Financial Sector (Collection of Data) (reporting standard) determination No. 21 of 2016

Reporting Standard LOLRS 800.3 Facility Business Data: Public and Product Liability and Professional Indemnity Insurance

I, Steve Davies, delegate of APRA, under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (the Act) DETERMINE Reporting Standard LOLRS 800.3 Facility Business Data: Public and Product Liability and Professional Indemnity Insurance, in the form set out in the Schedule, which applies to Lloyd’s within the meaning of the Insurance Act 1973.

Under section 15 of the Act, I DECLARE that the reporting standard shall begin to apply to Lloyd’s upon the date of registration of this instrument on the Federal Register of Legislation.

This instrument commences upon registration on the Federal Register of Legislation.

Dated: 6 September 2016

[Signed]

Steve Davies

General Manager

Statistics Division

Interpretation

In this Determination:

APRA means the Australian Prudential Regulation Authority.

Schedule

Reporting Standard LOLRS 800.3 Facility Business Data: Public and Product Liability and Professional Indemnity Insurance comprises the 19 pages commencing on the following page.

Reporting Standard LOLRS 800.3

Facility Business Data: Public and Product Liability and Professional   Indemnity Insurance

Reporting requirements 

1.             If, at any time during a reporting period covered by paragraph 2, a Lloyd’s underwriter is on risk in respect of reportable facility business, Lloyd’s must report on the business, in accordance with the Data Specifications, by the time in paragraph 3. 

Note: reportable facility business is defined in paragraph 16.

2.             For the purposes of the paragraph 1, the reporting periods are the six month period beginning on 1 January 2016 and ending on 30 June 2016 and each successive 6 month period (ending on 31 December or 30 June) after that.  

3.             A report required by paragraph 1 must be provided:

(a)           if the reporting period ends on 30 June – by no later than the 31 October next following the end of the reporting period; or

(b)          if the reporting period ends on 31 December – by no later than the 30 April next following the end of the reporting period,

or such later time as APRA may determine in writing.  APRA may determine a later time in writing in relation to the whole of a report, or in relation to a report to the extent that it relates to a particular class of Lloyd’s underwriters, or in relation to a report to the extent that it relates to one or more Lloyd’s underwriters named in the determination (to the intent that APRA may permit the late submission of part of the report).

Variation of reporting periods

4.             APRA may, by notice in writing, determine that to the extent that  reports required under this reporting standard will relate to a Lloyd’s underwriter with an accounting financial year that does not end on 30 June, the part of each such report relating to that underwriter may be provided in respect of reporting periods based on the underwriter’s own accounting financial year.  

5.             APRA may, by notice in writing, change the reporting periods for Lloyd’s to require it to provide reports under this reporting standard: 

(a)           more frequently (APRA may require this when, having regard to the particular circumstances of the Lloyd’s underwriters, APRA considers it necessary or desirable to obtain information more frequently for the purposes of the prudential supervision of the Lloyd’s underwriters); or 

(b)          less frequently  (APRA may do so when, having regard to the particular circumstances of the Lloyd’s underwriters and the extent to which they requires prudential supervision, and other relevant considerations, it is unnecessary to require Lloyd’s to provide the information on a 6 monthly basis).   

6.             If APRA changes a reporting period under paragraph 4 or 5 in relation to a report or part of a report, the report (or, where applicable, the part of the report) required under this reporting standard in respect of the changed period must be provided by no later than the last day of the second month after the end of the changed period or such later time as APRA may determine in writing.   

Method of submission

7.             Reports required by this reporting standard must be rendered in comma separated values (CSV) format in accordance with the Data Specifications, and must be provided either electronically through the web site www.ncpd.apra.gov.au, by logging on using the relevant customer identification number and password provided by Fujitsu Australia (as agent of APRA), and following the instructions on that web site.

8.             Despite paragraph 7, APRA may, in writing, make either or both of the following determinations:

(a)           a determination that reports required by this reporting standard must be provided in accordance with alternative information technology requirements specified by APRA in the determination; and

(b)          a determination that reports required by this reporting standard must be provided to APRA or an agent of APRA at an alternative address in accordance with requirements specified in the determination.

Authorisation

9.             Reports provided by Lloyd’s in accordance with this reporting standard must be the product of processes and controls developed by Lloyd’s for the internal review and authorisation of the information contained in the reports.  

Note: Lloyd’s General Representative in Australia must ensure that an appropriate set of policies and procedures is in place for the authorisation of data provided to APRA.

10.         Fujitsu Australia (as agent of APRA) will provide Lloyd’s with a customer identification number.  If Lloyd’s proposes to submit reports required by this reporting standard using the method in paragraph 7 (i.e. via the website), Lloyd’s must apply for a password by viewing the web page referred to in paragraph 7, quoting Lloyd’s customer identification number and following the instructions for applying for a password on that page.  Fujitsu Australia will advise Lloyd’s General Representative in Australia of the password for Lloyd’s.  When a report is provided using the method in paragraph 7, Lloyd’s will be required to quote its customer identification number and password.  Upon successful validation of the customer identification and password a secure session will be created and the report will be encrypted before transmission.

11.         Despite paragraph 10, or where APRA has made a determination under subparagraph 8(a) or (b) specifying an alternate method of submission, APRA may also determine in writing that: 

(a)           a specified person (who need not be Lloyd’s General Representative in Australia or agent); or

(b)          a person holding a specified position (who need not be Lloyd’s General Representative in Australia or agent); or

(c)           a person authorised by Lloyd’s to use Lloyd’s customer identification number and password, 

may, or must, authorise (in a manner specified) information provided by Lloyd’s under this reporting standard.

Minor alterations to forms and instructions

12.         APRA may: 

(a)           make minor variations to the Data Specifications (either generally, or in relation to a class of Lloyd’s underwriters, or in relation to one or more named Lloyd’s underwriters) to correct technical, programming or logical errors, inconsistencies or anomalies; 

(b)          vary, omit or substitute (either generally, or in relation to a class of Lloyd’s underwriters, or in relation to one or more named Lloyd’s underwriters) an occupation code or description in Appendix C to the Data Specifications, if APRA forms the view that the existing code or description is inappropriate having regard to the circumstances or business of Lloyd’s and any other relevant considerations; or

(c)           vary, omit or substitute (either generally, or in relation to a class of Lloyd’s underwriters, or in relation to a one or more named Lloyd’s underwriters) a specification in a Table in the Data Specifications, if APRA forms the view that the specification is inappropriate having regard to the circumstances or business of Lloyd’s underwriters and any other relevant considerations.

13.         If APRA makes such a variation it must notify Lloyd’s in writing.

Past reporting periods

14.         Lloyd’s must provide APRA with reports in respect of a past reporting period under the old reporting standard, notwithstanding that it was repealed on 8 August 2013.  For these purposes:

old reporting standard means the reporting standard  Reporting standard LOLRS 800.3 (2005) made by Financial Sector (Collection of Data) determination No. 35 of 2005;

past reporting period means a reporting period ending on a date between 1 June 2013 and 1 June 2016.

15.         Lloyd’s must provide reports to APRA under paragraph 14 of this reporting standard by 1 September 2016.  For the avoidance of doubt, where a general insurer has provided a report to APRA prior to 1 September 2016 in relation to a past reporting period, the general insurer has complied with paragraph 14.

Interpretation

16.     In this reporting standard:

agent of APRA means a person appointed under s 47 of the Australian Prudential Regulation Authority Act 1998 to receive data on behalf of APRA.

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

Data Specifications means the Data Specifications in the Schedule.

facility business means business that is closed by bordereau and for which the relevant Lloyd’s underwriter does not receive individual policy or claims data from the facility manager, and includes business undertaken through an underwriting pool or joint venture arrangement.

Fujitsu Australia means Fujitsu Australia Limited ABN 19 001 011 427.

Lloyd’s has the meaning in the Insurance Act 1973.

Lloyd’s General Representative in Australia means the employee of Lloyd’s or Lloyd’s Australia Ltd who holds the position of Lloyd’s General Representative in Australia, or performs the functions and duties described by that title.

Lloyd’s underwriter has the meaning in the Insurance Act 1973.

product liability insurance includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods.

professional indemnity insurance includes:

(a)           insurance that provides cover for a professional for actions taken against that professional in tort, contract or under statute law in respect of advice or services provided as part of their professional practice, including cover in respect of damages and legal expenses;

(b)          directors’ and officers’ liability insurance and legal expense insurance; and

(c)           medical indemnity insurance.

public liability insurance includes:

(a)           insurance covering legal liability to the public in respect of bodily injury or property damage arising out of the operation of the insured’s business; and

(b)          insurance in respect of environmental clean-up costs resulting from pollution where not covered by Fire and Industrial Special Risk policies.

reportable facility business means facility business underwritten by a Lloyd’s underwriter on or after 1 January 2003 under which the risk, or a risk, assumed by the Lloyd’s underwriter relates to product liability, professional indemnity or public liability insurance, not being a risk that relates to:

(a)           reinsurance or retrocession cover;

(b)          marine insurance; or

(c)           domestic householder’s or owner’s insurance, or tenant’s liability insurance, sold in conjunction with a building or contents policy; or

(d)          an event that could neither occur in Australia nor in relation to an insured resident of Australia.

17.     For the purposes of paragraphs 3 and 6, where a report must be provided no later than a particular date, Lloyd’s is required to ensure that the report is received by the person to whom it must be provided (whether APRA or an agent of APRA) no later than that date. 

Schedule

Data specifications for facility business for public and product liability and professional indemnity insurance

Overview  

These specifications have been prepared for the purpose of defining the facility business information required to be submitted by Lloyd’s in respect of public and product liability and professional indemnity insurance.  This information will contribute to a National Claims and Policy Database (NCPD) in respect of these classes of insurance.  The intention is to create a database that holds information in respect of claims and policies for public and product liability and professional indemnity on a national basis.  

Details of requirements in relation to reporting periods, method of submission and authorisation are set out in the reporting standard.  The data submitted by Lloyd’s will be validated by APRA each reporting period. The data validation to be performed is outlined in Appendix A.

Record Layouts and Field Specifications 

Facility Business Data Specifications

Key:

M – mandatory field on all records from 1 July 2004

O – optional field a – alpha

n - numeric

* Fields so indicated, as a combination, must be unique for each reporting period.

Facility Business Record Data Field Definitions

Where there is a mid-term market change, the facility reference may be repeated showing a changed insurer percentage.

1.       Insurer Code                                                                                                   

This will be provided by APRA when advised of the method of delivery of the data.

2.       Month of end of Reporting periods                                               

The data will relate to a six month period. Code the last day of this period in this field as DDMMYYYY, e.g. insert code 30062003 for data relating to the six months ending 30 June 2003. 

3.       Facility Identifier                                                                                             

A unique identifier for each facility where the insurer has received in excess of $100,000 in premium or made gross payments in excess of $100,000, for each respective six month period.

Provide a separate record for claims data and policies data for each facility.

Facilities where the insurer has received less than $100,000 in premium or made gross payments of less than $100,000 in the six month period are to be included “Other”.  

4.       Industry/Occupation Code                                                                          

For Public and Products Liability, EPL and D&O risks, use the principal classification of the business from the latest edition of Catalogue Number 1292.0 Australian and New Zealand Standard Industrial Classification (ANZSIC), published by the Australian Bureau of Statistics and available on their web site.  Provide data at the 4digit ANZSIC code level. Any reports or publications will be aggregated to the 2 digit level ANZSIC.

Residential strata owners’ liability is collected under ANZSIC classification 7711 - Residential Property Operators, whereas for Commercial Property Operators it is either 7712 or the occupation code that is most closely aligned with the tenancy of the strata.

For Professional Risks, use the codes provided in Attachment B.

Occupation code “OMULTI” should only be used for Facility Business data where a facility covers multiple occupation codes, no single code can be regarded as the principal occupation code and hence it is not possible or appropriate to use one of the more specific occupation codes.

Occupation code “OMULTI” and code “000000” (for ANZIIC codes) should only be used for Facility Business data where a facility covers multiple industry or occupation codes, no single code can be regarded as the principal industry or occupation code and hence it is not possible or appropriate to use one of the more specific codes.

Where this information is not available, enter a hyphen (“-“).

5.       Class of Business                                                                        

•           PL = Public & Product

•           PI = Professional Risk

Where this information is not available, enter a hyphen (“-“).

6.       Runoff Indicator

•           Y = Yes

•           N = No    

Where this information is not available, enter a hyphen (“-“).

7.       Insurer’s Percentage of Facility                                                    

Lloyd’s proportion of the facility, to 2 decimal places (e.g. 66.66 for 66.66%). 

Blank on “Other” facilities records.

8.       Number of Policies                                                                                        

The total numbers of policies covered by this facility, if available or else provide a “blank”.

9.       Premium Received for Reporting periods

Lloyd’s share of the gross premium from this facility during the half year net of GST in whole dollars, no decimal point and converted to A$ using end of processing month rates of exchange. Exclude all statutory charges (FSL, GST & SD) but include others costs (commissions).

10. Number of Claims                                                                           

The total numbers of claims covered by this facility for which payments have been reported in item 9 below, if available or else provide a “blank”. 

11. Gross Payments Made in Reporting periods                                            

Lloyd’s share of payments made for this facility since the last reporting period, net of GST in whole dollars, no decimal point and converted to A$ using end of processing month rates of exchange. Includes payments made to claimant and to third-party service providers (medical, legal, investigation) that are attributed to the claim.

Appendix A: Data Validation

The facility business data submitted by Lloyd’s will be validated by APRA as follows.

For facility business data, the total of all premiums received and the total of gross payments made will be deducted from earned premium and gross payment data submitted in GRF 440 (see below).   

a)            Earned premium submitted in information provided by Lloyd’s under Lloyd’s Security Trust Fund Determination No 1, less the premium received for all facilities, is expected to reconcile to within 5% of the total of the earned premium shown in field 15b on the individual policy records submitted by insurers or as calculated by APRA from the gross annualised premium (field 15a). APRA will expect Lloyd’s to explain the source of any greater discrepancy.  

b)            Gross claim payments submitted in information provided by Lloyd’s under Lloyd’s Security Trust Fund Determination No 1, less the gross payments received for all facilities, is expected to reconcile to within 5% of the gross payments for each accident year calculated from the individual claim records submitted.  Discrepancies in the most recent accident years will be compared with the amount of payments made for all facilities.

While it is appreciated that more extensive reconciliation could be attempted, this could require significant changes to the existing reporting requirements to APRA or the submission of other information (such as management accounts) from insurers that would not be in standard formats.  

APRA will expect that where Lloyd’s needs to demonstrate the reason for a discrepancy between the individual records submitted to the database and its aggregate data reported to APRA in the above forms, Lloyd’s will share such additional reports with APRA as required.  

Appendix B: APRA Occupation Codes for Professional

Indemnity