Insurance (prudential standard) determination No. 4 of 2011 - Prudential Standard GPS 311 - Audit and Actuarial Reporting and Valuation: Level 2 Insurance Groups
Insurance Liability Valuation ReportInsurance Liability Valuation Report
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Insurance Liability Valuation Report
- The parent entity of a Level 2 insurance group must ensure that its Group Actuary prepares an ILVR as required by this Prudential Standard and provides that ILVR to the group within the time required by paragraph 28. The ILVR must:
(a) be addressed to the Board of the parent entity;
(b) provide the Group Actuary’s advice in respect of the value of the group’s insurance liabilities, determined in accordance with this Prudential Standard; and
(c) in respect of the group, provide details on the same matters as required under GPS 310 for an APRA-authorised insurer’s ILVR.
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Preparation of the ILVR for a Level 2 insurance group must be consistent with professional standards issued by the Institute of Actuaries of Australia (IAAust) that relate to the preparation of insurance liability valuation reports for insurance groups, where these have been issued. Any such professional standards apply to the extent that they are not inconsistent with the requirements of this Prudential Standard. In the event of any inconsistency arising from application of the professional standards and this Prudential Standard, the requirements of this Prudential Standard prevail.
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The ILVR for a Level 2 insurance group must provide sufficient information in relation to the assumptions and methods used for the valuation of liabilities so that another actuary reading the ILVR will be able to obtain a sound understanding of:
(a) the valuation process and results;
(b) the suitability of accounting figures for overseas business relative to the requirements of GPS 310;
(c) the nature and quantum of consolidation adjustments;
(d) any inherent limitations in the process and results; and
(e) the key risks pertaining to the insurance liabilities of the portfolio.
Further detail on the measurement and reporting of insurance liabilities is provided at Attachment A. The ILVR may refer to other actuarial reports in respect of the Australian business or international business of the group and the group must also ensure the Group Actuary’s access to those actuarial reports.