Financial Sector (Collection of Data) (reporting standard) determination No. 31 of 2023

Administered by Department of the Treasury

Legislation au F2023L00257 Not in force Legislative Instrument

Legislation content

Financial Sector (Collection of Data) (reporting standard) determination Nos. 22, 23, 24, 26, 29, 30, 31, 32, 33, 35, 36 and 37 of 2023

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Financial Sector (Collection of Data) Act 2001, sections 13 and 15

Acts Interpretation Act 1901, section 33

Under subsection 13(1) of the Financial Sector (Collection of Data) Act 2001 (the Act), APRA has the power to determine reporting standards, in writing, 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 33(3) of the Acts Interpretation Act 1901 provides that where an Act confers a power to make, grant or issue an instrument of a legislative or administrative character 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.

Subsection 15(1) of the Act provides that APRA may declare a day on and after which the reporting standards are to apply.

On 22 March 2023, APRA made the following determinations:

  1. the Financial Sector (Collection of Data) (reporting standard) determination No. 22 of 2023 which:

 

(i)     revokes Reporting Standard LRS 001 Reporting Requirements (LRS 001) made under Financial Sector (Collection of Data) (reporting standard) determination No. 42 of 2013; and

 

(ii)  determines a new version of LRS 001; and

 

2.      the Financial Sector (Collection of Data) (reporting standard) determination No. 24 of 2023 which:

 

(i)     revokes Reporting Standard LRS 112.0 Determination of Capital Base (existing LRS 112.0) made under by Financial Sector (Collection of Data) (reporting standard) determination No. 44 of 2013; and

 

(ii)  determines a new version of LRS 112.0.

On 16 March 2023, APRA made the following determinations:

3.      the Financial Sector (Collection of Data) (reporting standard) determination No. 23 of 2023 which:

 

(i)     revokes Reporting Standard LRS 110.1 Prescribed Capital Amount (LRS 110.1) made under Financial Sector (Collection of Data) (reporting standard) determination No. 43 of 2013; and

 

(ii)  determines a new LRS 110.1;

 

4.      the Financial Sector (Collection of Data) (reporting standard) determination No. 26 of 2023 which:

 

(i)     revokes Reporting Standard LRS 114.0 Asset Risk Charge (LRS 114.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 46 of 2013; and

 

(ii)  determines a new version of LRS 114.0;

 

5.      the Financial Sector (Collection of Data) (reporting standard) determination No. 29 of 2023 which:

 

(i)     revokes Reporting Standard LRS 115.0 Insurance Risk Charge (LRS 115.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 49 of 2013; and

 

(ii)  determines a new version of LRS 115.0;

 

6.      the Financial Sector (Collection of Data) (reporting standard) determination No. 30 of 2023 which:

 

(i)     revokes Reporting Standard LRS 118.0 Operational Risk Charge (LRS 118.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 51 of 2013; and

 

(ii)  determines a new version of LRS 118.0;

 

7.      the Financial Sector (Collection of Data) (reporting standard) determination No. 31 of 2023 which:

 

(i)     revokes Reporting Standard LRS 200.0 Capital Adequacy Supplementary Information (LRS 200.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 52 of 2013; and

 

(ii)  determines a new version of LRS 200.0;

 

8.      the Financial Sector (Collection of Data) (reporting standard) determination No. 32 of 2023 which:

 

(i)     revokes Reporting Standard LRS 300.0 Statement of Financial Position (LRS 300.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 53 of 2013; and

 

(ii)  determines a new version of LRS 300.0;

 

9.      the Financial Sector (Collection of Data) (reporting standard) determination No. 33 of 2023 which:

 

(i)     revokes Reporting Standard LRS 310.0 Income Statement (LRS 310.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 54 of 2013; and

 

(ii)  determines a new version of LRS 310.0;

 

10.  the Financial Sector (Collection of Data) (reporting standard) determination No. 35 of 2023 which:

 

(i)     revokes reporting standard LRS 340.0 Retained Profits (LRS 340.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 56 of 2013; and

 

(ii)  determines a new version of LRS 340.0;

 

11.  the Financial Sector (Collection of Data) (reporting standard) determination No. 36 of 2023 which:

 

(i)     revokes Reporting Standard LRS 400.0 Statement of Policy Liabilities (LRS 400.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 57 of 2013; and

 

(ii)  determines a new version of LRS 400.0; and

 

12.  the Financial Sector (Collection of Data) (reporting standard) determination No. 37 of 2023 which:

 

(i)     revokes Reporting Standard LRS 420.0 Assets Backing Policy Liabilities (LRS 420.0) (as determined by Financial Sector (Collection of Data) (reporting standard) No. 58 of 2013; and

 

(ii)    determines a new version of LRS 420.0.

The determinations above are collectively referred to in this Explanatory Statement as the instruments. These instruments commence on 1 April 2023.

  1. Background

APRA’s prudential framework includes a suite of prudential standards that impose capital requirements for life insurers (LIs), for the purpose of ensuring LIs hold sufficient capital to address the risks associated with their operations.

APRA’s reporting standards collect financial data from regulated entities. This data contains critical indicators of a regulated entity’s financial wellbeing, including capital adequacy. APRA relies heavily on this financial data to inform its supervisory actions towards its regulated entities. Without timely and complete data, APRA may miss indicators that a LI is taking on imprudent risk or is in distress. APRA’s supervisory decisions may be jeopardised if its receipt of data is unreliable due to entities seeking merits review under its reporting standards.

In 2013, APRA introduced new reporting requirements for LIs following the Life and General Insurance Capital review of the regulatory capital framework for general insurers (GIs) and LIs that APRA commenced in 2010 (LAGIC review). APRA made a range of amendments to its prudential framework to give effect to the findings of the review. As a result of the changes, there was a common capital framework across GIs and LIs.

The new reporting requirements introduced as a result of the LAGIC review permit APRA to collect data to support APRA’s prudential supervision of LIs and are used by APRA to assess compliance with the capital standards.

The instruments were last determined by APRA in 2013 (the previous instruments).

2.      Purpose and operation of the instruments

The previous instruments were to be repealed by sunsetting on 1 April 2023 under subsection 50(1) of the Legislation Act 2003. APRA has reviewed the regulatory performance of the previous instruments and found that they continue to be fit for purpose. Consequently, APRA intends that they be remade without substantive changes.

The purpose of the instruments is to revoke the previous instruments and remake the instruments with minor changes to use the drafting style employed currently for APRA’s reporting standards, such as formatting to improve readability and accessibility in line with government requirements, make minor definitional changes and update the commencement date. The changes to the instruments do not alter the existing reporting obligations or interests of LIs. The due dates, data required and the application of the reporting standards have not changed.

The instruments incorporate by reference certain provisions of Acts, Prudential Standards, and Australian Accounting Standards issued by the Australian Accounting Standards Board. All of these references are references to the instruments as they exist from time to time. These instruments are disallowable instruments and are available on the Federal Register of Legislation at www.legislation.gov.au.

There are a number of powers that may be exercised by APRA in reporting standards that involve an element of discretion and which may impact the interests of the financial sector entity to which the reporting standard applies. These decisions include APRA refusing to change a reporting period or due date for a LI to provide information required by the instruments. Decisions made by APRA exercising those powers are not subject to merits review. Delays caused by an entity seeking merits review of APRA’s decisions under one or more reporting standards could significantly compromise use of the data at an entity and aggregate level by APRA. It is necessary that these reporting standards be allowed to continue in force from 1 April 2023 onwards.

APRA considers decisions made by APRA exercising discretions under its reporting standards should not be subject to merits review as they are financial decisions with a significant public interest element.

3.      Consultation

The substance of the instruments has already been consulted on with industry when originally determining the reporting standards (see the Explanatory Statements for the previous instruments). APRA is satisfied that further consultation is not necessary and not reasonably practicable to undertake for these instruments. The instruments do not alter the existing reporting obligations that are required to be complied with by LIs and any changes to the instruments are minor and machinery in nature.

4.      Regulation Impact Statement

The Office of Impact Analysis has advised that a Regulation Impact Statement is not required for these legislative instruments.

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

A Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is provided at Attachment A to this Explanatory Statement.

Attachment 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) determination Nos. 22, 23, 24, 26, 29, 30, 31, 32, 33, 35, 36 and 37 of 2023

These Legislative Instruments are 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 permit APRA to collect data to support APRA’s prudential supervision of life insurers (LIs) and are used by APRA to assess compliance with the capital standards. LIs are bodies corporate authorised to conduct life insurance business in Australia.

The purpose of the Legislative Instruments is to revoke the existing versions of the instruments determined by APRA in 2013 and replace them with new versions. New versions of the instruments are being made as the existing instruments are due to sunset on 1 April 2023.

Human rights implications

APRA has assessed the Legislative Instruments and is of the view that they do 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 Legislative Instruments are compatible with human rights.

Conclusion

These Legislative Instruments are compatible with human rights as they do not raise any human rights issues.

Overview

The Financial Sector (Collection of Data) (reporting standard) determination Nos. 22, 23, 24, 26, 29, 30, 31, 32, 33, 35, 36 and 37 of 2023 were enacted to ensure that the Australian Prudential Regulation Authority (APRA) can continue to collect necessary data to support its prudential supervision of life insurers (LIs) in Australia. Enacted under the authority of the Financial Sector (Collection of Data) Act 2001, these determinations were made to replace the previous reporting standards that were due to sunset on 1 April 2023. The primary objective of these instruments is to maintain the continuity of data collection, which is crucial for APRA's assessment of capital adequacy and overall financial wellbeing of regulated entities. APRA found that the previous reporting standards were fit for purpose and decided to remake them with minor changes to align with current drafting styles and government requirements, without altering the existing obligations of life insurers. This ensures that APRA can continue to make informed supervisory decisions, thereby safeguarding the stability and integrity of the financial sector.

Scope and Application

The Financial Sector (Collection of Data) (reporting standard) determination Nos. 22, 23, 24, 26, 29, 30, 31, 32, 33, 35, 36 and 37 of 2023, made under the Financial Sector (Collection of Data) Act 2001, apply to financial sector entities, specifically life insurers in Australia. These instruments are designed to facilitate the Australian Prudential Regulation Authority (APRA) in collecting financial and accounting data from these entities to ensure they comply with the capital adequacy requirements set forth in APRA's prudential standards. The instruments establish reporting standards that govern the format, content, and timelines for submitting the required data, ensuring that APRA has timely and accurate information to monitor the financial health and risk profiles of the life insurers. These determinations revoke the previous reporting standards made in 2013 and replace them with updated versions, incorporating minor changes to formatting and definitions while maintaining the existing reporting obligations. The changes are primarily administrative to align with current drafting practices and improve readability and accessibility, without altering the substantive requirements or the interests of the life insurers. The instruments commence on 1 April 2023 and are available on the Federal Register of Legislation.

Key Provisions

The Financial Sector (Collection of Data) (reporting standard) determination Nos. 22, 23, 24, 26, 29, 30, 31, 32, 33, 35, 36 and 37 of 2023 primarily serve to revoke and replace existing reporting standards for life insurers (LIs) set by the Australian Prudential Regulation Authority (APRA). These determinations (sections 2(i) and (ii)) revoke the older reporting standards made in 2013 and establish new versions of these standards, effective from 1 April 2023. These new standards are aimed at ensuring that APRA continues to collect essential financial data from life insurers, including data critical for assessing capital adequacy and overall financial health. The obligations imposed by these determinations on life insurers are largely unchanged from the previous standards they replace. Life insurers must still provide timely and accurate financial data as specified in the new reporting standards. These obligations include adhering to the specified data formats, definitions, and reporting deadlines. Any minor changes to the standards, such as formatting and definitional updates, do not alter the substance of the data required or the reporting obligations. Breach of these reporting standards can have significant consequences for life insurers. Under the Financial Sector (Collection of Data) Act 2001, failure to comply with the reporting standards may result in civil penalties. The maximum penalty for each contravention can be substantial, reflecting the importance of timely and accurate data for prudential supervision. While the determinations themselves do not specify exact penalties, non-compliance could lead to enforcement actions by APRA, including fines or other regulatory measures. The seriousness of the penalties underscores the critical nature of these reporting obligations for maintaining the stability and integrity of the financial sector. Additionally, under the Acts Interpretation Act 1901, APRA retains the power to revoke these determinations if they are found to be ineffective or no longer necessary. This flexibility allows APRA to adapt the regulatory framework as needed while ensuring that the necessary data for prudential oversight is continuously and reliably collected.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.