Financial Sector (Collection of Data) (reporting standard) determination No. 128 of 2023

Reporting Standard LRS 420.0 Assets Backing Policy Liabilities

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. 37 of 2023, including Reporting Standard LRS 420.0 Assets Backing Policy Liabilities made under that Determination; and

(b)   determine Reporting Standard LRS 420.0 Assets Backing Policy Liabilities, 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 LRS 420.0 Assets Backing Policy Liabilities shall begin to apply to those financial sector entities, and the revoked reporting standard shall cease to apply, on the day Reporting Standard LRS 420.0 Assets Backing Policy Liabilities 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 LRS 420.0 Assets Backing Policy Liabilities comprises the document commencing on the following page.

Reporting Standard LRS 420.0

Assets Backing Policy Liabilities

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 capital adequacy standards.

Application and commencement

3.             This Reporting Standard applies to all life insurance companies other than friendly societies (referred to as life insurers) registered under the Life Insurance Act 1995 (Life Act). This Reporting Standard applies for reporting periods ending on or after 1 July 2023.

Information required

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

5.             The information reported to APRA under this Reporting Standard is not required to be given to policy owners pursuant to section 124 of the Life Act. It does not constitute a reporting document for the purposes of section 124.

Method of submission

6.             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

7.             Subject to paragraph 8, a life insurer must provide the information required by this Reporting Standard:

(a)           in respect of each financial year of the life insurer on an unaudited basis.

Note 1: This means that information provided under this Reporting Standard will be submitted once for a full financial year.

8.             If, having regard to the particular circumstances of a life insurer,  APRA  considers it necessary or desirable to obtain information more or less frequently than as provided by subparagraph 7(a), APRA may, by notice in writing, change the reporting periods, or specify reporting periods, for the particular life insurer.

9.             The information required by this Reporting Standard in respect of a life insurer must be provided to APRA:

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

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

10.         APRA may, in writing, grant a life insurer an extension of a due date, 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 life insurer is nonetheless required to submit the information required no later than the due date.

Quality control

11.         The information provided by a life insurer under this Reporting Standard must be the product of systems, processes and controls that have been reviewed and tested by the Auditor of the life insurer. This will require the Auditor to review and test the life insurer’s systems, processes and controls supporting the reporting of the information to enable the life insurer to provide 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 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 LPS 310 Audit and Related Matters.

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

13.         Actuarial valuations and calculations included in or used in the preparation of the information provided to APRA must be in accordance with the prudential standards in force for the reporting period. However, life insurers may use reasonable estimates when preparing information that will not be audited.

Authorisation

14.         When an officer or agent of a life 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.

15.         An officer or agent of a life insurer who submits information under this Reporting Standard must be authorised by either:

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

(b)          the Chief Financial Officer of the life insurer.

Variations

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

Transition

17.         A life 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 life 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 a life 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 life insurer is still required to provide any overdue reporting documents in accordance with the old reporting standard.

 Interpretation

18.         In this Reporting Standard:

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

(b)          the following definitions are applicable:

Auditor means an auditor appointed under paragraph 83 of the Life Act.

capital adequacy standards means the prudential standards which relate to capital adequacy as defined in LPS 001.

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

financial year has the meaning in the Corporations Act 2001.

general instruction guide refers to the general instruction guide set out in Attachment A of LRS 001.

Life Act means the Life Insurance Act 1995.

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

reporting period means a reporting period under subparagraph 7(a) or, if applicable, paragraph 8.

19.         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 LRS 420.0

Assets Backing Policy Liabilities

General Instructions

Reporting tables

Tables described in this reporting form 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 the table must not appear on more than one row in that table when reported.

Definitions

Terms highlighted in bold italics indicate that the definition is provided in these instructions.

A

C

D

F

I

L

N

O

R

U

Specific instructions

Table 1: Assets Backing Policy Liabilities

Reporting basis

This table applies to life insurers only. Data must be submitted at the level of each statutory fund.

This table reports assets backing insurance and investment liabilities (net of insurance assets) as determined under AASB 17 and AASB 9 for conventional, investment and annuity products only (i.e. excluding risk products).

The basis of assets reported in each asset class in this Reporting Standard must be consistent with the basis for reporting values shown in Reporting Standard LRS 300.0 Statement of Financial Position.

Life insurers must complete this table for annuities with longevity risk and annuities without longevity risk regardless whether the products include or do not include an investment component.

Report all information as at the reporting date.

Units of measurement

Report the dollar values in this table in whole Australian dollars.

Table 2: Foreign Currencies Exposure Proportion

Reporting basis

This table applies to life insurers only. Data must be submitted at the level of each statutory fund.

Report all information as at the reporting date.

Units of measurement

Report percentage values to two decimal places.