Financial Sector (Collection of Data) exemption No. 2 of 2007

Financial Sector (Collection of Data) exemption No. 2 of 2007

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Financial Sector (Collection of Data) Act 2001 (the Act), subsection 16(1)

Under subsection 16(1) of the Act, APRA may, by legislative instrument, exempt a financial sector entity from the requirement to comply with all the requirements or specified requirements contained in applicable reporting standards.

Taxi Insurance Co-Operative Limited ABN 35 628 293 055 (Taxi) is a “financial sector entity” as defined by subsection 5(2) of the Act.  Financial Sector (Collection of Data) exemption No. 2 of 2007 (the instrument) exempts Taxi from the requirements contained in the reporting standards relating to quarterly returns specified in the Schedule.

1.      Background

Taxi is a local general insurer authorised to carry on insurance business in Australia under subsection 12(1) of the Insurance Act 1973.  Taxi is listed as being in run-off and is restricted by APRA from writing new or renewal insurance business. A notice varying the conditions on Authorisation to carry on insurance business states that from 4pm on 30 June 2007, Taxi may only conduct insurance business in Australia for the sole purpose of discharging liabilities that arose under policies entered prior to that date.

Taxi’s licence conditions also restricted Taxi to only write motor vehicle insurance to its members who are owners of “Ordinary Taxis” operating in the Perth Metropolitan area.

The last annual return lodged by Taxi (as at 30 June 2007) reported outstanding claims reserves entirely as a short term liability and at a level that is considered to be immaterial to APRA in terms of supervision and data publication purposes.

2.      Purpose of the instrument

The purpose of the instrument is to exempt Taxi from all of the requirements relating to quarterly reporting in the following reporting standards:

• GRS 110.0 (2007) Minimum Capital Requirement
• GRS 120.0 (2007) Determination of Capital Base
• GRS 130.0 (2007) Off Balance Sheet Business - Credit Substitutes Provided and Capital Charge
• GRS 130.1 (2007) Off Balance Sheet Business - Liquidity Support Facilities Obtained
• GRS 130.2 (2007) Off Balance Sheet Business - Charges Granted and Risk Charge
• GRS 130.3 (2007) Off Balance Sheet Business - Credit Support Received
• GRS 140.0 (2007) Investments - Direct Interest Rate Holdings and Risk Charge
• GRS 140.1 (2007) Investments - Direct Equity Holdings and Risk Charge
• GRS 140.2 (2007) Investments - Direct Property Holdings and Risk Charge
• GRS 140.3 (2007) Investments - Loans and Advances and Risk Charge
• GRS 140.4 (2007) Investments - Assets Indirectly Held by Insurer and Risk Charge
• GRS 150.0 (2007) Asset Concentration and Risk Charge
• GRS 160.0 (2007) Derivative Activity and Risk Charge
• GRS 170.0 (2007) Concentration Risk Charge
• GRS 170.1 (2007) Maximum Event Retention and Risk Charge for Lenders Mortgage Insurers
• GRS 210.0 (2007) Outstanding Claims Provision - Insurance Risk Charge
• GRS 210.1 (2007) Premium Liabilities - Insurance Risk Charge
• GRS 300.0 (2007) Statement of Financial Position
• GRS 310.0 (2007) Statement of Financial Performance
• GRS 310.1 (2007) Premium Revenue and Reinsurance Expense
• GRS 310.2 (2007) Claims Expense and Reinsurance Recoveries
• GRS 310.3 (2007) Investment and Operating Income and Expense

3.      Consultation

APRA has been in consultation with TAXIS in relation to this issue.