Australian Prudential Regulation Authority (confidentiality) determination
No. 4 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. 4 of 2011 (Determination No. 4) made on 19 January 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. 4 made on 19 January 2011 covers annual and quarterly reporting documents provided to APRA on or after 29 December 2010 and before the date of Determination No. 4.
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. 4 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. 4 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. 4 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. 4 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. 4 covers items of data described below in Part 1.
Part 1 – description of the documents covered by Determination No. 4
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. 4 of 2011 was enacted on 19 January 2011 to address the issue of disclosing certain information provided by life insurers and friendly societies to the Australian Prudential Regulation Authority (APRA) without violating the confidentiality provisions under the Australian Prudential Regulation Authority Act 1998. The problem this determination aimed to solve was the need to balance the protection of commercially sensitive information held by life insurers and friendly societies, while also enabling the publication of data that could assist regulators, policymakers, industry, researchers, analysts, and other interested parties in understanding the life insurance industry. This determination was made under the authority of the APRA Act, and the policy objective was to facilitate the disclosure of specified information in a way that would support informed decision-making and oversight in the financial sector.
The Australian Prudential Regulation Authority undertook a consultation process in November 2009, seeking feedback from all life insurers and friendly societies regarding the potential public release of data collected under the Financial Sector (Collection of Data) Act 2001. The consultation resulted in several responses, with some entities expressing concerns about the disclosure of product-level data due to its commercial sensitivity. APRA considered these views and determined that the publication of certain data would strike an appropriate balance between protecting commercially sensitive information and advancing the public interest in data transparency within the life insurance and friendly society sectors. This determination applies to all life insurers and friendly societies and covers specific data items from quarterly and annual reporting documents lodged with APRA.
Scope and Application
The Australian Prudential Regulation Authority (confidentiality) determination No. 4 of 2011, made under the Australian Prudential Regulation Authority Act 1998, aims to facilitate the disclosure of certain information provided by life insurers and friendly societies to the Australian Prudential Regulation Authority (APRA) for publication. This determination applies to life insurers and friendly societies, allowing APRA to release information contained in their quarterly and annual reports lodged under the Financial Sector (Collection of Data) Act 2001. The information covered includes data from various reporting standards such as solvency, management capital, derivatives, and financial statements, while excluding product level data to protect commercially sensitive information. The determination applies to reporting documents submitted on or after 29 December 2010, and it was made after APRA consulted with the industry and considered the feedback received. This determination assists regulators, policymakers, and the public in understanding the life insurance industry while maintaining a balance between confidentiality and transparency.
Key Provisions
The Australian Prudential Regulation Authority (confidentiality) determination No. 4 of 2011, which was issued on 19 January 2011, pertains to the disclosure of certain information submitted by life insurers and friendly societies to the Australian Prudential Regulation Authority (APRA) (sections 1 and 2). This information, which is included in quarterly and annual reports filed under section 13 of the Financial Sector (Collection of Data) Act 2001, would otherwise be subject to a confidentiality requirement under section 56(2) of the Australian Prudential Regulation Authority Act 1998 (APRA Act) (section 2). The primary aim of this determination is to allow APRA to publish this information, which is intended to benefit regulators, policymakers, industry stakeholders, researchers, analysts, and other interested parties by providing a better understanding of the life insurance industry (section 2).
The determination applies to all life insurers and friendly societies and specifies that the information contained in the quarterly and annual reporting documents, as listed in the appendix to this explanatory statement, is not confidential (section 3). These documents, which include various data items such as solvency, management capital, derivatives, commitments, and off-balance sheet items, as well as statements of financial position, financial performance, revenue and expenses, retained profits, policy liabilities, asset backing policy liabilities, and sources of profit, are provided to APRA under the specified reporting standards made under section 13 of the Financial Sector (Collection of Data) Act 2001 (section 3). It is important to note that this determination only covers documents provided to APRA on or after 29 December 2010 and before the date of Determination No. 4 (section 3).
APRA is required to consult with relevant entities or bodies, or their representative associations, before making a determination regarding the confidentiality of information in a reporting document (section 5). This consultation process ensures that APRA takes into account the views and concerns of the affected parties before deciding whether the information can be disclosed. The determination also allows APRA to publish the information in a manner that is deemed appropriate, taking into consideration the potential impact on the privacy and commercial interests of the life insurers and friendly societies (section 5).
Failure to comply with the confidentiality requirements set out in the APRA Act may result in criminal or civil penalties, depending on the nature and severity of the breach (section 5). The maximum penalties for such breaches are not specified in the legislation but may be found in other relevant laws or regulations. It is essential for life insurers and friendly societies to ensure that they adhere to the confidentiality provisions outlined in the APRA Act and any other applicable legislation to avoid potential legal consequences.