Financial Sector (Collection of Data) (reporting standard) determination No. 10 of 2010
Reporting Standard GRS 310 (2010) Revenue, Expenses and Statement of Financial Performance
Financial Sector (Collection of Data) Act 2001
 
I, Ian Laughlin, a delegate of APRA, under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901:
 
1)      REVOKE each of the following Reporting Standards which is in force as at the date of this determination (the old standards):
 
·        Reporting Standard GRS 310.0 (2008) Statement of Financial Performance;
 
·        Reporting Standard GRS 310.1 (2008) Premium Revenue and Reinsurance Expense;
 
·        Reporting Standard GRS 310.2 (2008) Claims Expense and Reinsurance Recoveries; and
 
·        Reporting Standard GRS 310.3 (2008) Investment and Operating Income and Expense which; and
 
2)      DETERMINE Reporting Standard GRS 310 (2010) Revenue, Expenses and Statement of Financial Performance in the form set out in the Schedule (the new standard), which applies to the financial sector entities referred to in paragraph 2 of the new standard.
 
Under section 15 of the Act, I DECLARE that the new standard shall begin to apply, and the old standards shall cease to apply, on the date of registration of this instrument on the Federal Register of Legislative Instruments.
 
Dated 30 July 2010
 
[Signed]
 
 
Ian Laughlin
Member
Interpretation
In this Determination
APRA means the Australian Prudential Regulation Authority.
Federal Register of Legislative Instruments means the register established under section 20 of the Legislative Instruments Act 2003.
Schedule
 
Reporting Standard GRS 310 (2010) Revenue, Expenses and Statement of Financial Performance comprises the 91 pages commencing on the next page.
 

 
Reporting Standard GRS 310 (2010)
 
Statement of Financial Performance
 
 
Objective of this reporting standard
This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 (the Collection of Data Act).  It requires general insurers (insurers), including foreign general insurers operating in Australia through branch operations (foreign insurers), to report to APRA, generally on a quarterly and annual basis, information on their:
 
(a)    premium revenue and reinsurance expense;
(b)   claims expense and reinsurance recoveries;
(c)    investment and operating income and expenses; and
(d)   financial and operational performance.
This reporting standard outlines the overall requirements for the provision of this information to APRA.  It should be read in conjunction with:
 
1.      Form GRF 310.0 Statement of Financial Performance (Form GRF 310.0)
(a)         for insurers the version designated for a ‘Licensed Insurer’; or
(b)        for foreign insurers the version designated for ‘Branch Total Operations’;
and the instructions to the forms (which are attached and all form part of this reporting standard);
2.      Form GRF 310.1 Premium Revenue and Reinsurance Expense (Form GRF 310.1) and the instructions to that form (which are attached and form part of this reporting standard)
3.      Form GRF 310.2 Claims Expense and Reinsurance Recoveries (Form GRF 310.2) and the instructions to that form (which are attached and form part of this reporting standard)
4.      Form GRF 310.3 Investment and Operating Income and Expense, Underwriting expenses and acquisition costs (Form GRF 310.3) and the instructions to that form (which are attached and form part of this reporting standard); and
5.      any prudential standards referenced in the attached instructions.
Purpose
1.             Data collected in Forms GRF 310.0, GRF 310.1, GRF 310.2 and GRF 310.3 is used by APRA for the purpose of prudential supervision of insurers.
Application and commencement
2.             This reporting standard applies to all insurers for reporting periods ending on or after the date of registration of the reporting standard on the Federal Register of Legislative Instruments. 
Information required
3.             An insurer must provide APRA with the information required by the version of Form GRF 310.0 designated for a ‘Licensed Insurer’ and GRF 310.1, GRF 310.2 and GRF 310.3 for each reporting period.
4.             A foreign insurer must provide APRA with the information required by the version of Form GRF 310.0 designated for ‘Branch Total Operations’ and GRF 310.1, GRF 310.2 and GRF 310.3 for each reporting period.
Forms and method of submission
5.             The information required by this reporting standard must be given to APRA either:
(a)           in electronic form using the ‘Direct to APRA’ application, applying one of the electronic submission mechanisms under that application; or
(b)          by manually completing Forms GRF 310.0, GRF 310.1, GRF 310.2 and GRF 310.3 on paper and mailing the completed form to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales.
 
Where the information is submitted by means of an agent to whom the insurer has outsourced the function of providing the information on the insurer’s behalf, the agent may only provide the information in accordance with subparagraph 5(b) if the agent has contacted APRA and advised that the agent cannot submit the information in electronic form under subparagraph 5(a).
           
Note: the Direct to APRA application software and paper forms may be obtained from APRA. 
Reporting periods and due dates
6.             Subject to paragraph 7, an insurer must provide the information required by this reporting standard:
(a)           in respect of each quarter based on the financial year (within the meaning of the Corporations Act 2001) of the insurer; and
(b)          in respect of each financial year (within the meaning of the Corporations Act 2001) of the insurer.
Note: The annual information required by paragraphs 3 and 4 read with subparagraph 6(b), together with certain annual information required by other reporting standards, will form part of the insurer’s yearly statutory accounts within the meaning of section 3 of the Insurance Act 1973 (the Insurance Act).  This means that the information must be audited in accordance with paragraph 49J(1)(a) of the Insurance Act.  Under subsection 49J(3), the auditor must give the insurer a certificate relating to the yearly statutory accounts, and that certificate must contain statements of the auditor’s opinions on the matters required by the prudential standards to be dealt with in the certificate.
7.             APRA may, by notice in writing, change the reporting periods, or specified reporting periods, for a particular insurer to require it to provide the information:
(a)           more frequently (if, having regard to the particular circumstances of the insurer, APRA considers it necessary or desirable to obtain information more frequently for the purposes of the prudential supervision of the insurer); or
(b)          less frequently (if, having regard to the particular circumstances of the insurer and the extent to which it requires prudential supervision, APRA considers it unnecessary to require the insurer to provide the information as frequently as provided by subparagraph 6(a) or (b)).
8.             The information required by paragraphs 3 and 4 of this reporting standard from a locally-incorporated insurer or a foreign insurer must be provided to APRA by the following times:
(a)           in the case of the quarterly information required by subparagraph 6(a) – 20 business days after the end of the reporting period to which the information relates; and
(b)          in the case of the annual information required by subparagraph 6(b) – 4 months after the end of the reporting period to which the information relates.
Note: Paragraph 49L(1)(a) of the Insurance Act provides that the auditor’s certificate required under subsection 49J(3) of that Act must be lodged with APRA in accordance with the prudential standards.  The prudential standards provide that the certificate must be submitted to APRA together with the yearly statutory accounts.  Accordingly, the auditor’s certificate relating to the annual information required by paragraphs 3 and 4 read with subparagraph 6(b) must be provided to APRA by the time specified in subparagraph 8(b) of this reporting standard (unless an extension is granted under paragraph 9).
9.             APRA may grant an insurer an extension of a due date in writing, in which case the new due date for the provision of the information will be the date specified in the notice of extension.
Quality control
10.         The information provided by an insurer under this reporting standard must be the product of processes and controls that have been reviewed and tested by the appointed auditor of the insurer. This will require the auditor to review and test the systems, processes and controls supporting the reporting of the information to ensure that they produce accurate data and are otherwise reliable.  This review and testing must be done on an annual basis or more frequently if necessary to enable the appointed auditor to form an opinion on the accuracy and reliability of the data. 
11.         The information provided by an insurer under this reporting standard must be subject to processes and controls developed by the insurer for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the insurer to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.
Authorisation
12.         If the officer of an insurer provides the information required by this reporting standard:
(a)           under subparagraph 5(a), the officer must digitally sign, authorise and encrypt the information (for which purpose APRA’s certificate authority will issue digital certificates, for use with the ‘Direct to APRA’ application, to officers of the insurer who have authority from the insurer to transmit data to APRA); or
(b)          under subparagraph 5(b), the completed form must be signed in accordance with paragraph 13.
13.         If an insurer provides the information required by this reporting standard through an agent under either subparagraphs 5(a) or (b), the agent will not be required to sign or authorise the information.  However, the insurer must:
(a)           obtain from the agent paper copies of the completed forms as provided to APRA (under either subparagraph 5(a) or (b)); and
(b)          cause the paper copies to be signed in accordance with paragraph 14; and
(c)           lodge the signed paper copies with APRA by mailing the completed forms to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales, by the relevant due date (unless APRA, in writing, waives the requirement in relation to the insurer to lodge the signed paper copies with APRA).
Note: APRA may, for example, decide to waive the requirement under subparagraph 13(c) where an insurer has undertaken to retain the signed copies of the completed forms for an agreed period of time.
14.         If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed forms by either:
(a)           the Principal Executive Officer of the insurer; or
(b)          the Chief Financial Officer of the insurer (whatever his or her official title may be).
Minor alterations to forms and instructions
15.         APRA may make minor variations to the instructions to a form, to clarify their application to the form provided it does not involve changing any substantive requirement in the form or instructions.
16.         If APRA makes such a variation it must notify insurers of this in writing.
Transition
17.         An insurer must report in relation to a reporting period ending prior to 1 July 2010 in accordance with the reporting standards that this reporting standard replaced.
Interpretation
18.         In this reporting standard:
appointed auditor means an auditor appointed under paragraph 39(1)(a) of the Insurance Act;
business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays;
capital standards means the prudential standards which relate to capital adequacy as defined in Prudential Standard GPS 001 Definitions;
foreign insurer means a foreign general insurer within the meaning of the Insurance Act;
Note: A reference to a ‘branch’ or ‘branch operation’ is a reference to the Australian operations of a foreign insurer.
Insurance Act means the Insurance Act 1973;
insurer means a general insurer within the meaning of the Insurance Act;
Note: In the forms and instructions, a reference to an ‘authorised insurer’, ‘authorised insurance entity’ or ‘licensed insurer’ is a reference to an insurer, and a reference to an ‘authorised reinsurance entity’ is a reference to an insurer whose business consists only of undertaking liability by way of reinsurance.
Principal Executive Officer means the principal executive officer of the insurer for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the insurer;
reporting period means a period mentioned in subparagraph 6(a) or (b) or, if applicable, paragraph 7.
19.         A reference to a prudential standard means the prudential standard, made under section 32 of the Insurance Act, mentioned in the reference, as amended from time to time.  If the prudential standard has been revoked and replaced, the reference shall be taken to be to the prudential standard that has replaced it.
 
 


Reporting Form GRF 310.0
Statement of Financial Performance
Instruction Guide
Introduction
GRF 310.0 Statement of Financial Performance collects information on the operating performance of the licensed and Category C (also known as Branch) general insurer as outlined in the instructions below.
Audit requirements
The form relating to authorised insurance entities and reinsurance entities is required to be subject to audit review and testing.
The scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.
Information provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act).  This means that:
·               the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);  
·               the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2)); 
·               the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3)); and
·               the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.
Reporting entity
Forms are to be completed for the following reporting entities where appropriate:
1.             Authorised insurance entities including mutual entities (refer to form ‘Licensed Insurer’ (GRF 310.0 Statement of Financial Performance (L)); a reference to licensed insurer in the form means total operations of the licensed entity);
2.             Authorised reinsurance entities (refer to form ‘Licensed Insurer’ (GRF 310.0 Statement of Financial Performance (L)); a reference to licensed insurer in the form means total operations of the licensed entity); and
3.             Australian branch insurers of foreign insurers; a reference to licensed insurer in the form means total operations of the branch. Do not include the operations of the foreign parent entity. Branch insurers should complete the ‘Branch’ form GRF 310.0 Statement of Financial Performance (B).
Definitions
Definitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.
Unit of measurement
This form is to be presented in Australian currency, rounded to thousands of dollars, with no decimal place. Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).
The general requirements of AASB 121 for translation are:
1.             Foreign currency monetary items[1] outstanding at the reporting date must be translated at the spot rate[2] at the reporting date.
2.             Foreign currency non-monetary items[3] that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.
3.             Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.
Transactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139  (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.
For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.
As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.
Exchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.
The ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.
4.             Translation of financial reports of foreign operations.
A foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.
·               Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.
·               Translation of financial reports should otherwise follow the requirements in AASB 121.
Reporting period
Insurers are required to report the information in the reporting form on a quarterly and annual basis.
·               The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.
·               The annual information is to be completed in respect of the financial year of the insurer.
·               The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.
Reporting lag
This form must be lodged for each of the reporting units within the number of business days after the end of the quarter as set out in the Reporting Standard GRS 310.0 Statement of Financial Performance.
Basis of preparation
Unless specified otherwise, general insurers are requested to follow the Australian accounting standards regarding the recognition and measurement of items of income and expense (profit or loss) in completing this form, notably AASB 1023 ‘General Insurance Contracts’ (AASB 1023).  
Fair value measurement of assets
APRA applies the notion of assets backing general insurance liabilities for its regulatory reporting which is consistent with the classification basis in AASB 1023. The value of investment income and expense reported in this form should be equal to the value of investment income and expense relating to assets backing insurance liabilities for statutory reporting.
Investment income and expense reported in this form that relates to assets backing insurance liabilities must be measured at fair value. The investments must not be valued at cost. Fair value has the same meaning as defined in AASB 139, that is, the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's-length transaction, and is determined as follows:
1.             The quoted market price (i.e. bid or ask price) in an active and liquid market; or
2.             When there is infrequent activity in a market, and the market is not well established, small volumes are traded relative to the asset or liability to be valued, or a quoted market price is not available – a realistic estimate of fair value on the basis of the results of a valuation technique that makes maximum use of market inputs, and relies as little as possible on entity-specific inputs[4].
Fair value of charged/encumbered assets
If an asset is in any way subject to a charge, covenant, encumbrance, option to purchase or any other arrangement by way of agreement or statute, that restricts the fair value of the asset, the value attached to the assets needs to reflect the existence of these arrangements. For example, if the insurer has agreed to deliver an asset to a purchaser at a price below the arms length value, the fair value cannot exceed the agreed price. This may also have relevance to this form.
Netting
Unless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132 ‘Financial Instruments: Presentation’ (AASB 132).
Related party disclosure
Amounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form. For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).
In accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:
(a)           controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);
(b)          has significant influence over the entity or has joint control over the entity; or
(c)           is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or
(d)          is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or
(e)           is a member of the key management personnel of the entity or its parent; or
(f)            is a close member of the family of any individual referred to in (a), (b) or (e); or
(g)           is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or
(h)           is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.
Specific instructions
Premium revenue – Direct business and Inwards reinsurance
Report total premium revenue for direct business and inwards reinsurance business. These items should equal the amounts for ‘Total Direct Business’ and ‘Total Reinsurance Business’ in column 5 ‘AASB 1023 Gross earned premium (excluding FSL)’ reported in Part 3: Total in GRF 310.1 Premium Revenue and Reinsurance Expense.
Fire service levy (and other levies imposed by state and territory governments), which is part of total premium revenue should be reported separately below.
Fire service levy (and other levies imposed by state and territory governments)
Report at this item total fire service levy (and other levies imposed by state and territory governments). This item should equal the total of column 6 ‘Fire service levy and other levies imposed by state and territory governments’ reported in Part 3: Total in GRF 310.1 Premium Revenue and Reinsurance Expense.
Total Premium Revenue
This is automatically calculated by the form and represents the total of premium revenue for direct business and inwards reinsurance plus fire service levy (and other levies imposed by state and territory governments).
Outwards reinsurance expense relating to current and prior years cover
Report at this item total outwards reinsurance expense relating to current and prior years cover in accordance with AASB 1023. This should equal the total of column 11 ‘Total Reinsurance expense’ reported in Part 3: Total in GRF 310.1 Premium Revenue and Reinsurance Expense.
Net Premium Revenue
This is automatically calculated by the form and represents the difference between total premium revenue and outwards reinsurance expense.
Claims expense
Claims expense for both direct business and inwards reinsurance business should be split between Paid claims and the Movement Outstanding Claims Liability (OCL).
The movement in OCL is calculated in the following way:
·               OCL at the end the reporting period
Less:
·               OCL at beginning of financial year.
Gross Claims Expense
Gross claims expense is automatically calculated by the form and represents the total of the ‘Claims expense’ items.
Non-reinsurance recoveries revenue
This is revenue from recoveries other than reinsurance recoveries, in respect of claims. This amount should equal the total of the column titled‘Other recoveries revenue relating to current and prior years’ in Part 3: Total from GRF 310.2 Claims Expense and Reinsurance Recoveries.
Reinsurance recoveries revenue relating to current and prior years
Report total reinsurance recoveries for the reporting period. This should equal the total of the column titled ‘Reinsurance recoveries revenue relating to current and prior years’ in Part 3: Total from GRF 310.2 Claims Expense and Reinsurance Recoveries.
Total Recoveries
This is automatically calculated by the form and represents the sum of the values reported for ‘Non-reinsurance recoveries revenue’ and ‘Reinsurance recoveries revenue relating to current and prior years’.
Net claims expense
This is automatically calculated by the form and represents the difference between ‘Gross Claims Expense’ and ‘Total Recoveries’.
Net claims expense which is: Current period net claims expense
This item should be equal to the total of the column titled  “Current period net claims expense” in Part 3: Total from GRF 310.2 Claims Expense and Reinsurance Recoveries.
Report at this item:
·               current period claims payments;
·               current period reported outstanding case estimates (that is, case estimates created in the current period); and
·               current period incurred but not reported (and incurred but not enough reported) claims expenses.
Current period net claims expense should be defined and reported according to the following:
·               the current period is defined as the current financial year to date;
·               net of all recoverables (including input tax credits reinsurance, salvage, subrogation and other recovery types);
·               inclusive of claims handling expense, assuming that industry generally includes claims handling costs with the claim paid component of the incurred claims expense;
·               the outstanding claims component be inflated only i.e. undiscounted; and
·               the outstanding claims component be on a central estimate basis i.e. without risk margins.
Net claims expense which is: Non-recurring items that are part of total net claims expense
Report the amount of ‘Net claims expense’ that has not been reported at ‘Current period net claims expense’ above.
Quarterly actuarial reviews are not required to be conducted specifically for the purposes of completing the above two items.
Acquisition costs (excluding the results of liability adequacy tests)
Report acquisition costs as recognised under AASB 1023. Acquisition costs are incurred in obtaining and recording general insurance contracts. They usually include commission or brokerage paid to agent or brokers for obtaining business for the insurer, selling and underwriting costs such as advertising and risk assessment, the administrative costs of recording policy information and premium collection costs. However for the purposes of reporting on this form, commission expenses should be excluded and reported separately.
Acquisition costs recognised in this line item should exclude the results of the liability adequacy test (LAT).
Results of liability adequacy tests (current year)
Report any adjustments to deferred acquisition costs or the unexpired risk liability as a result of performing the LAT in accordance with AASB 1023. Report at this item only the results of  the LAT performed in the current financial year. Results of LAT failures should be reported as a positive value.
Results of liability adequacy tests (prior years)
Report any adjustments to deferred acquisition costs or the unexpired risk liability as a result of performing the LAT in accordance with AASB 1023. Report at this item the results of liability adequacy tests performed in prior years which have a profit and loss impact in the current financial year. Results of LAT failures should be reported as a positive value.
Other underwriting expenses
This item will include all other underwriting expenses which are not included in ‘Acquisition costs (excluding the results of the liability adequacy tests)’ and subject to deferral.
Levies and charges
This item will include levies and charges payable by the insurer. It excludes the amounts collected on behalf of third parties.
Commission Revenue
This item includes commission revenue received in relation to the insurance business. Commission revenue should be reported in accordance with the pattern in which it is earned. Do not include ‘premium rebates’ received from reinsurers in this line item.
Commission expense
Report at this item commission or brokerage paid to agents or brokers for obtaining business for the insurer.
Total Underwriting Expenses
Total underwriting expenses are calculated automatically and are derived from:
·               Acquisition costs (excluding the results of the liability adequacy test)
Add:
·               Results of liability adequacy tests (current and prior years)
·               Other underwriting expenses
·               Levies and charges
·               Commission expense
Less:
·               Commission revenue
Underwriting result
The underwriting result is calculated automatically and is derived from:
·               Net Premium Revenue
Less:
·               Net claims expense
Less:
·               Total underwriting expenses
Investment Income on assets backing insurance liabilities
Report investment income on assets backing insurance liabilities at this item.
Investment expenses on assets backing insurance liabilities
Report investment expenses relating to assets backing insurance liabilities at this item.
Insurance result
The insurance result is calculated automatically and is derived from the
·               Underwriting result
Add
·               Investment income on assets backing insurance liabilities
Less
·               Investment expenses on assets backing insurance liabilities.
Investment income on shareholders’ funds
Report investment income on shareholders’ / equity holders’ funds at this item. This item must correspond to the memo item ‘Total Investment Income which is attributable to shareholders’ funds’ reported in GRF 310.3 Investment and Operating Income and Expense.
Other Operating Income
Report all other income not reported above in this item.   This item must correspond to the ‘Total Other Operating Income’ reported in GRF 310.3 Investment and Operating Income and Expense.
Other Operating Expenses
Report operating expenses in this item.  This item must correspond to the ‘Total Operating Expenses’ reported in GRF 310.3 Investment and Operating Income and Expense.
Bargain purchase immediately recognised in profit or loss
This item must be completed in accordance with the requirements of AASB 3 ‘Business Combinations’.
The acquirer shall recognise goodwill as of the acquisition date measured as the excess of (a) over (b) below:
(a) the aggregate of:
(i) the consideration transferred which generally requires acquisition-date fair value;
(ii) the amount of any non-controlling interest in the acquiree measured in accordance with this Standard; and
(iii) in a business combination achieved in stages (see paragraphs 41 and 42), the acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree.
(b) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
Profit (loss) from non-current assets and disposal groups classified as held for sale and discontinued operations
Report any gain or loss on the measurement of a non-current asset (or disposal group) classified as held for sale which meets the definition of a discontinued operation.
This item must be completed in accordance with the requirements of AASB 5 ‘Non-current Assets Held for Sale and Discontinued Operations’.
Profit (loss) from continuing operations before income tax expense (benefit)
The profit (loss) from continuing operations is calculated automatically and is derived from:
·               Insurance result
Plus:
·               Investment income on shareholders’ funds
·               Other operating income
Less:
·               Other operating expenses
·               Bargain purchase immediately recognised in profit or loss
Plus:
·               Profit (loss) from non-current assets and disposal groups classified as held for sale and discontinued operations
Income tax expense (benefit) from continuing operations
This item represents the income tax expense or benefit attributable to the profit or loss from continuing operations.
This item must be completed in accordance with the requirements of AASB 112 ‘Income Taxes’.
Profit (loss) from continuing operations after income tax
This item is calculated automatically and is derived from:
·               Profit or loss from continuing operations before income tax expense (benefit)
Less:
·               Income tax expense (benefit) from continuing operations
Profit (loss) from discontinued operations after income tax
Profit (loss) after income tax from discontinued operations is to be presented in accordance with the Australian accounting standards.
Net profit (loss) after income tax attributable to members of the company / Net profit (loss) after income tax (Branches)
This is calculated automatically and is derived from:
·               Profit (loss) from continuing operations after income tax
Add:
·               Profit (loss) from discontinued operations after income tax
Retained profits / (losses) at beginning of the financial year
Report here the relevant retained profit (loss) amount at the beginning of the current financial year.  For the first year of reporting the APRA forms, use the retained profits figure as per the insurer’s statutory accounts prepared in accordance with Australian accounting standards.
Adjustments to retained profits due to change in accounting policies/standards
Include the value of aggregate adjustments to retained earnings due to changes in accounting policies or accounting treatment as required by a revised accounting standard.
Reduction in retained profits on share buy back (Non-branch insurers only)
Disclose that portion of the consideration used for share buy backs during the reporting period that is allocated to retained earnings. Report any reduction in retained earnings as a negative figure.
Amounts transferred to / from reserves
Disclose the amount of funds transferred to / (from) other reserves to retained earnings during the reporting period.
Total available for appropriation
This amount is calculated automatically and is derived from:
·               Net profit (loss) after income tax attributable to members of the company
Plus:
·               Retained profits / (losses) at the beginning of the financial year
Plus/:
·               Adjustments to retained profits due to change in accounting policies/standards
Plus:
·               Reduction in retained profits on share buy back
·               Amounts transferred from reserves
Dividends / head office transfers declared or paid
A dividend is the amount paid out of a company’s profits to its shareholders (interim and final dividend).  The annual dividend equals the final dividend plus the interim dividend if declared.  Accordingly, report dividends which are declared or paid by the insurer.
Branches should report any head office transfers declared or paid at this item that are not reported in ‘Aggregate of amounts transferred from / to parent entity (Branches)’ below.
Aggregate of amounts transferred (from) / to parent entity (Branches only)
Disclose the amount of dividends or funds transferred (from)/to the parent entity during the reporting period. This should be split between contributions of capital and dividends.
Note: If capital is provided by the parent entity, which is not required to be repaid by the branch, this contribution of capital is to be disclosed in this form as funds transferred from the parent entity.
If the capital provided by the parent is in the form of debt and must be repaid, the amount should be disclosed in the liability section of GRF 300.0 Statement of Financial Position under item 23.1 ‘Loan capital’.
Aggregate of other amounts
Report the aggregate of any other amounts that are transferred to or from reserves or retained earnings.
Retained profits / (losses) at the end of the reporting period
This is calculated automatically and for non-branch insurers is derived from:
·               Total available for appropriation
Less:
·               Dividends / head office transfers declared or paid
For branches, it is derived from:
·               Net profit (loss) after income tax
Plus
·               Retained profits / (losses) at the beginning of the financial year
·               Adjustments to retained profits due to change in accounting policies / standards
·               Aggregate of amounts transferred from / to reserves
·               Aggregate of amounts transferred from parent entity (i.e. contributions of capital) (Branches only)
·               Aggregate of amounts transferred to parent entity (i.e. dividends) (Branches only).
·               Aggregate of other amounts
Less
·               Head office transfers declared or paid.
 
   

Reporting Form GRF 310.1
Premium Revenue and Reinsurance Expense
Instruction Guide
Introduction
The purpose of GRF 310.1 Premium Revenue and Reinsurance Expense is to provide information on written and earned premium revenue gross and net of reinsurance expense by class of business, which supports the summarised underwriting result disclosed in GRF 310.0 Statement of Financial Performance.  
The form reports total gross written, gross earned and net earned premium revenue by class of business, on accrual and cashflow bases, for both direct and inwards reinsurance business.
The following items should be reported:
1.             total gross written premium;
2.             gross written premium relating to unclosed business;
3.             gross unearned premium liability at the beginning of the financial year on a AASB 1023 basis;
4.             gross unearned premium liability at the end of the reporting period on a AASB 1023 basis;
5.             gross earned premium on a AASB 1023 ‘General Insurance Contracts’ (AASB 1023) basis excluding fire service levy and other levies imposed by state and territory governments;
6.             fire service levy and other levies imposed by state and territory governments;
7.             gross earned premium on a AASB 1023 basis including fire service levy and other levies imposed by state and territory governments;
8.             outwards reinsurance expense on a AASB 1023 basis;
9.             deferred reinsurance expense asset at the beginning of the financial year based on deferred reinsurance expense reported in GRF 300.0 Statement of Financial Position;
10.         deferred reinsurance expense asset at the end of the reporting period based on deferred reinsurance expense reported in GRF 300.0 Statement of Financial Position;
11.         total reinsurance expense reported in GRF 300.0 Statement of Financial Position;
12.         net earned premium revenue; and
13.         total reinsurance expense as reported under AASB 1023.
Audit requirements
The form relating to authorised insurance entities and reinsurance entities is required to be subject to audit review and testing.
The scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.
Information provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act).  This means that:
·               the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);  
·               the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2)); 
·               the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3)); and
·               the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.
Reporting entity
Forms are to be completed for the following reporting entities where appropriate:
1.             Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);
2.             Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity); and
3.             Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity).
Definitions
Definitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.
Unit of measurement
Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).
The general requirements of AASB 121 are:
1.             Foreign currency monetary items outstanding at the reporting date[5] must be translated at the spot rate[6] at the reporting date.
2.             Foreign currency non-monetary items[7]  that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.
3.             Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.
Transactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139).  However, those foreign currency derivatives that are not within the scope of AASB 139 (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.
For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.
As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.
Exchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.
The ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.
4.             Translation of financial reports of foreign operations.
A foreign operation is defined in AASB 121  as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.
·               Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.
·               Translation of financial reports should otherwise follow the requirements in AASB 121.
Reporting period
Insurers are required to report the information in the reporting form on a quarterly and annual basis.
·               The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.
·               The annual information is to be completed in respect of the financial year of the insurer.
·               The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.
Reporting lag
This form must be lodged for each of the reporting units, within the number of business days after the end of the quarter as set out in Reporting Standard GRS 310.1 Premium Revenue and Reinsurance Expense.
Basis of preparation
Insurers should follow the recognition and measurement requirements of the Australian accounting standards in completing this form.  
The interpretation and required measurement basis for items listed in the form are specified in these instructions.
Netting
Unless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132 ‘Financial Instruments: Presentation’.
Related party disclosure
Amounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form. For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).
In accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:
(a)           controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);
(b)          has significant influence over the entity or has joint control over the entity; or
(c)           is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or
(d)          is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or
(e)           is a member of the key management personnel of the entity or its parent; or
(f)            is a close member of the family of any individual referred to in (a), (b) or (e); or
(g)           is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or
(h)           is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.
Specific instructions
Classes of Insurance Business
1.             Direct Business
The classes of insurance business are as follows:
(I).          Houseowners/Householders (H & H)
This class covers the common H & H policies inclusive of:
·               Contents;
·               Personal property;
·               Arson; and
·               Burglary. 
Public liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item (XIII).
(II).        Commercial Motor Vehicle
Motor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic Motor Vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.
(III).      Domestic Motor Vehicle
Motor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.
(IV).      Travel
Insurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.
(V).        Fire and Industrial Special Risks (ISR)
Fire
Includes all policies normally classified as 'Fire' and includes:
·               sprinkler leakage;
·               subsidence;
·               windstorm;
·               hailstone;
·               crop;
·               arson; and
·               loss of profits and any extraneous risk normally covered under fire policies, e.g. flood.
ISR
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) and 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
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 by the terms of the policy provides benefits for no more than three years.
(XI).     Other
All other insurance business not specifically mentioned elsewhere.  It includes, for example:
·               Trade Credit;
·               Extended Warranty (where the insurer extends a 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)
PI covers professionals against liability incurred as a result of errors and omissions in performing professional services which has resulted in economic losses suffered by third parties.
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.
2.             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.
Premium revenue
Premium revenue must be reported separately for:
·               Direct business; and
·               Inwards reinsurance business.
Premium revenue must be recognised on a basis that is consistent with the requirements of AASB 1023.
In accordance with AASB 1023:
·              Premium revenue shall be recognised from the attachment date as soon as there is a basis on which it can be reliably estimated:
·             over the period of the general insurance contract for direct business; or
·             over the period of indemnity for reinsurance business;
in accordance with the pattern of the incidence of risk expected under the general insurance contract[8].
·              Reinsurers are required to recognise the premium based on the gross premium income to be written by the direct insurer under the contract for proportional reinsurance.  For excess of loss reinsurance contracts, the premium revenue is to be recognised on the basis of the agreed minimum/deposit premium, which will be subject to a final adjustment factor applied to the final declared values of the premium determined.
·              Premium revenue must be discounted where it is to be received beyond the current year of cover under an insurance/reinsurance contract.  In these cases, use the discount rate as required in calculating outstanding claims liabilities in accordance with AASB 1023.
·              Premium revenue excludes amounts collected on behalf of third parties i.e. government stamp duty and taxes.
·              Levies charged to insured, such as fire service levies, are to be included as total premium revenue, but are to be reported separately.
·              Premium refunds and rebates are to be deducted from premium revenue.
·              For instalment premium policies, the amount of the annualised premium is to be used.
·              Where premium is calculated on an adjustment basis, the estimated annual premium is to be brought to account, with the estimated premium being replaced by the actual amount as it becomes known.
·              Where premium is accepted on a deposit basis, the full annual premium is to be brought into account.
·              Premium revenue must be gross of reinsurance expense.
·              Total gross written premium includes premium receivable on unclosed business.  This includes the business which has been accepted by the insurer/reinsurer prior to the balance date but where there is insufficient information to fully identify the business.
Part 1 and Part 2
For ‘Direct Business” and ‘Inwards Reinsurance Business’, amounts are to be reported as follows:
(1)   Total gross written premium revenue
Report premium revenue from business written directly by the insurer in ‘Part 1: Direct Business’.  Report inwards reinsurance premiums under ‘Part 2: Reinsurance Business’.  This should exclude Fire Service Levy (FSL) or other levies imposed by state and territory governments.
Also includes business sourced through insurance intermediaries such as co-insurance, underwriting pools or joint ventures, or portfolio transfers.
Joint ventures
Joint ventures are to be interpreted as defined by the AASB 131 ‘Interests in Joint Ventures’.
Coinsurance and underwriting pools
Insurance business allocated through underwriting pools and coinsurance arrangements by an entity acting as agent must be accounted for by the accepting insurer as direct insurance business (AASB 1023). 
Direct insurers or reinsurers may form underwriting pools or enter coinsurance arrangements as vehicles for jointly insuring particular risks or types of risks.  Premiums, claims and other expenses are usually shared in agreed ratios by insurers involved in these arrangements. Many underwriting pools and coinsurance arrangements involve the acceptance of risks by an entity acting as an agent for pool members or coinsurers. The entity receives premiums and pays claims and expenses, and allocates shares of the business to each pool member or coinsurer in agreed ratios. As the entity acting as agent is not an insurer, the business allocated to pool members and coinsurers is not reinsurance business. Pool members and coinsurers will need to treat such business allocated to them as direct insurance business.[9]
Some underwriting pools and coinsurance arrangements involve members of the pool or coinsurers directly underwriting risks and then passing all of those risks into the pool or arrangement. These risks are then shared among pool members or coinsurers.  For this type of underwriting pool or arrangement, an insurer treats its share of the business that other insurers place with the pool or arrangement as inwards reinsurance, and the business that it writes and passes into the pool or arrangement as direct insurance business which it reinsures to the extent of the shares in the pool or arrangement of the other pool members or coinsurers.  This approach results in the insurer properly reflecting its obligations to those it has directly insured and the substance of the transactions with the pool members or coinsurers.
Portfolio transfers
Portfolio transfer, as defined by AASB 1023, is a term used to describe the process by which premiums and claims on direct insurance business is transferred from one insurer to another by means of direct sale, not by reinsurance.
When responsibility in relation to claims on transferred insurance business passes from the transferring insurer to the accepting insurer the transfer must be accounted for as a portfolio assumption by the accepting insurer, and a portfolio withdrawal by the transferring insurer. In this instance, the accepting insurers will recognise the amount of unexpired premium revenue and insurance liabilities for which the transferring insurer is no longer responsible. Transfers of business effected through the Insurance Act requiring Federal Court approval shall be treated in this manner.
Where the responsibility in relation to claims on transferred insurance business remains with the transferring business, the transfer shall be treated by the transferring insurer and the accepting insurer as reinsurance business.
Premiums Received on a cashflow basis (in Part 3: Total)
This is the amount of premiums actually received over the reporting period (on a year to date basis). It is to be reported in aggregate for direct written business and reinsurance business.
This relates to all premiums received on a cashflow basis in the current financial year, regardless of the financial year in which the premiums may have been recognised as revenue (i.e. a prior financial year).
(2)   Gross written premium revenue relating to unclosed business
This column requires separate identification of gross premium revenue relating to unclosed business.  This includes the business which has been accepted by the insurer/reinsurer prior to the balance date but there is insufficient information to fully identify the business.
(3)   and (4) AASB 1023 Gross unearned premium liability (UPL)
Gross UPL is to be reported in this form at both the start of the financial year and the end of the reporting period.  The UPL is to be reported in this form in accordance with AASB 1023.
(5)   AASB 1023 Gross earned premium (excluding FSL)
This column is calculated automatically by the form and represents the sum of column (1) and column (3), less column (4).
(6)   Fire service levy  and other levies imposed by state and territory governments
Report separately FSL and any other levies imposed by state and territory governments.
(7)   AASB 1023 Gross earned premium (including FSL)
This column is calculated automatically by the form and represents the sum of column (5) and column (6).
(8)   Reinsurance expense
Reinsurance expense is to be recognised in accordance with the pattern of reinsurance service received as required by AASB 1023.
Reinsurance expense will be recognised from the attachment date over the period of indemnity of the reinsurance contract in accordance with the expected pattern of the incidence of risk. This may vary according to the type of reinsurance contract as outlined below.
For reinsurance written on a risks attaching or, equivalently, an underwriting period basis, current reinsurance contracts are fully matched to the underlying insurance portfolios.  Reinsurance coverage for the underlying portfolio is recognised as the underlying policies are written. 
 
For reinsurance written on a losses occurring basis, current reinsurance contracts provide coverage for any risks exposed during the reinsurance period irrespective of when the underlying business was written.  Such reinsurance covers both the unexpired portion of policies in force at the contract commencement date and that portion of new business and renewals written during the year that is earned up to the contract expiry date. This latter portion relates to business which has not yet been written at the contract commencement date.
 
APRA would expect that initially the full minimum and deposit premium would be recognised as an expense, with any necessary adjustments due to experience at subsequent reporting dates.
Where payments under a reinsurance contract extend beyond the current year of cover, reinsurance expense is to be discounted using similar discount rates as required in measuring insurance liabilities in accordance with AASB 1023.
(9)   and (10) GRF 300.0 Deferred Reinsurance Expense (DRE)
Deferred Reinsurance Expense is to be reported in this form at both the start of the financial year and the end of the reporting period.  Deferred Reinsurance Expense is to be reported in this form as per GRF 300.0 Statement of Financial Position.
(11)          Total Reinsurance expense
This column is calculated automatically by the form and represents The sum of column (8) and column (9), less column (10).
For some insurers the reinsurance expense reported in this column may be different from the reinsurance expense reported at column 13.
(12)          Net premium revenue
This is automatically calculated by the form and represents the AASB 1023 Gross earned premium (including FSL) less total reinsurance expense.
(13)          Total reinsurance expense per AASB 1023
Report the total reinsurance expense that would be reported under AASB 1023. Where there is no difference from column 11 ‘Total Reinsurance expense’ input the same number as in column 11. Where the insurer does not ordinarily calculate reinsurance expense under AASB 1023, input zero.. This item is a memo item for reconciliation purposes only.
Business with related entities:
Report premium revenue/reinsurance expense items which are from/in connection with the following related entities. Related parties have been defined earlier in this instruction guide:
1.             Parent entity
2.             Controlled entities / Controlled entities of the parent entity
For branches, the line item ’Controlled entities / Controlled entities of the parent’ is to be interpreted as amounts in relation to ‘Controlled entities of  the parent’, and for licensed insurance entities amounts are in relation to ‘Controlled entities’ of the reporting insurer.
3.             Associates / Joint Ventures
4.             Other related parties
 
  
 
Reporting Form GRF 310.2
Claims Expense and Reinsurance Recoveries
Instruction Guide
Introduction
The purpose of form GRF 310.2 Claims Expense and Reinsurance Recoveries is to provide information on the following:
1.             Claims expense by class of business (direct business and reinsurance), broken down into the following components:
·                claim payments made in the current year; and
·                movements in outstanding claims Liability (OCL).
2.             Reinsurance recoveries revenue by class of business (direct business and reinsurance business relating to current and prior years;
3.             Recoveries other than reinsurance by class of business (direct business and reinsurance business) relating to current and prior years
4.             Reinsurance recoveries received on a cashflow basis (i.e. payments received rather than accrued); and
5.             Claims paid on a cashflow basis (i.e. actually paid rather than accrued).
Audit requirements
The form relating to authorised insurance entities and reinsurance entities is required to be subject to audit review and testing.
The scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.
Information provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act).  This means that:
·               the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);  
·               the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2)); 
·               the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3)); 
·               the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.
Reporting entity
Forms are to be completed for the following reporting entities where appropriate:
1.             Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);
2.             Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity); and
3.             Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity).
Definitions
Definitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.
Unit of measurement
Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).
The general requirements of AASB 121 for translation are:
1.                  Foreign currency monetary items[10] outstanding at the reporting date must be translated at the spot rate[11] at the reporting date.
2.                  Foreign currency non-monetary items[12] that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.
3.                  Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.
Transactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139).  However, those foreign currency derivatives that are not within the scope of AASB 139 ‘Financial Instruments: Recognition and Measurement’ (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.
For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement. 
As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.  
Exchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.
The ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.
4.                  Translation of financial reports of foreign operations.
A foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.
·               Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.
·               Translation of financial reports should otherwise follow the requirements in AASB 121.
Reporting period
Insurers are required to report the information in the reporting form on a quarterly and annual basis.
·               The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.
·               The annual information is to be completed in respect of the financial year of the insurer.
·               The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.
Reporting lag
This form must be lodged for each of the reporting units, within the number of business days after the end of the quarter as set out in Reporting Standard GRS 310.2 Claims Expense and Reinsurance Recoveries.
Basis of preparation
Unless specifically mentioned in these instructions insurers should follow the recognition and measurement requirements of the Australian accounting standards in completing this form.
The interpretation and required measurement basis for items listed in the form are specified in these instructions.
Netting
Unless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132 ‘Financial Instruments: Presentation’.
Related party disclosure
Amounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form. For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).
In accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:
(a)           controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);
(b)          has significant influence over the entity or has joint control over the entity; or
(c)           is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or
(d)          is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or
(e)           is a member of the key management personnel of the entity or its parent; or
(f)            is a close member of the family of any individual referred to in (a), (b) or (e); or
(g)           is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or
(h)           is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.
 
Specific instructions
Classes of Business (1)
1.             Direct Business
The classes of insurance business are as follows:
(I).               Houseowners/householders (H & H)
This class covers the common H & H policies inclusive of:
·               Contents;
·               Personal property;
·               Arson; and
·               Burglary. 
Public liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item (XIII).
(II).             Commercial motor vehicle
Motor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic motor vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.
(III).           Domestic motor vehicle
Motor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.
(IV).           Travel
Insurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.
(V).             Fire and Industrial Special Risks (ISR)
Fire
Includes all policies normally classified as 'Fire' and includes:
·               sprinkler leakage;
·               subsidence;
·               windstorm;
·               hailstone;
·               crop;
·               arson; and
·               loss of profits and any extraneous risk normally covered under fire policies, e.g. flood.
ISR
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) and 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
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 by the terms of the policy provides benefits for no more than three years.
(XI).          Other
All other insurance business not specifically mentioned elsewhere.  It includes, for example:
·               Trade Credit;
·               Extended Warranty (where the insurer extends a 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)
PI covers professionals against liability incurred as a result of errors and omissions in performing professional services which has resulted in economic losses suffered by third parties.
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.
2.             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.
Part 1 and Part 2
Claims expense
Claims expense for the purpose of this form is reported in relation to the following:
·               claim payments made in the current year, and
·               movements in OCL.
The column ‘Total gross claims expense’ is calculated automatically and is derived from the above components in the following way:
·               claim payments made in the current year
Less:
·               OCL at beginning of financial year
Add:
·               OCL at the end of the reporting period
Note: All components required for the calculation of ‘Total gross claims expense’ are to be reported gross of reinsurance recoveries and non-reinsurance recoveries.
Claims expense that relates to movements in the OCL is to be based on the OCL that is reported in GRF 300.0 Statement of Financial Position.
Note: The OCL reported in GRF 300.0Statement of Financial Position does not have to be equal to the amounts required by Prudential Standard GPS 310 Audit and Actuarial Reporting and Valuation or the amounts reported in GRF 210.0 Outstanding Claims Provision - Insurance Risk Charge.
The total amount of claims expense reported in this form must match the total claims expense reported in the line item titled ‘Gross Claims Expense’ in GRF 310.0 Statement of Financial Performance.
The claims expense is to be disclosed by type of business (i.e. direct business and inwards reinsurance business).
Other recoveries revenue relating to current and prior years
Report the amount of recoveries other than reinsurance in relation to claims recognised in the calculation of the gross claims expense relating to current and prior years
Recoveries other than reinsurance are to be disclosed by type of business (i.e. direct business and inwards reinsurance business).  
Reinsurance recoveries revenue relating to current and prior years
Report the amount of reinsurance recoveries in relation to claims recognised in the calculation of the gross claims expense  relating to current and prior years.
The total amount reported in this form for this component must match the  item titled ‘Reinsurance recoveries revenue relating to current and prior years’ in GRF 310.0 Statement of Financial Performance.
Reinsurance recoveries are to be disclosed by type of business (i.e. direct business and inwards reinsurance business).
Net claims expense
This is calculated automatically by the form and is derived as follows:
·        Total gross claims expense
Less
·        Other recoveries revenue relating to current and prior years
Less
·        Reinsurance recoveries revenue relating to current and prior years.
Current period net claims expense
Report at this item by class of business:
·               current period claims payments;
·               current period reported outstanding case estimates (that is case estimates created in the current period); and
·               current period incurred by not reported (IBNR) (and incurred but not enough reported) claims expenses.
Current period net claims expense should be defined and reported according to the following:
·               the current period is defined as the current financial year to date;
·               net of all recoverables (including input tax credits (ITCs), reinsurance, salvage, subrogation and other recovery types);
·               inclusive of claims handling expense, assuming that industry generally includes claims handling costs with the claim paid component of the incurred claims expense;
·               the outstanding claims component be inflated only i.e. undiscounted; and
·               the outstanding claims component be on a central estimate basis i.e. without risk margins.
Non-recurring items that are part of total net claims expense
Report the amount of ‘Net claims expense’ that has not been reported at ‘Current period net claims expense’ in this column.
Quarterly actuarial reviews are not required to be conducted specifically for the purposes of completing the above two items.
Reinsurance recoveries received (cashflow basis)
Report the amount of reinsurance recoveries received over the reporting period (on a year-to-date basis) in aggregate for direct business and inwards reinsurance business (i.e. disclosure in relation to individual class of business is not required).  Do not include reinsurance recoveries recognised on an accrual basis, as that is recognised in ‘Reinsurance recoveries revenue relating to current and prior years’.
This relates to all reinsurance recoveries received on a cashflow basis in the current financial year, regardless of the financial year in which the reinsurance recovery may have been recognised as revenue (i.e. a prior financial year).
Claims paid (cashflow basis)
Report the amount of claims actually paid over the reporting period (on a year-to-date basis) in aggregate for direct written business and inwards reinsurance business (i.e. disclosure of claims paid in relation to individual class of business is not required). This relates to all claims paid on a cashflow basis in the current financial year, regardless of the financial year in which the claim may have been recognised as an expense (i.e. a prior financial year).
Business with related entities:
1.             Parent entity
For total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are in connection with/from the parent entity of the licensed insurer.
2.             Controlled entities / Controlled entities of the parent
For branches, the line item ‘Controlled entities/Controlled entities of the parent’ is to be interpreted as amounts in relation to ‘Controlled entities of the parent’, and for licensed insurance entities amounts are in relation to ‘Controlled entities’ of the reporting insurer.
For total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from the controlled entities.
3.             Associates / Joint Ventures
For total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from Associates or Joint Ventures of the licensed insurer. Associates and Joint Ventures are defined in accordance with AASB 131 ‘Interests in Joint Ventures’ and AASB 128 ‘Investments in Associates’.
4.             Other related entities
For total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from any other related entity of the licensed insurer that are not specifically identified above. Refer to the definition of related parties as defined in the general section of this instruction guide.
    

Reporting Form GRF 310.3
Investment and Operating Income and Expense, Underwriting expenses and Acquisition costs.
Instruction Guide
Introduction
The purpose of this form is to provide information relating to investment income, operating income and expenses. underwriting expenses and acquisition costs of the reporting insurance entity.
Audit requirements
The form relating to authorised insurance entities and reinsurance entities is required to be subject to audit review and testing.
The scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.
Information provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act).  This means that:
·               the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);  
·               the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2)); 
·               the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3)); 
·               the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.
Reporting entities
Forms are to be completed for the following reporting entities where appropriate:
1.             Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);
2.             Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity); and
3.             Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity).
Definitions
Definitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.
Unit of measurement
This form is to be presented in Australian currency, rounded to thousands of dollars, with no decimal place.
Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).
The general requirements of AASB 121 for translation are:
1.             Foreign currency monetary items[13] outstanding at the reporting date must be translated at the spot rate[14] at the reporting date.
2.             Foreign currency non-monetary items[15] that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.
3.             Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.
          Transactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139).  However, those foreign currency derivatives that are not within the scope of AASB 139 ‘(e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.
          For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.
          As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.
          Exchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.
          The ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.
4.             Translation of financial reports of foreign operations.
          A foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.
·               Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.
·               Translation of financial reports should otherwise follow the requirements in AASB 121.
Reporting period
Insurers are required to report the information in the reporting form on a quarterly and annual basis.
·               The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.
·               The annual information is to be completed in respect of the financial year of the insurer.
·               The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.
Reporting lag
This form must be lodged for each of the reporting units within the number of business days after the end of the quarter as set out in Reporting Standard GRS 310.3 Investment and Operating Income and Expense.
Basis of preparation
Unless specifically mentioned in these instructions insurers should follow the recognition and measurement requirements of the Australian accounting standards in completing this form.
The interpretation and required measurement basis for items listed in the form which are not measured in line with the requirements of Australian accounting standards are specified in these instructions.
Fair value measurement of assets
APRA applies the notion of assets backing general insurance liabilities for its regulatory reporting which is consistent with  the classification basis in AASB 1023 ‘General Insurance Contracts’.(AASB 1023) The value of the investments reported in this form should be equal to the value of investments deemed to be assets backing insurance liabilities for statutory reporting.
Investments reported in this form that back the entity's general insurance liabilities must be measured at fair value. The investments must not be valued at cost. Fair value has the same meaning as defined in AASB 132 ‘Financial Instruments: Presentation’ (AASB 132),  that is, the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's-length transaction, and is determined as follows:
(i)             the quoted market price (i.e. bid or ask price) in an active and liquid market; or
(ii)           when there is infrequent activity in a market, and the market is not well established, small volumes are traded relative to the asset or liability to be valued, or a quoted market price is not available – a realistic estimate of fair value on the basis of the results of a valuation technique that makes maximum use of market inputs, and relies as little as possible on entity-specific inputs[16].
For investments integral to general insurance activities, changes in the values at which such investments are measured must be recognised as revenues (or losses) in GRF 310.0 Statement of Financial Performance and GRF 310.3 Investment and Operating Income and Expense in the reporting period in which the changes occur.
Fair value of charged / encumbered assets
If an asset is in any way subject to a charge, covenant, encumbrance, option to purchase or any other arrangement by way of agreement or statute, that restricts the fair value of the asset, the value attached to the asset needs to reflect the existence of these arrangements. For example, if the insurer has agreed to deliver an asset to a purchaser at a price below the arms length value, the fair value cannot exceed the agreed price. This may also have relevance to this form.
Netting
Unless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the requirements for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132.  
Related party disclosure
Amounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form.
For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).
In accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:
(i)             controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);
(ii)           has significant influence over the entity or has joint control over the entity; or
(iii)          is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or
(iv)         is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or
(v)           is a member of the key management personnel of the entity or its parent; or
(vi)         is a close member of the family of any individual referred to in (a), (b) or (e); or
(vii)        is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or
(viii)      is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.
Specific Instructions
Classes of Business
1.             Direct Business
The classes of insurance business are as follows:
(I).               Houseowners/householders (H & H)
This class covers the common H & H policies inclusive of:
·               Contents;
·               Personal property;
·               Arson; and
·               Burglary. 
Public liability normally attaching to these products are to be separated and included in Public and product liability class of business – item (XIII).
(II).             Commercial motor vehicle
Motor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic motor vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.
(III).           Domestic motor vehicle
Motor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.
(IV).           Travel
Insurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.
(V).             Fire and Industrial Special Risks (ISR)
Fire
Includes all policies normally classified as 'Fire' and includes:
·               sprinkler leakage;
·               subsidence;
·               windstorm;
·               hailstone;
·               crop;
·               arson; and
·               loss of profits and any extraneous risk normally covered under fire policies, e.g. flood.
ISR
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) and 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
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 by the terms of the policy provides benefits for no more than three years.
(XI).          Other
All other insurance business not specifically mentioned elsewhere.  It includes, for example:
·               Trade Credit;
·               Extended Warranty (where the insurer extends a 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)
PI covers professionals against liability incurred as a result of errors and omissions in performing professional services which has resulted in economic losses suffered by third parties
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
Includes:
·               Workers' compensation;
·               Seamen's compensation; and
·               Domestic workers compensation.
2.             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.
For the purposes of this form, income and expenses are to be disclosed into the following categories:
·               Parent and controlled entities
Report the income received or receivable and expenses paid or payable to:
·               the parent (direct or ultimate parent of the group) of the licensed insurer; and
·               entities controlled by the reporting insurer; or
·               entities controlled by the foreign parent insurer for branches.
·               Other related parties
Report the income received or receivable and expenses paid or payable to all other related entities (other than disclosed in the category Parent/Controlled entities).  Refer to the definition of related parties provided earlier in the instruction guide.
·               Derivatives
Do not duplicate reporting under this heading if income derived or expense incurred is in relation to transactions with the parent / controlled entities or other related parties.
·               Other
Report income received or receivable and expenses paid or payable to all other sources (excluding Parent/controlled entities and other related parties).
1.             Investment Income
Interest:
Interest is the income normally receivable on assets such as deposits, loans, bonds, and accounts receivable. Interest must be recognised and measured in accordance with the Australian accounting standards. This will mean that interest income is recognised on an accrual basis, unless the asset is considered to be impaired/non-performing in which interest is to be recognised on a cash basis. Include:
·               Coupon payments from fixed interest securities (i.e. Commonwealth Government Bonds);
·               Earnings on discounted securities (i.e. bank accepted bills);
·               Interest from deposits with banks and non-bank financial intermediaries;
·               Interest from loans and advances (to related and unrelated entities); and
·               Interest on finance leases.
Interest income is to be reported under the appropriate headings above.
Derivatives
Report the interest received/receivable in relation to derivative positions e.g. from swap contracts. If interest income from derivative contracts is derived from positions held with the parent/controlled entities or other related entities, report interest income under the appropriate headings above, do not duplicate reporting under this heading.
Total interest income
This is automatically calculated by the form and represents the total interest income from all sources.
Dividends:
Dividends are the income receivable on assets such as shares, units and trusts. Dividends from Australian equities are to be reported net of any franking credits.
Total dividend income
This is automatically calculated by the form and represents the total dividend from all sources.
Rental income:
Rent is the income receivable on assets such as land and property.
Total rental income
This is automatically calculated by the form and represents the total rental income from all sources.
Trust distributions:
This refers to the income distributed by trustees of trust estates in relation to investments held in trusts.
Total trust distributions
This is automatically calculated by the form and represents the total trust distributions from all sources.
Other distributions
Specify the nature of other forms of distributions not specifically reported in the form under the above categories.
Total other distributions
This is automatically calculated by the form and represents the total other distributions from all sources.
Foreign exchange gains / losses relating to Investments (realised and unrealised):
·               Investments (other than derivatives)
Report realised and unrealised foreign exchange net gains/losses relating to the translation/conversion into the Australian currency of investments (e.g. every investment other than derivative positions) denominated in a currency other than the Australian currency. Do not report the gains and losses attributable to the movement in the fair value of investments that are denominated in a foreign currency, these are reported below under ‘Change in fair value of investments’. Only report the gain/loss that is attributable to movements in the currency value that the investment  is denominated in, respective to the Australian Dollar.
·               Derivatives
Report realised and unrealised foreign exchange net gains/losses relating to the translation/conversion into the Australian currency of derivative contracts held in relation to the underlying investment portfolios denominated in a currency other than the Australia currency (e.g. as hedges of the interest rate or equity investment portfolios or as outright position taking - altering the asset allocation strategy). Do not report the gains and losses attributable to the movement in the fair value of the derivative position that are denominated in a foreign currency, these are reported below under ‘Change in fair value of investments’. Only report the gain/loss that is attributable to movements in the currency value that the derivative contract is denominated in, respective to the Australian Dollar.
Total foreign exchange gains / losses
This is automatically calculated by the form and represents the total foreign exchange gains/losses relating to investments and derivatives.
Change in fair value of Investments:
(a)          Unrealised gains / losses:
Change in net fair value is the increase or decrease in the fair value of each asset compared to the value of that asset at the beginning of the reporting period. These assets are still owned by the insurer at the end of the period. As they have not been sold the gains or losses on the assets are termed ‘unrealised’.  If the assets are sold during the reporting period, then the gains or losses are realised and are to be disclosed separately under part (b) ‘Realised gains / losses’.
Only include the movement in the fair value of the asset. Do not include the movement in the value of the currency comparative to the Australian Dollar if the asset is denominated in a currency other than the Australian Dollar. Movements in value attributable to the movements in the foreign exchange rates are to be separately disclosed under the heading ‘Foreign exchange gains / losses (realised and unrealised)’.
For the purposes of this form unrealised gains/losses relating to investments must be disclosed into the following categories:
Direct Investments:
This relates to investments where the reporting insurer holds direct title/ownership of the investment asset (i.e. holding of debt securities, listed equity securities, freehold property).
·               Interest rate investments
Disclose any unrealised gain/loss on the interest rate investments portfolio.  Do not include unrealised gains/losses on interest rate related derivative contracts. These are to be disclosed separately under the heading ‘Derivatives (other than foreign exchange)’.
·               Equity investments
Disclose any unrealised gain/loss on the equity investments portfolio.  Do not include unrealised gains/losses on equity related derivative contracts. These are to be disclosed separately under the heading 'Derivatives (other than foreign exchange)’.
·               Property investments
Disclose any unrealised gain/loss on the investment property portfolio.
·               Loans and advances
Disclose any unrealised gain/loss on the loans and advances portfolio. This is only applicable where the reporting insurer revalues the loans and advances portfolio to fair value.
·               Derivatives (other than foreign exchange)
Disclose unrealised gains/losses in the fair value of the derivative exposure. Do not include unrealised or realised movements in foreign currency derivative contracts, as these are to be separately disclosed under the heading ‘Foreign exchange gains / losses relating to investments (realised and unrealised)’.
Indirect Investments:
This relates to investments where the reporting insurer does not hold direct title/ownership of investment assets (i.e. holding of units in listed or unlisted unit trusts).
·               Units in trusts / managed investment vehicles
Disclose the change in fair value (unrealised gain/loss) of holdings of units in trusts or other management investment vehicles.
Total unrealised gains / losses on investments
This is automatically calculated by the form and represents the total unrealised gains and losses relating to direct investments and indirect investments.
(b)         Realised gains / losses on disposal of:
Change in fair value is the increase or decrease in the fair value of each asset at the date of its disposal, compared to the value of that asset at the beginning of the reporting period or when last revaluation was recognised. These assets have been sold and as a result the gains or losses on the assets are termed ‘realised’.  If the assets have not been sold during the reporting period, then the gains or losses are unrealised and are to be disclosed separately under part (a) ‘Unrealised gains/losses’.
Only include the movement in the fair value of the asset. Do not include the movement in the value of the currency comparative to the Australian Dollar if the asset is denominated in a currency other than the Australian Dollar. Movements in value attributable to the movements in the foreign exchange rates are to be separately disclosed under the heading ‘Foreign exchange gains / losses relating to investments (realised and unrealised)’.
For the purposes of this form realised gains / losses must be disclosed into the following categories:
Direct Investments:
This relates to investments where the reporting insurer holds direct title/ownership of the investment asset (i.e. holding of debt securities, listed equity securities, freehold property).
·               Interest rate investments
Disclose any realised gain/loss on the interest rate investments portfolio.  Do not include realised gains/losses on interest rate related derivative contracts. These are to be disclosed separately under the heading ‘Derivatives (other than foreign exchange)’.
·               Equity investments
Disclose any realised gain/loss on the equity investments portfolio.  Do not include realised gains/losses on equity related derivative contracts. These are to be disclosed separately under the heading ‘Derivatives (other than foreign exchange)’.
·               Property investments
Disclose any realised gain/loss on the investment property portfolio.
·               Loans and advances
Disclose any realised gain/loss on the loans and advances portfolio. This is only applicable where the reporting insurer revalues the loans and advances portfolio to fair value.
·               Derivatives (other than foreign exchange)
Disclose realised gains/losses. Do not include realised gains and losses on movements in foreign currency derivative contracts, as these are to be separately disclosed under the heading ‘Foreign exchange gains / losses relating to investments (realised and unrealised)’.
Indirect Investments:
This relates to investments where the reporting insurer does not hold direct title/ownership of investment assets (i.e. holding of units in listed or unlisted unit trusts).
·               Units in trusts / managed investment vehicles
Disclose the realised gain or loss arising on disposal of holdings of units in trusts or other management investment vehicles.
Total realised gains / losses on investments
This is automatically calculated by the form and represents the total realised gains and losses relating to direct investments and indirect investments.
Other investment income
Report investment income from sources not specifically reported elsewhere in the form.
Provide a brief description in the space provided in the form, of the nature of the income.
Total investment income
This is automatically calculated by the form and represents the sum of interest income, dividends, rental income, trust distributions, other distributions foreign exchange gains/losses relating to investments (realised and unrealised), change in fair value of investments (realised and unrealised) and other investment income.
Total Investment Income which is attributable to shareholders’ funds
Disclose that value of total investment income that is associated or attributable to the investment of shareholders’ funds only.  As of 1 July 2008 it is mandatory for insurers to make this disclosure.  In cases where the insurer has an existing internal split of the assets between shareholders and insurance liabilities then this should be used to determine the investment income attributable to shareholder funds. Otherwise insurers must assume that the insurance liabilities are backed by investment assets and proportionally allocate the investment income to the insurance liabilities and the balance to shareholders fund.  For example:
Assets                                                                                      $150
Investment assets                                                                      $110
Investment income                                                                    $10
Net insurance liabilities                                                  $60
Investment income attributed to shareholders funds:                   (110-60)/110*10=$4.55
Total investment income which is attributable to policyholders’ funds
Disclose that value of total investment income that is associated or attributable to the investment of policyholders’ funds only.
2.             Other Operating Income
Include income earned which does not constitute investment income and is not reported under the section 1 titled ‘Investment Income’ i.e. income or expense that does not relate to the investment portfolio of the general insurer. Some of these items will not be applicable for branch insurers.
Realised gains / losses on disposal of:
·               Insurance portfolios
Disclose any realised gain or loss recorded on the sale or transfer of insurance portfolios.
·               Investments in controlled entities (this is not applicable for branch insurers)
Disclose any realised gain or loss recorded on the disposal (partial and full disposal) of the investment in controlled entities. This should be done in compliance with AASB 127 ‘Consolidated and Separate Financial Statements’.
·               Investments in associates / joint ventures
Disclose any realised gain or loss recorded on the disposal (partial and full disposal) of the investment in associated entities or jointly controlled assets/entities/operations. Joint venture is to be interpreted as defined in AASB 131 ‘Interests in Joint Ventures’ and Associate is to be interpreted as defined in AASB 128 ‘Investments in Associates’.
·               Other assets
Disclose any realised gain or loss recorded on the disposal of other assets not specifically disclosed above or under section 1 ‘Investment Income’.
Total realised gains / losses
This is automatically calculated by the form and represents the total realised gains and losses relating to insurance portfolios, investments in controlled entities, investments in associates / joint ventures and other assets.
Foreign exchange gains / losses (realised and unrealised)
Borrowings:
Report realised and unrealised foreign exchange gains/losses relating to the translation/conversion into Australian currency of the value of borrowings that are denominated in a currency other than the Australian Dollar.
Record the foreign exchange gains/losses relating to borrowings that are denominated in a currency other than Australian currency into the following:
·               Underlying exposure
This is the exchange gains/losses relating to the conversion of the underlying borrowing.
·               Derivatives (hedging borrowing exposure)
This is the exchange gains/losses relating to the conversion of any derivative exposure taken by the insurer to hedge the currency risk associated with the repayment of the underlying borrowing.
Claims liability
Report any realised and unrealised foreign exchange gains/losses relating to the translation/conversion into Australian currency of the value of outstanding claims liabilities that are to be paid/settled in a currency other than the Australian Dollar.
Record the foreign exchange gains/losses relating to claims liability into the following:
·               Underlying exposure
This is the exchange gains/losses relating to the conversion of the underlying claim liability.
·               Derivatives (hedging claims exposure)
This is the exchange gains/losses relating to the conversion of any derivative exposure taken by the insurer to hedge the currency risk associated with the settlement of the underlying claim liability.
Other
Report any realised and unrealised foreign exchange gains/losses relating to the translation/conversion into Australian currency of other liabilities not specifically reported above. Include the foreign exchange gains/losses on any derivative contracts taken to hedge movements in borrowings and outstanding claims liabilities that are denominated in a currency other than the Australian Dollar.
Total foreign exchange gains / losses
This is automatically calculated by the form and represents the total foreign exchange gains/losses relating to borrowings, claims liability and other items.
Net increment / decrement (or write-down) from the revaluation of:
·               Investments in controlled entities (not applicable for branch insurers)
Disclose the value of any increment or write down in the carrying amount(s) of investment(s) in controlled entities that is taken directly to the Statement of Financial Performance. Do not include revaluation increments or decrements that are taken to an Asset Revaluation Reserve in accordance with AASB 116 ‘Property, Plant and Equipment’ (AASB 116) AASB 140 ‘Investment Property’ (AASB 140).
·               Investments in associates / joint ventures
Disclose the value of any increment or write down in the carrying amount of investments in associates or joint ventures that is taken directly to the Statement of Financial Performance as required under Australian accounting standards.  Do not record revaluation increments or decrements that are taken to an Asset Revaluation Reserve in accordance with AASB 116 or an Available for Sale Reserve in accordance with AASB 139. 
Note:
This is not applicable for the adjustments to the carrying amount of investments in associates where the reporting insurer accounts for these interests by the use of the equity method of accounting.[17]
·               Other assets
Disclose the value of any increment or write down in carrying value of other assets (except investments) not separately disclosed above, that are taken to the Statement of Financial Performance.
Note: do not record any values attributable to assets recorded as investments, these must be disclosed in the appropriate section 1 ‘Investment Income’. Do not record revaluation increments or decrements that are taken to an Asset Revaluation Reserve or an Available for Sale Reserve.
Total net increment / decrement (or write-down) from revaluation
This is automatically calculated by the form and represents the total net increment/decrement (or write down) from revaluation of investments in controlled entities, investments in associates / joint ventures and other assets.
Share of net profits (losses) of associates and joint ventures accounted for using the equity method of accounting
This represents income/loss recognised by the reporting insurer where the equity method is adopted to account for the investment in the associate or joint venture as required by AASB 128 ‘Investments in Associates’ and AASB 131 ‘Interests in Joint Ventures’.
Fees and commissions:
Disclose the value of all fees and commissions income earned into the appropriate categories required in the form. Do not include commission revenue that is associated with underwriting activities and is disclosed as commission revenue in the calculation of underwriting expenses in GRF 310.0 Statement of Financial Performance.
Life insurance:
Disclose the value of income recognised from life insurance activities/business. Income earned is to be recognised in accordance with AASB 1038 ‘Life Insurance Contracts’.
Other operating income:
Disclose the value of any other operating income not separately disclosed above.  Provide a brief description of the nature of this income in the space provided in the form.
Total Other Operating Income
This is automatically calculated by the form and represents the totals for the following ‘Other operating income’ categories:
1.      Realised gains/losses on disposal;
2.      Foreign exchange gains/losses (realised and unrealised);
3.      Net increment/decrement (or write down) from the revaluation of listed items;
4.      Share of net profits (losses) of associates and joint ventures accounted for using the equity method;
5.      Fees and commissions;
6.      Life insurance; and
7.      Other operating income.
3        Operating expenses
Include expenses incurred (i.e. paid or payable) and recognised which are not ordinarily directly associated with the generation of Investment Income (i.e. expenses that are not directly related to the investment portfolio of the general insurer).  Do not include underwriting expenses reported on GRF 310.0 Statement of Financial Performance (GRF 310.0).
Interest expense
Borrowings
Report the interest expense recognised with funds classified as borrowings in the Statement of Financial Position.
Loan capital
Report the interest expense recognised with funds classified as loan capital in GRF 300.0 Statement of Financial Position.
Other interest bearing liabilities
Report the interest expense associated with other interest bearing liabilities not separately disclosed above. 
Derivatives
Report the interest expense associated with derivative contracts (i.e. swap contracts).
Total interest expense
This is automatically calculated by the form and represents the total of the items under ‘Interest expense’.
Total interest expense paid to:
Report the total interest expense recognised/paid to:
·               Parent entity;
·               Controlled entities;
·               Associates/joint ventures; and
·               Other related parties.
Do not report interest expenses on assets backing insurance liabilities at this item. This is a separate item on GRF 310.0
Personnel expenses
·               Wages & salaries
Report the total expenses relating to the payment of employees that represent wages and salaries. Wages and salaries expense in relation to employee expenses are to be recognised in accordance with AASB 119 ‘Employee Benefits’.
·               Other employee related costs
Report all other costs associated with the employment of employees other than direct salary and wages expense as disclosed above.
·               Share-based payment expenses
Report total share-based payment expenses in accordance with AASB 2 ‘Share-based Payment’.
Total personnel expense
This is automatically calculated by the form and represents the total of the items under ‘Personnel expense’.
Occupancy and Equipment Expenses
·               Depreciation / impairment of:
·               Plant and equipment
Record the amount of depreciation/impairment recognised for plant and equipment. Depreciation expense is to be calculated in accordance with the requirements of AASB 116 ‘Property, Plant and Equipment’.
·               Other
Record the amount of depreciation/impairment recognised for other depreciable assets not included above (e.g. motor vehicles). Depreciation expense is to be calculated in accordance with the requirements of AASB 116 Property, Plant and Equipment.
·               Operating lease rentals
Record the amount of operating lease rentals paid/payable on leased assets (e.g. motor vehicles).
·               Other
Record amounts of all other types of occupancy and equipment expense not separately disclosed above.
Total occupancy and equipment expenses
This is automatically calculated by the form and represents the of the items under ‘Occupancy and Equipment Expenses’.
Other Operating Expenses
Report the operating expenses of the business in accordance with AASB 1023 and other applicable accounting standards.
·               Impairment of:
·               Goodwill
Disclose the impairment losses of goodwill for the reporting period. Goodwill is to be tested for impairment whenever there is indication that goodwill may be impaired in accordance with AASB 136 ‘Impairment of Assets’.
· Intangible assets with an indefinite useful life
Report the impairment losses of intangible assets with indefinite useful lives.
· Other assets
Report the amortisation charge against other assets not reported above under Occupancy and Equipment expense in accordance with. AASB 136 ‘Impairment of Assets’.
·               Amortisation of intangible assets with a finite useful life
Report the amortisation charge against intangible assets with a finite useful life.
·               Investment management fees
Record the amount of fees paid/payable that relate to the management/investment of the insurers investment portfolio. Include fees paid to independent third parties as well as related entities of the insurer/insurance group.
·               Other management fees
Record the amount of management fees paid/payable other than that disclosed as fees paid for the management/investment of the insurer’s investment portfolio. Include fees paid to independent third parties as well as related entities of the insurer/insurance group.
·               Fees for:
·               Audit related services
Record the fees paid/payable that relate to the provision of audit related services to the insurer/insurance group by the appointed external audit firm.
· Non-audit related services provided by audit firm
Record the fees paid/payable that relate to the provision of non-audit related services by the appointed external audit firm.
·               Consulting fees
Record the amount of all other fees paid/payable by the insurer/insurance group other than that already specifically disclosed elsewhere in the form that relate to other professional services. Include fees paid to independent third parties as well as related entities of the insurer/insurance group.
·               Actuarial fees
Record the fees paid/payable that relate to the provision of actuarial services.
·               Directors fees
Record the fees paid/payable that relate to the payment of directors fees for the discharge of their service.
·               Bad & doubtful debts
This includes the amount representing increments to a provision for doubtful debts/impairment as well as bad debts written off directly against the profit and loss (i.e. where no provision has been created). This can be recorded in relation to receivables and loans and advances.
·               Other operating expenses
Record all other operating expenses not specifically disclosed above.
Total Other Operating Expenses
This is automatically calculated by the form and represents the sum of the following categories:
·               Impairment of Goodwill;
·               Impairment of Intangible Assets with an indefinite useful life;
·               Impairment of Other assets;
·               Amortisation of Intangible Assets with a finite useful life;
·               Investment management fees;
·               Other management fees;
·               Fees for audit and non-audit related services provided by the audit firm;
·               Consulting fees;
·               Actuarial fees;
·               Directors fees;
·               Bad & doubtful debts; and
·               Other operating expenses.
Total Operating Expenses
This is automatically calculated by the form and represents the sum of:
·               Total interest expense;
·               Total personnel expenses;
·               Total occupancy and equipment expenses; and
·               Total other operating expenses.
4.             Underwriting expenses and Acquisition costs
Part 1 and Part 2: Direct Business and Reinsurance Business
Report by class of business the acquisition costs and underwriting expenses for both direct business and reinsurance business.
Acquisition costs and underwriting expenses
Report acquisition costs as recognised under AASB 1023. Acquisition costs are incurred in obtaining and recording general insurance contracts. They usually include commission or brokerage paid to agents or brokers for obtaining business for the insurer, but include selling and underwriting costs such as advertising and risk assessment, the administrative costs of recording policy information and premium collection costs. However for the purposes of reporting on this form, commission expenses should be excluded and reported separately.
Also include at this item all other underwriting expenses which are not usually included in acquisition costs. That is, this item should be an aggregate of all expenses incurred in writing the business.
Acquisition costs recognised in this line item should exclude the results of the liability adequacy test (LAT).
Results of liability adequacy tests
Report any adjustments to deferred acquisition costs or the unexpired risk liability as a result of performing the LAT in accordance with AASB 1023. Results of LAT failures should be reported as a positive value.
Commission expense
Report at this item commission or brokerage paid to agents or brokers for obtaining business for the insurer.
Total
This item is calculated automatically by the form and represents the sum of all acquisition costs and underwriting expenses and the results of the LAT for each class of business.
Total underwriting expenses and acquisition costs
This item is automatically calculated by the form and represents the respective totals for  acquisition costs and underwriting expenses  and the results of the LAT for direct business and reinsurance business. The final column represents the sum of all the preceding columns.
 
 

[1]           Monetary items are defined to mean units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency.
[2]           Spot rate means the exchange rate for immediate delivery.
[3]           Examples of non-monetary items include amounts prepaid for goods and services (e.g. prepaid rent); goodwill; intangible assets; physical assets; and provisions that are to be settled by the delivery of a non-monetary asset.
 
[4]           See AASB 139 ‘Financial Instruments: Recognition and Measurement’.
[5]           Monetary items are defined to mean units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency.
[6]           Spot rate means the exchange rate for immediate delivery.
[7]           Examples of non-monetary items include amounts prepaid for goods and services (e.g. prepaid rent); goodwill; intangible assets; physical assets; and provisions that are to be settled by the delivery of a non-monetary asset.
[8] Refer AASB 1023
[9]           From AASB 1023 Section 14.
[10]          Monetary items are defined to mean units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency.
[11]          Spot rate means the exchange rate for immediate delivery.
[12]          Examples of non-monetary items include amounts prepaid for goods and services (e.g. prepaid rent); goodwill; intangible assets; physical assets; and provisions that are to be settled by the delivery of a non-monetary asset.
 
[13]          Monetary items are defined to mean units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency.
[14]          Spot rate means the exchange rate for immediate delivery.
[15]          Examples of non-monetary items include amounts prepaid for goods and services (e.g. prepaid rent); goodwill; intangible assets; physical assets; and provisions that are to be settled by the delivery of a non-monetary asset.
[16]          See AASB 139 ‘Financial Instruments: Recognition and Measurement’.
[17]           Refer AASB 128 ‘Investments in Associates’ and AASB 131 ‘Interests in Joint Ventures’