Financial Sector (Collection of Data) (reporting standard) determination No. 9 of 2009 - LRS 310.0 - Statement of Financial Performance
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Report benefits paid or payable for death and/or disability claims on life insurance business, including current period bonus and any interim or terminal bonuses included in claims amounts.
6.5 Policy Conversions – outwards
Report the claim elements of Conversions between statutory funds. The outward (claim) side of the conversion is shown here, while the inward (premium) side is shown at item 1.2 (Policy Conversions – inwards); any deposit components are to be taken into account in items 9.2 and/or 10.5.
Premium and Claim elements of policy conversions are not expected to apply for Life Investment Contracts, due to section 5 of AASB 1038. In those cases, only deposit components are expected to apply.
6.6 Other Claims
Include all other claims expense items not specifically categorised above.
6.7 Inwards Reinsurance Claims Expense (including current year bonus)
Inwards reinsurance claims expense should be gross of retrocession recoveries.
Include bonuses paid as a distribution of current year profit.
6.8 Total Non-Life Policy Expense
Is generally only expected to apply if permitted to write general insurance business under section 234 of the Life Insurance Act 1995.
6.9 Outward Reinsurance Claims Revenue
Outward reinsurance claims revenue should be entered as revenue amounts, i.e. enter as negative amounts.
6.10 Total insurance policy expense, net of reinsurance [derived item]
This item represents total insurance policy expenses net of outwards reinsurance, and is the sum of the reporting items above (i.e. Items 6.1 to 6.9).
Operating Expenses:
Abnormal operating expenses are not to be excluded or shown separately, but included in the relevant category. In total, all expenses are to be included.
Policy acquisition items are prior to any component deferred to either policy liabilities or a deferred acquisition cost asset.
7.1 Policy Acquisition – Commission and Other Incremental Expenses
Include variable costs of acquiring new insurance business.
7.2 Policy Acquisition – Other Expenses
Include all other fixed and variable costs incurred when acquiring new business.
7.3 Policy Maintenance – Commission and Other Incremental Expenses
Variable costs of:
Administering policies subsequent to their sale; and
Administering the general operations of the life company.
Include all normal operating costs and expenses other than acquisition and investment management expenses.
7.5 Investment Management Expenses
These are the fixed and variable costs of managing the investment portfolio.
7.6 Acquisition Expenses reported as movement in Policy Liability (Net Movement in DAC)
Include amortization and impairment of existing deferred acquisition costs (DAC) less additional deferrals of acquisition expenses during the reporting period.
Note that amounts are as per AASB 1038, and not offset by any initial fee revenue.
An adjustment for this amount is automatically made by the form when calculating Item 11 Effective Movement in Net Policy Liabilities.
7.7 Other Administration Expenses
Including all other general administration expenses not specifically categorised above.
7.10 Total Non-Life Operating Expenses
Is generally only expected to apply if permitted to write general insurance business under section 234 of the Life Insurance Act 1995.
7.11 Total operating expenses [derived item]
This item represents total operating expenses, and is the sum of the reporting items above (i.e. Items 7.1 to 7.10).
Movement in Net Policy Liabilities:
8.1 Increase/(Decrease) in Net Policy Liabilities
This item is to be reported as the numerical result: Net Policy Liabilities at end of reporting period, less Net Policy Liabilities at beginning of reporting period; thus if net policy liabilities increased the result is an expense, while if they decreased the result is a negative expense. It is to be reported inclusive of inwards reinsurance and net of outwards reinsurance at beginning and end of reporting period.
A number of adjustments to Movement in Net Policy Liabilities are required in order to obtain the relevant measure of profit or loss for the reporting period. The adjustments involve deposits/withdrawals, non-premium related fees for management services, and movements in the liabilities for deferred fee revenue and deferred acquisition cost. The end result of these adjustments is Effective Movement in Net Policy Liabilities (Item 11).
Items 9 and 10 are two of these adjustments and represent the deposit/withdrawal components of both life insurance and life investment contracts (which are recorded directly to policy liabilities).
Adjustment to Movement in Net Policy Liabilities – Policy Revenue: Policy Revenue recognised as a Deposit or as a change in Policy Liability
9.1 Contractual Direct Premiums
Report the deposit components of regular and single premiums received or receivable for life investment and life insurance investment account business written directly – i.e. exclude any revenue components. Show amounts gross of outwards reinsurance, but exclude amounts for inwards reinsurance (see item 9.3, below). Include the deposit component of premiums in respect of deferred or immediate annuities that are life investment business.
9.2 Policy Conversion – inwards
Report the deposit elements of Conversions between statutory funds. The inward side of the conversion is shown here, while the outward side is shown at item 10.5 (Policy Conversions – outwards); any revenue or expense components are to be taken into account in items 1.2 and/or 6.5.
As revenue and expense elements of policy conversions are not expected to apply for Life Investment Contracts due to section 5 of AASB 1038, the full conversion is expected to be treated as a deposit.
9.3 Inwards Reinsurance Premium Revenue
Report deposit elements for life investment and life insurance investment account business written as inwards reinsurance – i.e. exclude any revenue components. Show amounts gross of outwards (retrocession) reinsurance. Include the deposit component of premiums in respect of deferred or immediate annuities that are life investment business written as inwards reinsurance.
9.4 Total Non-Life Insurance Premiums
Report any deposit elements corresponding to Item 1.4.
9.5 Outward Reinsurance Premiums Expense
Report any deposit elements corresponding to Item 1.5.
Adjustment to Movement in Net Policy Liabilities – Policy Expense: Policy Expense recognised as Withdrawal of Deposit or change in Policy Liability
10.1 Death and Disability Claims
Report benefits paid or payable as withdrawal of any deposit elements for death and/or disability claims on life investment business.
10.2 Maturities
Report benefits paid or payable as withdrawal of any deposit elements for maturity claims on life investment business.
10.3 Annuities
Report benefits paid or payable as withdrawal of any deposit elements for annuity benefits on life investment business.
10.4 Surrender and Terminations
Report benefits paid or payable as withdrawal of any deposit elements for surrender and/or termination benefits on life investment business.
10.5 Policy Conversions – outwards
Report the withdrawal of deposit elements on Conversions between statutory funds. The outward side of the conversion is shown here, while the inward side is shown at item 9.2 (Policy Conversions – inwards); any revenue or expense components are to be taken into account in items 1.2 and/or 6.5.
As revenue and expense elements of policy conversions are not expected to apply for Life Investment Contracts due to section 5 of AASB 1038, the full conversion is expected to be treated as a withdrawal.
10.6 Other Claims
Report benefits paid or payable as withdrawal of any deposit elements for other claims on life investment business.
10.7 Inwards Reinsurance Claims Expense (including current year bonus)
Report benefits paid or payable as withdrawal of any deposit elements for inwards reinsurance claims, gross of any retrocession recoveries. (While field names for Items 10.1 to 10.9 correspond exactly to those for Items 6.1 to 6.9, it is not expected that reference to “current year bonus” would be applicable.)
10.8 Total Non-Life Policy Expense
Report any withdrawal of deposit elements corresponding to Item 6.8.
10.9 Outward Reinsurance Claims Revenue
Outward reinsurance claims revenue as withdrawal of any deposit elements should be entered as negative amounts.
Effective movement in Net Policy Liabilities [derived item]:
The effective movement in net policy liabilities is calculated as:
increase/(decrease) in net policy liabilities (per Item 8.1);
less deposits received (per Item 9.6);
plus withdrawals of deposits (per Item 10.12);
plus non-premium related fees for management services (which would otherwise be recognised as a reduction in policy liabilities, per Item 2.2);
plus movements in the liability for deferred fee revenue (which are reported as part of Fees for Management Services Rendered but would otherwise result in a change in policy liabilities for Life Investment Contracts, per Item 2.3);
less movements in the liability for deferred acquisition costs (which are reported as part of Operating Expenses but would otherwise result in a change in policy liabilities for Life Investment Contracts, per Item 7.6).
Change in Policy Owner Retained Profits:
12.1 Increase/(Decrease) in Policy Owner Retained Profits
Policy Owner Retained Profits represent the value of statutory fund profits allocated to participating policy owners generally, but not yet vested as specific amounts to particular policies. This item is included under Expenses in these forms for the purpose of ultimately deriving the profit that is attributable to shareholders.
Other Expenses
Include all other expense items not specifically categorised above.
Total Expenses [derived item]
This item is the sum of reporting items 6.10, 7.11, 11, 12.1 and 13.
Profit/(Loss) before Income Tax [derived item]
Total Revenue (item 5) less Total Expenses (item 14).
Tax:
As a life insurance company is liable for tax partly on behalf of its policy owners and partly on behalf of its shareholders, this item has two components. -
16.1 Income Tax Attributable to Profit/( Loss) – Shareholders
This component relates to that part of the total tax liability arising in the reporting period that is incurred on behalf of shareholders.
16.2 Income Tax Attributable to Profit/(Loss) – Policy Owners
This component relates to that part of the total tax liability arising in the reporting period that is incurred on behalf of policy owners.
16.3 Total Tax [derived item]
This item represents total tax liability arising in the reporting period, and is the sum of the reporting items above (i.e. Items 16.1 and 16.2).
Profit/(Loss) after Income Tax [derived item]
Profit/(Loss) (item 15) less Total Tax (item 16.3).
This item represents the profit (or loss) result, after tax. Where there is no further data applicable to enter on these forms (i.e. Item 18 does not apply), the result will represent the “profit (or loss) after tax” that is attributable to shareholders.
Increase/(Decrease) in Unallocated Benefit Fund reserves
Unallocated Benefit Fund reserves represent the value of benefit funds which has not been allocated to either the benefit fund members or to the management fund. This item is only expected to be applicable to friendly societies. This item is included in this section for the purpose of deriving the profit that is attributable to shareholders.
For life companies other than friendly societies, enter zero under this item.
Profit/(Loss) after Income Tax attributable to Shareholders [derived Item]
A derived item that equals Profit/(loss) after Income Tax (item 17) less Increase/(Decrease) in Unallocated Benefit Fund reserves (item 18).
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