Australian Prudential Regulation Authority (confidentiality) determination No. 16 of 2011

Administered by Department of the Treasury

Legislation au F2011L02063 Not in force Legislative Instrument

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Australian Prudential Regulation Authority (confidentiality) determination

No. 16 of 2011

 

Information provided by life insurers and friendly societies under certain reporting standards

 

 

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Australian Prudential Regulation Authority Act 1998 (APRA Act)

 

The purpose of the Australian Prudential Regulation Authority (confidentiality) determination No. 16 of 2011 (Determination No. 16) made on 5 September 2011 is to enable APRA to disclose, by way of publication, certain information provided by life insurers and friendly societies to APRA contained in documents lodged quarterly and annually under s 13 of the Financial Sector (Collection of Data) Act 2001 (Collection of Data Act). The publication of the information would otherwise give rise to an offence under s 56(2) of the APRA Act.

Publishing this information should assist regulators, policymakers, industry, researchers, analysts and other interested parties in performing their functions and duties and enable them to better to understand the life insurance industry.

Determination No. 16 made on 5 September 2011 covers annual and quarterly reporting documents provided to APRA on or after 19 January 2011 and before the date of Determination No. 16.

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 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 APRA must take such representations into account before making such a determination. 

Information covered by the determination 

Determination No. 16 provides that the reporting documents (quarterly and annual returns) described in the Appendix to this Explanatory Statement, given to APRA prior to the date of Determination No. 16 under the reporting standards listed in the Appendix (being reporting standards made under s 13 of the Collection of Data Act) are not confidential.  Determination No. 16 applies to all life insurers and friendly societies.

Consultation

November 2009

 

In accordance with s 57 of the APRA Act, APRA issued a discussion paper and wrote to all life insurers and friendly societies on 6 November 2009, requesting comment on what data collected in the life insurance and friendly society quarterly and annual forms could be released publicly. APRA also sought comment on the proposed content and format of both aggregated and entity level data tables contained within two proposed new publications, the Half Yearly Life Insurance Bulletin and the Annual Friendly Society Bulletin.

 

APRA received 7 responses to the consultation. IFSA provided a response on behalf of life insurers and Abacus on behalf of friendly societies. There were 4 responses from individual life insurers and 1 from an individual friendly society.

 

A number of the responses expressly stated that product level data for individual life insurers and friendly societies should not be disclosed as it was considered to be commercially sensitive information and could lead to adverse effects on pricing for some products. There were no other objections raised by life insurers to data that APRA proposed to release.

 

The response received from Abacus expressed support for the publication of data that provides a snapshot of the friendly society sector but only if the data did not identify individual entities directly or indirectly.

 

After taking into account the views expressed in the consultations, APRA considers that Determination No. 16 establishes an appropriate balance between on the one hand protecting each life insurer and friendly society’s commercially sensitive information from inappropriate disclosure and on the other hand pursuing the public interest in releasing data relating to the life insurance and friendly society industries in Australia.

 


Appendix

 

Determination No. 16 covers items of data described below in Part 1.

 

Part 1 – description of the documents covered by Determination No. 16

 

Data items as indicated from reporting documents given to APRA by life insurers and friendly societies under the following reporting standards (effective for reporting periods after 1 October 2009) made under the Financial Sector (Collection of Data Act) 2001:

 

Reporting Standards for Life Insurers and Friendly Societies:

 

  • LRS 100.0 Solvency (all data in form)
  • LRS 120.0 Management Capital (all data in form)
  • LRS 210.0 Derivatives, Commitments and Off-Balance Sheet Items (all data in form)
  • LRS 300.0 Statement of Financial Position (all data in forms)
  • LRS 310.0 Statement of Financial Performance (all data in forms)
  • LRS 330.0 Summary of Revenue and Expenses (all data in form except product level data)
  • LRS 340.0 Retained Profits (all data in forms)
  • LRS 400.0 Statement of Policy Liabilities (all data in form except product level data)
  • LRS 420.0 Asset Backing Policy Liabilities (all data in form except product level data)
  • LRS 430.0 Sources of Profit (all data in form except product level data)
     

Overview

The Australian Prudential Regulation Authority (confidentiality) determination No. 16 of 2011, enacted on 5 September 2011, addresses the need for the Australian Prudential Regulation Authority (APRA) to disclose certain information provided by life insurers and friendly societies to the public. This determination was made under the Australian Prudential Regulation Authority Act 1998 (APRA Act) and aims to facilitate the disclosure of information contained in documents lodged with APRA under the Financial Sector (Collection of Data) Act 2001. By allowing the publication of this information, the determination seeks to assist various stakeholders, including regulators, policymakers, industry representatives, researchers, and analysts, in better understanding the life insurance industry and performing their respective roles effectively. The determination applies to all life insurers and friendly societies and covers specific data items from quarterly and annual reporting documents provided to APRA, ensuring a balance between protecting commercially sensitive information and promoting public interest.

Scope and Application

The Australian Prudential Regulation Authority (confidentiality) determination No. 16 of 2011, made on 5 September 2011, enables the Australian Prudential Regulation Authority (APRA) to disclose, by way of publication, certain information provided by life insurers and friendly societies to APRA, contained in documents lodged quarterly and annually under s 13 of the Financial Sector (Collection of Data) Act 2001. This Determination applies to all life insurers and friendly societies in Australia and covers annual and quarterly reporting documents provided to APRA on or after 19 January 2011 and before the date of Determination No. 16. It is designed to assist regulators, policymakers, industry, researchers, analysts, and other interested parties in performing their functions and duties by making information publicly available, thereby enabling them to better understand the life insurance industry. The Determination applies to all data reported under specific reporting standards, with some exclusions such as product level data, which was deemed commercially sensitive by some respondents. After considering the views expressed during consultations, APRA established a balance between protecting the commercially sensitive information of individual entities and pursuing the public interest in releasing data relating to the life insurance and friendly society industries in Australia.

Key Provisions

The Australian Prudential Regulation Authority (confidentiality) determination No. 16 of 2011 (Determination No. 16) enables APRA to disclose certain information provided by life insurers and friendly societies in their reporting documents. This determination was made to ensure that the publication of this information does not breach the confidentiality requirements under section 56(2) of the Australian Prudential Regulation Authority Act 1998 (APRA Act) (paragraphs 1-3). The determination specifically applies to annual and quarterly reporting documents provided to APRA on or after 19 January 2011 and before the date of Determination No. 16 (paragraph 5). These documents are listed in the Appendix and include various financial and operational data from life insurers and friendly societies. The determination requires that APRA 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. APRA must take these representations into account before determining whether the document contains confidential information (section 57 of the APRA Act) (paragraph 6). Determination No. 16 specifies that the reporting documents, which include data on solvency, management capital, derivatives, financial positions, policy liabilities, and sources of profit, among other things, do not contain confidential information (paragraphs 8-9). Life insurers and friendly societies are required to provide accurate and complete information in their quarterly and annual reports to APRA, as per the reporting standards outlined in the determination. They must ensure that the data they submit complies with the specified standards and that it does not contain confidential or commercially sensitive information, as determined by APRA. The obligation extends to responding to APRA’s requests for comments and representations regarding the disclosure of certain data items (paragraphs 7-10). Breaches of the confidentiality provisions under section 56(2) of the APRA Act can result in offences. However, Determination No. 16 exempts the disclosure of certain information from these provisions, provided that the disclosure is made in accordance with the determination. Penalties for breaches of confidentiality provisions can include substantial fines and, in some cases, imprisonment. However, the specific penalties are not detailed in the determination itself but would be in line with the general provisions of the APRA Act (paragraphs 1, 3, 6).

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