Federal Register of Legislation - Australian Government

Primary content

No. 102 of 2013 Determinations/Financial (Other) as made
This determination makes Reporting Standard GRS 460.1 Exposure Analysis by Reinsurance Counterparty.
Administered by: Treasury
Registered 18 Dec 2013
Tabling HistoryDate
Tabled HR11-Feb-2014
Tabled Senate11-Feb-2014

Financial Sector (Collection of Data) (reporting standard) determination No. 102 of 2013

Reporting Standard GRS 460.1 Exposure Analysis by Reinsurance Counterparty

Financial Sector (Collection of Data) Act 2001

 

I, Charles Littrell, delegate of APRA, under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (the Act) DETERMINE Reporting Standard GRS 460.1 Exposure Analysis by Reinsurance Counterparty, in the form set out in the Schedule, which applies to the financial sector entities to the extent provided in paragraph 3 of the reporting standard.

 

Under section 15 of the Act, I DECLARE that the reporting standard shall begin to apply to those financial sector entities on 31 December 2013.

 

This instrument commences on 31 December 2013.

 

Dated: 13 December 2013

 

[Signed]

 

 

Charles Littrell

Executive General Manager

Policy, Statistics and International

 

Interpretation

In this Determination:

APRA means the Australian Prudential Regulation Authority.

financial sector entity has the meaning given in section 5 of the Act.

Schedule

 

Reporting Standard GRS 460.1 Exposure Analysis by Reinsurance Counterparty comprises the 12 pages commencing on the following page.


 

Reporting Standard GRS 460.1

Exposure Analysis by Reinsurance Counterparty

Objective of this Reporting Standard

This Reporting Standard sets out the requirements for the provision of information to APRA relating to a general insurer’s exposures to reinsurance counterparties.

It includes Form GRF 460.1 Exposure Analysis by Reinsurance Counterparty and associated specific instructions and must be read in conjunction with the general instruction guide.

Authority

1.             This Reporting Standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001.

Purpose

2.             Information collected in Form GRF 460.1 Exposure Analysis by Reinsurance Counterparty (GRF 460.1) is used by APRA for the purposes of prudential supervision.

Application and commencement

3.             This Reporting Standard applies to all general insurers authorised under the Insurance Act 1973 (insurers).

4.             This Reporting Standard applies for reporting periods ending on or after 31 December 2013.

Information required

5.             An insurer to which this Reporting Standard applies must provide APRA with the information required by GRF 460.1 in respect of each reporting period.

Forms and method of submission

6.             The information required by this Reporting Standard must be given to APRA in electronic format using the ‘Direct to APRA’ application or, where ‘Direct to APRA’ is not available, by a method notified by APRA prior to submission.

Note: the ‘Direct to APRA’ application software (also known as ‘D2A’) may be obtained from APRA.

Reporting periods and due dates

7.             Subject to paragraph 8, an insurer to which this Reporting Standard applies must provide the information required by this Reporting Standard in respect of each financial year of the insurer.

8.             If, having regard to the particular circumstances of an insurer, APRA considers it necessary or desirable to obtain information more or less frequently than as provided by paragraph 7, APRA may change the reporting periods, or specify reporting periods, for the particular insurer.

9.             The information required by this Reporting Standard must be provided to APRA:

(a)           within the time stated in Reporting Standard GRS 001 Reporting Requirements (GRS 001); or

(b)          in the case of information provided in accordance with paragraph 8, within the time specified by APRA.

10.         APRA may grant an insurer an extension of a due date, in which case the new due date for the provision of the information will be the date on the notice of extension.

Quality control

11.         All information provided by an insurer under this Reporting Standard must be subject to systems, processes and controls developed by the insurer for the internal review and authorisation of that information. It is the responsibility of the Board and senior management of the insurer to ensure that an appropriate set of policies and procedures for the authorisation of information submitted to APRA is in place.

12.         As a result of Insurance (exemption) determination No. 2 of 2013, the Appointed Auditor of an insurer is not ordinarily required to audit, or provide a certificate in relation to, information provided by the insurer under this Reporting Standard.

Authorisation

13.         When an officer or agent of an insurer provides the information required by this Reporting Standard using the ‘Direct to APRA’ software, it will be necessary for the officer or agent to digitally sign the relevant information using a digital certificate acceptable to APRA.

14.         If the information required by this Reporting Standard is provided by an agent who submits using the ‘Direct to APRA’ software on the insurer’s behalf, the insurer must:

(a)           obtain from the agent a copy of the completed form with the information provided to APRA; and

(b)          retain the completed copy.


 

15.         An officer or agent of an insurer who submits the information under this Reporting Standard for, or on behalf of, the insurer must be authorised by either:

(a)           the Principal Executive Officer of the insurer; or

(b)          the Chief Financial Officer of the insurer.

Variations

16.         APRA may vary the reporting requirements of GRF 460.1 in relation to an insurer.

Interpretation

17.         In this Reporting Standard:

(a)           unless the contrary intention appears, words and expressions have the meanings given to them in Prudential Standard GPS 001 Definitions (GPS 001); and

(b)          Appointed Auditor means an auditor appointed under paragraph 39(1)(a) of the Insurance Act;

APRA means the Australian Prudential Regulation Authority established under the Australian Prudential Regulation Authority Act 1998;

Chief Financial Officer means the chief financial officer of the insurer, by whatever name called;

financial year means the financial year (within the meaning in the Corporations Act 2001) of the insurer;

general instruction guide refers to the general instruction guide set out in Attachment A of GRS 001;

insurer means a general insurer within the meaning of section 11 of the Insurance Act;

Principal Executive Officer means the principal executive officer of the insurer, by whatever name called, and whether or not he or she is a member of the governing board of the insurer; and

reporting period means a period mentioned in paragraph 7 or, if applicable, paragraph 8.

18.         Where this Reporting Standard provides for APRA to exercise a power or discretion, this power or discretion is to be exercised in writing.


GRF_460_1: Exposure analysis by Reinsurance Counterparty

 

Australian Business Number

Institution Name

 

Reporting Period

Scale Factor

Reporting Consolidation

Annual

Thousands of dollars no decimal place

Level 1 / Level 2

 

Impact on capital base and prescribed capital amount

 

Name of counterparty (reinsurer)

Reinsurer identifier

Counterparty group name

APRA counterparty grade

Counterparty domicile

Group domicile

Total impact on capital base

Total impact on Insurance Risk Charge

Total impact on Insurance Concentration Risk Charge

Total impact on Asset Risk Charge (after aggregation formula)

Total impact on Asset Concentration Risk Charge

Total impact on Operational Risk Charge

Total impact on prescribed capital amount

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

(13)

 

 

 

 

 

 

 

 

 

 

 

 

 


 



Reporting Form GRF 460.1

Exposure Analysis by Reinsurance Counterparty

Instructions

These instructions assist completion of Reporting Form GRF 460.1 Exposure Analysis by Reinsurance Counterparty (GRF 460.1). GRF 460.1 collects information relating to the impact on the capital base and each component of the prescribed capital amount of a regulated institution due to a reinsurance counterparty failure. Information reported in GRF 460.1 is primarily required for prudential purposes.

These instructions must be read in conjunction with the general instruction guide.

Audit matters

As a result of Insurance (exemption) determination No. 2 of 2013, the Appointed Auditor of a general insurer is not required to audit, or provide a certificate in relation to, information provided by a general insurer under Reporting Standard GRS 460.1 Exposure Analysis by Reinsurance Counterparty. Under Prudential Standard GPS 310 Audit and Related Matters (GPS 310), the Group Auditor of a Level 2 insurance group is not required to provide a limited assurance review in relation to information provided by the parent entity of a Level 2 insurance group under Reporting Standard GRS 460.1 Exposure Analysis by Reinsurance Counterparty (Level 2 Insurance Group). APRA, however, may exercise its power under GPS 310 to require the Appointed Auditor or Group Auditor to undertake a special purpose review of the systems, processes and controls surrounding the completion of GRF 460.1 and Reporting Form GRF 460.1_G Exposure Analysis by Reinsurance Counterparty (G) (GRF 460.0_G), or the data contained within GRF 460.1 and GRF 460.1_G.

Supplementary information

The regulated institution must ensure that any underlying calculations and assumptions used to complete GRF 460.1 are made available to APRA upon request from the regulated institution’s APRA responsible supervisor.

Reporting Level

GRF 460.1 must be completed by all general insurers.

Specific instructions

Terms highlighted in bold italics indicate that the definition is provided in these instructions. Additional definitions are provided at the end of these instructions.  

Reporting Practice Guide GRPG 460 Reinsurance Counterparty Data Collection provides guidance to assist regulated institutions in completing GRF 460.1. Regulated institutions are permitted to use simplifying assumptions where those assumptions do not have a material impact on the resulting capital coverage of the regulated institution.

Exposure Analysis by Reinsurance Counterparty

Report individual counterparties on GRF 460.1 where the failure of that counterparty results in a five per cent change in capital coverage of the regulated institution when compared to the capital coverage at the end of the financial year.

For the purposes of this reporting form, failure means that the counterparty will no longer meet their obligation to the regulated institution. This means that the regulated institution makes no recovery from on-balance sheet reinsurance assets and the reinsurer is not replaced on any of its previous or current reinsurance programs.

Reporting basis: report balances for Columns 7 to 13 as at the end of the financial year.

Unit of measurement: report amounts in Columns 7 to 13 as thousands of dollars.

 

Report each counterparty as a separate line item.

For each counterparty report the Name of counterparty (reinsurer) in column 1, the Reinsurer identifier in column 2, the Counterparty group name in column 3, the APRA counterparty grade in column 4, the Counterparty domicile in column 5, the Group domicile in column 6, the Total impact on capital base, in column 7, the Total impact on Insurance Risk Charge in column 8, the Total impact on Insurance Concentration Risk Charge in column 9, the Total impact on Asset Risk Charge (after aggregation formula) in column 10, the Total impact on Asset Concentration Risk Charge in column 11, the Total impact on Operational Risk Charge in column 12 and the Total impact on prescribed capital amount in column 13.

Name of counterparty (reinsurer)

The legal name of the counterparty to the reinsurance exposure. Where relevant, use the name of counterparty as stated on the reinsurer identifier list.

Reinsurer identifier

The unique identifier for the counterparty reported in column 1. Where relevant, the reinsurer identifier must be reported as stated on the reinsurer identifier list. If the reinsurer is not on the reinsurer identifier list, report the reinsurer identifier as ‘unassigned’.

Counterparty group name

The name of the group to which the counterparty to the reinsurance exposure belongs. If the counterparty to the reinsurance exposure does not belong to a group, leave this column blank. Where relevant, the counterparty group name must be reported as stated on the reinsurer identifier list. If the counterparty group name is not on the reinsurer identifier list, report the counterparty group name as per these instructions.

APRA counterparty grade

The counterparty grade of 1 to 7 in accordance with Prudential Standard GPS 001 Definitions (GPS 001).

Counterparty domicile

For a subsidiary, the domicile is where the counterparty is legally incorporated. For a branch, the domicile is where the counterparty (branch) is located. Where relevant, the counterparty domicile must be reported as stated on the reinsurer identifier list. If the counterparty is not on the reinsurer identifier list, report the domicile using the domiciles in Appendix 1.

Group domicile

The domicile where the group owning the counterparty is legally incorporated. If the counterparty does not belong to a group, leave this column blank. Where relevant, the group domicile must be reported as stated on the reinsurer identifier list. If the group is not on the reinsurer identifier list, report the group domicile using the domiciles listed in Appendix 1.

Total impact on capital base

Report the decrease in capital base, after tax where applicable, due to the failure of the reinsurer reported in column 1. This takes into account changes as a result of the loss of the reinsurer on a regulated institution’s net outstanding claims liabilities and net premiums liability. This will include any change in the OCP surplus/deficit and PL surplus/deficit. Amounts reported for this item must be equal to or less than zero.

Total impact on Insurance Risk Charge

Report the increase in Insurance Risk Charge due to the failure of the reinsurer reported in column 1. This takes into account the impact on the OCP and PL risk charges as a result of the impact of a reinsurer failure on the net outstanding claims provisions and net premiums liabilities. A regulated institution may use simplifying assumptions as long as those assumptions do not have a material impact on the overall capital coverage outcome. Amounts reported for this item must be equal to or greater than zero.

Total impact on Insurance Concentration Risk Charge

Report the increase in the Insurance Concentration Risk Charge (ICRC) due to the failure of the reinsurer reported in column 1. This must consider the impact on each component of the ICRC (if applicable) and the current ICRC of the insurer. A regulated institution may use simplifying assumptions as long as those assumptions do not have a material impact on the overall capital coverage outcome. Amounts reported for this item must be equal to or greater than zero.

Total impact on Asset Risk Charge (after aggregation formula)

Report the change in the Asset Risk Charge due to the failure of the reinsurer reported in column 1. The amount reported must be after the aggregation formula in Prudential Standard GPS 114 Capital Adequacy: Asset Risk Charge is applied. A regulated institution may estimate this by applying the percentage of the aggregated risk charge components to the sum of the risk charge components on Reporting Form GRF 114.0 Asset Risk Charge or Reporting Form GRF 114.0_G Asset Risk Charge (G) for a Level 2 insurance group. In addition, a regulated institution may use simplifying assumptions as long as those assumptions do not have a material impact on the overall capital coverage outcome. Report an increase in the Asset Risk Charge as a positive amount and a decrease as a negative amount.

Total impact on Asset Concentration Risk Charge

Report the change in the Asset Concentration Risk Charge (ACRC) due to the failure of the reinsurer reported in column 1. A regulated institution must consider whether any existing ACRC due to the reinsurer reported in column 1 is decreased due to its failure. A regulated institution must also consider whether there is a change in the ACRC (either an increase in an existing ACRC or a new ACRC) due to a decrease in capital base from the failure of the reinsurer reported in column 1. Report an increase in the ACRC as a positive amount and a decrease as a negative amount.

Total impact on Operational Risk Charge

Report the increase in the Operational Risk Charge due to the failure of the reinsurer reported in column 1. A regulated institution may use simplifying assumptions as long as those assumptions do not have a material impact on the overall capital coverage outcome. Amounts reported for this item must be equal to or greater than zero.

Total impact on prescribed capital amount

Report the total change in prescribed capital amount due to the failure of the reinsurer reported in column 1. The total change in the prescribed capital amount is the change in the each component of the prescribed capital amount reported in columns 8 to 12 after applying the aggregation benefit in accordance with Prudential Standard GPS 110 Capital Adequacy. Amounts reported for this item must be equal to or less than the sum of columns 8 to 12 due to the increase in the aggregation benefit.

Glossary of additional terms

Capital coverage

This is the regulated institution’s capital base, determined under Prudential Standard GPS 112 Capital Adequacy: Measurement of Capital, divided by its prescribed capital amount, determined under Prudential Standard GPS 110 Capital Adequacy.

Asset concentration risk charge (ACRC)

This is the risk charge determined under Prudential Standard GPS 117 Capital Adequacy: Asset Concentration Risk Charge.

Asset risk charge

This is the risk charge determined under Prudential Standard GPS 114 Capital Adequacy: Asset Risk Charge.

Insurance concentration risk charge (ICRC)

This is the risk charge determined under Prudential Standard GPS 116 Capital Adequacy: Insurance Concentration Risk Charge.

Insurance risk charge

This is the risk charge determined under Prudential Standard GPS 115 Capital Adequacy: Insurance Risk Charge.

OCP surplus/deficit

This is the net outstanding claims liabilities determined under Australian Accounting Standard AASB 1023 General Insurance Contracts (AASB 1023) in surplus or deficit to the net outstanding claims liabilities determined under Prudential Standard GPS 320 Actuarial and Related Matters (GPS 320).

Operational risk charge

This is the risk charge determined under Prudential Standard GPS 118 Capital Adequacy: Operational Risk Charge.

PL surplus/deficit

This is the net premiums liabilities determined under AASB 1023 in surplus or deficit to the net premiums liabilities determined under GPS 320.

Reinsurer identifier list

This is a list of reinsurers which includes the name of the counterparty, counterparty domicile, counterparty group name and group domicile that must be used for reporting on GRF 460.0 and GRF 460.0_G. The list is located on APRA’s website.

 

Interpretation

For the purposes of these instructions:

·                Appointed Auditor is defined in GPS 001;

·                general insurer means a general insurer authorised under the Insurance Act 1973;

·                Group Auditor is defined in GPS 001;

·                regulated institution is defined in GPS 001 as a collective term for general insurers and Level 2 insurance groups; and

·                Level 2 insurance group is defined in Attachment D of GPS 001.

 

 


 

 

Appendix 1: Country list


The following country list must be used when reporting any values for columns 8 and 9.

If the country cannot be identified, report the relevant ‘residual’ region listed in the table (for example, US Pacific Islands). If the residual region cannot be identified, report ‘unallocated’.


Country/Grouping

Code

Afghanistan

AF

Albania

AL

Algeria

DZ

Andorra

AD

Angola

AO

Argentina

AR

Armenia

AM

Aruba

AW

Australia

AU includes Christmas Islands, Cocos Islands, Norfolk Islands, Heard and McDonald Islands, Territory of Ashmore and Cartier Islands and Territory of Coral Sea Islands

Austria

AT

Azerbaijan

AZ

Bahamas

BS

Bahrain

BH

Bangladesh

BD

Barbados

BB

Belarus

BY

Belgium

BE

Belize

BZ

Benin

BJ

Bermuda

BM

Bhutan

BT

Bolivia

BO

Bosnia and Herzegovina

BA

Botswana

BW

Brazil

BR

British Overseas Territories

1W includes British Antarctic Territory, British Indian Ocean Territory, Chagos, Pitcairn Islands, South Georgia and South Sandwich Islands

Brunei

BN

Bulgaria

BG

Burkina Faso

BF

Burundi

BI

Cambodia

KH

Cameroon

CM

Canada

CA

Cape Verde

CV

Cayman Islands

KY

Central African Republic

CF

Chad

TD

Chile

CL

China

CN

Colombia

CO

Comoros Islands

KM

Congo

CG

Congo Democratic Republic

CD

Consortium Banks

1G

Costa Rica

CR

Cote d'Ivoire

CI

Croatia

HR

Cuba

CU

Cyprus

CY

Czech Republic

CZ

Denmark

DK excludes Faeroe Islands and Greenland

Djibouti

DJ

Dominica

DM

Dominican Republic

DO

Ecuador

EC

Egypt

EG

El Salvador

SV

Equatorial Guinea

GQ

Eritrea

ER

Estonia

EE

Ethiopia

ET

Faeroe Islands

FO

Falkland Islands

FK

Fiji

FJ

Finland

FI  includes Aland Islands

France

FR includes French Guiana, French Southern Territories, Guadeloupe, Martinique, Mayotte, Monaco, Reunion and St. Pierre and Miquelon

French Polynesia

PF includes Society Archipelago, Tuamotu-Gambier Islands, Marquesas, Australes Archipelago

Gabon

GA

Gambia

GM

Georgia

GE

Germany

DE

includes the European Central Bank

Ghana

GH

Gibraltar

GI

Greece

GR

Greenland

GL

Grenada

GD

Guatemala

GT

Guernsey

GG

Guinea

GN

Guinea-Bissau

GW

Guyana

GY

Haiti

HT

Honduras

HN

Hong Kong SAR

HK

Hungary

HU

Iceland

IS

India

IN

Indonesia

ID

International organisations

1C except the BIS which is included under Switzerland, and the ECB which is included under Germany

Iran

IR

Iraq

IQ

Ireland

IE

Isle of Man

IM

Israel

IL

Italy

IT

Jamaica

JM

Japan

JP

Jersey

JE

Jordan

JO

Kazakhstan

KZ

Kenya

KE

Kiribati

KIR

Kuwait

KWT

Kyrgyz Republic

KGZ

Laos

LAO

Latvia

LV

Lebanon

LB

Lesotho

LS

Liberia

LR

Libya

LY

Liechtenstein

LI

Lithuania

LT

Luxembourg

LU

Macau SAR

MO

Macedonia

MK

Madagascar

MG

Malawi

MW

Malaysia

MY includes Labuan International Offshore Financial Centre

Maldives

MV

Mali

ML

Malta

MT

Marshall Islands

MH

Mauritania

MR

Mauritius

MU

Mexico

MX

Micronesia

FM

Moldova

MD

Mongolia

MN

Montenegro

ME

Morocco

MA

Mozambique

MZ

Myanmar

MM

Namibia

NA

Nauru

NR

Nepal

NP

Netherlands

NL

Netherlands Antilles

AN  includes Bonaire, Curacao, Saba, St. Eustatius and St. Maarten

New Caledonia

NC

New Zealand

NZ includes Cook Islands, Minor Islands, Niue, Ross Dependency and Tokelau

Nicaragua

NI

Niger

NE

Nigeria

NG

North Korea

KP

Norway

NO includes Bouvet Islands, Svalbard and Jan Mayen Islands

Official Monetary Authorities

1D

Oman

OM

Pakistan

PK

Palau

PW

Palestinian Territory

PS

Panama

PA  includes Panama Canal Zone

Papua New Guinea

PG

Paraguay

PY

Peru

PE

Philippines

PH

Poland

PL

Portugal

PT includes the Azores and Madeira

Qatar

QA

Residual Africa and Middle East

2W includes Western Sahara

Residual Asia and Pacific

2O

Residual developed countries

2R

Residual Europe

2B

Residual Latin America and Caribbean

2H

Residual offshore centres

2N

Romania

RO

Russia

RU

Rwanda

RW

Samoa

WS

San Marino

SM

Sao Tome and Principe

ST

Saudi Arabia

SA

Senegal

SN

Serbia

RS

Seychelles

SC

Sierra Leone

SL

Singapore

SG

Slovakia

SK

Slovenia

SI

Solomon Islands

SB

Somalia

SO

South Africa

ZA

South Korea

KR

Spain

ES includes Balearic Islands, Canary Islands and Ceuta and Melilla

Sri Lanka

LK

St. Helena

SH includes Ascension, Gough and Tristan Da Cunha

St. Lucia

LC

St. Vincent

VC includes the Grenadines

Sudan

SD

Suriname

SR

Swaziland

SZ

Sweden

SE

Switzerland

CH includes Bank for International Settlements

Syria

SY

Taiwan, China

TW

Tajikistan

TJ

Tanzania

TZ

Thailand

TH

Timor Leste

TL

Togo

TG

Tonga

TO

Trinidad and Tobago

TT

Tunisia

TN

Turkey

TR

Turkmenistan

TM

Turks and Caicos

TC

Tuvalu

TV

Uganda

UG

Ukraine

UA

Unallocated

5M

United Arab Emirates

AE

United Kingdom

GB excludes Guernsey, Isle of Man and Jersey

United States

US includes American Samoa, Guam, Midway Islands, Northern Mariana Islands, Puerto Rico, US Virgin Islands and Wake Islands

Uruguay

UY

US Pacific Islands

PU includes Carolines, Howland and Baker, Kingman Reef, Palmyra and Jarvis and Johnston

Uzbekistan

UZ

Vanuatu

VU

Vatican

VA

Venezuela

VE

Vietnam

VN

Wallis and Futuna

WF

West Indies UK

1Z includes Anguilla, Antigua and Barbuda, British Virgin Islands, Montserrat and St. Christopher/St. Kitts - Nevis

Yemen

YE

Zambia

ZM

Zimbabwe

ZW