Financial Sector (Collection of Data) (reporting standard) determination No. 34 of 2013 - GRS 115.1_G - Premiums Liabilities - Insurance Risk Charge (Level 2 Insurance Group)

Administered by Department of the Treasury

Legislation au F2013L00098 Not in force Legislative Instrument

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Financial Sector (Collection of Data) (reporting standard) determination Nos. 27 to 41 of 2013

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Financial Sector (Collection of Data) Act 2001, subsections 13(1) and 15(1)
Acts Interpretation Act 1901, subsection 33(3)

Under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (FSCODA), 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 15(1) of FSCODA provides that APRA may declare a date on and after which 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 and vary any such instrument.

 On 20 December 2012, APRA made the following determinations (the instruments):

  1. Financial Sector (Collection of Data) (reporting standard) determination No. 27 of 2013, which revokes Reporting Standard GRS 110.0_G (2011) Minimum Capital Requirement (Level 2 Insurance Group) made on 23 September 2011 and makes a new Reporting Standard GRS 110.1_G Prescribed Capital Amount (Level 2 Insurance Group);
  2. Financial Sector (Collection of Data) (reporting standard) determination No. 28 of 2013, which revokes Reporting Standard GRS 120.0_G (2011) Determination of Capital Base (Level 2 Insurance Group) made on 23 September 2011 and makes a new Reporting Standard GRS 112.0_G Determination of Capital Base (Level 2 Insurance Group);
  3. Financial Sector (Collection of Data) (reporting standard) determination No. 29 of 2013, which revokes Reporting Standard GRS 450.0_G (2009) Interest in Controlled Entities, Associates and Joint Ventures made on 21 August 2009 and makes a new Reporting Standard GRS 112.3_G Related Party Exposures (Level 2 Insurance Group);
  4. Financial Sector (Collection of Data) (reporting standard) determination No. 30 of 2013, which makes Reporting Standard GRS 114.0_G Asset Risk Charge (Level 2 Insurance Group);
  5. Financial Sector (Collection of Data) (reporting standard) determination No. 31 of 2013, which makes Reporting Standard GRS 114.1_G Assets by Counterparty Grade (Level 2 Insurance Group);
  6. Financial Sector (Collection of Data) (reporting standard) determination No. 32 of 2013, which revokes Reporting Standard GRS 131.0_G (2009) Off Balance Sheet Exposure Risk Charge made on 21 August 2009 and makes a new Reporting Standard GRS 114.3_G Off-balance Sheet Business (Level 2 Insurance Group);
  7. Financial Sector (Collection of Data) (reporting standard) determination No. 33 of 2013, which revokes Reporting Standard GRS 210.0_G (2011) Outstanding Claims Liability – Insurance Risk Charge (Level 2 Insurance Group) made on 23 September 2011 and makes a new Reporting Standard GRS 115.0_G Outstanding Claims Liabilities – Insurance Risk Charge (Level 2 Insurance Group)
  8. Financial Sector (Collection of Data) (reporting standard) determination No. 34 of 2013, which revokes Reporting Standard GRS 210.1_G (2011) Premiums Liabilities – Insurance Risk Charge (Level 2 Insurance Group) made on 23 September 2011 and makes a new Reporting Standard GRS 115.1_G Premiums Liabilities – Insurance Risk Charge (Level 2 Insurance Group);
  9. Financial Sector (Collection of Data) (reporting standard) determination No. 35 of 2013, which makes Reporting Standard GRS 116.0_G Insurance Concentration Risk Charge;
  10. Financial Sector (Collection of Data) (reporting standard) determination No. 36 of 2013, which revokes Reporting Standard GRS 150.0_G (2009) Asset Exposure Concentrations and Risk Charge made on 21 August 2009 and makes a new Reporting Standard GRS 117.0_G Asset Concentration Risk Charge (Level 2 Insurance Group);
  11. Financial Sector (Collection of Data) (reporting standard) determination No. 37 of 2013, which makes Reporting Standard GRS 118.0_G Operational Risk Charge;
  12. Financial Sector (Collection of Data) (reporting standard) determination No. 38 of 2013, which revokes Reporting Standard GRS 300.0_G (2011) Statement of Financial Position (Level 2 Insurance Group) made on 23 September 2011 and makes a new Reporting Standard GRS 300.0_G Statement of Financial Position (Level 2 Insurance Group);
  13. Financial Sector (Collection of Data) (reporting standard) determination No. 39 of 2013, which revokes Reporting Standard GRS 302.0_G (2011) Statement of Financial Position by Region (Level 2 Insurance Group) made on 23 September 2011 and makes a new Reporting Standard GRS 302.0_G Statement of Financial Position by Region (Level 2 Insurance Group);
  14. Financial Sector (Collection of Data) (reporting standard) determination No. 40 of 2013, which revokes Reporting Standard GRS 310.0_G (2011) Income Statement (Level 2 Insurance Group) made on 23 September 2011 and makes a new Reporting Standard GRS 310.0_G Income Statement (Level 2 Insurance Group); and
  15. Financial Sector (Collection of Data) (reporting standard) determination No. 41 of 2013, which revokes:
    1. Reporting Standard GRS 141.0_G (2009) Listed Equity Holdings and Risk Charge made on 21 August 2009; and
    2. Reporting Standard GRS 301.0_G (2011) Reinsurance Assets and Risk Charge (Level 2 Insurance Group) made on 23 September 2011.

The instruments commence on 1 January 2013. The instruments are being registered after this date; however the requirements apply to reporting periods ending no earlier than 28 February 2013. No insurer will be impacted by the retrospective registration as the time for lodging forms with APRA will arise no earlier than three months after 28 February 2013.

  1.    Background

APRA commenced a review of the regulatory capital framework for general insurers (including Level 2 insurance groups) and life companies (LAGIC review) in 2010. The broad aims of the review were to:

  • improve the risk sensitivity and appropriateness of the capital standards in general insurance and life insurance (including friendly societies); and
  • where appropriate, improve the alignment of the capital standards across the industries that APRA supervises.

APRA has 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 is a common capital framework for required capital and eligible capital across general insurers and life companies. The minimum capital requirement is known as the Prudential Capital Requirement (PCR). This comprises a prescribed capital amount plus any supervisory adjustment determined by APRA. General insurers and Level 2 insurance groups must at all times satisfy minimum requirements for the composition of their capital bases and ensure that the capital base exceeds the PCR.

2.      Purpose and operation of the instruments

The purpose of making the instruments is to introduce new and amended reporting standards and revoke existing reporting standards in relation to Level 2 insurance groups in order to implement the changes under the LAGIC review.

The implementation of the revised capital framework under LAGIC requires substantive changes to the reporting requirements for both general insurers and life companies. For general insurers and Level 2 insurance groups, amendments to the methodology for calculating the prescribed capital amount are made. This includes the introduction of an explicit operational risk charge, revisions to the calculation of the asset risk charge, insurance concentration risk charge and asset concentration risk charge. The definitions of capital base and the categories of capital included in the capital base are also revised.

APRA has also taken the opportunity to make improvements to the reporting requirements of general insurers, by implementing a number of changes to enhance the general insurance publications. The timing of submission of annual returns and a small number of technical changes to data submission were also made.

For Level 2 insurance groups, the changes to reporting requirements arising from the LAGIC review are effected through the instruments.

The new reporting standards and associated reporting forms are issued under FSCODA. These reporting standards enable the reporting requirements of the revised prudential framework in relation to Level 2 insurance groups to take effect. 

The collection of quarterly and annual data under the new general insurance prudential reporting requirements will commence for the first reporting period ending on or after 1 January 2013.

3.      Consultation

APRA undertook consultation on the LAGIC review between May 2010 and October 2012, including four rounds of industry consultation, three technical papers and two quantitative impact studies.

In addition to extensive consultation in relation to the prudential requirements, APRA released the following consultation materials in relation to the reporting requirements:

  • June 2012 – Discussion paper ‘Review of capital standards for general insurers and life insurers – proposed revisions to reporting requirements’[1], draft versions of reporting forms and instructions, reporting standards and capital adequacy calculation workbooks and instructions;
  • August 2012 – Letter to insurers ‘Additional proposed changes to the reporting standards’[2]; and
  • October 2012 – Response paper ‘Review of capital standards for general insurers and life insurers – reporting requirements’[3], final versions of all forms and instructions and reporting standards.

APRA has considered both formal and informal feedback from industry throughout the above multi-year process. Submissions received by APRA were broadly supportive of the changes. Issues considered to be significant or to have merit were incorporated into the revised capital framework.

4.      Regulation Impact Statement

A Regulation Impact Statement has been prepared and has been lodged as supporting material.

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

The legislative instruments the subject of this explanatory statement 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. Accordingly, in APRA’s assessment, these legislative instruments are compatible with human rights.

 

 

[1]  http://www.apra.gov.au/CrossIndustry/Consultations/Pages/LAGIC-Reporting-Requirements-June-2012.aspx

[2]  http://www.apra.gov.au/CrossIndustry/Consultations/Documents/120806-letter-to-industry-LAGIC-proposed-changes-to-reporting-standards.pdf

[3]  http://www.apra.gov.au/lifs/ReportingFramework/Pages/LAGIC-final-reporting-requirements-LI-October-2012.aspx

Overview

The Financial Sector (Collection of Data) (reporting standard) determination Nos. 27 to 41 of 2013, made by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, aim to introduce new and amended reporting standards and revoke existing ones in relation to Level 2 insurance groups. Enacted in 2013, these determinations were introduced to implement the findings of the Life and General Insurance Capital (LAGIC) review, which sought to improve the risk sensitivity and appropriateness of capital standards in general insurance and life insurance, and to better align capital standards across industries under APRA's supervision. The new and amended reporting standards provide the framework for the revised prudential requirements in relation to Level 2 insurance groups, and the collection of quarterly and annual data under the new general insurance prudential reporting requirements commenced for the first reporting period ending on or after 1 January 2013. APRA considered extensive feedback from industry throughout the consultation process, and a Regulation Impact Statement has been prepared and lodged as supporting material.

Scope and Application

The Financial Sector (Collection of Data) (reporting standard) determination Nos. 27 to 41 of 2013 apply to financial sector entities, specifically focusing on Level 2 insurance groups. These entities are required to comply with the new reporting standards established by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001. The legislation pertains to the reporting of financial and accounting data, as well as information concerning the business or activities of these entities. The determinations aim to implement the findings of the Life and General Insurance Capital (LAGIC) review, which sought to improve the risk sensitivity and appropriateness of the capital standards for general insurers and life companies, as well as to align capital standards across the industries supervised by APRA. The new reporting standards address changes to the methodology for calculating prescribed capital amounts, introduce an explicit operational risk charge, and revise the definitions of capital base and categories of capital. The geographic and jurisdictional reach of these determinations is Commonwealth-wide, applying to all Level 2 insurance groups within Australia. The requirements apply to reporting periods ending no earlier than 28 February 2013. APRA has the power to revoke and vary these instruments as needed, subject to the conditions outlined in the Acts Interpretation Act 1901. The instruments themselves do not specify any exclusions, exemptions, or thresholds, but they do build upon the existing framework and may be subject to further adjustments through subordinate instruments as determined by APRA.

Key Provisions

The Financial Sector (Collection of Data) (reporting standard) determination Nos. 27 to 41 of 2013 introduce new reporting standards and revoke existing reporting standards for Level 2 insurance groups as part of the implementation of the Life and General Insurance Capital (LAGIC) review. These instruments are made under the Financial Sector (Collection of Data) Act 2001 (FSCODA) and commence on 1 January 2013, applying to reporting periods ending no earlier than 28 February 2013. The new reporting standards include requirements for prescribed capital amounts, asset risk charges, operational risk charges, and other capital-related metrics, aligning with the revised capital framework for general insurers and life companies. These changes aim to enhance the risk sensitivity and alignment of capital standards across the industries supervised by the Australian Prudential Regulation Authority (APRA). The obligations imposed by these instruments on Level 2 insurance groups include the submission of quarterly and annual data under the new general insurance prudential reporting requirements. These entities must ensure their capital bases exceed the Prudential Capital Requirement (PCR), which comprises a prescribed capital amount plus any supervisory adjustment. The new standards also require detailed reporting on various risk charges and capital composition, enhancing the transparency and accuracy of financial data submitted to APRA. Additionally, these instruments necessitate compliance with revised definitions and categories of capital included in the capital base, as well as the new methodologies for calculating capital requirements. Failure to comply with the requirements set forth in these determinations can result in regulatory scrutiny and enforcement actions by APRA. Although the specific penalties for non-compliance are not detailed in the explanatory statement, breaches of the reporting standards could lead to enforcement measures, including fines and other penalties. The severity of these consequences may depend on the nature and extent of the non-compliance, as well as any resulting impact on the financial stability and regulatory compliance of the affected entities. APRA may also take corrective actions, such as requiring additional information or imposing temporary restrictions on business activities, to ensure adherence to the new reporting standards.

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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.