Australian Prudential Regulation Authority (confidentiality) determination No. 2 of 2018
Information provided by life insurers and friendly societies under Reporting Standard LRS 750.0 Claims and Disputes
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority (APRA)
Australian Prudential Regulation Authority Act 1998, s 57
Under section 57 of the Australian Prudential Regulation Authority Act 1998 (the Act), APRA may determine, by legislative instrument, that all or a specified part of relevant reporting documents of a specified kind contain, or do not contain, confidential information.
On 23 October 2018, APRA made Australian Prudential Regulation Authority (confidentiality) determination No. 2 of 2018 (the instrument) which determines that the reporting standard listed in the instrument (namely LRS 750.0) does not contain confidential information.
The instrument commences on the date of registration on the Federal Register of Legislation.
- Background
Subsection 56(2) of the Act provides that it is an offence to disclose “protected information”[1] or a “protected document”[2], being information or documents provided to APRA under a “prudential supervision framework law”[3]. The Financial Sector (Collection of Data) Act 2001 (FSCOD Act) is a prudential supervision framework law, and the reporting standards listed in the instrument, having been provided to APRA under that Act, are protected documents.
Subsection 56(5C) of the Act provides that it is not an offence to disclose information in a reporting document given to APRA under section 13 of the FSCOD Act where APRA has made a determination under section 57 of the Act in relation to the information.
Under subsections 57(2) and (4) of the Act APRA may, by legislative instrument, determine that:
(a) all or a specified part of a relevant reporting document does not contain confidential information; or
(b) all or a specified part of relevant reporting documents of a specified kind do not contain confidential information,
if, taking into account any representations made under subsection 57(3) in relation to the document or documents of that kind, APRA considers that the benefit to the public from the disclosure of the document or documents, or information contained in the document or documents, outweighs any detriment to commercial interests that the disclosure may cause.
Under subsection 57(3) of the Act, APRA must not make a determination under subsection 57(2) unless APRA gives interested parties for the determination a reasonable opportunity to make representations as to whether or not the relevant reporting document contains, or relevant reporting documents of that kind contain, confidential information.
The consultation undertaken by APRA for the purposes of subsection 57(3) is discussed below.
2. Purpose of the instrument
The determination provides that information given to APRA under the reporting standard LRS 750.0 is non-confidential. As a result, the information will be disclosed by APRA under subsection 56(5C) of the Act. The information will enable APRA to address the need for better quality, more consistent and more transparent data about insurance claims and disputes. This was a key finding from an Australian Securities and Investment Commission (ASIC) 2016 review of claims handling across the life insurance industry. It will form the basis of statistical publications that will be of use to regulators, policymakers, industry, researchers, analysts and other interested parties.
3. Consultation
APRA released a response paper, Response to submissions: Life insurance – public reporting of claim information – update on progress, in May 2018. The Paper sought feedback from the life insurance industry and other stakeholders on APRA’s intention to determine under section 57 of the Act that all data collected, as part of the requirements, is non-confidential.
Submissions were generally supportive of the non-confidentiality of the data, and pointed to benefits that would flow from more transparency over claims and dispute outcomes. Some life insurers stated that there would be some potential detriment to commercial interests.
APRA considers that greater transparency is beneficial for consumers and the industry as a whole, and that the benefit to the public from the disclosure would outweigh any potential detriment to the commercial interests that the disclosure might cause. On that basis, APRA has determined all data collected under the reporting standard to be non-confidential.
4. Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
A Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is provided at Attachment A to this Explanatory Statement.
ATTACHMENT A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Australian Prudential Regulation Authority (confidentiality) determination No. 2 of 2018
Information provided by life insurers and friendly societies under Reporting Standard LRS 750.0 Claims and Disputes
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instrument listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (HRPS Act).
Overview of the legislative instrument
The purpose of making this Legislative Instrument is to enable APRA to disclose certain information provided to APRA by life insurers and friendly societies under Reporting Standard LRS 750.0. This information will be of use to inter alia, regulators, policymakers, industry, researchers, analysts and consumers.
Human rights implications
APRA has assessed the Legislative Instrument against the international instruments listed in section 3 of the HRPS Act and determined that only Article 17 of the International Covenant on Civil and Political Rights (ICCPR) is conceivably of relevance to the Legislative Instrument.
Article 17 of the ICCPR prohibits the arbitrary or unlawful interference with a person’s privacy, family, home and correspondence, and attacks on reputation. Article 17 is exclusively concerned with prohibiting interference with the privacy and/or reputation of individual persons. It does not extend to the privacy and/or reputation of corporate entities.
The Legislative Instrument will facilitate the disclosure of specific information provided to APRA by life insurers and friendly societies in accordance with Reporting Standard LRS 750.0. The data that has been determined to be non-confidential identifies individual insurers, but will not identify individual claimants or breach the privacy of individuals. Further, APRA reviews all releases of data received under reporting standards to ensure that no information pertaining to an individual person can be deduced from the data.
Consequently, the Legislative Instrument does not engage any of the applicable rights or freedoms recognised or declared in the international instruments listed in section 3 of the HRPS Act. Accordingly, in APRA’s assessment, the Legislative Instrument is compatible with human rights.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
[1] Defined in s 56(1) of the Act.
[2] Defined in s 56(1) of the Act.
[3] Defined in s 3(1) of the Act.