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PR No. 48 Rules/Other as made
Determination revoking Prudential Rules No. 48 made under subsection 252(1) of Life Insurance Act 1995 and making new Prudential Rules No. 48.
Administered by: Treasury
General Comments: This determination revokes Prudential Rules No. 48 (June 1999) as amended with effect from 2/9/2005. Prudential Rules No. 48 - Collection of Statistics (26/8/2005) was revoked by Life Insurance (Prudential Rules) Determination No. 3 of 2006 - Prudential Rules No. 48 - Collection of Statistics (19/4/2006) with effect from 31/5/2006.
Registered 02 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Repealed by Treasury (Spent and Redundant Instruments) Repeal Regulation 2013

Life Insurance (Prudential Rules) Determination No. 3 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. 48 (made on or around June 1999 under subsection 252(1) of the Act for the purposes of subsections 244(1) and (2) of the Act) (as amended by Life Insurance (Prudential Rules) Determination No. 3 of 2004); and

·      MAKE the Prudential Rules No. 48 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  26.8.2005

 

[Signed]

John Francis Laker

Chair

 

 

 


 

 

Interpretation

In this Determination

APRA means the Australian Prudential Regulation Authority.

 

Schedule     

Prudential Rules No. 48 comprise the 44 pages commencing on the following page.

 

 


 

 

 


Prudential Rules No. 48

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.

Provision of quarterly statistics by friendly societies to APRA

1.             Life companies that are friendly societies must provide the statistics that are required in the Schedule to APRA:

(a)           no later than 21 days after the end of the quarter to which the statistics relate; and

(b)          in the form and manner set out in the Schedule, subject to the modifications set out in rule 2 and rule 2A.

2.             The Schedule is to be read so that where the word or phrase in Column 1 of Table A appears in the Schedule, it is to be replaced with the corresponding word or phrase in Column 2 of Table A. 

Table A

 

Column 1

Column 2

1

Financial Institutions Scheme

Life Insurance Act 1995

2

Friendly Societies Code

Life Insurance Act 1995

3

Prudential Standards

Applicable Prudential Rules and Prudential Standards

4

Prudential Standard x. (where x represents a number)

The applicable Prudential Standard

5

State Supervisory Authorities Authority

Australian Prudential Regulation Authority

6

SSA

APRA

7

Australian Financial Institutions Commission

Australian Prudential Regulation

Authority

8

AFIC

APRA

9

Division x of Part x of the FS Code (where x represents a number)

Applicable part of the Life Insurance Act 1995

 

 

2A       The Schedule is to be read so that the references identified in Column 1 of Table B are to be interpreted as set out in Column 2 of Table B.

Table B

Ref

Column 1

Column 2

B8 Item BM1

 

Value of Benefit Entitlements at the Beginning of the Period

The phrase “Benefit Entitlements “ should be read to mean “Policy Liabilities”

B8 Item BM10

 

Value of Benefit Entitlements at the End of the Period

The phrase “Benefit Entitlements “ should be read to mean “Policy Liabilities”

 

B9

Benefit Fund Solvency Requirement

The heading “Benefit Fund Solvency Requirement” is not relevant

B10

Benefit Fund Solvency Requirement (continued)

 

The heading “Benefit Fund Solvency Requirement (continued)” is not relevant

 

B10

Adjusted Value

The phrase “Adjusted Value” means “Value at adjusted yield”

 

C14

Management Fund - Capital Requirement

 

The heading “Management Fund - Capital Requirement” should be read to mean Management Capital Requirement under AS6.02

 

 

 

3.             In these Prudential Rules, “quarter” means any of the three month periods ending 31 March, 30 June, 30 September or 31 December.

4.             Despite rule 3, if at the commencement of these Prudential Rules, the quarter of a friendly society is a period other than that specified in rule 3, the friendly society may retain that period as its quarter.

5.             If a life company that is a friendly society does not report under the IFRS Transitional Arrangements set out in rules 6, 7 and 8 then the Schedule to Prudential Rules No. 48 must be completed based on the accounting standards that applied as at 31 December 2004. 

IFRS Transitional Arrangements

6.             In rules 7 and 8 of these Prudential Rules No 48:

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.

 

Management capital requirement means the management capital requirement determined in accordance with Actuarial Standard AS 6.02.   

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 benefit 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 benefit 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.

 

7.             Despite anything in these Prudential Rules No 48 life companies registered under the Act that are friendly societies may, with APRA’s written agreement, use general ledger data collected on a post-IFRS basis to report statistics for the purposes of the Schedule to Prudential Rules 48.  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 C - IFRS Introduced or Modified Items, separately for each benefit fund and the management 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 C - 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 C - IFRS Introduced or Modified Items.

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

(a)           In respect of each benefit fund and the management 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 6 and 7 must be identified in the format of Table C and submitted to APRA along with the quarterly Forms submitted under Prudential Rules No. 48; and

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

 

 


Table C - IFRS Introduced or Modified Items

 

 

($ millions)

Amount as Reported in Schedule to Prudential Rules No. 48

Adjustment made to IFRS ledger data to produce reported amount

 

 

 

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