Australian Prudential Regulation Authority (confidentiality) determination No. 17 of 2010

Administered by Department of the Treasury

Legislation au F2010L02404 Not in force Legislative Instrument

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Australian Prudential Regulation Authority (confidentiality) determination

No. 17 of 2010

 

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. 17 of 2010 (Determination No. 17) made on 31 August 2010 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. 17 made on 31 August 2010 covers annual and quarterly reporting documents provided to APRA on or after 31 May 2010 and before the date of Determination No. 17.

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. 17 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. 17 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. 17 applies to all life insurers and friendly societies.

Consultation

November 2008

 

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. 17 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. 17 covers items of data described below in Part 1.

 

Part 1 – description of the documents covered by Determination No. 17

 

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. 17 of 2010, enacted on 31 August 2010, aims to facilitate the disclosure by the Australian Prudential Regulation Authority (APRA) of specific information provided by life insurers and friendly societies to APRA, which would otherwise be considered confidential under the Australian Prudential Regulation Authority Act 1998 (APRA Act). This determination addresses the need for transparency in the life insurance industry by allowing APRA to publish certain quarterly and annual reporting documents that contain information collected under the Financial Sector (Collection of Data) Act 2001. The policy objective is to support regulators, policymakers, industry, researchers, analysts, and other stakeholders by providing them with a clearer understanding of the life insurance industry, thereby enhancing their ability to perform their respective functions and duties. The enactment of this determination by APRA followed a consultation process in November 2008, where various stakeholders were invited to provide feedback on the types of data that could be disclosed publicly. APRA received seven responses, with some entities expressing concerns about the potential commercial sensitivity of specific product-level data. After considering these views, APRA concluded that the determination strikes an appropriate balance between protecting commercially sensitive information and promoting the public interest in industry data disclosure.

Scope and Application

The Australian Prudential Regulation Authority (confidentiality) determination No. 17 of 2010 applies to all life insurers and friendly societies in Australia, and it relates to the confidentiality and disclosure of information provided under certain reporting standards. Specifically, the determination enables the Australian Prudential Regulation Authority (APRA) to publish certain information contained in quarterly and annual reports submitted by life insurers and friendly societies, which would otherwise be considered confidential under the Australian Prudential Regulation Authority Act 1998 (APRA Act). The information covered includes various financial and operational data, except for commercially sensitive information such as product-level data, which was deemed not to be disclosed due to its potential impact on pricing. The determination applies to reports given to APRA on or after 31 May 2010 and before the date of the determination. The decision to publish this information was made after consultation with the relevant industry participants and aims to balance the protection of commercially sensitive information with the public interest in understanding the life insurance industry.

Key Provisions

The main operative sections of the Australian Prudential Regulation Authority (confidentiality) determination No. 17 of 2010 (Determination No. 17) are sections 56(2) and 56(5C) of the Australian Prudential Regulation Authority Act 1998 (APRA Act), and section 13 of the Financial Sector (Collection of Data) Act 2001 (Collection of Data Act). Section 56(2) of the APRA Act prohibits the disclosure of information that is confidential, while section 56(5C) allows for the disclosure of such information if it is determined by APRA that it is not confidential under section 57 of the APRA Act. Section 13 of the Collection of Data Act requires life insurers and friendly societies to provide certain information to APRA. Determination No. 17 clarifies that specific information provided in annual and quarterly reporting documents to APRA is not considered confidential and may be disclosed by APRA to the public, with the aim of enhancing transparency and understanding of the life insurance industry. The obligations and requirements imposed by Determination No. 17 on the parties it governs, specifically life insurers and friendly societies, involve submitting their quarterly and annual reporting documents to APRA, as required by section 13 of the Collection of Data Act. These documents must comply with the reporting standards listed in the Appendix to the Determination, which include various financial and operational data. Additionally, APRA is obligated to consider any representations made by relevant entities or their representative associations before determining whether the information in these documents is confidential, as per section 57 of the APRA Act. There are no explicit offences or penalties mentioned in the Determination No. 17 for breaches of the provisions. However, any unauthorised disclosure of confidential information by APRA or any other person would still be an offence under section 56(2) of the APRA Act, unless the information is determined to be non-confidential under section 57. The penalties for such an offence can include fines and imprisonment, as prescribed by the APRA Act and other relevant legislation. It is important for all parties to comply with the confidentiality determinations and reporting requirements to avoid any potential legal repercussions.

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