Financial Sector (Collection of Data) (reporting standard) determination No. 36 of 2016 - Revocation of reporting standards applying to Medical Defence Organisations

Administered by Department of the Treasury

Legislation au F2016L01708 Not in force Legislative Instrument

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Financial Sector (Collection of Data) determination No. 36 of 2016

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 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 26 October 2016, APRA made Financial Sector (Collection of Data) (reporting standard) determination No. 36 of 2016 (the instrument) which revokes the following instruments:

(1)          Financial Sector (Collection of Data) (reporting standard) determination No. 1 of 2007, including Reporting Standard MRS 120.0 Capital Base made under that Determination;

(2)          Financial Sector (Collection of Data) (reporting standard) determination No. 2 of 2007, including Reporting Standard MRS 130.0 Off Balance Sheet Business - Credit Substitutes Provided  made under that Determination;

(3)          Financial Sector (Collection of Data) (reporting standard) determination No. 3 of 2007, including Reporting Standard MRS 130.1 Off Balance Sheet Business – Liquidity  Support  Facilities Obtained made under that Determination;

(4)          Financial Sector (Collection of Data) (reporting standard) determination No. 4 of 2007, including Reporting Standard MRS 130.2 Off Balance Sheet Business – Charges Granted made under that Determination;

(5)          Financial Sector (Collection of Data) (reporting standard) determination No. 5 of 2007, including Reporting Standard MRS 130.3 Off Balance Sheet Business - Credit Support  Received made under that Determination;

(6)          Financial Sector (Collection of Data) (reporting standard) determination No. 6 of 2007, including Reporting Standard MRS 140.0 – Investments – Direct  Interest Rate Holdings made under that Determination;

(7)          Financial Sector (Collection of Data) (reporting standard) determination No. 7 of 2007, including Reporting Standard MRS 140.1 Investments – Direct  Equity Holdings made under that Determination;

(8)          Financial Sector (Collection of Data) (reporting standard) determination No. 8 of 2007, including Reporting Standard MRS 140.2 Investments- Direct Property Holdings made under that Determination;

(9)          Financial Sector (Collection of Data) (reporting standard) determination No. 9 of 2007, including Reporting Standard MRS 140.3 Investments - Loans and Advances made under that Determination;

(10)      Financial Sector (Collection of Data) (reporting standard) determination No. 10 of 2007, including Reporting Standard MRS 140.4 Investments - Asset Indirectly Held made under that Determination;

(11)      Financial Sector (Collection of Data) (reporting standard) determination No. 11 of 2007, including Reporting Standard MRS 150.0 Asset Exposures made under that Determination;

(12)      Financial Sector (Collection of Data) (reporting standard) determination No. 12 of 2007, including Reporting Standard MRS 160.0 Derivative Activity made under that Determination;

(13)      Financial Sector (Collection of Data) (reporting standard) determination No. 13 of 2007, including Reporting Standard MRS 210.0 Outstanding Claims Liability  made under that Determination;

(14)      Financial Sector (Collection of Data) (reporting standard) determination No. 14 of 2007, including Reporting Standard MRS 300.0 Statement of Financial Position  made under that Determination;

(15)      Financial Sector (Collection of Data) (reporting standard) determination No. 15 of 2007, including Reporting Standard MRS 310.0 Statement of Financial Performance made under that Determination;

(16)      Financial Sector (Collection of Data) (reporting standard) determination No. 16 of 2007, including Reporting Standard MRS 310.2 Claims Expenses and Reinsurance Recoveries  made under that Determination; and

(17)      Financial Sector (Collection of Data) (reporting standard) determination No. 17 of 2007, including Reporting Standard MRS 310.3 Investment and Operating Income and Expenses  made under that Determination.

 

The instrument commences on the date it is registered on the Federal Register of Instruments.

  1. Background

APRA began collecting data from Medical Defence Organisations (MDOs) in 2004 as part of the Government’s package of reforms to address the regulation of medical indemnity cover. The MDO data collection assisted the Government in the implementation and monitoring of the medical indemnity reforms against their stated objectives. The collection also allowed APRA to develop a greater understanding of the financial position of the overall group to which an APRA-regulated medical indemnity insurer belongs.

The reporting standards for the MDO collection were last amended in 2007. APRA assesses the data that is collected under reporting standards for its continuing relevance and purpose. In 2015, APRA assessed its non-prudential data collection and determined that APRA had minimal prudential use for the industry-wide data provided by MDOs. The review also assessed that there were less costly means for APRA to access similar information about the MDOs.

Consistent with APRA’s commitment to look for opportunities to reduce compliance costs for business and the community, APRA considers that the benefit obtained from the use of the data collection no longer outweighs the reporting costs to MDOs. Consequently, APRA is revoking all the relevant reporting standards and their associated reporting forms:

  • Reporting Standard MRS 120.0 Capital Base;
  • Reporting Standard MRS 130.0 Off Balance Sheet Business – Direct Credit Substitutes Provided;
  • Reporting Standard MRS 130.1 Off Balance Sheet Business – Liquidity Support Facilities Obtained;
  • Reporting Standard MRS 130.2 Off Balance Sheet Business – Charges Granted;
  • Reporting Standard MRS 130.3 Off Balance Sheet Business – Credit Support Received;
  • Reporting Standard MRS 140.0 Investments – Direct Interest Rate Holdings;
  • Reporting Standard MRS 140.1 Investments – Direct Equity Holdings;
  • Reporting Standard MRS 140.2 Investments – Direct Property Holdings;
  • Reporting Standard MRS 140.3 Investments – Loans and Advances;
  • Reporting Standard MRS 140.4 Investments – Assets Indirectly Held;
  • Reporting Standard MRS 150.0 Asset Exposures;
  • Reporting Standard MRS 160.0 Derivative Activity;
  • Reporting Standard MRS 210.0 Outstanding Claims Liabilities;
  • Reporting Standard MRS 300.0 Statement of Financial Position;
  • Reporting Standard MRS 310.0 Statement of Financial Performance;
  • Reporting Standard MRS 310.2 Claims Expense and Reinsurance Recoveries; and
  • Reporting Standard MRS 310.3 Investment and Operating Income and Expenses.

2.        Purpose and operation of the instrument

 

The purpose of the instrument is to revoke the reporting standard listed above. The data collected under these reporting standards is no longer required, and the revocation of the reporting standards will reduce the reporting burden of MDOs.

 

3.        Consultation

 

APRA undertook a four week consultation on its proposed revocation of the reporting standards between 2 September 2016 and 30 September 2016. APRA received four submissions from the MDOs.

 

The consultation clearly communicated to the industry APRA’s proposal to cease collection and APRA’s position on the benefits obtained verses the cost involved in collecting this information.  All the four submissions acknowledged APRA’s proposal and supported the revocation of above listed reporting standards.

 

APRA also consulted with Treasury on the proposed revocation of the reporting standards and has no objections to the proposal.

 

4.      Regulatory Impact Statement

 

APRA has consulted with the Office of Best Practice Regulation (OBPR) and 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 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

Human Rights (Parliamentary Scrutiny) Act 2011

Financial Sector (Collection of Data) (reporting standard) determinations No. 3 of 2016

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

Overview of the legislative instruments

This legislative instrument revokes the reporting standards that apply to Medical Defence Organisations (MDOs) for the purposes of collecting data.

 

Human rights implications

APRA has assessed this instrument against the international instruments listed in section 3 of the HRPS Act and has determined 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.

 

The instrument removes reporting obligations for DMFs, and does not have any direct or indirect effects on the rights of individual persons.  Consequently, the instrument 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, this legislative instrument is compatible with human rights.

 

Conclusion

This legislative instruments is compatible with human rights as it does not raise any human rights issues.

 

 

 

 

Overview

The Financial Sector (Collection of Data) (Reporting Standard) Determination No. 36 of 2016 was introduced by the Australian Prudential Regulation Authority (APRA) to address the need for periodic review and amendment of data collection standards within the financial sector, particularly in relation to Medical Defence Organisations (MDOs). Enacted under the authority conferred by the Financial Sector (Collection of Data) Act 2001, the instrument aims to revoke previously established reporting standards that have become obsolete or less relevant. The policy objective behind this determination is to reduce the reporting burden on MDOs and ensure that APRA collects only the data that is essential for its regulatory purposes, thereby streamlining compliance requirements and minimising costs for the regulated entities. The determination revokes a series of reporting standards that were last updated in 2007, reflecting APRA's assessment that the benefits of collecting certain industry-wide data from MDOs no longer justify the associated costs. This decision aligns with APRA's commitment to seek opportunities for reducing compliance costs for businesses and the broader community. The revocation of these standards is intended to facilitate a more efficient and effective data collection process, ensuring that APRA focuses on data that is most pertinent to its regulatory objectives.

Scope and Application

The Financial Sector (Collection of Data) determination No. 36 of 2016, made by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, revokes a series of reporting standards previously imposed on Medical Defence Organisations (MDOs) to collect specific financial and accounting data. This revocation applies to MDOs, which are entities that provide medical indemnity insurance, and aims to reduce their reporting burden. The instrument, which comes into effect upon registration on the Federal Register of Instruments, nullifies the reporting standards last amended in 2007, including standards related to capital base, off-balance sheet business, investments, derivative activities, and financial performance statements. The revocation follows APRA's assessment that the data collected under these standards is no longer necessary for prudential purposes and that there are more cost-effective ways to obtain similar information. APRA's decision aligns with its commitment to minimising compliance costs for businesses and the community. The instrument operates within the Commonwealth jurisdiction, and its application is confined to the entities and data collection practices specified within the revoked reporting standards.

Key Provisions

The Financial Sector (Collection of Data) determination No. 36 of 2016, made by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, revokes the reporting standards that apply to Medical Defence Organisations (MDOs) for the purposes of data collection. These revoked standards include, but are not limited to, Reporting Standard MRS 120.0 Capital Base and Reporting Standard MRS 310.3 Investment and Operating Income and Expenses. The determination came into effect on the date it was registered on the Federal Register of Instruments. The primary aim of this instrument is to eliminate the data collection requirements from MDOs, which APRA has determined to be no longer necessary for its prudential functions, thereby reducing the reporting burden on these organisations. The revoked reporting standards previously required MDOs to provide detailed financial and accounting data, covering various aspects such as capital bases, off-balance-sheet business activities, investment holdings, and financial performance statements. These standards were established in 2007 to aid in the regulation and monitoring of medical indemnity reforms. However, APRA's assessment in 2015 indicated that the prudential benefits of this data collection were minimal, and more cost-effective means of obtaining similar information were available. As a result, APRA decided to revoke these standards to alleviate the reporting costs on MDOs while still maintaining sufficient oversight. APRA engaged in a four-week consultation period from 2 September 2016 to 30 September 2016, during which it received four submissions from MDOs. All submissions acknowledged and supported APRA's proposal to revoke the reporting standards. Additionally, APRA consulted with the Treasury, which did not object to the proposed revocation. Given the minimal impact on prudential oversight and the support from the industry, APRA proceeded with the revocation of the specified reporting standards. In terms of regulatory impact, APRA consulted with the Office of Best Practice Regulation (OBPR), which confirmed that a Regulatory Impact Statement (RIS) was not required for this determination. Furthermore, APRA prepared a Statement of Compatibility under the Human Rights (Parliamentary Scrutiny) Act 2011, which is attached to the Explanatory Statement. The Statement concludes that the revocation of these reporting standards is compatible with human rights as it does not affect any rights or freedoms recognised in the international instruments listed in section 3 of the Act. While the revocation of these reporting standards does not directly impose new obligations on MDOs, it does eliminate previous reporting requirements, thus reducing the administrative burden on these organisations. There are no specific offences, penalties, or consequences outlined in the determination for breach, as the primary change is the removal of certain data collection obligations. However, MDOs are still expected to comply with other relevant regulatory requirements and standards as stipulated by APRA.

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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.