Federal Register of Legislation - Australian Government

Primary content

PR No. 26 Rules/Other as made
Determination revoking Prudential Rules No. 26 made under subsection 252(1) of the Life Insurance Act 1995 and making new Prudential Rules No. 26 - Collection of Statistics.
Administered by: Treasury
General Comments: This determination revokes Prudential Rules No. 26 (1/10/1996) with effect from 1/9/2005. Prudential Rules No. 26 - Collection of Statistics (26/8/2005) were revoked by Life Insurance (Prudential Rules) Determination No. 4 of 2005 - Prudential Rules No. 26 - Collection of Statistics (16/12/2005) with effect from 21/12/2005.
Registered 01 Sep 2005
Tabling HistoryDate
Tabled HR05-Sep-2005
Tabled Senate06-Sep-2005
Date of repeal 09 Aug 2013
Repealed by Treasury (Spent and Redundant Instruments) Repeal Regulation 2013
Table of contents.

Life Insurance (Prudential Rules) Determination No. 2 of 2005

Collection of Statistics

Life Insurance Act 1995

I, John Francis Laker, Chair of APRA, under subsection 252(1) of the Life Insurance Act 1995 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901:

·        REVOKE the Prudential Rules No. 26 (made on 1 October 1996 under subsection 252(1) of the Act for the purposes of subsections 244(1) and (2) of the Act) (as amended by Prudential Rules Nos. 29, 30, 32, 33 and 34); and

·        MAKE the Prudential Rules No. 26 set out in the Schedule for the purposes of subsections 244(1) and (2) of the Act.

This Determination shall take effect upon registration on the Federal Register of Legislative Instruments.

 

 

Dated   26 August 2005

 

 

 

[Signed]

John Francis Laker

Chair

 

 

 


 

 

Interpretation

In this Determination

APRA means the Australian Prudential Regulation Authority.

 

Schedule      

Prudential Rules No. 26 comprise the 64 pages commencing on the following page.

 


Prudential Rules No. 26

Collection of Statistics

Life Insurance Act 1995 (s 244(1) and s 244(2))

These Prudential Rules are made under subsection 252(1) of the Life Insurance Act 1995 (the Act) for the purposes of subsections 244(1) and 244(2) of the Act and apply to life companies registered under the Act (other than friendly societies).

 

Application

1.             These rules apply as follows:

(a)           Schedule 1 Forms A to H apply to a quarter ending on or after 30 June 2005;

(b)          Schedule 1 Form I applies to a half-year ending on or after 30 June 2005;

(c)           Schedule 1 Forms J to L apply to a quarter ending on or after 30 June 2005;

(d)          Schedule 2 applies to a half-year ending on or after 30 June 2005;

(e)           Schedule 3 applies to a financial year of a life company ending on or after 30 June 2005.

 

2.             In rule 1:

(a)           “quarter” means:

                                (i)              the period comprising:

(A)         January, February and March; or

(B)         April, May and June; or

(C)                   July, August and September; or

(D)                   October, November and December; or

                              (ii)              a period approved by APRA in relation to a particular life company;

(b)          “half-year” means:

                                (i)              the period comprising:

(A)                   January to June (both inclusive); or

(B)                   July to December (both inclusive); or

                              (ii)              a period approved by APRA in relation to a particular life company.

 

APRA must collect statistics

3.             APRA must collect the statistics to which the Forms in the Schedules relate, at such times and in such manner as prescribed in these rules.

 

When the statistics must be collected

4.             APRA must collect:

(a)           the statistics in Schedules 1 and 2 within 6 weeks after the end of the period to which they relate; and

(b)          the statistics in Schedule 3 within 3 months after the end of the period to which they relate.

5.             If the statistics in any of Schedule 1 Forms A to H have not been audited in accordance with rule 13 by the end of the time within which rule 4 requires them to be collected:

(a)           they must still be collected by the end of that time; and

(b)          audited versions of them must be collected within 3 months after the end of the period to which they relate.

 

Actuarial valuations and calculations must be in accordance with actuarial standards

6.             Actuarial valuations and calculations included in, or used in the preparation of, the statistics must be in accordance with actuarial standards made by the Life Insurance Actuarial Standards Board, as in force from time to time.

 

Statistics must be expressed in Australian dollars

7.             Amounts of money in the statistics must be expressed in units of one, one thousand or one million Australian dollars.  (All Forms relating to a particular statutory fund must use the same units.)

8.             A foreign currency amount must be converted to Australian dollars at the market exchange rate prevailing at the end of the period to which the statistics in which the amount is included relate.

 

Statistics must be consistent with financial statements

9.             The statistics in Schedule 1 Form A and Schedule 3 Forms A and B must be consistent with, and prepared on the same basis as, the life company’s financial statements mentioned in section 82 of the Act, except to the extent that compliance with these rules or with the requirements of specific Forms necessitates deviation from them.

 

Statistics in Schedule 1 Forms B to H must be consistent with Schedule 1 Form A

10.         The statistics in Schedule 1 Forms B to H must be consistent with, and prepared on the same basis as, the statistics in Schedule 1 Form A, except to the extent that compliance with these rules or with the requirements of specific Forms necessitates deviation from them.


Statistics must be prepared on a look-through basis in relation to trust investments

11.         If, at the end of the period to which the statistics relate, more than 1% in value of the assets of the statutory fund are invested in a trust, the statistics must be prepared on a look-through basis to the assets of the trust.

 

References to controlled entities

12.         For the purposes of the Schedules, whether one entity controls another entity is to be determined in the same way as under the Corporations Act 2001.

 

Certain statistics must be audited

13.         The statistics in Schedule 1 Forms A to H that relate to a period the end of which coincides with the end of a financial year of the life company must be audited by the auditor of the life company.

14.         Those statistics must be accompanied by a report signed by the auditor stating:

(a)           that they have been prepared in accordance with these rules; and

(b)          that the records of the life company on which they are based properly record the affairs and transactions of the life company; and

(c)           that they truly represent the financial position of the life company.

 

How the statistics must be signed or approved on behalf of the life company

15.         If the statistics are given to APRA in paper form they must be signed by, and if the statistics are given to APRA in electronic form they must include a statement stating that they have been approved by:

(a)           in the case of the statistics in Schedule 1:

                                (i)                   Forms A to H and J to L - the principal executive officer or the chief financial officer; or

                              (ii)              Form I - the principal executive officer or the appointed actuary;

(b)          in the case of the statistics in Schedule 2 - the principal executive officer or the compliance manager;

(c)           in the case of the statistics in Schedule 3 - the principal executive officer or the appointed actuary.

 

Review of APRA’s decisions concerning approval of quarters and half-years

16.         In rules 17 to 19, “financial period decision” means a decision by APRA approving, or refusing to approve, a period under subparagraph 2(a)(ii) or 2(b)(ii) of these rules.

17.         Subsections 236(2) to (10) and section 237 of the Act apply in relation to a request for reconsideration and application for review of a financial period decision as if, in those provisions of the Act:

(a)           “person affected by a reviewable decision” means a life company in relation to which a financial period decision has been made; and

(b)          “reviewable decision” means a financial period decision.

18.         When APRA notifies a life company of a financial period decision, APRA must inform the company in writing that:

(a)           the company may, if dissatisfied with the decision, seek a reconsideration of the financial period decision by APRA in accordance with rule 17; and

(b)          the company may, if dissatisfied with the reconsideration of the financial period decision, apply to the Administrative Appeals Tribunal for review of the reconsideration in accordance with rule 17.

19.         When APRA notifies a life company of the reconsideration of a financial period decision, APRA must inform the company in writing that the company may, if dissatisfied with the reconsideration, apply to the Administrative Appeals Tribunal for review of the reconsideration in accordance with rule 17.

20.         A failure by APRA to comply with rule 18 or 19 does not affect the validity of the financial period decision or of any reconsideration of the financial period decision concerned.

IFRS Transitional Arrangements

21.         In rules 22, 23 and 24 of these Prudential Rules No 26:

Actuarial Standard means an actuarial standard made by the Life Insurance Actuarial Standards Board under the Act.

Adjustment means a change in the value of a balance sheet item between that which would be reported pre-IFRS and that which would be reported post-IFRS.

APRA means the Australian Prudential Regulation Authority.

Assets available to meet solvency and/or capital adequacy reserves means the excess of the assets of the relevant fund over the sum of the minimum termination value, other liabilities and approved subordinated debt as applied in the calculation of the solvency requirement.

Balance sheet items means asset, liability and equity line items as would appear on a balance sheet.

Capital adequacy requirement means the capital adequacy requirement determined in accordance with Actuarial Standard AS 3.03

Capital adequacy reserve means the excess of the capital adequacy requirement over the sum of the minimum termination value, other liabilities and approved subordinated debt as applied in the calculation of the solvency requirement.

DAC means deferred acquisition costs arising from the issuing of a policy.

Fair value means the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

General ledger data means data from which an income statement, balance sheet and statement of cash flows would be prepared in accordance with Part 2M.3 of the Corporations Act 2001.

IFRS means International Financial Reporting Standards as adopted in Australia.

IFRS introduced items means items reported in financial statements post-IFRS that would not have been reported in those financial statements pre-IFRS.

IFRS modified items means items reported in financial statements post-IFRS where the values of items would be materially different if reported in those financial statements pre-IFRS.

Material – Unless otherwise determined by APRA the following adjustments are material:

(a)           Equal to or greater than 10% of the dollar amount of an individual balance sheet item that has a direct impact on either the solvency or capital adequacy requirements;

(b)          Equal to or greater than 10% of the dollar amount of an individual balance sheet item that has a direct impact on the amount of assets available to meet solvency or capital adequacy requirements;

(c)           Equal to or greater than 5% of the dollar amount of the solvency reserves or capital adequacy reserves, as appropriate, aggregated across all statutory funds; or

(d)          Equal to or greater than 5% of the dollar amount of assets available to meet Solvency and/or Capital Adequacy reserves aggregated across all statutory funds.

Net market value, in relation to an asset, means the market value less the costs likely to be incurred in realising the asset.    

Post-IFRS means in accordance with the accounting standards made by the Australian Accounting Standards Board as they applied to reporting periods that began on or after 1 January 2005.

Pre-IFRS means in accordance with the accounting standards made by the Australian Accounting Standards Board as they applied to reporting periods that began on or before 31 December 2004.   

Solvency requirement means the solvency requirement determined in accordance with Actuarial Standard AS 2.03

Solvency reserve means the excess of the solvency requirement over the sum of the minimum termination value, other liabilities and approved subordinated debt as applied in the calculation of the Solvency requirement.

 

22.         Despite anything in these Prudential Rules No. 26, life companies registered under the Act (other than friendly societies) may, with APRA’s written agreement, use general ledger data collected on a post-IFRS basis to report statistics for Schedule 1 Forms.  APRA will agree to this alternative reporting basis if the following criteria (and any other criteria reasonably specified by APRA) are met:

(a)           Although post-IFRS general ledger data may be used as the source, the reported statistics must be materially the same as would have been reported using pre-IFRS data.  In particular, the measurement of assets must be materially the same as if they had been measured at net market value. 

(b)          All IFRS introduced items are to be excluded (whether material or not).

(c)           Where materially different from the value that would be reported using pre-IFRS data, the value of all IFRS modified items is to be adjusted to produce a value equivalent to the value that would have been reported using pre-IFRS data. 

(d)          All other adjustments to the data that APRA requires must be made. 

(e)           All adjustments that have been made to the general ledger data to enable the reported statistics to be prepared in the manner described above (i.e. those made under items (b), (c) and (d) above) must be identified and reported to APRA as provided in the attached Table - IFRS Introduced or Modified Items, separately for each statutory fund. 

(f)            The request to APRA for specific transitional reporting arrangements must:

                                (i)                   Confirm acceptance of, and intended compliance with, items (a) to (e) above;

                              (ii)                   Indicate those items that are expected to be included in the attached Table - IFRS Introduced or Modified Items; and

                             (iii)                   Provide confirmation that there is no material difference for items where the value reported in financial statements post-IFRS is different from the value that would have been reported in those financial statements pre-IFRS and where the item is not intended to be included in the attached Table - IFRS Introduced or Modified Items. 

23.         In respect of the attached Table - IFRS Introduced or Modified Items:

(a)           In respect of each statutory fund, all adjustments that have been made to the general ledger data to enable the statistics to be prepared materially in accordance with the requirements of the Transitional IFRS Arrangements as set out in rules 21 and 22 must be identified in the format of the Table and submitted to APRA along with the quarterly Forms submitted under Prudential Rules No. 26; and

(b)          The specific items listed in the Table refer to items as they would be commonly understood and interpreted for general purpose reporting. 

24.         If a life company that is not a friendly society does not report under the IFRS Transitional Arrangements set out in rules 21, 22 and 23 then the Schedules to Prudential Rules No. 26 must be completed based on the accounting standards that applied as at 31 December 2004. 

 

 


Table - IFRS Introduced or Modified Items

 

 

Amount as Reported in Prudential Rule No. 26 Schedules

Adjustment made to IFRS ledger data to produce reported amount

($ millions)

($ millions)

 

 

 

 

Included in “Investment Assets”

 

 

 

Owner Occupied Property

 

 

 

Items where asset not measured at fair value through profit and loss (please specify)

 

 

 

Items where net market value is materially different from fair value (please specify)

 

 

 

Other (please specify)

 

 

 

Total

 

 

 

 

 

 

 

Included in “Other Assets”

 

 

 

Defined Benefit Superannuation Fund Surpluses

 

 

 

DAC in respect of policy acquisition expenses

 

 

 

Owner Occupied Property

 

 

 

Deferred Tax Asset

 

 

 

Items where asset not measured at fair value through profit and loss (please specify)

 

 

 

Items where net market value is materially different from fair value (please specify)

 

 

 

Other (please specify)

 

 

 

Total

 

 

 

 

 

 

 

Included in “Other Liabilities”

 

 

 

Defined Benefit Superannuation Fund Deficits

 

 

 

Deferred Revenue Liability

 

 

 

Deferred Tax Liability

 

 

 

Other (please specify)

 

 

 

Total

 

 

 


 

 

Schedule 1 – Form A

Statement of Assets

 


Statement of Assets


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 1 – Form B

Assets by country of asset

 

 



 

 

Schedule 1 – Form C

Controlled entities and unit trusts

 

 

 





 

 

Schedule 1 – Form D

Derivatives

 

 

 





 

 

Schedule 1 – Form E

Currency Risk

 

 



 

 

Schedule 1 – Form F

Large Exposures

 



 

 

Schedule 1 – Form G

Interest Rate Risk

 

 



 

 

Schedule 1 – Form H

Contingent Assets and Liabilities

 

 

 



 

 

Schedule 1 – Form I

Half Yearly Market Statistics

 

 








 

 

Schedule 1 – Form J

Adjusted Asset Exposures

 

 

 

 

 

 



 

 

Schedule 1 – Form K

Current Termination Values

 

 




 

 

Schedule 1 – Form L

Asset Reconciliation Form

 

 



 

 

Schedule 2 – Form A

Advisers and Broking Agreements

 

 



 

 

Schedule 2 – Form B

Complaints

 





 

 

Schedule 2 – Form C

Individual Business – Number of Policies

 

 




 

 

Schedule 3 – Form A

Components of Net Policy Liability

 

 

 




 

 

Schedule 3 – Form B

Solvency

 

 




 

 

Schedule 3 – Form C

Capital Adequacy