Australian Prudential Regulation Authority (confidentiality) determination No. 21 of 2012

Administered by Department of the Treasury

Legislation au F2012L02199 Not in force Legislative Instrument

Legislation content

Australian Prudential Regulation Authority (confidentiality) determination

No. 21 of 2012

 

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. 21 of 2012 (Determination No. 21) made on 16 November 2012 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. 21 made on 16 November 2012 covers annual and quarterly reporting documents provided to APRA on or after 13 August 2012 and before the date of Determination No. 21.

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. 21 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. 21 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. 21 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. 21 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.

 

Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

The legislative instrument the subject of this explanatory statement does not engage any of the applicable rights or freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Accordingly, in APRA’s assessment, this legislative instrument is compatible with human rights.

 


Appendix

 

Determination No. 21 covers items of data described below in Part 1.

 

Part 1 – description of the documents covered by Determination No. 21

 

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. 21 of 2012, enacted on 16 November 2012, was introduced to address the need for increased transparency in the life insurance industry while still protecting commercially sensitive information from inappropriate disclosure. This determination was made under the Australian Prudential Regulation Authority Act 1998 (APRA Act) and was designed to enable APRA to disclose certain information provided by life insurers and friendly societies, which would otherwise be subject to confidentiality restrictions, through publication. This action is intended to assist regulators, policymakers, industry, researchers, analysts, and other interested parties in performing their functions and duties by providing them with a better understanding of the life insurance industry. The policy objective is to strike a balance between protecting the confidentiality of individual entities and promoting the public interest in releasing relevant data. In accordance with section 57 of the APRA Act, APRA undertook a consultation process in November 2009, seeking feedback from all life insurers and friendly societies on the proposed content and format of the data to be published. After considering the responses received, APRA determined that the information outlined in the determination would provide a suitable balance between the protection of commercially sensitive information and the public interest in data disclosure. This determination applies to all life insurers and friendly societies and covers annual and quarterly reporting documents provided to APRA on or after 13 August 2012 and before the date of the determination.

Scope and Application

The Australian Prudential Regulation Authority (confidentiality) determination No. 21 of 2012 applies to all life insurers and friendly societies operating within Australia, facilitating the disclosure of specific information contained in their reporting documents. These documents, which include quarterly and annual returns provided to the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, are deemed not to contain confidential information as per the provisions of the Australian Prudential Regulation Authority Act 1998 (APRA Act). This determination enables APRA to publish such information, aiding regulators, policymakers, industry stakeholders, researchers, and analysts in understanding the life insurance industry better. The application of this determination extends to reporting documents submitted to APRA from 13 August 2012 up until the date of the determination. The scope of the determination includes various data items as per specified reporting standards, with some exceptions for product-level data which has been deemed commercially sensitive and therefore exempt from public disclosure. The authority to make such determinations is exercised under section 57 of the APRA Act, which mandates that APRA consults relevant entities before making any determination regarding the confidentiality of the reported information.

Key Provisions

The Australian Prudential Regulation Authority (confidentiality) determination No. 21 of 2012 (Determination No. 21) provides a framework for the Australian Prudential Regulation Authority (APRA) to disclose certain information provided by life insurers and friendly societies. According to subsection 56(5C) of the Australian Prudential Regulation Authority Act 1998 (APRA Act), it is not an offence to disclose information contained in reporting documents provided to APRA under the Financial Sector (Collection of Data) Act 2001 (Collection of Data Act) if APRA determines that the documents do not contain confidential information. Determination No. 21 outlines that specific quarterly and annual reporting documents, lodged with APRA before the date of the determination, are not confidential and may be published. This includes information on solvency, management capital, derivatives, commitments, off-balance sheet items, financial position, financial performance, revenue and expenses, retained profits, policy liabilities, asset backing policy liabilities, and sources of profit, among others. The determination imposes obligations on life insurers and friendly societies to provide accurate and complete information to APRA as required by the Collection of Data Act and related reporting standards. APRA, in turn, is required to assess the confidentiality of the information and consult with relevant entities before making a determination. The consultation process, as outlined in section 57 of the APRA Act, involves giving affected parties a reasonable opportunity to make representations regarding the confidentiality of the information. Breach of the confidentiality provisions under the APRA Act may result in criminal or civil consequences. Specifically, section 56(2) of the APRA Act prohibits the unauthorised disclosure of confidential information, which could lead to penalties. The exact penalties are not specified in the Determination No. 21, but typically, breaches of the APRA Act can result in substantial fines and, in some cases, imprisonment. For instance, under section 131 of the APRA Act, an individual may be fined up to $210,000 or, in the case of a body corporate, up to $1,050,000 for each offence of unauthorised disclosure of confidential information. The penalties reflect the importance of maintaining confidentiality to protect the interests of consumers and the financial system.

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Determination
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Reporting & Disclosure Obligations
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