Australian Prudential Regulation Authority (confidentiality) determination No. 23 of 2012

Overview

The Australian Prudential Regulation Authority (confidentiality) determination No. 23 of 2012 was enacted to allow the Australian Prudential Regulation Authority (APRA) to disclose certain information provided by life insurers and friendly societies under specific reporting standards, without contravening the confidentiality provisions of the Australian Prudential Regulation Authority Act 1998 (APRA Act). This determination enables APRA to publish information contained in documents lodged quarterly and annually under section 13 of the Financial Sector (Collection of Data) Act 2001, which would otherwise be an offence under section 56(2) of the APRA Act. The policy objective is to assist regulators, policymakers, industry, researchers, analysts, and other interested parties in understanding the life insurance industry better by providing them with accessible and relevant data. Enacted by APRA, this determination applies to all life insurers and friendly societies and aims to strike a balance between protecting commercially sensitive information and promoting the public interest in data transparency. The determination was developed following consultations in November 2009, where APRA sought comments from life insurers and friendly societies regarding the release of specific data. The consultation process considered the views of the industry and aimed to ensure that commercially sensitive information would not be inappropriately disclosed. After reviewing the feedback, APRA determined that the disclosure of certain information would not breach confidentiality provisions, thereby enabling the publication of data that benefits the industry and the public. This determination is compatible with human rights as it 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.

Scope and Application

The Australian Prudential Regulation Authority (confidentiality) determination No. 23 of 2012 applies to life insurers and friendly societies operating within Australia. It pertains to the disclosure of information contained in quarterly and annual reporting documents lodged with the Australian Prudential Regulation Authority (APRA) under section 13 of the Financial Sector (Collection of Data) Act 2001. The determination allows APRA to publish specific information provided by life insurers and friendly societies, which would otherwise be considered confidential and subject to an offence under section 56(2) of the Australian Prudential Regulation Authority Act 1998. This applies to documents submitted to APRA on or after 30 November 2012, and the determination aims to assist regulators, policymakers, industry stakeholders, researchers, analysts, and the public in understanding the life insurance industry better. The scope of the determination includes various data items specified in the reporting standards effective for reporting periods after 1 October 2009, though it excludes certain product-level data deemed commercially sensitive. The determination was made in accordance with section 57 of the APRA Act, which empowers APRA to decide whether documents contain confidential information after considering representations from relevant entities or their representative associations. The decision balances the protection of commercially sensitive information against the public interest in data disclosure. Notably, the determination does not engage any of the applicable rights or freedoms recognised in the international human rights instruments, thereby ensuring its compatibility with human rights as assessed by APRA. The application of this determination is further extended through subordinate instruments if necessary.

Key Provisions

The Australian Prudential Regulation Authority (confidentiality) determination No. 23 of 2012 (Determination No. 23) serves to allow APRA to publish specific information that life insurers and friendly societies submit to APRA under certain reporting standards (s 2). This determination was made to circumvent the offence that would otherwise arise from such disclosures under section 56(2) of the Australian Prudential Regulation Authority Act 1998 (APRA Act) (s 2). The determination covers quarterly and annual reports submitted to APRA from 30 November 2012 onwards (s 2). The legislation underpinning this determination is the APRA Act and the Financial Sector (Collection of Data) Act 2001 (Collection of Data Act) (s 4). Under Determination No. 23, APRA is empowered to decide whether information in the reporting documents provided by life insurers and friendly societies is confidential or not (s 5). Before making such a determination, APRA must allow relevant entities or their representative associations a reasonable opportunity to present their views on the confidentiality of the information, and must take these views into account (s 5). The determination specifies that certain documents are not confidential and therefore can be published (s 5). This includes quarterly and annual returns given to APRA under particular reporting standards (s 5). The information covered by the determination is detailed in the appendix to the explanatory statement (s 5). The obligations imposed by Determination No. 23 on life insurers and friendly societies include the submission of quarterly and annual reports to APRA (s 5). These reports must be provided under specific reporting standards and include data on solvency, management capital, derivatives, commitments, off-balance sheet items, statements of financial position, statements of financial performance, and more (s 5). APRA, on the other hand, is required to review these documents, consider any representations from the entities, and determine whether the information contained therein is confidential or not (s 5). Breaches of the confidentiality provisions under the APRA Act can result in criminal penalties. Specifically, section 56(2) of the APRA Act imposes an offence for the unauthorised disclosure of confidential information. The maximum penalty for an individual who commits such an offence is 12 months imprisonment or a fine of $126,000, or both (s 56(2)). For a body corporate, the maximum penalty is a fine of $630,000 (s 56(2)). However, Determination No. 23 exempts certain information from these penalties when published as per its provisions (s 2).