Australian Prudential Regulation Authority (confidentiality) determination No. 5 of 2012

Administered by Department of the Treasury

Legislation au F2012L00463 Not in force Legislative Instrument

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Australian Prudential Regulation Authority (confidentiality) determination

No. 5 of 2012

 

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. 5 of 2012 (Determination No. 5) made on 27 February 2012 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. 5 made on 27 February 2012 covers annual and quarterly reporting documents provided to APRA on or after 28 February 2011 and before the date of Determination No. 5.

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. 5 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. 5 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. 5 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. 5 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.

 

Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

The legislative instrument the subject of this explanatory statement 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. Accordingly, in APRA’s assessment, this legislative instrument is compatible with human rights.

 


Appendix

 

Determination No. 5 covers items of data described below in Part 1.

 

Part 1 – description of the documents covered by Determination No. 5

 

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. 5 of 2012 was enacted on 27 February 2012 by the Australian Prudential Regulation Authority (APRA) under the Australian Prudential Regulation Authority Act 1998. This determination addresses the issue of enabling APRA to disclose, by way of publication, certain information provided by life insurers and friendly societies, which otherwise would result in an offence under the APRA Act. The policy objective of this determination is to facilitate the dissemination of relevant information to regulators, policymakers, industry, researchers, analysts, and other stakeholders to improve their understanding of the life insurance industry. This determination applies to annual and quarterly reporting documents submitted to APRA from 28 February 2011 onwards. APRA consulted with relevant stakeholders in November 2009, receiving seven responses, and considered their views to establish a balance between protecting commercially sensitive information and promoting the public interest in data disclosure. The Australian Prudential Regulation Authority (confidentidentiality) determination No. 5 of 2012 was enacted by APRA under the Australian Prudential Regulation Authority Act 1998 to address the need for transparency in the life insurance industry. This determination allows APRA to publish specific information provided by life insurers and friendly societies, which would otherwise be considered an offence under the APRA Act. The objective of this determination is to enable stakeholders to better understand the life insurance industry by making certain data publicly available. This determination applies to annual and quarterly reporting documents provided to APRA from 28 February 2011 onwards. APRA consulted with relevant parties in November 2009, receiving seven responses, and took their views into account when establishing the balance between protecting commercially sensitive information and promoting public interest in data disclosure.

Scope and Application

The Australian Prudential Regulation Authority (confidentiality) determination No. 5 of 2012 pertains to the disclosure of specific information provided by life insurers and friendly societies to the Australian Prudential Regulation Authority (APRA). This determination, effective from 28 February 2011 and made on 27 February 2012, aims to allow APRA to publish certain data contained in quarterly and annual reporting documents submitted by these entities under section 13 of the Financial Sector (Collection of Data) Act 2001. The publication of such information would otherwise be an offence under section 56(2) of the Australian Prudential Regulation Authority Act 1998. This initiative is intended to assist regulators, policymakers, industry participants, researchers, and analysts in understanding the life insurance sector better. The determination applies to all life insurers and friendly societies, and it involves data from various reporting standards, including solvency, management capital, derivatives, financial positions, and performance statements, excluding product-level data deemed commercially sensitive. APRA conducted consultations in November 2009 to gauge views on the proposed data release, and the final determination balances the protection of commercially sensitive information with the public interest in data transparency.

Key Provisions

The Australian Prudential Regulation Authority (confidentiality) determination No. 5 of 2012 (Determination No. 5) enables the Australian Prudential Regulation Authority (APRA) to disclose, by way of publication, certain information provided by life insurers and friendly societies under specific reporting standards. This disclosure is permitted under the Australian Prudential Regulation Authority Act 1998 (APRA Act) and the Financial Sector (Collection of Data) Act 2001 (Collection of Data Act). Section 56(5C) of the APRA Act provides that it is not an offence to disclose information in reporting documents given to APRA under section 13 of the Collection of Data Act if APRA has determined that the document does not contain confidential information, and section 57 of the APRA Act empowers APRA to make this determination. The obligations and requirements imposed by the Determination No. 5 on life insurers and friendly societies include the submission of annual and quarterly reporting documents to APRA on or after 28 February 2011 and before the date of Determination No. 5. These documents must be provided under the reporting standards listed in the Appendix, which includes various data items such as solvency, management capital, derivatives, financial position, performance, and policy liabilities. APRA must give relevant entities or bodies, or their representative associations, a reasonable opportunity to make representations as to whether the information contained in the documents is confidential, and these representations must be taken into account before making a determination. Under the APRA Act, there are consequences for breach of certain provisions. However, the Determination No. 5 specifically exempts the disclosure of certain information from the offence under section 56(2) of the APRA Act. This means that the publication of the information permitted by Determination No. 5 would not constitute an offence. Life insurers and friendly societies must ensure that the information they provide to APRA complies with the requirements of the Determination No. 5 and the relevant reporting standards to avoid any potential issues. Failure to comply with the requirements could result in civil or criminal penalties as outlined in the APRA Act, although the Determination No. 5 itself does not specify any particular penalties for breach.

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Determination
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Reporting & Disclosure Obligations
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