Financial Sector (Collection of Data) determination No. 26 of 2005 Reporting Standard GRS 430.0 (2005) Financial Sector (Collection of Data) Act 2001
I, Charles Watts Littrell, a delegate of APRA, under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (‘the Act’) MAKE the reporting standard set out in the Schedule, which applies to financial sector entities of the kind specified in paragraph 2 of the reporting standard. Under section 15 of the Act, I DECLARE that the reporting standard shall begin to apply to those entities on the later of 1 July 2005 and the date of registration on the Federal Register of Legislative Instruments. Dated 21 June 2005 [signed] ……………………............ Charles Littrell Executive General Manager Policy, Research and Statistics Division APRA Interpretation In this Notice APRA means the Australian Prudential Regulation Authority.
Reporting Standard GRS 430.0 (2005)
Claims Expense by State and Territory of Australia
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 (foreign insurers) operating in Australia through branch operations, to report to APRA, generally on an annual basis, on the claims expense by State and Territory of Australia. This standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with: · Form GRF 430.0 Claims Expense by State and Territory of Australia (Form GRF 430.0) and the associated instructions (each of which is attached and forms part of this reporting standard).
1. Data collected in Form GRF 430.0 is used by APRA on behalf of the Australian Bureau of Statistics (ABS). APRA will use this information to monitor the source of claims expense by State and Territory of Australia.
Application and commencement
2. This reporting standard applies to all insurers, other than authorised reinsurers, and shall begin to apply to those entities on the later of 1 July 2005 and the date of registration on the Federal Register of Legislative Instruments.
3. An insurer must provide APRA with the information required by Form GRF 430.0 for each reporting period.
Forms and method of submission
4. The information required by this reporting standard must be given to APRA either: (a) in electronic form, using one of the electronic submission mechanisms provided by the ‘Direct to APRA’ (also known as ‘D2A’) application; or (b) manually completed on paper, which must be faxed or mailed to APRA’s head office. Note: the Direct to APRA application software and paper forms may be obtained from APRA.
Reporting Periods and Due Dates
5. Subject to paragraph 6, an insurer must provide the information required by this reporting standard in respect of each financial year (within the meaning of the Corporations Act 2001) of the insurer. Note: APRA proposes to determine exemptions, under section 7 of the Insurance Act 1973 (Insurance Act), from the obligations under Part IV Division 4 of the Insurance Act in respect of the auditing of information provided under this reporting standard. 6. 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 paragraph 5). 7. The information required by paragraph 3 of this reporting standard must be provided to APRA 4 months after the end of the reporting period to which the information relates. 8. 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 on the notice of extension.
9. 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. 10. If an insurer submits information under this reporting standard using the ‘Direct to APRA’ software, it will be necessary for an officer of the insurer to digitally sign, authorise and encrypt the relevant data. For this purpose APRA’s certificate authority will issue ‘digital certificates’, for use with the software, to officers of the insurer who have authority from the insurer to transmit the data to APRA. 11. If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed form 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
12. APRA may make minor variations to: (a) a form that is part of this reporting standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or (b) the instructions, to clarify their application to the form without changing any substantive requirement in the form or instructions. 13. If APRA makes such a variation it must notify general insurers in writing. Transitional 14. If a reporting period of an insurer ended on 30 June 2005, or ends after that date, the insurer must report under this reporting standard in respect of that reporting period. Interpretation 15. In this reporting standard: authorised reinsurer means an insurer whose business consists only of undertaking liability by way of reinsurance; approved auditor means an auditor who has been approved by APRA under section 40 of the Insurance Act; 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.
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 paragraph 5 or, if applicable, paragraph 6.
Reporting Form GRF 430.0
Claims Expense by State and Territory of Australia
This form captures data required by the Australian Bureau of Statistics. Claims expense inside Australia is to be reported by, class of business for each state or territory of Australian, based on where the risk is located. Audit requirements The information provided under the form is not required to be audited and has been exempted from the definition of ‘yearly statutory accounts’.
This form is to be completed by: 1. Branch operations of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations); and 2. Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity). This form is not to be completed by authorised reinsurers.
Basis of preparation
Insurers are requested to follow the recognition and measurement basis required by the APRA forms for the reporting of claims expense in this form. Specifically claims expense that is recognised in GRF 310.2 Claims Expense and Reinsurance Recoveries. Where the insurers operations are wholly within Australia, total claims expense per this form should agree to the aggregate of claims expense disclosed in GRF 310.2 Claims Expense and Reinsurance Recoveries. Do not follow the recognition and measurement requirements for premium revenue contained in AASB 1023 ‘Financial Reporting for General Insurance Activities’.
Reporting period Insurers are required to report the information in the reporting form on an annual basis. · 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. See the Reporting Requirements table for details.
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 Requirements table.
Report claims expense Inside Australia according to where the risk is located. Claims expense for the purpose of this form is to be interpreted as the same meaning for claims expense as calculated and reported in GRF 310.2 Claims Expense and Reinsurance Recoveries. Where the insurer does not have insurance business outside of Australia (i.e. claims liabilities) the total claims expense amounts on this form should agree to the aggregate amount of claims expense recorded from Direct Business in GRF 310.2 Claims Expense and Reinsurance Recoveries. In addition the total claims expense should then also agree to the amount of claims expense disclosed from direct business, for the line item titled “Claims Expense relating to current and prior years” in GRF 310.0 Statement of Financial Performance. For the purposes of this form: · Do not include movements in the Premium Liabilities as claims expense; · Do not include government taxes in claims expense; · Claims expense can include an allocation for claims handling expenses to the extent that is permitted by AASB 1023; and · Claims expense is gross of reinsurance recoveries. Classes of Insurance Business 1. Direct Business The classes of business for companies that are not specialist reinsurers 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 8. (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)
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.
Standard policy wordings exist for this type of policy. All policies which contain such standard wordings or where the wording is substantially similar are to be classified as ISR.
(VI). Marine Includes Marine Hull (including pleasure craft), Marine Cargo (including sea and inland transit insurance). (VII). Aviation Aviation (including aircraft hull and aircraft liability). (VIII). Mortgage Insurance against losses arising from the failure of debtors to meet financial obligations to creditors or under which payment of debts is guaranteed. It includes lease guarantee. (IX). Consumer Credit (CCI) Insurance to protect a consumer's ability to meet the loan repayments on personal loans and credit card finance in the event of death or loss of income due to injury, illness or unemployment. (X). Other Accident Includes the following types of insurance: · Miscellaneous accident (involving cash in transit, theft, loss of money); · All risks (baggage, sporting equipment, guns); · Engineering when not part of ISR or Fire policy; · Plate glass when not part of packaged policy (e.g. houseowners /householders) · Guarantee (Insurance Bonds); · Live Stock; · Pluvius; and, · Sickness and Accident (which provides stated benefits where the insured is killed or suffers loss of specific parts of the body or is prevented from carrying out the insured’s normal occupation. In addition, regular benefits may be paid over a short period of time (typically less than 3 years), noting that continuous disability policies are now considered to be Life Insurance Policies and should not be provided by general insurance companies).
(XI). Other All other insurance business not specifically mentioned elsewhere. It includes, for example: · All guarantees (e.g. fidelity Guarantee) · Trade Credit; · Extended Warranty (includes insurance by a third party for a period in excess of the manufacturer's or seller’s normal warranty); · Kidnap and Ransom; and · Contingency. (XII). Compulsory Third Party Motor Vehicle (CTP) This class consists only of CTP business. (XIII). Public and Product Liability · Public Liability covers legal liability to the public in respect of bodily injury or property damage arising out of the operation of the insured's business. Product Liability includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods and also environmental clean-up caused by pollution spills where not covered by Fire and ISR policies. · Also will include builders warranty insurance. (XIV). Professional Indemnity (PI) Includes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses general included in this type of policy. (XV). Employers' Liability (EL) Includes: · Workers' compensation; · Seamen's compensation; and · Domestic workers compensation. 2. Reinsurance Business Include the aggregate value of all reinsurance business in this line item.