Financial Sector (Collection of Data) (reporting standard) determination No. 14 of 2016 - GRS 302.0_G - Statement of Financial Position by Region (Level 2 Insurance Group)

Administered by Department of the Treasury

Legislation au F2016L01220 Not in force Legislative Instrument

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Financial Sector (Collection of Data) determination Nos. 1 to 15 of 2016

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Financial Sector (Collection of Data) Act 2001(the Act), subsections 13(1) and 15(1)

Acts Interpretation Act 1901, subsection 33(3)

Under paragraph 13(1)(a) of the Act, APRA may, by writing, determine reporting standards with which financial sector entities must comply.  Such standards relate to reporting financial or accounting data and other information regarding the business or activities of the entities.  Subsection 15(1) of the Act provides that APRA may declare a day on and after which the reporting standards are to apply.

Subsection 33(3) of the Acts Interpretation Act 1901 provides that where an Act confers a power to issue an instrument the power shall, unless the contrary intention appears, be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to revoke any such instrument.

On 19 July 2016, APRA made the following determinations (the instruments):

  1. Financial Sector (Collection of Data) (reporting standard) determination No. 1 of 2016 which:

(i)                  revokes Reporting Standard GRS 001 Reporting Requirements made under Financial Sector (Collection of Data) (reporting standard) determination No. 1 of 2013; and

(ii)               determines Reporting Standard GRS 001 Reporting Requirements;

 

2.      Financial Sector (Collection of Data) (reporting standard) determination No. 2 of 2016 which:

(i)                  revokes Reporting Standard GRS 110.1_G Prescribed Capital Amount (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 27 of 2013; and

(ii)               determines Reporting Standard GRS 110.1_G Prescribed Capital Amount;

 

3.      Financial Sector (Collection of Data) (reporting standard) determination No. 3 of 2016 which:

(i)                  revokes Reporting Standard GRS 112.0_G Determination of Capital Base (Level 2 Insurance Group) made  under Financial Sector (Collection of Data) (reporting standard) determination No.28 of 2013; and

(ii)               determines Reporting Standard GRS 112.0_G Determination of Capital Base (Level 2 Insurance Group);

4.      Financial Sector (Collection of Data) (reporting standard) determination No. 4 of 2016 which:

(i)                  revokes Reporting Standard GRS 112.3_G Related Party Exposures (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 29 of 2013; and

(ii)               determines Reporting Standard GRS 112.3_G Related Party Exposures (Level 2 Insurance Group);

5.      Financial Sector (Collection of Data) (reporting standard) determination No. 5 of 2016 which:

(i)                    revokes Reporting Standard GRS 114.0_G Asset Risk Charge (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 30 of 2013; and

(ii)               determines Reporting Standard GRS 114.0_G Asset Risk Charge (Level 2 Insurance Group);

6.      Financial Sector (Collection of Data) (reporting standard) determination No. 6 of 2016 which:

(i)                  revokes Reporting Standard GRS 114.1_G Assets by Counterparty Grade (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 31 of 2013; and

(ii)                determines Reporting Standard GRS 114.1_G Assets by Counterparty Grade (Level 2 Insurance Group);

7.      Financial Sector (Collection of Data) (reporting standard) determination No. 7 of 2016 which

(i)                  revokes Reporting Standard GRS 114.3_G Off-balance Sheet Business (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 32 of 2013; and

(ii)                determines Reporting Standard GRS 114.3_G Off-balance Sheet Business (Level 2 Insurance Group);

8.      Financial Sector (Collection of Data) (reporting standard) determination No. 8 of 2016 which

(i)                  revokes Reporting Standard GRS 115.0_G Outstanding Claims Liabilities – Insurance Risk Charge (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 33 of 2013; and

(ii)                determines Reporting Standard GRS 115.0_G Outstanding Claims Liabilities – Insurance Risk Charge (Level 2 Insurance Group);

9.      Financial Sector (Collection of Data) (reporting standard) determination No. 9 of 2016 which:

(i)                  revokes Reporting Standard GRS 115.1_G Premiums Liabilities – Insurance Risk Charge (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 34 of 2013; and

(ii)                determines Reporting Standard GRS 115.1_G Premiums Liabilities – Insurance Risk Charge (Level 2 Insurance Group);

10.  Financial Sector (Collection of Data) (reporting standard) determination No. 10 of 2016 which:

(i)                  revokes Reporting Standard GRS 116.0_G Insurance Concentration Risk Charge (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 35 of 2013; and

(ii)                determines Reporting Standard GRS 116.0_G Insurance Concentration Risk Charge (Level 2 Insurance Group);

11.  Financial Sector (Collection of Data) (reporting standard) determination No. 11 of 2016 which:

(i)                  revokes Reporting Standard GRS 117.0_G Asset Concentration Risk Charge (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 36 of 2013; and

(ii)                determines Reporting Standard GRS 117.0_G Asset Concentration Risk Charge (Level 2 Insurance Group);

12.  Financial Sector (Collection of Data) (reporting standard) determination No. 12 of 2016 which:

(i)                  revokes Reporting Standard GRS 118.0_G Operational Risk Charge (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 37 of 2013; and

(ii)                determines Reporting Standard GRS 118.0_G Operational Risk Charge (Level 2 Insurance Group);

13.  Financial Sector (Collection of Data) (reporting standard) determination No. 13 of 2016 which:

(i)                  revokes Reporting Standard GRS 300.0_G Statement of Financial Position (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 38 of 2013; and

(ii)                determines Reporting Standard GRS 300.0_G Statement of Financial Position (Level 2 Insurance Group);

14.  Financial Sector (Collection of Data) (reporting standard) determination No. 14 of 2016 which:

(i)                  revokes Reporting Standard GRS 302.0_G Statement of Financial Position by Region (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 39 of 2013; and

(ii)                determines Reporting Standard GRS 302.0_G Statement of Financial Position by Region (Level 2 Insurance Group); and

15.  Financial Sector (Collection of Data) (reporting standard) determination No. 15 of 2016 which:

(i)                   revokes Reporting Standard GRS 310.0_G Income Statement (Level 2 Insurance Group) made under Financial Sector (Collection of Data) (reporting standard) determination No. 40 of 2013; and

(ii)                determines Reporting Standard GRS 310.0_G Income Statement (Level 2 Insurance Group).

 

The instrument commences on 30 June 2016 and applies to reporting periods ending on and after that date.  The instruments are being registered after this date; however, parent entities of Level 2 insurance groups will not be adversely impacted by this retrospective operation as APRA has removed the duplicate reporting requirement to reduce unnecessary reporting for the parent entities. No parent entity’s rights will be adversely affected, nor will any liabilities be imposed by these instruments, as the time for lodging forms with APRA for the parent entities of Level 2 insurance groups will arise no earlier than three months after the June reporting period.

 

  1. Background

Until now, Level 2 insurance groups have provided two unaudited semi-annual returns and an audited annual return each financial year. The second unaudited semi-annual return was due one month prior to the audited annual return, and was used by APRA supervisors to review capital position and financial performance prior to submission of the audited return.

The due dates for audited annual return submission was made one month earlier for reporting periods after 1 January 2015, making it due on the same day as the unaudited second semi-annual return.

Consistent with APRA’s commitment to look for opportunities to reduce compliance costs for business and the community, APRA has removed this duplicate reporting requirement to reduce unnecessary reporting for Level 2 insurance groups.

 

2.      Purpose and operation of the instrument

 

The purpose of the instrument is to remove the second semi-annual return for Level 2 insurance groups and reduce their reporting burden by amending the reporting standards.

 

3.      Consultation

 

In 2014, APRA undertook a project to identify opportunities for regulatory cost savings for industry. As part of the project, APRA undertook a structured consultation process with each APRA-regulated industry (via the relevant industry associations). Together, the membership of these industry associations represented all APRA-regulated industries. Submissions from industry bodies suggested that changes to the reporting framework could be made in areas where the frequency of reporting could be reduced.

 

In 2015, the duplicate reporting requirement represented by the unaudited Level 2 second semi-annual and audited Level 2 annual forms falling due on the same day was identified by industry participants and APRA as an opportunity for regulatory costs savings.

 

Removing the duplicate reporting and reducing the burden on industry is overall beneficial to industry and as it was resultant of earlier engagement with industry further consultation with industry was not considered necessary.

 

4.      Regulatory Impact Statement

 

APRA has consulted with the Office of Best Practice Regulation (OBPR) and the OBPR has confirmed that the changes implemented by the instrument are of a minor nature. The OBPR has confirmed that a Regulatory Impact Statement (RIS) is not required.  

 

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

 

A Statement of Compatibility with Human Rights is Appendix A to this Explanatory Statement.

 

Appendix A

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Financial Sector (Collection of Data) (reporting standard) determinations No. 1 to 15 of 2016

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (HRPS Act).

 

Overview of the Legislative Instruments

 

These Legislative Instruments removes the requirement to report the second semi-annual return for Level 2 insurance groups in the following reporting standards:

 

  •   Reporting Standard GRS 110.1_G Prescribed Capital Amount  (Level 2 Insurance Group);
  •   Reporting Standard GRS 112.0_G Determination of Capital Base (Level 2 Insurance Group);
  •   Reporting Standard GRS 112.3_G Related Party Exposures (Level 2 Insurance Group);
  •   Reporting Standard GRS 114.0_G Asset Risk Charge (Level 2 Insurance Group);
  •   Reporting Standard GRS 114.1_G Assets by Counterparty Grade (Level 2 Insurance Group);
  •   Reporting Standard GRS 114.3_G Off-balance Sheet Business (Level 2 Insurance Group);
  •   Reporting Standard GRS 115.0_G Outstanding Claims Liabilities - Insurance Risk Charge (Level 2 Insurance Group);
  •   Reporting Standard GRS 115.1_G Premiums Liabilities - Insurance Risk Charge (Level 2 Insurance Group);
  •   Reporting Standard GRS 116.0_G Insurance Concentration Risk Charge (Level 2 Insurance Group);
  •   Reporting Standard GRS 117.0_G Asset Concentration Risk Charge (Level 2 Insurance Group);
  •   Reporting Standard GRS 118.0_G Operational Risk Charge (Level 2 Insurance Group);
  •   Reporting Standard GRS 300.0_G Statement of Financial Position (Level 2 Insurance Group);
  •   Reporting Standard GRS 302.0_G Statement of Financial Position by Region (Level 2 Insurance Group); and
  •   Reporting Standard GRS 310.0_G Income Statement (Level 2 Insurance Group).

 

 

Human rights implications

 

APRA has assessed the instruments and are of the view that it does not engage any of the applicable rights or freedoms recognised or declared in the international instruments listed in section 3 of the HRPS Act.  Accordingly, in APRA’s assessment, the instruments are compatible with human rights.

 

Conclusion

 

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Financial Sector (Collection of Data) (reporting standard) determinations No. 1 to 15 of 2016 were enacted by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001 to address the problem of duplicative reporting requirements for Level 2 insurance groups within the financial sector. The determinations aim to reduce unnecessary reporting burdens by removing the requirement for a second semi-annual return, which had coincided with the due date of the audited annual return. This change was part of APRA's broader initiative to identify opportunities for regulatory cost savings for the industry. The determinations were developed following consultations with relevant industry bodies and were deemed to be of minor nature, not requiring a Regulatory Impact Statement. They are compatible with human rights, as assessed by APRA, and do 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. The instruments came into effect on 30 June 2016, applying to reporting periods ending on or after that date.

Scope and Application

The Financial Sector (Collection of Data) determination Nos. 1 to 15 of 2016, issued by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, apply to financial sector entities, specifically Level 2 insurance groups, within the Commonwealth of Australia. These determinations aim to revise reporting standards to reduce the regulatory burden on financial entities by eliminating duplicate reporting requirements. The instruments, which came into effect on 30 June 2016, focus on removing the necessity for a second semi-annual return for Level 2 insurance groups, thus streamlining the reporting process for these entities. The changes do not affect any existing rights or liabilities of parent entities, as the new reporting deadlines will not arise until three months after the June reporting period. The Act allows APRA to revoke and determine reporting standards through these subordinate instruments, ensuring that the regulatory framework remains efficient and responsive to industry needs without imposing unnecessary administrative costs.

Key Provisions

The Financial Sector (Collection of Data) determination Nos. 1 to 15 of 2016, issued by the Australian Prudential Regulation Authority (APRA), primarily revise and update reporting standards for financial sector entities under the Financial Sector (Collection of Data) Act 2001. These determinations (sections 13(1) and 15(1)) address the reporting of financial and accounting data and other relevant information, with specific focus on Level 2 insurance groups. Each determination revokes an existing reporting standard and establishes a new one, effective from the reporting periods ending on and after 30 June 2016. The new standards aim to streamline reporting requirements, particularly by eliminating the need for a second semi-annual return, thereby reducing the overall reporting burden on these entities. Entities governed by these determinations, primarily Level 2 insurance groups, are required to comply with the newly established reporting standards. This includes adhering to the specified formats and timelines for submitting financial data and other pertinent information to APRA. The primary obligation for these entities is to ensure that their reporting practices align with the updated standards, which may involve adjustments to their internal reporting processes and systems. Compliance with these standards is critical for maintaining transparency and enabling effective regulatory oversight by APRA. Failure to comply with the reporting standards outlined in these determinations can result in various consequences. Although the determinations themselves do not explicitly detail specific penalties, non-compliance with the Financial Sector (Collection of Data) Act 2001 can lead to enforcement actions by APRA. Such actions may include the issuance of directions, imposition of administrative penalties, or other regulatory measures designed to ensure compliance. Additionally, severe or repeated non-compliance could potentially lead to more stringent enforcement actions, including legal proceedings, which might result in substantial fines or other penalties as prescribed by the relevant legislation. It is essential for entities to adhere to these reporting requirements to avoid any adverse regulatory consequences.

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