Australian Prudential Regulation Authority (confidentiality) determination
No. 26 of 2013
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, section 57
Acts Interpretation Act 1901, section 33
- Purpose
The purpose of the Australian Prudential Regulation Authority (confidentiality) determination No.26 of 2013 (the determination) made on 9 December 2013 is to enable APRA to disclose, including by way of publication, certain information provided by life insurers and friendly societies to APRA under the reporting standards listed in Appendix A. This information will be of use to regulators, policymakers, industry, researchers, analysts and other interested parties.
2. Legislative background
Subsection 56(5C) of the Australian Prudential Regulation Authority Act 1998 (APRA Act) provides that it is not an offence against section 56(2) of that Act to disclose information in a reporting document given to APRA under section 13 of the Financial Sector (Collection of Data) Act 2001 (FSCOD Act) where APRA has determined, under section 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 section 13 of the FSCOD 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 take such representations into account. The consultation undertaken is discussed below.
3. Information covered by the determination
The determination provides that certain information given to APRA under the reporting standards listed in Appendix A is non-confidential. The reporting standards in Appendix A were made under section 13 of the FSCOD Act. This determination applies to all life insurers, including foreign life insurers operating in Australia through branch operations, and friendly societies.
4. Consultation
In accordance with the requirements for consultation under section 57 of the APRA Act , APRA released a discussion paper on 22 February 2013 that proposed that all life insurance and friendly society data[1] be determined non-confidential, as well as proposals to change its statistical publications. The discussion paper provided all affected entities an opportunity to make representations on the proposed determination. The consultation period ended on 5 April 2013. APRA also invited some affected entities to make additional representations to clarify their submissions in response to the discussion paper, particularly in relation to proposed disclosures in institution-level publications.
APRA received submissions from four entities and representative associations during the consultation. These submissions supported the life insurance publications, and supported the principles behind the proposals to make life insurance data non-confidential. However, some submissions suggested that making all data non-confidential would cause detriment to commercial interests; particularly data at a product level, and information relating to individual counterparties.
As a result, APRA revised the proposed determination and primarily only included information that entities and representative associations suggested to date would not be detrimental to their commercial interests. Further consultation was then held in relation to the revised proposed determination with representative associations and their members. Certain information that is included in this determination, but that consulted parties suggested may be detrimental to their commercial interests, relate to data that has previously been determined by APRA to be non-confidential and has been previously been publicly disclosed on a regular basis.
APRA intends to further consult with entities and representative associations on other life insurance data that is collected under the FSCOD Act and is not included in this determination.
APRA considers, after taking affected entities’ representations into account that there is a strong public interest in the publication of the information in the determination, and this outweighs any potential detrimental effect to the commercial interests of life insurers and friendly societies.
5. Statement of compatibility with human rights prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
A Statement of Compatibility with Human Rights is Appendix B to this Explanatory Statement.
Appendix A
Determination No. 26 of 2013 covers the following reporting standards and data:
Part 1 (reporting documents covered by this determination)
This determination applies to the annual information in reporting forms given to APRA by a life insurer or friendly society under the following reporting standards, where a period of at least 14 days has elapsed from the date the life insurer or friendly society was required to provide the information required under the reporting standards in accordance with paragraph 5 of Reporting Standard LRS 001 Reporting Requirements:
- New reporting standards which came into effect on 1 January 2013
- Reporting Standard LRS 300.0 Statement of Financial Position
- Reporting Standard LRS 112.0 Determination of Capital Base – only data in the form LRF 112.2 Determination of Capital Base (Entity)
Part 2 (Parts of reporting documents covered by this determination)
This determination applies to the annual information in reporting forms given to APRA by a life insurer or friendly society under the following reporting standards, where a period of at least 14 days has elapsed from the date the life insurer or friendly society was required to provide the information required under the reporting standards in accordance with paragraph 5 of Reporting Standard LRS 001 Reporting Requirements:
Parts of reporting form covered by this determination | Reporting standards |
LRF_110_1: Prescribed Capital Amount (SF, GF) - statutory fund only
(a) Section 1: Summary of prescribed capital amount: (i) 1. LRF 114: Asset risk charge
(ii) 2. LRF 115: Insurance risk charge
(iii) 3. Less: Aggregation benefit
(iv) 4. LRF 200: Aggregate risk charge for variable annuities
(v) 5. LRF 117: Asset concentration risk charge
(vi) 6. LRF 118: Operational risk charge
(vii) 7. Combined stress scenario adjustment
(viii) 8. Adjustment to prescribed capital amount as approved by APRA – Total amount
(ix) 9. Prescribed capital amount
(b) Section 2: Capital adequacy assessment -
(i) 10. Capital base
(ii) 10.1 Tier 2 Capital
(iii) 11. Capital base net of Tier 2 Capital
(iv) 12. Capital in excess of prescribed capital amount
| LRS 110.1 Prescribed Capital Amount (which came into effect on 1 January 2013)
|
LRF_110_2: Prescribed Capital Amount (Entity)
(a) Section 1: Summary of prescribed capital amount:
(i) 1. Life company: Prescribed capital amount
(b) Section 2: Capital adequacy assessment
(i) 2. LRF 112.2: Life company: Capital base
(ii) 2.1 Common Equity Tier 1 Capital
(iii) 2.2 Additional Tier 1 Capital
(iv) 2.3 Tier 2 Capital
(v) 3. Capital in excess of prescribed capital amount | LRS 110.1 Prescribed Capital Amount (which came into effect on 1 January 2013) |
LRF_310_1: Income Statement (SF and SF Eliminations) and
LRF_310_2: Income Statement (SF Total, GF, GF Elim, Entity)
Revenue
(i) 1.6. Total insurance policy revenue, net of reinsurance
(ii) 2.4. Total fees for management services rendered
(iii) 3.3. Total investment revenue
(iv) 4. Other revenue
(v) 5. Total revenue
Expenses
(vi) 6.10. Total insurance policy expense, net of reinsurance
(vii) 7.13. Total operating expenses
(viii) 11. Effective movement in net policy liabilities
(ix) 12.1. Increase/(decrease) in policy owner retained profits
(x) 13. Other expenses
(xi) 14. Total expenses
(xii) 16.3. Total tax
(xiii) 17. Profit/(loss) after income tax
| LRS 310.0 Income Statement (which came into effect on 1 January 2013) |
AND
This determination applies to the annual information in reporting forms given to APRA by a life insurer and not a friendly society under the following reporting standards, where a period of at least 14 days has elapsed from the date the life insurer was required to provide the information required under the reporting standards in accordance with paragraph 5 of Reporting Standard LRS 001 Reporting Requirements:
Parts of reporting form covered by this determination | Reporting standards |
LRF_110_1: Prescribed Capital Amount (SF, GF) - general fund only
(a) Section 1: Summary of prescribed capital amount: (i) 1. LRF 114: Asset risk charge
(ii) 2. LRF 115: Insurance risk charge
(iii) 3. Less: Aggregation benefit
(iv) 4. LRF 200: Aggregate risk charge for variable annuities
(v) 5. LRF 117: Asset concentration risk charge
(vi) 6. LRF 118: Operational risk charge
(vii) 7. Combined stress scenario adjustment
(viii) 8. Adjustment to prescribed capital amount as approved by APRA – Total amount
(ix) 9. Prescribed capital amount
(b) Section 2: Capital adequacy assessment -
(i) 10. Capital base
(ii) 10.1 Tier 2 Capital
(iii) 11. Capital base net of Tier 2 Capital
(iv) 12. Capital in excess of prescribed capital amount | LRS 110.1 Prescribed Capital Amount (which came into effect on 1 January 2013)
|
Part 3 (Old reporting documents covered by this determination)
This determination applies to reporting forms given to APRA by a life insurer or friendly society under the following reporting standards.
Reporting Standards effective from 1 January 2008 to 30 September 2009:
- Reporting Standard LRS 100.0 Solvency (all data in form) ;
- Reporting Standard LRS 120.0 Management Capital (all data in form);
- Reporting Standard LRS 210.0 Derivatives, Commitments and Off-Balance
Sheet Items (all data in form);
- Reporting Standard LRS 300.0 Statement of Financial Position (all data in form);
- Reporting Standard LRS 310.0 Statement of Financial Performance (all data in form);
- Reporting Standard LRS 330.0 Summary of Revenue and Expenses (all data in form except product level data);
- Reporting Standard LRS 340.0 Retained Profits (all data in form);
- Reporting Standard LRS 400.0 Statement of Policy Liabilities (all data in form except product level data);
- Reporting Standard LRS 420.0 Assets Backing Policy Liabilities (all data in form except product level data); or
- Reporting Standard LRS 430.0 Sources of Profit (all data in form except product level data).
Reporting Standards effective from 1 October 2009 to 31 December 2012:
- Reporting Standard LRS 100.0 Solvency (all data in form);
- Reporting Standard LRS 120.0 Management Capital (all data in form);
- Reporting Standard LRS 210.0 Derivatives, Commitments and Off-Balance
Sheet Items (all data in form);
- Reporting Standard LRS 300.0 Statement of Financial Position (all data in form);
- Reporting Standard LRS 310.0 Statement of Financial Performance (all data in form);
- Reporting Standard LRS 330.0 Summary of Revenue and Expenses (all data in form except product level data);
- Reporting Standard LRS 340.0 Retained Profits (all data in form);
- Reporting Standard LRS 400.0 Statement of Policy Liabilities (all data in form except product level data);
- Reporting Standard LRS 420.0 Assets Backing Policy Liabilities (all data in form except product level data); or
- Reporting Standard LRS 430.0 Sources of Profit (all data in form except product level data).
Appendix B
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. 26 of 2013
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
This Legislative Instrument will enable APRA to disclose (including by way of publication in industry bulletins) certain information provided to it by life insurers and friendly societies under certain reporting standards. This information will be of use to inter alia, regulators, policymakers, industry, researchers and analysts.
Human rights implications
APRA has assessed this Legislative Instrument against the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (HRPS Act) and determined that only Article 17 of the International Covenant on Civil and Political Rights (ICCPR) is conceivably of relevance.
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.
This Legislative Instrument will facilitate the disclosure of specific information given to APRA by general insurers in accordance with certain reporting standards. It does not involve the disclosure of information directly relating to individual persons. 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 this 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.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
[1] Where data are provided under the Financial Sector (Collection of Data) Act 2001