Financial Sector (Collection of Data) determination No. 15 of 2005 (Cth)
Financial Sector (Collection of Data) determination No. 15 of 2005
Reporting Standard GRS 210.0 (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.
Schedule
Reporting Standard GRS 210.0 (2005)
Outstanding Claims Provision – Insurance Risk Charge
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 a quarterly and annual basis, in relation to their outstanding claims provision.
This reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:
the versions of Form GRF 210.0 Outstanding Claims Provision – Insurance Risk Charge (Form GRF 210.0) designated for a ‘Licensed Insurer’ and ‘Consolidated Insurance Group’ and the associated instructions (which are attached and all of which form part of this reporting standard); and
·Prudential Standard GPS 110 Capital Adequacy for General Insurers, Guidance Notes GGN 110.1, GGN 110.2, GGN 110.3, GGN 110.4 and GGN 110.5 and Prudential Standard GPS 210 Liability Valuation for General Insurers.
Purpose
Data collected in each version of Form GRF 210.0 is used by APRA for the purpose of prudential supervision including assessing an insurer’s compliance with Prudential Standard GPS 110 Capital Adequacy for General Insurers and Prudential Standard GPS 210 Liability Valuation for General Insurers.
Application and commencement
This reporting standard applies to all insurers 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.
Information required
An insurer must provide APRA with the information required by the version of Form GRF 210.0 designated for a ‘Licensed Insurer’ for each reporting period.
An insurer that is a highest parent entity in relation to a consolidated insurance group must also provide APRA with the information required by the version of Form GRF 210.0 designated for a ‘Consolidated Insurance Group’ for each reporting period.
Forms and method of submission
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
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 paragraph 3 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 specify the matters provided for in the prudential standards. (The annual information required from a highest parent entity under paragraph 4 read with subparagraph 6(b) is not required to be audited. APRA proposes to determine an exemption, under section 7 of the Insurance Act, in relation to the obligations under Part IV Division 4 of the Act in respect of the auditing of this information.)
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)).
The information required by paragraph 3 of this reporting standard from an 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 paragraph 3 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 10).
The information required by paragraph 4 of this reporting standard from an insurer that is a highest parent entity must be provided to APRA by the following times:
(a) in the case of the quarterly information required by subparagraph 6(a) – 30 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.
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.
Quality control
The information provided by an insurer under this reporting standard (other than the information required from a highest parent entity under paragraph 4) must be the product of processes and controls that have been reviewed and tested by the approved 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 approved auditor to form an opinion on the accuracy and reliability of the data.
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
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.
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
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 a form, to clarify their application to the form
without changing any substantive requirement in the form or instructions.
If APRA makes such a variation it must notify insurers in writing.
Transitional
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
In this reporting standard:
Accounting Standard AASB 1024 means the accounting standard so designated made by the Australian Accounting Standards Board, being the accounting standard that applied in respect of reporting periods (within the meaning of the accounting standard) commencing immediately before 1 January 2005;
approved auditor means an auditor who has been approved by APRA under section 40 of the Insurance Act;
business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays;
consolidated insurance group means a group comprising:
(a) an insurer that is a highest parent entity; and
(b) each subsidiary under the control (within the meaning of Accounting Standard AASB 1024) of that insurer, whether the subsidiary is incorporated in Australia or not;
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.
highest parent entity means an insurer that satisfies all of the following conditions:
(a) it is incorporated in Australia;
(b) it has at least one subsidiary under its control (within the meaning of Accounting Standard AASB 1024); and
(c) it is not itself a subsidiary of an insurer that is incorporated in Australia;
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.
A reference to a prudential standard or guidance note means the prudential standard or guidance note, made under section 32 of the Insurance Act, mentioned in the reference, as amended from time to time. If the prudential standard or guidance note has been revoked and replaced, the reference shall be taken to be to the prudential standard or guidance note that has replaced it.
Reporting Form GRF 210.0
Outstanding Claims Provision – Insurance Risk Charge
Instruction Guide
Introduction
This instruction guide is designed to assist in the completion of GRF 210.0 Outstanding Claims Provision – Insurance Risk Charge.
The form can be used to calculate the risk capital charge associated with the licensed insurer’s Outstanding Claims Provision in accordance with GGN 110.3 Insurance Risk Capital Charge.
The value of the outstanding claims provision and the reinsurance recoveries that are included in this form must be measured in accordance with GPS 210 Liability Valuation for General Insurers.
Note: Risk charge is not applied to consolidated insurance group data.
The purpose of this form is to provide detailed information in relation to the following:
Outstanding claims provision by class of business (direct business and reinsurance);
Total outstanding claims provision split between:
insurance business written (directly by the insurer and by inward reinsurance);
insurance business received or written indirectly through underwriting pools or joint ventures; and
insurance portfolio transfers to the accepting insurer;
Central estimate of outstanding claims provision gross of reinsurance and non recoveries;
Risk margin for outstanding claims provision (in accordance with GPS 210 Liability Valuation for General Insurers) gross of reinsurance and non recoveries;
The component of the outstanding claims provision that is classified as current liabilities; and
The component of the outstanding claims provision classified as non-current liabilities.
Audit requirements
This form that relates to Authorised insurance entities and reinsurance entities is required to be subject to audit review and testing. The forms relating to the consolidated insurance group reporting unit is not subject to audit review and testing.
The scope and nature of audit testing required is outlined in the applicable Audit Guidance Statement issued by the Auditing and Assurance Board of the Australian Accounting Research Foundation.
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. This means that:
the completed form for the financial year must be audited by the approved 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:
Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);
Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity);
Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity); and
4. Consolidated insurance groups.
For the purposes of APRA prudential reporting, the consolidated insurance group is interpreted as the accounts incorporating the highest parent entity in a group structure, that is an Australian authorised general insurance entity (for the purposes of the Insurance Act 1973), and includes all subsidiaries, associates and joint ventures (registered both in Australia and overseas) of that parent entity.
For the purposes of this form, the highest parent entity in the corporate group does not include a company (e.g. non-operating holding company) that is not an authorised general insurance entity.
Definition of subsidiaries should be consistent with the requirements of Australian accounting standards AASB 1024 ‘Consolidated Accounts’ and definition of associates should be consistent with AASB 1016 ‘Accounting for Investments in Associates’.
Exemptions from the Consolidated Insurance Group requirements
Australian authorised insurers which do not have any subsidiaries are not required to complete the forms for this reporting unit.
Australian authorised insurers which have subsidiaries, but the financial position of the consolidated insurance group is not materially different from that of the licensed insurance entity, are not required to complete the forms for this reporting unit (i.e. the subsidiaries do not have any material dealings/balances).
Definitions
Definitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’. In addition, the ‘Glossary of Terms’ also contains a list of definitions of common data reporting items.
Unit of measurement
This form is to be prepared in thousands of Australian dollars (AUD). Amounts denominated in a currency other than Australian currency are to be converted to AUD in accordance with AASB 1012 ‘Foreign Currency Translation’.
The general requirements of AASB 1012 for translation are:
Foreign currency monetary items outstanding at the reporting date must be translated at the spot rate at the reporting date; and
Other items outstanding at the reporting date must not be retranslated subsequent to initial recognition of the transaction.
Monetary items are defined to mean money held and assets and liabilities that are to be received or paid in fixed or determinable amounts of money (e.g. claims payments, reinsurance recoveries).
Monetary items arising under foreign currency derivative contracts at the reporting date must be translated as follows:
Where the exchange rate is fixed in the contract, at that fixed exchange rate; and
Where the exchange rate varies, at the spot rate at the reporting date.
The general requirements of AASB 1012 for accounting treatment of exchange differences arising on translation are:
Exchange differences must be recognised as either revenues or expenses in the calculation of net profit or loss on GRF 310.3 Investment and Other Operating Income and Expense, in the reporting period in which the exchange rates change.
Exchange differences arise in respect of foreign currency monetary items which is directly attributable to the acquisition, construction or production of an asset that takes a long period of time to get ready for its intended use or sale, must be capitalised (net of any effects of a hedge) as part of the cost of that asset.
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. See the Reporting Requirements table for details.
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 Requirements table.
Specific instructions
Classes of Insurance Business
Direct Business
The classes of business for companies that are not specialist reinsurers are as follows:
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.
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.
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.
Travel
Insurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.
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.
Marine
Includes Marine Hull (including pleasure craft), Marine Cargo (including sea and inland transit insurance).
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.
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.
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).
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.
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.
Employers' Liability (EL)
Includes:
Workers' compensation;
Seamen's compensation; and
Domestic workers compensation.
Reinsurance Business
The classes of business for companies that are specialist reinsurers are as follows:
Facultative
Proportional
Excess of loss.
Facultative Reinsurance.
The reinsurance of individual risks by offer and acceptance wherein the reinsurer has the “faculty” (option) to accept or reject each offer by the ceding company.
Proportional Reinsurance.
A proportional treaty is an agreement between an insurer and a reinsurer in which the reinsurer shares an identical proportion of the premiums and losses of the ceding company.
Excess of Loss Reinsurance.
Reinsurance which, subject to a specified limit, indemnifies the ceding company against the loss in excess of a specified retention. This type of reinsurance can involve:
any one risk reinsurance;
any one event reinsurance;
catastrophe reinsurance;
aggregate excess of loss reinsurance; and
stop loss reinsurance.
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 slit out all the classes of reinsurance businesses. However as required by GGN 110.3 Insurance Risk Capital Charge, where an insurer writes inwards reinsurance business and is unable to split this business into the classes and types listed in Table 2 of that guidance note, they are to use the highest casualty factors on their outstanding claims liabilities.
Where an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, APRA suggests that the contract should be allocated using one of 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 writes 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.
Outstanding Claims Liabilities
Outstanding Claims Liabilities (Provision) relate to all claims incurred prior to the calculation date, whether or not they have been reported to the insurer. Long tail business is the most significant component of the value of the Outstanding Claims Liabilities. The valuation of Outstanding Claims Liabilities must include an amount in respect of the internal expenses that the insurer expects to incur in settling these claims. Outstanding Claims Liabilities are to be determined on a fully prospective basis; both net and gross of expected reinsurance and non reinsurance recoveries.
The valuation of Outstanding Claims Liabilities for each class of business must comprise:
(a) a central estimate (refer below); and
(b) a risk margin (refer below) that relates to the inherent uncertainty in each of these central estimates.
To ensure that valuation processes are consistent and sufficiently rigorous across the industry, the risk margin should be established on a basis that is intended to secure the insurance liabilities of the reporting insurer at a given level of sufficiency. The prescribed level of sufficiency in GPS 210 Liability Valuation for General Insurer is 75 per cent.
Due to the highly skewed nature of some insurance distributions, the 75 per cent level of sufficiency may result in a value regarded as insufficient for prudent purposes. Therefore, the risk margin should not be less than one half of the coefficient of variation for the Outstanding Claims Liabilities of the reporting insurer.
(a) The central estimate
The central estimate is intended to reflect the mean value in the range of possible values for the outcome (that is, the mean of the distribution of probabilistic outcomes). The determination of the central estimate should be based on assumptions as to future experience which reflect the experience and circumstances of the insurer and which are:
made using judgement and experience;
made having regard to reasonably available statistics and other information; and
neither deliberately overstate nor understate.
The central estimate will generally be measured as the present value of the future expected payments. This measurement process will involve prospective calculations and modelling techniques, taking into account all factors which are considered to be material to the calculation, including:
Discount rate (in accordance with GPS 210 Liability Valuation for General Insurer);
Claims escalation;
Claims expenses; and
The pattern of claims run-off.
(b) The risk margin
The risk margin is to be valued in accordance with the requirements of GPS 210 Liability Valuation for General Insurer. The risk margin is a component of the value of Outstanding Claims Liabilities that relates to the inherent uncertainty in the central estimate. The risk margin does not relate to the risk associated with the underlying assets, including asset-liability mismatch risk. As the risk margin is an additional component of the Outstanding Claims Liabilities value, it is therefore aimed at ensuring that the value of the Outstanding Claims Liabilities is established at an appropriate and sufficient level.
The insurer is free to provide for the OCP in the Statement of Financial Position at a level equal to or greater than the amount required by GPS 210 Liability Valuation for General Insurer. However for the purposes of this form only, the Outstanding Claims Provision is to be measured and reported in accordance with GPS 210 Liability Valuation for General Insurer and disclosed by type of insurance business (direct business and inward reinsurance business), i.e. must be at the 75% level. If the OCP is reported at a level greater than that required by GPS 210 Liability Valuation for General Insurer in this form, the insurer will be subjecting itself to a greater risk charge than required.
Note: any amount of the OCP reported in the Statement of Financial Position in excess of the amount required by GPS 210 Liability Valuation for General Insurer, can be added back to Tier 1 capital in GRF 120.0 Determination of Capital Base.
Quarterly actuarial reviews are not required to be conducted specifically for the purposes of completing this form.
For the “Direct business” and “Reinsurance” business, amounts are to be reported as follows:
Direct Business written:
Includes Outstanding Claims Provision associated with the insurance business written directly by the insurer. Include Outstanding Claims Provision associated with reinsurance business under the “Reinsurance” section of Type of Business column. Inward reinsurance includes amounts that relate to inward facultative reinsurance and to inward treaty reinsurance.
Reinsurance
Include Outstanding Claims Provision associated with reinsurance business under the “Reinsurance” section of Type of Business column. Inward reinsurance includes amounts, which relate to inward facultative reinsurance and to inward treaty reinsurance.
Total Outstanding Claims Provision - Gross of reinsurance recoveries
Central Estimate
For each line of business report the central estimate of the Outstanding Claims Provision that is calculated in accordance with GPS 210 Liability Valuation for General Insurer.
Risk Margin
For each line of business, report the prudential risk margin for the Outstanding Claims Provision that is calculated in accordance with GPS 210 Liability Valuation for General Insurer.
Total OCP
Represents the total of the central estimate and risk margin. Do not enter a value as this is automatically calculated by the form.
Reinsurance Recoveries
For each line of business report the Reinsurance Recoveries associated with the Outstanding Claims Provision that is calculated in accordance with GPS 210 Liability Valuation for General Insurer.
Non Reinsurance Recoveries
For each line of business report the Non Reinsurance Recoveries associated with the Outstanding Claims Provision that is calculated in accordance with GPS 210 Liability Valuation for General Insurer.
Total OCP net of Reinsurance Recoveries and Non-reinsurance Recoveries
The following calculates the Total OCP net of Reinsurance Recoveries and Non-reinsurance Recoveries:
Total Outstanding Claims Provision - Gross of reinsurance recoveries; less
Reinsurance Recoveries; less
Non Reinsurance Recoveries.
Do not enter a value as this is automatically calculated by the form.
Risk Capital Factor
This column states the insurance risk capital factor applicable to each line of business/product. The capital factors are taken from Table 1 and Table 2 of GGN 110.3 Insurance Risk Capital Charge.
OCP Insurance Risk Charge
This column represents the insurance risk capital charge applicable to each line of business/product. The capital charge is calculated based on the risk capital factors disclosed in accordance with requirements of GGN 110.3 Insurance Risk Capital Charge.
The insurance capital charge is automatically calculated, do not enter values. The total of this column for direct business and reinsurance business is included in the calculation of the minimum capital requirement for the insurer.
Outstanding Claims Provision Gross of Reinsurance Recoveries Classified as – Current Liabilities
For the total of Direct business and Reinsurance business, report the component of the Outstanding Claims Provision that can be classified by the insurer as a current liability.
The total of this column (Current Liabilities) does not necessarily have to equate to the total of Outstanding Claims Provision disclosed as a current liability in GRF 300.0 Statement of Financial Position. This will be the case (i.e. it is not equal) where the insurer as provided for Outstanding Claims Provision in excess of that valuation required by GPS 210 Liability Valuation for General Insurer (the value which is required to be reported in this form).
Outstanding Claims Provision Gross of Reinsurance Recoveries Classified as – Non-current Liabilities
For the total of Direct business and Reinsurance business, report the component of the Outstanding Claims Provision valuation that can be classified by the insurer as a non-current liability.
The total of this column (Non-Current Liabilities) does not necessarily have to equate to the total of Outstanding Claims Provision disclosed as a non-current liability in GRF 300.0 Statement of Financial Position. This will be the case (i.e. they are not equal) where the insurer as provided for Outstanding Claims Provision in excess of that valuation required by GPS 210 Liability Valuation for General Insurer (the value which is required to be reported in this form).
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