Australian Prudential Regulation Authority (confidentiality) determination
No. 24 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. 24 of 2010 (Determination No. 24) made on 29 December 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. 24 made on 29 December 2010 covers annual and quarterly reporting documents provided to APRA on or after 30 November 2010 and before the date of Determination No. 24.
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. 24 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. 24 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. 24 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. 24 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. 24 covers items of data described below in Part 1.
Part 1 – description of the documents covered by Determination No. 24
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. 24 of 2010, enacted on 29 December 2010, was introduced to address the issue of enabling the Australian Prudential Regulation Authority (APRA) to disclose certain information provided by life insurers and friendly societies to APRA, as contained in documents lodged under the Financial Sector (Collection of Data) Act 2001. This disclosure, by way of publication, aims to assist regulators, policymakers, industry, researchers, analysts, and other interested parties in performing their functions and duties, while also enabling them to better understand the life insurance industry. The determination was made under the Australian Prudential Regulation Authority Act 1998 (APRA Act) by APRA itself, with the policy objective being to strike an appropriate balance between protecting each life insurer and friendly society’s commercially sensitive information from inappropriate disclosure and pursuing the public interest in releasing data relating to the life insurance and friendly society industries in Australia.
In accordance with section 57 of the APRA Act, APRA issued a discussion paper and sought comments from life insurers and friendly societies on the proposed content and format of the data to be published. After considering the feedback received, APRA concluded that the determination establishes an appropriate balance between the two competing interests. The determination applies to all life insurers and friendly societies and covers certain items of data from reporting documents given to APRA under specified reporting standards made under the Financial Sector (Collection of Data) Act 2001.
Scope and Application
The Australian Prudential Regulation Authority (confidentiality) determination No. 24 of 2010 applies to all life insurers and friendly societies in Australia, governing the disclosure of certain information that these entities provide to the Australian Prudential Regulation Authority (APRA) under specified reporting standards. This determination, effective for documents lodged with APRA on or after 30 November 2010, permits the publication of specific data contained in quarterly and annual reports to facilitate better understanding of the life insurance industry among regulators, policymakers, industry participants, researchers, analysts, and other interested parties. The determination ensures that the information, which is otherwise subject to confidentiality under the Australian Prudential Regulation Authority Act 1998, is not treated as confidential when published by APRA. This disclosure aims to balance the protection of commercially sensitive information of individual entities against the public interest in transparency and informed decision-making. The data covered includes various financial statements and related information, though certain product-level data has been excluded from the determination to protect the competitive position of individual entities.
Key Provisions
The Australian Prudential Regulation Authority (confidentiality) determination No. 24 of 2010, or Determination No. 24, enables the Australian Prudential Regulation Authority (APRA) to disclose specific information provided by life insurers and friendly societies. This information, which includes quarterly and annual reporting documents lodged with APRA under section 13 of the Financial Sector (Collection of Data) Act 2001, is otherwise subject to confidentiality provisions under section 56(2) of the Australian Prudential Regulation Authority Act 1998 (APRA Act). Section 56(5C) of the APRA Act allows for the exemption of certain information from these confidentiality requirements if APRA determines, under section 57 of the Act, that the information is not confidential. Determination No. 24 specifies which documents are not confidential and thus can be published by APRA. This determination applies to all life insurers and friendly societies and covers reporting documents submitted on or after 30 November 2010.
APRA is mandated to consult with relevant entities or bodies before making any determinations about the confidentiality of information. Specifically, APRA must provide these entities with a reasonable opportunity to make representations about whether the information is confidential, and APRA must consider these representations before making a determination under section 57 of the APRA Act. Determination No. 24 pertains to the quarterly and annual reporting documents submitted to APRA under specific reporting standards made under the Financial Sector (Collection of Data) Act 2001, which include details such as solvency, management capital, derivatives, and financial statements. However, product-level data that could identify individual entities directly or indirectly is excluded from the non-confidential information, as it is considered commercially sensitive.
APRA’s obligations under the APRA Act include ensuring that the information published does not breach confidentiality provisions unless explicitly permitted by a determination such as No. 24. In making this determination, APRA must balance the protection of commercially sensitive information against the public interest in making certain industry data available. This involves consulting with the industry, considering the views and representations of life insurers and friendly societies, and determining an appropriate level of disclosure. By taking into account the commercial sensitivity of the information and the public interest in transparency, APRA aims to strike an appropriate balance in its determinations.
Failure to adhere to the confidentiality provisions of the APRA Act could result in an offence under section 56(2) of the Act. However, Determination No. 24 explicitly exempts the specified information from these confidentiality requirements, allowing APRA to publish it without incurring such penalties. The penalties for breaching the confidentiality provisions can be severe, but since Determination No. 24 provides a lawful exemption for the specified information, no penalties apply to its publication. The maximum penalties for breaching confidentiality provisions under the APRA Act can include substantial fines and, in some cases, imprisonment, but these do not apply to the information covered by Determination No. 24.