Australian Prudential Regulation Authority (confidentiality) determination No. 22 of 2011

Administered by Department of the Treasury

Legislation au F2011L02729 Not in force Legislative Instrument

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Australian Prudential Regulation Authority (confidentiality) determination

No. 22 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. 22 of 2011 (Determination No. 22) made on 13 December 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. 22 made on 13 December 2011 covers annual and quarterly reporting documents provided to APRA on or after 28 November 2011 and before the date of Determination No. 22.

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. 22 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. 22 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. 22 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. 22 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. 22 covers items of data described below in Part 1.

 

Part 1 – description of the documents covered by Determination No. 22

 

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. 22 of 2011 was enacted to address the need for greater transparency in the life insurance and friendly society industries, while also protecting commercially sensitive information. The legislation, enacted by the Australian Prudential Regulation Authority (APRA), aims to balance the public interest in accessing industry data with the protection of proprietary information held by life insurers and friendly societies. This determination allows APRA to disclose, through publication, specific information from quarterly and annual reporting documents that would otherwise be subject to confidentiality provisions under the Australian Prudential Regulation Authority Act 1998. The objective of this legislation is to enhance the understanding of the life insurance industry among regulators, policymakers, and other stakeholders by making certain data publicly available, thereby fostering better-informed decision-making and oversight.

Scope and Application

The Australian Prudential Regulation Authority (confidentiality) determination No. 22 of 2011 applies to all life insurers and friendly societies operating within Australia. This legislation enables the Australian Prudential Regulation Authority (APRA) to disclose certain information that these entities provide in their quarterly and annual reporting documents, which are lodged under section 13 of the Financial Sector (Collection of Data) Act 2001. The determination ensures that such disclosures do not constitute an offence under section 56(2) of the Australian Prudential Regulation Authority Act 1998, by certifying that the information in question does not contain confidential data. The intent is to promote transparency and better understanding of the life insurance industry among regulators, policymakers, industry participants, researchers, and analysts, while still protecting commercially sensitive information from inappropriate disclosure. The determination applies to documents submitted to APRA from 28 November 2011 onwards, and includes specific data items from various reporting standards, with some product level data excluded to maintain confidentiality. APRA considered stakeholder feedback during the consultation process to strike an appropriate balance between disclosure and confidentiality.

Key Provisions

The Australian Prudential Regulation Authority (confidentiality) determination No. 22 of 2011 (Determination No. 22) is a legislative instrument made under the Australian Prudential Regulation Authority Act 1998 (APRA Act) that allows the Australian Prudential Regulation Authority (APRA) to disclose, through publication, specific information provided by life insurers and friendly societies. This disclosure is permitted under section 13 of the Financial Sector (Collection of Data) Act 2001 (Collection of Data Act), and it would otherwise constitute an offence under section 56(2) of the APRA Act (subsection 56(5C)). The purpose of this disclosure is to assist regulators, policymakers, industry, researchers, analysts, and other interested parties in understanding the life insurance industry better. Determination No. 22 applies to all annual and quarterly reporting documents provided to APRA on or after 28 November 2011 and before the date of the determination. Under Determination No. 22, APRA is required to give relevant entities or bodies, or their representative association, a reasonable opportunity to make representations regarding whether the information contained in the reporting documents is confidential before making a determination (section 57 of the APRA Act). This process ensures that the views and concerns of the life insurers and friendly societies are considered before the information is made public. The determination covers specific data items from various reporting standards, such as solvency, management capital, derivatives, commitments, and off-balance sheet items, statements of financial position, financial performance, revenue and expenses, retained profits, policy liabilities, asset backing policy liabilities, and sources of profit. The obligations and requirements imposed by Determination No. 22 include giving relevant entities or bodies, or their representative association, a reasonable opportunity to make representations about the confidentiality of the information in the reporting documents. APRA must also consider these representations before making a determination under section 57 of the APRA Act. Furthermore, life insurers and friendly societies must provide the specified information to APRA under the reporting standards listed in the appendix to the determination. There are no specific offences, penalties, or civil/criminal consequences outlined in Determination No. 22 for breaches of its provisions. However, the APRA Act and the Collection of Data Act may impose penalties for breaches related to the confidentiality and disclosure of information. For example, section 56(2) of the APRA Act prohibits the disclosure of confidential information, and breaches of this provision may result in civil or criminal penalties, including fines and imprisonment. It is essential for life insurers, friendly societies, and other relevant parties to comply with the requirements of Determination No. 22 and the relevant legislation to avoid any potential consequences.

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