Financial Sector (Collection of Data) (reporting standard) determination No. 90 of 2006 - Reporting Standard GRS 440.0 (2007) Claims Development Tables
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Standard policy wordings exist for this type of policy. All policies which contain such standard wordings or where the wording is substantially similar are to be classified as ISR.
(VI). Marine
Includes Marine Hull (including pleasure craft), Marine Cargo (including sea and inland transit insurance).
(VII). Aviation
Aviation (including aircraft hull and aircraft liability).
(VIII). Mortgage
Insurance against losses arising from the failure of debtors to meet financial obligations to creditors or under which payment of debts is guaranteed. It includes lease guarantee.
(IX). Consumer Credit (CCI)
Insurance to protect a consumer's ability to meet the loan repayments on personal loans and credit card finance in the event of death or loss of income due to injury, illness or unemployment.
(X). Other Accident
Includes the following types of insurance:
Miscellaneous accident (involving cash in transit, theft, loss of money);
All risks (baggage, sporting equipment, guns);
Engineering when not part of ISR or Fire policy;
Plate glass when not part of packaged policy (e.g. houseowners /householders)
Guarantee (Insurance Bonds);
Live Stock;
Pluvius; and
Sickness and Accident (which provides stated benefits where the insured is killed or suffers loss of specific parts of the body or is prevented from carrying out the insured’s normal occupation. In addition, regular benefits may be paid over a short period of time (typically less than 3 years), noting that continuous disability policies are now considered to be Life Insurance Policies and should not be provided by General Insurance companies).
(XI). Other
All other insurance business not specifically mentioned elsewhere. It includes, for example:
All guarantees (e.g. fidelity Guarantee)
Trade Credit;
Extended Warranty (includes insurance by a third party for a period in excess of the manufacturer's or seller’s normal warranty;
Kidnap and Ransom; and
Contingency.
(XII). Compulsory Third Party Motor Vehicle (CTP)
This class consists only of CTP business.
(XIII). Public and Product Liability
Public Liability covers legal liability to the public in respect of bodily injury or property damage arising out of the operation of the insured's business. Product Liability includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods and also environmental clean-up caused by pollution spills where not covered by Fire and ISR policies.
Also will include builders warranty insurance.
Includes public liability attaching to houseowners/householders policies.
(XIV). Professional Indemnity (PI)
Includes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses is generally included in this type of policy.
(XV). Employers' Liability (EL)
Includes:
Workers' compensation;
Seamen's compensation; and
Domestic workers compensation.
Reinsurance Business
The classes of business for companies that provide reinsurance are as follows:
Treaty Proportional: This refers to all forms of quota share and surplus reinsurance written on a treaty reinsurance arrangement where the reinsurer is bound to accept all business ceded by the reinsured subject to the terms and conditions of the pre-agreed treaty wording, and shares in the same proportion of premium and losses of the reinsured.
Treaty Excess of Loss: This refers to all reinsurance arrangements where the reinsurer is bound to accept all business ceded by the reinsured and the reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.
Facultative Proportional: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis and the reinsurer shares in the same proportion of premium and losses of the reinsured.
Facultative Excess of Loss: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis. The reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.
Reinsurance non-split: This line item classification disclosed under Reinsurance class of business is to be used where it is not possible for the insurer to separately split out all the classes of reinsurance businesses.
Where an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, the contract must be allocated using an appropriate method, including the following methods:
(a) allocate the contract to the category which represents the greatest exposure; or
(b) allocate the contract to the category representing the greatest premium income.
An insurer that underwrites inwards reinsurance is free to choose which of the above methods it uses, or may use another appropriate method, provided the same method is used for all contracts and all subsequent periods.
The following fields are to be completed on a cumulative basis:
Gross Claims Paid
Reinsurance and Other Recoveries Received
The following fields are NOT to be completed on a cumulative basis:
Premium Earned
Number of Claims
Reinsurance Recoveries Receivable
Other Recoveries Receivable
Case Estimates
(1) Premium Earned
Premium earned is to be reported gross of reinsurance expense. Premium earned is to be reported in this form in accordance with AASB 1023 ‘General Insurance Contracts’ (i.e. recognised on an earned and unearned basis).
The amount reported for ‘Current Accident/Underwriting Year’ will then be the same reported for the ‘Accident/Underwriting Year – 1 Year Previous’ in the following financial year. For example:
Financial Year Ended
Current Accident/Underwriting Year
Accident/Underwriting Year – 1 Year Previous
Accident/Underwriting Year – 2 Years Previous
31 December 2001
4,000
2,000
31 December 2002
5,000
4,000
2,000
Premium revenue is to take into account the following:
Do not include amounts collected on behalf of third parties i.e. government stamp duty and taxes;
Levies charged to customers are to be included such as fire service levies;
Deduct returned premiums and rebates;
Premiums are to be brought to account from the attachment date;
For installment premium policies, the amount of the annualised premium is to be reported; and
Premium revenue must be gross of reinsurance expense.
(2) Number of Claims
Report the total number of claims open for each class of business (i.e. not just new claims) as at the end of the reporting period for each accident/underwriting year.
Do not include in this figure the number of claims recorded in relation to Incurred but not reported (IBNR) claims and do not include any claims that have been paid and closed.
The outstanding value of the number of open claims in this column should be recorded as the case estimate in (7).
Note: this number should be reported in whole numbers of claims, not in thousands.
This column is not applicable for business written under proportional treaties as this information is generally not known.
(3) Gross Claims Paid
Report the amount of gross claims paid attributable to each accident/underwriting year on a cumulative basis, for classes of direct written business and reinsurance business. Do not adjust for reinsurance recoveries received.
(4) Reinsurance and Other Recoveries Received
Report the amount of reinsurance and other recoveries received on claims paid attributable to each accident/underwriting year on a cumulative basis, for classes of direct written business and reinsurance business. Do not include reinsurance and other recoveries recognised on an accrual basis.
(5) Reinsurance Recoveries Receivable
Report the amount of reinsurance recoveries that are expected to be received in relation to claims recognised in the calculation of the outstanding claims provision and claims paid.
The amount is the balance outstanding at the end of the year. Report the undiscounted amount in accordance with AASB 1023 ‘General Insurance Contracts’.
(6) Other recoveries receivable
Report the amount of recoveries receivable other than recoveries from reinsurers (e.g. subrogation, salvage) as at the end of the development year for the specified accident/underwriting year. These are expected to be received in relation to claims recognised in the calculation of the outstanding claims provision and claims paid.
The amount is the balance outstanding at the end of the year and must be undiscounted.
(7) Case Estimate
The Case Estimate is to be disclosed by type of business (direct business and inwards reinsurance business). This relates to the Outstanding Claims Liability as at the end of the development year for the specified accident/underwriting year.
For the purposes of this form, the outstanding claims liability must be:
The amount is the balance outstanding at the end of the year.
Undiscounted;
Gross of reinsurance recoveries;
Based on ‘Case Estimate’ only, do not include a risk margin; and
Do not include estimates of IBNR claims (Incurred but not reported).
Section ISR - Financial Sector (Collection of Data) (reporting standard) determination No. 90 of 2006 - Reporting Standard GRS 440.0 (2007) Claims Development Tables - ISR | Zoe