Financial Sector (Collection of Data) (reporting standard) determination No. 84 of 2023

Reporting Standard GRS 311.0 Statement of Profit or Loss and Other Comprehensive Income by Product Group

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, determine Reporting Standard GRS 311.0 Statement of Profit or Loss and Other Comprehensive Income by Product Group, 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 the day it 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 311.0 Statement of Profit or Loss and Other Comprehensive Income by Product Group comprises the document commencing on the following page.

Reporting Standard GRS 311.0

Statement of Profit or Loss and Other Comprehensive Income by Product Group  

Objective of this Reporting Standard

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.

Interpretation

16.         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.

17.         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 311.0

Statement of Profit or Loss and Other Comprehensive Income by Product Group

General instructions

These instructions assist completion of Reporting Standard GRS 311.0 Statement of Profit or Loss and Other Comprehensive Income by Product Group. This Reporting Standard collects income statement data by APRA product groups (classes of business).

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.

General accounting basis

Unless otherwise specifically stated, reporting insurers are to report in accordance with the relevant Australian Accounting Standards.

References to Australian Accounting Standards

Each item reported under this Reporting Standard aligns with the Accounting Standards made by the Australian Accounting Standards Board (AASB). The applicable AASB references are specified with each item. AASB reference provides a written description of the accounting meaning of an IFRS Taxonomy element.

IFRS taxonomy element reference

Each IFRS taxonomy element contains at least one cross-reference to an AASB Standard (that incorporates IFRS 17 Standards as issued and amended by the International Accounting Standards Board (IASB)) and has a reference type that can be used to identify the source of that element. The IFRS Taxonomy uses the following element reference types:

(a)    disclosure—an element of this type depicts a presentation or disclosure requirement of an IFRS/AASB Standard;

(b)   example—an element of this type represents an example provided in an IFRS/AASB Standard or its accompanying materials; and

(c)    common practice—an element of this type reflects common reporting practice within IFRS/AASB financial statements they not specifically mentioned in IFRS/AASB Standards or their accompanying materials, but are consistent with IFRS/AASB Standards. They have been found to be frequently disclosed across a range of companies and accounting jurisdictions.

Definitions

Terms that are highlighted in bold italics are defined in these instructions.

Specific instructions

Reporting basis

Information in this form is to be completed by general insurers for each reporting period on a Level 1 (licensed insurer) basis.

APRA product groups

The APRA product groups (classes of business) that apply for the reporting purpose are defined in GPS 001:

Insurance business

·         C1: Householders

·         C2: Commercial Motor

·         C3: Domestic Motor

·         C4: Travel

·         C5: Fire and ISR

·         C6: Marine

·         C7: Aviation

·         C8: Consumer Credit

·         C9: Other Accident

·         C10: Mortgage

·         C11: CTP

·         C12: Public and Product Liability

·         C13: Professional Indemnity

·         C14: Employers Liability

·         C15: Cyber

·         C16: Directors and Officers

·         C17: Other Direct – Category A

·         C18: Other Direct – Category B

·         C19: Other Direct – Category C

Reinsurance business

·         RB1: Proportional – Category A

·         RB2: Proportional – Category B

·         RB3: Proportional – Category C

·         RB4: Non-proportional – Category A

·         RB5: Non-proportional – Category B

·         RB6: Non-proportional – Category C

Direct business is any insurance business written / insurance contracts issued by the reporting insurer.

Inwards reinsurance is any reinsurance business written / reinsurance contracts issued by the reporting insurer.

Category A consists of householders, commercial motor, and domestic motor. Category B consists of travel, fire and ISR, marine and aviation, consumer credit, and other accident. Category C consists of mortgage, CTP, public and product liability, professional liability, employers’ liability, cyber, and directors’ & officers’ liability.

Allocation principles

General insurers are to apply the allocation principles defined in GRS 001 to allocate AASB 17 numbers to APRA classes of business where it is not possible to clearly identify AASB 17 numbers and assign it to specific APRA classes of business.

Units of measurement

Report values in this form in whole Australian dollars (AUD) with no decimal place.

Convert amounts denominated in foreign currency to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates.

Report losses and expenses as negative values.

Columns for Licensed insurer

1.            Insurance revenue

2.            Insurance service expense

3.            Insurance service result before reinsurance contracts held

4.            Allocation of reinsurance premiums

5.            Amounts recoverable from reinsurers

6.            Net expense from reinsurance contracts held

7.            Insurance service result

8.            Balance sheet memo items

APRA intends to collect General Measurement Model (GMM) and Premium Allocation Approach (PAA) liability for remaining coverage and liability for incurred claims, GMM contractual service margin and risk adjustment component by APRA product groups. APRA will use these items and the data items collected:

·         to form a view on profitability by APRA product groups;

·         to compare the accounting risk adjustment to the GPS 340 risk margin by APRA product groups; and

·         to understand drivers behind accounting liability movements by APRA product groups.

APRA appreciates this information required by APRA product groups may require allocation of the AASB 17 balance sheet items which may not be perfect. APRA requests that insurers to use the allocation principles to allocate the AASB 17 items into APRA product groups. The intent is that simple “allocation drivers” (deemed appropriate by the insurer) are used to allocate the AASB 17 items into product groups.

For clarity, the following items are defined based on AASB 17:

·         AASB 17 liability for remaining coverage as defined in AASB 17 Appendix A 

·         AASB 17 liability for incurred claims as defined in AASB 17 Appendix A

·         AASB 17 contractual service margin as defined in AASB 17 Appendix A

·         AASB 17 risk adjustment for non-financial risk as defined in AASB 17 Appendix A

Note, GMM items in the table below can be zero.

Columns for Licensed insurer