Financial Sector (Collection of Data) determination No. 62 of 2006
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority
Issued by the authority of APRA
Paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (FSCOD Act) and subsection 33(3) of the Acts Interpretation Act 1901.
Under subsection 13(1) of the FSCOD Act, APRA has power, in writing, to determine reporting standards that are required to be complied with by financial sector entities. Subsection 33(3) of the Acts Interpretation Act 1901 gives APRA power to revoke reporting standards so made.
Financial Sector (Collection of Data) determination No. 62 of 2006 (the instrument) revokes Reporting Standard GRS 800.2 (2005) Claim Data: Public and Product Liability and Professional Indemnity Insurance made by Financial Sector (Collection of Data) determination No. 31 of 2005 dated 21 June 2005 (the old reporting standard) and replaces it with a new reporting standard to rectify an error in the old reporting standard.
The instrument will come into force on the date of registration of the instrument on the Federal Register of Legislative Instruments.
- Background
This Explanatory Statement explains the changes being made by APRA to the reporting standard for general insurers (within the meaning of the Insurance Act 1973) which require them to provide information in relation to public liability and professional indemnity insurance for the purposes of APRA's National Claims & Policies Database (NCPD).
2. Purpose of the instrument
The purpose of the instrument is to revoke the old reporting standard and replace it with a corresponding reporting standard which incorporates appropriate adjustments. APRA considered that it would be clearer and more effective to consolidate the necessary changes within a new instrument. For that reason, APRA decided to revoke and replace this reporting standard rather than to amend it.
3. Operation of the instrument
Under the reporting standard, general insurers that write public liability, product liability or professional indemnity insurance policies must provide APRA with data on claims made or not settled during a half-yearly reporting period.
As with the old reporting standard, the information collected includes the class of business covered by the claim, its current status, the dates of loss and report, the jurisdiction of the claim, the nature of the loss and details of the likely case estimate, amongst other information.
A new definition for 'reportable claim' has been inserted into the reporting standard to replace the previous inaccurate definition. Definitions of 'reportable policy' and 'reportable facility business' have also consequently been removed as they are now redundant.
4. Consultation
As the instrument only changes the old reporting standard to remove an inaccurate definition of 'reportable claim' and replace it with a new and accurate definition, industry has not been consulted. Under the old reporting standard, industry has provided data in accordance with the new definition of ‘reportable claim’ on the understanding that this definition reflected APRA’s intention in relation to the operation of the reporting requirements. Consequently, industry will not experience any change in the extent of their reporting obligations to APRA.