Financial Sector (Collection of Data) determination No. 28 of 2005 (Cth)
Financial Sector (Collection of Data) determination No. 28 of 2005
Reporting Standard GRS 450.0 (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 450.0 (2005)
Interest in Controlled Entities and Joint Ventures
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, information on controlled entities and joint venture operations/entities.
This reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:
·Form GRF 450.0 Interest in Controlled Entities and Joint Ventures (Form GRF 450.0) and the instructions to the form (all of which are attached and form part of this reporting standard).
Purpose
Data collected in Form GRF 450.0 is used by APRA for the purpose of prudential supervision of 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 Form GRF 450.0 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 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.
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).
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.
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.
Authorisation
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.
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 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 general 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:
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, 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 paragraph 5 or, if applicable, paragraph 6.
Reporting Form GRF 450.0
Interest in Controlled Entities and Joint Venture
Instruction Guide
Introduction
This form captures information on the reporting an insurer’s interest in controlled entities and joint venture entities and joint venture operations.
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’.
Reporting entities
Forms are to be completed for the following reporting entities where appropriate:
Authorised insurance entities (including mutuals); and
Authorised reinsurance entities.
Unit of measurement
This form is to be presented in Australian currency, rounded to thousands of dollars, with no decimal place. As a general rule, amounts denominated in foreign currency are to be converted to AUD in accordance with the requirements of the Australian accounting standards, notably AASB 1012 ‘Foreign Currency Translation’.
Basis of preparation
Insurers are requested to follow the recognition and measurement basis required by the APRA forms for the purposes of completing this form.
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.
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
This form is separated into the following parts:
Part A: Interest in Controlled entities
Part B: Interest in Joint Venture Operations/entities
The requirements for each of these are detailed below:
Part A: Interest in Controlled Entities
For the purposes of this form, “Entity" means any legal, administrative, or fiduciary arrangement, organisational structure or other party (including a person) having the capacity to deploy scarce resources in order to achieve objectives.
For the purposes of this form, “controlled entities” is to be interpreted as defined in AASB 1024 Consolidated Accounts. AASB 1024 defines a controlled entity/“subsidiary" as meaning an entity which is controlled by a parent entity. A parent entity is defined as an entity which controls another entity.
Name of Entity
Report the full name of the controlled entity.
Description/Nature of Main Business
In the space provided, detail a brief description of the main business conducted by the entity.
APRA Regulated General Insurer Yes/No
If the controlled entity is an APRA regulated general insurance entity input ‘yes’.
If the controlled entity is an APRA regulated general insurance entity, then details on exposure of gross assets and gross liabilities in the various countries/geographical regions does not need to be completed.
Country of Incorporation
This is the country in which the entity is incorporated.
Ownership Percentage %
Disclose the percentage of the reporting insurer ownership of shares or units of the controlled entity.
Market Value of Investment in Controlled Entity $'000
Disclose the market value of the investment of the reporting insurer in the controlled entity. Market value is to be interpreted as defined in accordance with the Australian accounting pronouncements.
“Market value means the amount which could be expected to be received from the disposal of an asset in an orderly market”.[1]
[1] Extracted from ICAA Members' Handbook December 2001 issue, AASB 1023.
Market value or fair value has the same meaning as defined in the Australian Accounting standards. Market value is defined for accounting purposes as a subset of fair value, where fair value means 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:
The quoted market price in an active and liquid market (i.e. market value); or
When there is infrequent activity in a market, 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 – an estimate of a price for the asset or liability in an active and liquid market.
Goodwill or Intangible Component of Investment $'000
Disclose that component value of the reporting insurer’s investment in the controlled entity, that comprises goodwill and other forms of intangible assets.
Market Value of Controlled Entity
Disclose the total market value of the controlled entity. Market value is to be interpreted as defined in accordance with the Australian accounting pronouncements.
“Market value means the amount which could be expected to be received from the disposal of an asset in an orderly market”.
Market value or fair value has the same meaning as defined in the Australian Accounting standards. Market value is defined for accounting purposes as a subset of fair value, where fair value means 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:
The quoted market price in an active and liquid market (i.e. market value); or
When there is infrequent activity in a market, 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 – an estimate of a price for the asset or liability in an active and liquid market.
Disclosure of Gross Assets and Gross Liabilities
Disclosure of ‘Gross Assets’ and ‘Gross Liabilities’ reported by country or geographic region specified on the form. This is to based on where the items of assets are invested and liabilities incurred. Enter the relevant details for each country/region as appropriate.
Do not disclose this information if the controlled entity is an APRA regulated general insurer. This type of information is reported in GRF 400.0 Statement of Risk by Country.
The countries/regions listed on the form are:
Australia;
New Zealand;
USA;
UK;
Asia;
Continental Europe; and
Other.
Part B: Interest in Joint Venture Operations/entities
For the purposes of this form, the reference to joint venture includes a joint venture entity and a joint venture operation. Joint venture entity and joint venture operation is to be interpreted as defined in AASB 1006 ‘Accounting For Interests in Joint Ventures’. An extract of the definition in AASB 1006 is provided below:
Joint venture means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control.
Joint venture entity means a joint venture that is in the form of an entity and does not include:
(a) an entity that is acquired and held exclusively with a view to its disposal in the near future
(b) an entity that operates under severe long-term restrictions which impair significantly its ability to make distributions to the venturer.
Joint venture operation means a joint venture that is not a joint venture entity and does not include an entity that:
(a) is acquired and held exclusively with a view to its disposal in the near future
(b) operates under severe long-term restrictions that impair significantly its ability to make distributions to the venturer.[2]
[2]Extracted from ICAA Members' Handbook December 2001 issue, AASB 1006.
Name of Joint Venture
Report the full name of the Joint Venture.
Description/Nature of Main Business
In the space provided, detail a brief description of the main business conducted by joint venture.
APRA Regulated General Insurer Yes/No
If the joint venture is an APRA regulated general insurance entity input ‘yes’.
If the joint venture is an APRA regulated general insurance entity, then details on exposure of gross assets and gross liabilities in the various countries/geographical regions as required by the form does not need to be completed.
Country of Incorporation
This is the country in which the joint venture is incorporated (where applicable).
Ownership Percentage or Interest in Joint Venture
Disclose the percentage of the reporting insurer ownership or interest in the joint venture.
Market Value of Investment/Interest in Joint Venture $'000
Disclose the market value of the investment/interest of the reporting insurer in the Joint Venture. Market value is to be interpreted as defined in accordance with the Australian accounting pronouncements.
“Market value means the amount which could be expected to be received from the disposal of an asset in an orderly market”.[3]
[3]Extracted from ICAA Members' Handbook December 2001 issue, AASB 1023.
Market value or fair value has the same meaning as defined in the Australian Accounting standards. Market value is defined for accounting purposes as a subset of fair value, where fair value means 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:
The quoted market price in an active and liquid market (i.e. market value); or
When there is infrequent activity in a market, 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 – an estimate of a price for the asset or liability in an active and liquid market.
Goodwill or Intangible Component of Investment $'000
Disclose that component value of the reporting insurer’s investment/interest in the Joint Venture, that comprises goodwill and other forms of intangible assets.
Market Value of Joint Venture
Disclose the total market value of the joint venture. Market value is to be interpreted as defined in accordance with the Australian accounting pronouncements.
“Market value means the amount which could be expected to be received from the disposal of an asset in an orderly market”[4]
[4]Extracted from ICAA Members' Handbook December 2001 issue, AASB 1023.
Market value or fair value has the same meaning as defined in the Australian Accounting standards. Market value is defined for accounting purposes as a subset of fair value, where fair value means 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:
The quoted market price in an active and liquid market (i.e. market value); or
When there is infrequent activity in a market, 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 – an estimate of a price for the asset or liability in an active and liquid market.
Disclosure of Gross Assets and Gross Liabilities
Disclosure of ‘Gross Assets’ and ‘Gross Liabilities’ reported by country or geographic region specified on the form. This is to be based on where the items of assets are invested and liabilities incurred. Enter the relevant details for each country/region as appropriate.
Do not disclose this information if the joint venture is an APRA regulated general insurer.
The countries/regions listed on the form are:
Australia;
New Zealand;
USA;
UK;
Asia;
Continental Europe; and
Other.
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