Financial Sector (Collection of Data) (reporting standard) determination No. 85 of 2023

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

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.G Statement of Profit or Loss and Other Comprehensive Income by Product Group and by Region, 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.G Statement of Profit or Loss and Other Comprehensive Income by Product Group and by Region comprises the document commencing on the following page.

Reporting Standard GRS 311.0.G

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

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 a parent entity of a Level 2 insurance group as defined in Prudential Standard GPS 001 Definitions (GPS 001). This Reporting Standard applies for reporting periods ending on or after 1 July 2023 and is to be prepared on a best endeavours basis until 1 January 2025. The parent entity of a Level 2 group is required to ensure that each requirement in this Reporting Standard is complied with.

Information required

4.             The parent entity of a Level 2 insurance group must provide APRA with the information required by this Reporting Standard in respect of the Level 2 insurance group 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, the parent entity of a Level 2 insurance group must provide the information required by this Reporting Standard:

(a)           in respect of the first half year based on the financial year of the Level 2 insurance group on an unaudited basis; and

(b)          in respect of each financial year of the Level 2 insurance group on an audited basis.

Note: The annual information required by paragraphs 4, 5 and 6(b), together with certain annual information required by other reporting standards, will form part of the Level 2 insurance group’s annual accounts within the meaning of GPS 001. Prudential Standard GPS 310 Audit and Related Matters contains the relevant provisions governing audits.

7.             If, having regard to the particular circumstances of a Level 2 insurance group, 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 Level 2 insurance group.

8.             The information required by this Reporting Standard in respect of a Level 2 insurance group must be provided to APRA:

(a)           in the case of half yearly information, within three months 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: GPS 310 requires a Level 2 insurance group to ensure that its Group Auditor conducts a limited assurance review of the group’s annual accounts.  Accordingly, the Group Auditor’s report(s) as required by GPS 310 (relating to the information required by paragraph 4) 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 a parent entity of a Level 2 insurance group 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, a parent entity of a Level 2 insurance group is nonetheless required to submit the information required no later than the due date.

10.         On the written application of the parent entity of a Level 2 insurance group, APRA may by notice in writing to the parent entity exclude the requirement under subparagraph 6(a) to provide half yearly information.

Quality control

11.         The information provided by the parent entity of a Level 2 insurance group under this Reporting Standard must be the product of systems, processes and controls that have been reviewed and tested by the Group Auditor of the Level 2 insurance group. This will require the Group Auditor to review and test the Level 2 insurance group’s systems, processes and controls designed to enable the group 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 Group 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 (GPS 310).

12.         All information provided by the parent entity of a Level 2 insurance group under this Reporting Standard must be subject to systems, processes and controls developed by the Level 2 insurance group for the internal review and authorisation of that information. It is the responsibility of the Board and senior management of the parent entity of the Level 2 insurance group to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.

 Authorisation

13.         When an officer, or agent, of a parent entity of a Level 2 insurance group 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.

14.         If the information required by this Reporting Standard is provided by an agent who submits the information on the parent entity of a Level 2 insurance group’s behalf, the parent entity of a Level 2 insurance group must:

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

(b)          retain the completed copy.

15.         An officer, or agent, of a parent entity of a Level 2 insurance group who submits the information under this Reporting Standard for, or on behalf of, the parent entity of a Level 2 insurance group must be authorised by either:

(a)           the Principal Executive Officer of the parent entity of a Level 2 insurance group; or

(b)          the Chief Financial Officer of the parent entity of a Level 2 insurance group.

Variations

16.         APRA may, by written notice to the parent entity of a Level 2 insurance group, vary the reporting requirements of this Reporting Standard in relation to that Level 2 insurance group.

Interpretation

17.         In this Reporting Standard:

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

(b)          the following definitions are applicable:

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 parent entity of a Level 2 insurance group, by whatever name called;

financial year means the financial year (within the meaning in the Corporations Act 2001) of the parent entity of a Level 2 insurance group;

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;

Group Auditor has the meaning given in GPS 310;

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 entity, by whatever name called, and whether or not he or she is a member of the governing board of the entity; 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 311.0.G

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

General instructions

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

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 International Financial Reporting Standards (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 2 insurance group 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 indemnity, 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.

Region reporting

Inter-region elimination is the value of inter-region transactions, which are eliminated on consolidation, and need to be reported as negative values under Inter-region elimination.

Australian and international business

Australian business is as defined in Prudential Standard GPS 001 Definitions (GPS 001).

International business is as defined in GPS 001.

For entities that are not insurers within the Level 2 insurance group, items should be reported as:

·         Australian business where they relate to an entity incorporated in Australia; and

·         International business where they relate to an entity incorporated outside of Australia. The entity should be included in the international region that most appropriately reflects the incorporation of the entity. The region can be selected to align to the region(s) chosen by the Level 2 insurance group for reporting insurance business carried on by an entity within the group that is not authorised under the Insurance Act 1973.

Columns for Level 2 insurance group

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 Level 2 insurance group