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Financial Sector (Collection of Data) (reporting standard) determination No. 67 of 2023

Authoritative Version
Determinations/Financial (Other) as made
This instrument determines Reporting Standard GRS 114.1 Assets by Counterparty Grade and revokes the Financial Sector (Collection of Data) (reporting standard) determination No. 12 of 2022
Administered by: Treasury
Registered 24 May 2023
Tabling HistoryDate
Tabled HR25-May-2023
Tabled Senate13-Jun-2023

Commonwealth Coat of Arms of Australia

Financial Sector (Collection of Data) (reporting standard) determination No. 67 of 2023

Reporting Standard GRS 114.1 Assets by Counterparty Grade

Financial Sector (Collection of Data) Act 2001

I, Michael Murphy, delegate of APRA, under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901:

 

(a)           revoke Financial Sector (Collection of Data) (reporting standard) determination No. 12 of 2022, including Reporting Standard GRS 114.1 Assets by Counterparty Grade made under that Determination; and

 

(b)          determine Reporting Standard GRS 114.1 Assets by Counterparty Grade, in the form set out in the Schedule, which applies to the financial sector entities to the extent provided in paragraph 3 of that reporting standard.

 

Under section 15 of the Act, I declare that Reporting Standard GRS 114.1 Assets by Counterparty Grade shall begin to apply to those financial sector entities, and the revoked reporting standard shall cease to apply, on the day Reporting Standard GRS 114.1 Assets by Counterparty Grade is registered on the Federal Register of Legislation.

 

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

 

Dated: 18 May 2023

 

 

 

Michael Murphy

General Manager - Chief Data Officer (Acting)

Technology and Data Division

 

 

 

Interpretation

In this Determination:

APRA means the Australian Prudential Regulation Authority.

Federal Register of Legislation means the register established under section 15A of the Legislation Act 2003.

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

Schedule

 

Reporting Standard GRS 114.1 Assets by Counterparty Grade comprises the document commencing on the following page.

Commonwealth Coat of Arms of Australia

Reporting Standard GRS 114.1

Assets by Counterparty Grade

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 assets by counterparty grade.

It includes associated specific instructions and must be read in conjunction with Reporting Standard GRS 001 Reporting Requirements, including 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.             The information reported to APRA under this Reporting Standard is used by APRA for the purpose of prudential supervision including assessing compliance with the capital standards.

Application and commencement

3.             This Reporting Standard applies to all general insurers authorised under the Insurance Act 1973 (insurers). This Reporting Standard applies for reporting periods ending on or after 1 July 2023.

Information required

4.             An insurer must provide APRA with the information required by this Reporting Standard for each reporting period.

Method of submission

5.             The information required by this Reporting Standard must be given to APRA:

(a)           in electronic format using an electronic method available on APRA’s website; or

(b)          by a method notified by APRA prior to submission.

Reporting periods and due dates

6.             Subject to paragraph 7, an insurer must provide the information required by this Reporting Standard:

(a)           in respect of each quarter based on the financial year of the insurer; and

(b)          in respect of each financial year of the insurer.

Note: The annual information required from an insurer by paragraphs 4, 5 and 6(b), together with certain annual information required by other reporting standards, will form part of the insurer’s yearly statutory accounts within the meaning of section 3 of the Insurance Act. This means that the information must be audited in accordance with paragraph 49J(1)(a) of the Insurance Act. Under subsection 49J(3), the principal auditor of the insurer must give the insurer a certificate relating to the yearly statutory accounts, and that certificate must contain statements of the auditor’s opinions on the matters required by the prudential standards to be dealt with in the certificate.

7.             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 subparagraph 6(a) or 6(b), APRA may, by notice in writing, change the reporting periods, or specify reporting periods, for the particular insurer.

8.             The information required by this Reporting Standard in respect of an insurer must be provided to APRA:

(a)           in the case of quarterly information, within 20 business days after the end of the reporting period to which the information relates;

(b)          in the case of annual information, within three months after the end of the reporting period to which the information relates; or

(c)           in the case of information provided in accordance with paragraph 7, within the time specified by notice in writing.

Note: Paragraph 49L(1)(a) of the Insurance Act provides that the auditor’s certificate required under subsection 49J(3) of that Act must be lodged with APRA in accordance with the prudential standards.  The prudential standards provide that the certificate must be submitted to APRA together with the yearly statutory accounts.  Accordingly, the auditor’s certificate relating to the annual information referred to in subparagraph 6(b) must be provided to APRA by the time specified in GRS 001 (unless an extension of time is granted under GRS 001).

9.             APRA may, in writing, grant an insurer an extension of a due date in paragraph 8, in which case the new due date will be the date on the notice of extension.

Note: For the avoidance of doubt, if the due date for a particular reporting period falls on a day other than a usual business day, an insurer is nonetheless required to submit the information required no later than the due date.

Quality control

10.          The information provided by an insurer under this Reporting Standard must be the product of systems, processes and controls that have been reviewed and tested by the Appointed Auditor of the insurer. This will require the Appointed Auditor to review and test the insurer’s systems, processes and controls designed to enable the insurer to report reliable financial information to APRA. This review and testing must be done on:

(a)           an annual basis or more frequently if necessary to enable the Appointed Auditor to form an opinion on the reliability and accuracy of data; and

(b)          at least a limited assurance engagement consistent with professional standards and guidance notes issued by the Auditing and Assurance Standards Board as may be amended from time to time, to the extent that they are not inconsistent with the requirements of Prudential Standard GPS 310 Audit and Related Matters.

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 data submitted to APRA is in place.

Authorisation

12.         When an officer, or agent, of an insurer provides the information required by this Reporting Standard using an electronic format the officer, or agent, must digitally sign the relevant information using a digital certificate acceptable to APRA.

13.         If the information required by this Reporting Standard is provided by an agent who submits the information on the insurer’s behalf, the insurer must:

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

(b)          retain the completed copy.

14.         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

15.         APRA may, by written notice to the insurer, vary the reporting requirements of this Reporting Standard in relation to that insurer.

Transition

16.         An insurer must report under the old reporting standard in respect of a transitional reporting period. For these purposes:

old reporting standard means the reporting standard revoked in the determination making this Reporting Standard; and

transitional reporting period means a reporting period under the old reporting standard:

(a)           which ended before 1 July 2023; and

(b)          in relation to which the insurer was required, under the old reporting standard, to report by a date on or after the date of revocation of the old reporting standard.

Note: For the avoidance of doubt, if an insurer was required to report under an old reporting standard, and the reporting documents were due before the date of revocation of the old reporting standard, the insurer is still required to provide any overdue reporting documents in accordance with the old reporting standard.

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)          the following definitions are applicable:

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

APRA-authorised reinsurer means an insurer carrying on reinsurance business.  For the purposes of this definition, a Lloyd’s underwriter as defined under the Insurance Act is an APRA-authorised reinsurer if it carries on reinsurance business. The Australian Reinsurance Pool Corporation is also an APRA-authorised reinsurer for the purposes of this definition;

capital standards means the prudential standards which relate to capital adequacy as defined in GPS 001;

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;

foreign insurer means a foreign general insurer within the meaning of the Insurance Act;

Note: A reference to a ‘branch’ or ‘branch operation’ is a reference to the Australian operations of a foreign insurer.

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

Insurance Act means the Insurance Act 1973;

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

Note: In this Reporting Standard, a reference to an ‘authorised insurer’, ‘authorised insurance entity’ or ‘licensed insurer’ is a reference to an insurer, and a reference to an ‘authorised reinsurance entity’ is a reference to an insurer whose business consists only of undertaking liability by way of reinsurance.

non-APRA-authorised reinsurer means any reinsurer that is not an APRA-authorised reinsurer;

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 subparagraph 6(a) or 6(b) or, if applicable, paragraph 7.

18.         Unless the contrary intention appears, a reference to an Act, Prudential Standard, Reporting Standard, Australian Accounting or Auditing Standard is a reference to the instrument as in force from time to time.

Reporting Standard GRS 114.1

Assets by Counterparty Grade

General instructions

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

Reporting tables

Tables described in this reporting standard list each of the data fields required to be reported. The data fields are listed sequentially in the column order that they will appear in the reported data set. Constraints on the data that can be reported for each field have also been provided.

Any specific combination of values in a table must not appear on more than one row in that table when reported.

Definitions

Terms in bold italics are defined in this Definitions section of these instructions.

C

Cash and cash equivalents

This is the value, as at the relevant date, of notes and coins; deposits withdrawable or redeemable within 24 hours; and securities purchased under agreements to resell.

Cash management trusts

This is the aggregate value of holdings in investment vehicles which constitute cash management trusts.

Counterparty grade

This is the classification applied to an investment or exposure as per the requirements of GPS 001. Assets guaranteed by an Australian state or territory government must be reported in the counterparty grade that applies after rating up one grade in accordance with Prudential Standard GPS 114 Capital Adequacy: Asset Risk Charge.

D

Derivatives (assets)

This is the value of all open derivatives positions reported as assets.

E

Expected reinsurance recoveries

This is the amount due to an insurer, or to an entity that carries on international business within a Level 2 insurance group, from a reinsurer that arises from the recognition of premiums liabilities referred to in the GI Prudential Standards (including Prudential Standard GPS 340 Insurance Liability Valuation (GPS 340)). This is distinguished from reinsurance recoverables.

This is calculated as the sum of:

·           expected reinsurance recoveries: relating to APRA-authorised reinsurers; and

·           expected reinsurance recoveries: relating to non-APRA-authorised reinsurers.

Expected reinsurance recoveries: relating to APRA-authorised reinsurers

Means the value of expected reinsurance recoveries related to APRA-authorised reinsurers.

Expected reinsurance recoveries: relating to non-APRA-authorised reinsurers

Means the value of expected reinsurance recoveries related to non-APRA-authorised reinsurers.

I

Interest rate investments (direct)

This is the value of debt securities held by the reporting insurer as at the relevant date, plus the value of deposits and placements that have been classified by the reporting insurer as assets backing insurance liabilities for statutory reporting purposes. A debt security is a transferable instrument evidencing a relationship of indebtedness. It is characterised by having a definable return that is not based on the economic performance of the issuing entity.

Investment income receivable

This is the value, as at the relevant date, of investment income that is receivable by the reporting insurer net of any related provisions for doubtful debts. For the purposes of this item, include only income from the holding of investment assets (e.g. interest, dividends, unit trust distributions, and rental income that is accrued but not yet received). Investment assets are those acquired with the intention to subsequently sell the asset at a profit and not for use within the operations of the business or as a strategic investment.

L

Loans (direct)

This is the value of loans. Loans include financial leases and mortgages, and are typically non-negotiable on the secondary market.

N

Non-reinsurance recoveries receivable

This is the value of non-reinsurance recoveries on paid claims.

Non-reinsurance recoveries receivable is netted against insurance contract liabilities or added to insurance contract assets under Australian Accounting Standards Board 17 Insurance Contracts (AASB 17).

This must exclude any amount already allowed in insurance liabilities determined under GPS 340 to avoid double counting.

O

Other accounts receivable by counterparty grade

This is the amount related to any other relevant accounts receivable not reported in investment income receivable, non-reinsurance recoveries receivable and any other item reported for GRS 114.1. This may include (but is not limited to) levies, taxes, rebates, fees and commissions.

Other assets by counterparty grade

This is the value of the accounting assets that have not been reported elsewhere in:

·           cash and cash equivalents;

·           interest rate investments (direct);

·           loans (direct);

·           cash management trusts; and

·           derivatives (assets).

This excludes the following items from the AASB 17 Insurance Contracts balance sheet:

·           insurance contract assets; and

·           reinsurance contract assets.

Other reinsurance assets

This is the value of the central estimate of any asset recognised by the reporting insurer that relates to reinsurance other than:

·           reinsurance recoverables on outstanding and paid claims; and

·           expected reinsurance recoveries.

This is calculated as the sum of:

·           other reinsurance assets: from APRA-authorised reinsurers; and

·           other reinsurance assets: from non-APRA-authorised reinsurers.

Other reinsurance assets: from APRA-authorised reinsurers

Means the value of other reinsurance assets that are due from APRA-authorised reinsurers.

Other reinsurance assets: from non-APRA-authorised reinsurers

Means the value of other reinsurance assets that are due from non-APRA-authorised reinsurers.

R

Reinsurance recoverables on outstanding and paid claims

This is the value of the central estimate of reinsurance recoverables in relation to reinsurance contracts for both paid and outstanding claims. This item does not include amounts under reinsurance contracts that do not meet the reinsurance documentation test or governing law requirements under Prudential Standard GPS 230 Reinsurance Management (GPS 230).

This is calculated as the sum of:

·           reinsurance recoverables on outstanding and paid claims: from APRA-authorised reinsurers;

·           reinsurance recoverables on outstanding and paid claims: from non-APRA authorised reinsurers except for amounts outstanding on and from the second balance date;

·           reinsurance recoverables on outstanding and paid claims: from non-APRA authorised reinsurers that are amounts outstanding on and from the second balance date; and

·           reinsurance recoverables on outstanding and paid claims:  from non-APRA-authorised reinsurers that are overdue for more than 6 months.

Reinsurance recoverables on outstanding and paid claims: from APRA-authorised reinsurers

This is the value of reinsurance recoverables for both paid and outstanding claims against the reporting insurer from APRA-authorised reinsurers. This item does not include amounts under reinsurance contracts that do not meet the reinsurance documentation test or governing law requirements under GPS 230.

This must be reduced by the amount that is likely to become uncollectable in the future.

Reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers except for amounts outstanding on and from the second balance date

This is the value as of reinsurance recoverables for both paid and outstanding claims against the reporting insurer from non-APRA-authorised reinsurers except for amounts outstanding on and from the second balance date after the financial year in which the event occurred. This item does not include amounts under reinsurance contracts that do not meet the reinsurance documentation test or governing law requirements under GPS 230.

This must be reduced by the amount that is likely to become uncollectable in the future.

Reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers that are amounts outstanding on and from the second balance date

This is the value of reinsurance recoverables for both paid and outstanding claims against the reporting insurer from non-APRA-authorised reinsurers that are amounts outstanding on and from the second balance date after the financial year in which the event occurred. This item does not include amounts under reinsurance contracts that do not meet the reinsurance documentation test or governing law requirements under GPS 230.

This must be reduced by the amount that is likely to become uncollectable in the future.

This is calculated as the sum of:

·           reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers that are amounts outstanding on and from the second balance date - supported by security arrangements in Australia; and

·           reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers that are amounts outstanding on and from the second balance date – not supported by security arrangements in Australia.

Reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers that are amounts outstanding on and from the second balance date - supported by security arrangements in Australia

This is the value of reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers that are amounts outstanding on and from the second balance date, where there is collateral, a guarantee or a letter of credit supporting the reinsurance recoverables. This item does not include amounts under reinsurance contracts that do not meet the reinsurance documentation test or governing law requirements under GPS 230.

Reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers that are amounts outstanding on and from the second balance date – not supported by security arrangements in Australia

This is the value of reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers that are amounts outstanding on and from the second balance date, where there is no collateral, guarantee or letter of credit supporting the reinsurance recoverables. This item does not include amounts under reinsurance contracts that do not meet the reinsurance documentation test or governing law requirements under GPS 230.

Reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers that are overdue for more than 6 months

This is the value of reinsurance recoverables for both paid and outstanding claims against the reporting insurer from non-APRA-authorised reinsurers that are receivables overdue for more than six months since a request for payment was made to the reinsurer and where there is no formal dispute between the insurer and reinsurer in relation to the receivables. This item does not include amounts under reinsurance contracts that do not meet the reinsurance documentation test or governing law requirements under GPS 230.

This must be reduced by the amount that is likely to become uncollectable in the future.

Specific instructions

Table 1: Assets by Counterparty Grade

For each asset exposure, report the amounts corresponding to each counterparty grade. 

Reporting basis

Report assets backing insurance liabilities at fair value. Report values on a Level 1 (licensed insurer) basis.

Units of measurement

Report values in whole Australian dollars (no decimal places).

 

Name

Valid values

Description

1

Assets By Counterparty Grade Type

Accounting assets

·            Cash and cash equivalents

·            Interest rate investments (direct)

·            Loans (direct)

·            Cash management trusts

·            Derivatives (assets)

·            Other assets by counterparty grade

GPS 340 reinsurance assets

·            Reinsurance recoverables on outstanding and paid claims: from APRA-authorised reinsurers

·            Reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers except for amounts outstanding on and from the second balance date

·            Reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers that are amounts outstanding on and from the second balance date - supported by security arrangements in Australia

·            Reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers that are amounts outstanding on and from the second balance date – not supported by security arrangements in Australia

·            Reinsurance recoverables on outstanding and paid claims: from non-APRA-authorised reinsurers that are overdue for more than 6 months

·            Expected reinsurance recoveries: relating to APRA-authorised reinsurers

·            Expected reinsurance recoveries: relating to non-APRA-authorised reinsurers

·            Other reinsurance assets: from APRA-authorised reinsurers

·            Other reinsurance assets: from non-APRA-authorised reinsurers

Receivables

·            Non-reinsurance recoveries receivable

·            Investment income receivable

·            Other accounts receivable

Report the assets by counterparty grade type.

2

Counterparty Grade Type

·            Grade 1 (Government)

·            Grade 1 (Other)

·            Grade 2

·            Grade 3

·            Grade 4

·            Grade 5

·            Grade 6

·            Grade 7

Report the counterparty grade type.

3

Assets By Counterparty Grade Amount

Whole dollars

Report the assets by counterparty grade amount.