Australian Prudential Regulation Authority (confidentiality) determination No. 7 of 2009

Australian Prudential Regulation Authority (confidentiality) determination

No. 7 of 2009

Information provided by general insurers under certain reporting standards

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Australian Prudential Regulation Authority Act 1998 (APRA Act), s 57

The purpose of the Australian Prudential Regulation Authority (confidentiality) determination No. 7 of 2009 (Determination No. 7) made on 15 June 2009 is to enable APRA to disclose, by way of publication, certain information provided by general insurers to APRA through the National Claims and Policies Database (NCPD). Releasing this information may assist regulators, policymakers, industry, researchers, analysts and other interested parties to perform their functions and duties and better to understand the insurance industry.

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 Financial Sector (Collection of Data) Act 2001 (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 (the consultation undertaken is discussed below).

Information covered by the determination 

Determination No. 7 provides that the reporting documents (level 2 reports), described in the Appendix to this Explanatory Statement, which are based on information given to APRA prior to the date of Determination No. 7 under the reporting standards also listed in the Appendix (made under section 13 of the Collection of Data Act are not confidential.  Determination No. 7 applies to all general insurers, including foreign general insurers operating in Australia through branch operations.

Consultation

In accordance with section 57, APRA issued a discussion paper and wrote to all NCPD contributing insurers on 26 November 2008, requesting comment on three options for the level of confidentiality protection to be applied to the future release of level 2 reports. These options were to release reports with full confidentiality protection in place, to remove confidentiality protection from claim data, or to remove confidentiality protection from both policy and claim data.

To enable assessment of the confidentiality protection capabilities of the level 2 reports, APRA made the reports available for use by contributing insurers. The reports were released subject to full confidentiality protection, in accordance with the first of the options outlined above, being the most restrictive. In the consultation process, insurers were able to assess the capability of the confidentiality protection applied to the reports and its effect on the level of disclosure of the data.

Determination No. 7 relates to reports with full confidentiality protection in place, ie on the same basis as the reports which were made available during the consultation period.

APRA received 18 responses from contributors during the consultation. Of these, 10 supported release of reports with full masking in place, two supported the removal of masking on claim data, and six supported removing all masking.

A number of the responses expressly noted that level 2 reports released under option A protect the confidentiality of insurer data, based on both the description of the full masking capabilities and a review of the reports that were released for the purposes of the consultation. One comment was made in relation to the approach taken in masking the data being insufficient, on the basis that the masking was determined on an individual insurer rather than conglomerate group basis.

The majority of the feedback received during consultation related to the proposals for removing masking from the level 2 reports. The feedback received in support of removing masking from either claim data or both policy and claim data also provides implicit recognition that these contributors do not have issues with the confidentiality of data released with full masking in place.

At this stage, APRA considers that Determination No. 7 establishes an appropriate balance between protecting each general insurer’s commercially sensitive information from inappropriate disclosure and pursuing the public interest in releasing data from the NCPD. APRA intends to consider in future whether it is appropriate to remove some or all of the confidentiality protection from the level 2 reports in line with the other two options upon which APRA consulted with contributing insurers. Determination No. 7 will enable APRA to effectively consult with a wide range of stakeholders on the public interest and benefit in the availability of useful output from the NCPD.

Appendix

Determination No. 7 covers certain items of data (‘the level 2 reports’) described below in Part 1, modified in accordance with confidentiality measures as outlined in Part 2.

Part 1 – description of the level 2 reports covered by Determination No. 7

Determination No. 7 does not cover any data items other than those outlined below.

The level 2 reports comprise data items from reporting documents given to APRA, on or before the date of Determination No. 7, by general insurers under the following reporting standards made under the Financial Sector (Collection of Data Act) 2001:

• Reporting Standard GRS 800.1 Policy Data: Public and Product Liability and Professional Indemnity Insurance
• Reporting Standard GRS 800.2 Claims Data: Public and Product Liability and Professional Indemnity Insurance
• Reporting Standard GRS 800.3 Facility Business Data: Public and Product Liability and Professional Indemnity Insurance

The data items described below are the data items that comprise the level 2 reports

Data measures

Gross written premium, gross earned premium, number of risks written and average earned premium.

Number of claims reported, number of claims finalised, gross claim payments and gross claims incurred, each of which is available on an underwriting year, accident year and calendar year basis.

Premiums received, claims paid, and number of policies, number of claims and number of facilities.

Data dimensions

•                  Year
•                  Development year
•                  Class of business
•                  State/Jurisdiction
•                  Product
•                  Industry/Occupation
•                  Limit of indemnity
•                  Excess/deductible

Report restrictions

There are restrictions on the intersection of some of these dimensions; information on both state/jurisdiction and occupation is not available, nor is information on both the limit of indemnity and the excess/deductible.

Dimension categories available in level 2 reports

•                  Year
  •           Underwriting years
  •           Accident years
  •           Calendar years
  •           Six month reporting period (facility reports only)
•                  Development year
  •           ALL
  •           0 – 9
•                  Class of business (COB)
  • PI
  •           PL
•                  State/Jurisdiction
  •           All States
    • No detailed occupation information is available except on ‘All States’
  •           NSW
  •           VIC
  •           QLD
  •           SA
  •           WA
  •           TAS
  •           NT
  •           ACT
  •           Unknown
• Product
  •           ALL
  •           D&O and employment practices liability
  •           Medical indemnity/Malpractice
  • Other professional indemnity
  •           Construction liability
  •           Product liability
  •           Public liability
  •           Other product and public liability
•                  Industry/Occupation
  • ALL
    • No detailed state/jurisdiction information is available except on ‘ALL’
  •           2 digit ANZSIC code; or
  •           1 character occupation code
    • A  - Financial occupations
    • B  - General Consultants
    • C  - Medical & Paramedical occupations
    • D  - Legal & Para Legal occupations
    • E  - Real Estate occupations
    • F  - Agricultural, Horticultural occupations
    • G  - Schools, Colleges occupations
    • H  - Insurance occupations
    • I  - Local Government occupations
    • J  - Miscellaneous occupations
    • K  - Architects
    • L  - Engineering occupations
    • M  - Surveying occupations
    • N  - Defamation
•                  Limit of indemnity (LOI)
  • ALL
    • No detailed EDA information is available except on ‘ALL’
  •           0-5m
  •                       5m-10m
  •           10m+
•                  Excess/deductible (EDA)
  •           ALL
    •            No detailed LOI information is available except on ‘ALL’
  •           0-$499
  •           $500-$999
  •           $1,000+

List of reports

The data is provided as a set of reports with various row and column combinations. The remaining dimensions, subject to the restrictions identified above, are available to further filter the data.

•                  Policy reports
  •           Year by Product (filter by: COB, State, Occupation, LOI, EDA)
  •           Product by State (filter by: Year, COB, LOI, EDA)
  •           Product by LOI (filter by: Year, COB, State, Occupation)
  •           Product by EDA (filter by: Year, COB, State, Occupation)
  •           Year by State (filter by: COB, Product, LOI, EDA)
  •           LOI by State (filter by: Year, COB, Product)
  •           EDA by State (filter by: Year, COB, Product)
  •           Year by LOI (filter by: COB, State, Product, Occupation)
  •           Year by EDA (filter by: COB, State, Product, Occupation)
  •           Occupation by Year (filter by: COB, Product, LOI, EDA)
  •           Occupation by Product (filter by: Year, COB, LOI, EDA)
  •           Occupation by LOI (filter by: Year, COB, Product, Occupation)
  •           Occupation by EDA (filter by: Year, COB, Product, Occupation)

•                  Claim reports
  • Year by Development year (filter by: COB, State, Product, Occupation, LOI, EDA)
  •           Year by Product (filter by: COB, State, Occupation, LOI, EDA)
  •           Product by State (filter by: Year, COB, LOI, EDA)
  •           Product by LOI (filter by: Year, COB, State, Occupation)
  •           Product by EDA (filter by: Year, COB, State, Occupation)
  •           Year by State (filter by: COB, Product, LOI, EDA)
  •           LOI by State (filter by: Year, COB, Product)
  •           EDA by State (filter by: Year, COB, Product)
  •           Year by LOI (filter by: COB, State, Product, Occupation)
  •           Year by EDA (filter by: COB, State, Product, Occupation)
  •           Occupation by Year (filter by: COB, Product, LOI, EDA)
  •           Occupation by Product (filter by: Year, COB, LOI, EDA)
  •           Occupation by LOI (filter by: Year, COB, Product, Occupation)
  •           Occupation by EDA (filter by: Year, COB, Product, Occupation)
•                  Facility reports
  •           Reporting period (filter by: Occupation)
  •           Occupation (filter by: Reporting period)
• Facility in run-off reports
  •           Reporting period (filter by: Occupation)
  •           Occupation (filter by: Reporting period)

Part 2 – Modifications to reporting document

Primary confidentiality layer

All information in the level 2 reports is presented as summary information. Each data item aggregates data from insurers who contribute to the NCPD.  The names of individual insurers are not to be shown.

The level 2 aggregated data will then be modified by masking certain aggregated values selected based on confidentiality criteria described below.

There are three primary confidentiality rules applied to each aggregated data item individually. Where one of these rules is not met, the value is masked and not provided to report users. A data item is treated as confidential if:

1. It has less than three contributors; or
2. One contributor makes up more than 85 per cent of the value of the cell; or
3. Two contributors make up more than 90 per cent of the value of the cell.

Complementary confidentiality layer

Where a data item is masked due to the primary confidentiality layer, an algorithm selects further cells for masking to prevent a masked value from being easily calculated using the total for that row or column. This is known as complementary masking.

In the level 2 reports, at least two cells are masked in each row and column which contains data masked by the primary confidentiality layer (excluding data presented in an ‘unknown’ category), except in a small number of cases where the algorithm cannot determine appropriate masking (less than 0.009% of cells).