Australian Prudential Regulation Authority (confidentiality) determination No. 10 of 2006
Information provided by general insurers under certain reporting standards
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority (APRA)
Australian Prudential Regulation Authority Act 1998 (APRA Act), s 57
The purpose of the Australian Prudential Regulation Authority (confidentiality) determination No. 10 of 2006 (the Determination) made on 2 August 2006 is to enable APRA to disclose, including by way of publication in industry bulletins, certain information provided by general insurers to APRA, being information which is of use to regulators, policymakers, industry, researchers, analysts and other interested parties.
Legislative background
Subsection 56(5C) of the APRA Act provides that it is not an offence against s 56(2) of that Act to disclose information in a reporting document given to APRA under s 13 of the Financial Sector (Collection of Data) Act 2001 (the Collection of Data Act) where APRA has determined, under s 57, that the document does not contain confidential information.
Section 57 of the APRA Act gives APRA power to determine whether a document given under s 13 of the Collection of Data Act contains confidential information. The section provides that before doing so APRA must give relevant entities or bodies, or their representative association, a reasonable opportunity to make representations as to whether information of the kind contained in the document is confidential, and take such representations into account. (Consultation undertaken is discussed below.)
Information covered by the determination
The Determination provides that information given to APRA before the date of the Determination under the reporting standards listed in the Appendix and their predecessors (made under s13 of the Collection of Data Act) is non-confidential. The Determination applies to all general insurers, including foreign general insurers operating in Australia through branch operations.
Consultation
APRA commenced consultations in relation to whether information of the kind covered by the Determination and in addition, information provided under reporting standards GRS 210.0, GRS 210.1, GRS 310.1, GRS 310.2, GRS 420.0 and GRS 430.0, should be treated as non-confidential by writing to all authorised general insurers on 30 September 2005. APRA received 17 submissions from general insurers and insurance groups and 14 submissions from other interested organisations. Feedback was generally positive, with many respondents pleased that APRA would be releasing more detailed statistics on the general insurance industry. However, some general insurers, in particular those which operate in small, specialised markets, were concerned that the proposed determination would result in the release of commercially sensitive information. In order to address these concerns, APRA revised the proposed determination to exclude all reporting standards and related forms which cover data relating to classes of business, namely GRS 210.0, GRS 210.1, GRS 310.1, GRS 310.2, GRS 420.0 and GRS 430.0 and related forms.
Further consultation was held in relation to the revised proposed determination with two general insurance bodies and their members. The removal of information provided under reporting standards GRS 210.0, GRS 210.1, GSS 310.1, GRS 310.2, GRS 420.0 and GRS 430.0 alleviated the consulted parties’ major concerns.
APRA considers that the Determination strikes the appropriate balance between protecting general insurers’ commercially sensitive information and the public interest in releasing data that will enable the public to gain a greater understanding of the financial strength of individual insurers and offer further insight into the Australian insurance market.
Appendix
Reporting Standard | FRLI reference |
Reporting Standard GRS 110.0 (2005) Minimum Capital Requirement (which came into effect on 1 July 2005) | Made by Financial Sector (Collection of Data) determination No. 1 of 2005 Legislative Instrument - F2005L01638 |
Reporting Standard GRS 120.0 (2005) Determination of Capital Base (which came into effect on 1 July 2005) | Made by Financial Sector (Collection of Data) determination No. 2 of 2005 Legislative Instrument - F2005L01639 |
Reporting Standard GRS 300.0 (2005) Statement of Financial Position (which came into effect on 1 July 2005) | Made by Financial Sector (Collection of Data) determination No. 17 of 2005 Legislative Instrument - F2005L01654 |
Reporting Standard GRS 310.0 (2005) Statement of Financial Performance (which came into effect on 1 July 2005) | Made by Financial Sector (Collection of Data) determination No. 18 of 2005 Legislative Instrument - F2005L01655 |
Reporting Standard GRS 310.3 (2005) Investment and Operating Income (which came into effect on 1 July 2005) | Made by Financial Sector (Collection of Data) determination No. 21 of 2005 Legislative Instrument - F2005L01659 |
Reporting Standard GRS 320.0 (2005) Reconciliation of Annual Disclosure (which came into effect on 1 July 2005) | Made by Financial Sector (Collection of Data) determination No. 22 of 2005 Legislative Instrument - F2005L01660 |
Reporting Standard GRS 400.0 (2005) Statement of Risk by Country (which came into effect on 1 July 2005) | Made by Financial Sector (Collection of Data) determination No. 23 of 2005 Legislative Instrument - F2005L01661 |
Overview
The Australian Prudential Regulation Authority (confidentiality) determination No. 10 of 2006 was enacted to enable the Australian Prudential Regulation Authority (APRA) to disclose certain non-confidential information provided by general insurers to APRA, with the intent to benefit regulators, policymakers, industry stakeholders, researchers, analysts, and other interested parties. This determination was made under the authority of the Australian Prudential Regulation Authority Act 1998 (APRA Act) and specifically pursuant to section 57 of that Act, which empowers APRA to determine whether information is confidential. The enactment of this legislation aims to strike a balance between maintaining the confidentiality of commercially sensitive information and facilitating the release of useful data that can enhance the understanding of the financial strength of individual insurers and provide further insight into the Australian insurance market.
In formulating this determination, APRA undertook consultations with all authorised general insurers and received submissions from both general insurers and other interested organisations. The consultation process led to revisions that excluded certain reporting standards and related forms that cover data relating to classes of business, thereby addressing concerns about the disclosure of commercially sensitive information. This approach reflects the policy objective of the determination to balance the protection of sensitive commercial information with the public interest in accessing detailed statistical information about the insurance industry.
Scope and Application
The Australian Prudential Regulation Authority (confidentiality) determination No. 10 of 2006, made under the Australian Prudential Regulation Authority Act 1998, aims to facilitate the disclosure of specific information provided by general insurers to APRA. This determination applies to all general insurers, including foreign entities operating through branches in Australia, and pertains to information reported under certain standards listed in the appendix, excluding those related to classes of business. APRA, in making this determination, considered submissions from various stakeholders and adjusted the proposal to mitigate concerns about the disclosure of commercially sensitive data. The Determination allows for the disclosure of non-confidential information, which can be beneficial for regulators, policymakers, industry participants, researchers, analysts, and other interested parties, thus striking a balance between maintaining commercial confidentiality and promoting transparency.
The scope of the Determination is geographically and sectorally specific, covering all general insurers operating within Australia, and it applies to the information they provide to APRA under particular reporting standards, as detailed in the appendix. This includes data concerning minimum capital requirements, capital base determinations, financial positions, performance, investment and operating income, annual disclosure reconciliations, and risk statements by country, among others. However, it excludes information related to specific classes of business. The Determination does not extend to other types of financial institutions or industries outside the general insurance sector, and any further application or restriction of its provisions is subject to subordinate instruments made by APRA under the APRA Act.
Key Provisions
The Australian Prudential Regulation Authority (confidentiality) determination No. 10 of 2006 (the Determination) made on 2 August 2006, provides that information given to the Australian Prudential Regulation Authority (APRA) under specified reporting standards is not considered confidential (section 1). This determination allows APRA to disclose this information, including through industry bulletins, for the benefit of regulators, policymakers, industry participants, researchers, analysts, and other interested parties. The information covered by this Determination includes data provided by general insurers under reporting standards listed in the Appendix to the Determination, such as the Minimum Capital Requirement (GRS 110.0), Determination of Capital Base (GRS 120.0), Statement of Financial Position (GRS 300.0), Statement of Financial Performance (GRS 310.0), and others (section 1). These reporting standards were made under the Financial Sector (Collection of Data) Act 2001.
The Determination imposes specific obligations on general insurers, including those operating in Australia through branch operations. These insurers must provide information to APRA under the specified reporting standards, ensuring that the information provided is accurate and complete (section 1). APRA, in turn, has the responsibility to determine whether this information contains any confidential elements and to give relevant entities or their representative associations a reasonable opportunity to make representations on the confidentiality of the information before making such a determination (section 2). This ensures that the interests of all parties are considered before any information is disclosed.
While the Determination does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches, the underlying legislation, the Australian Prudential Regulation Authority Act 1998, provides a framework for enforcement. For instance, subsection 56(2) of the APRA Act generally prohibits the unauthorised disclosure of information. However, this prohibition does not apply if APRA has determined, under section 57, that the document does not contain confidential information. The Determination effectively removes the confidentiality barrier for the specified information, allowing for its disclosure without contravening the APRA Act. Therefore, any unauthorised disclosure of information that APRA has determined to be non-confidential would not constitute an offence under the APRA Act (section 3). However, the Determination does not provide specific penalties or consequences for breaches, which would be governed by the broader provisions of the APRA Act and any other relevant legislation.