Financial Sector (Collection of Data) (reporting standard) determination No. 107 of 2023

Reporting Standard HRS 118.0 Operational Risk Charge

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, determine Reporting Standard HRS 118.0 Operational Risk Charge, 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: 26 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 HRS 118.0 Operational Risk Charge comprises the document commencing on the following page.

Reporting Standard HRS 118.0

Operational Risk Charge

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 standards.

Application and commencement

3.             This Reporting Standard applies to all private health insurers. This Reporting Standard applies for reporting periods ending on or after 1 July 2023. 

Information required

4.             A private health 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, a private health insurer must provide the information required by this Reporting Standard:

(a)   in respect of each calendar quarter (i.e. the periods ending 30 September, 31 December, 31 March and 30 June); and

(b)   in respect of each year ending 30 June.

7.             If, having regard to the particular circumstances of a private health 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 private health insurer.

8.             The information required by this Reporting Standard must be provided to APRA:

(a)          in the case of quarterly information, within 28 calendar days after the end of the reporting period to which the information relates; 

(b)          in the case of annual information, by 30 September each year; or

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

9.             APRA may, in writing, grant a private health 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 private health insurer is nonetheless required to submit the information required no later than the due date.

Quality control

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

Annual audit requirements

11.         The information submitted for the purposes of paragraph 8(b) is to be subject to external audit to ensure consistency with the private health insurer’s statutory financial accounts and faithful application of the capital standards.

12.         Audit certification and opinion must be provided to APRA by 30 September each year.

13.         If a private health insurer received a qualified auditor’s report for a health benefits fund, the general fund or the private health insurer for the year previous to the year for which the report is provided, the report for the year for which the report is provided must state whether the auditor has examined the issues identified and is satisfied that the private health insurer has taken the appropriate steps to rectify the matters raised in the previous report.

14.         The auditor’s report must:

(a)          state details of the program adopted to carry out the audit; and

(b)          include the name of, and be signed by, the auditor who takes responsibility for the accuracy of the report.

Authorisation

15.         A person who submits the information required under this Reporting Standard must be suitably authorised by an officer of the private health insurer.

Variations

16.         APRA may, in writing, vary the reporting requirements of this Reporting Standard in relation to a private health insurer.

Interpretation

17.         In this Reporting Standard:

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

(b)          the following definitions are applicable:

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

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

officer has the same meaning as in the Act;

private health insurer has the same meaning as in the Act;

reporting period means a period mentioned in paragraph 6 or, if applicable, paragraph 7; and

the Act means the Private Health Insurance (Prudential Supervision) Act 2015.

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 HRS 118.0

Operational Risk Charge

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.

G

H

O

Specific instructions

Reporting basis

Report items relating to Operational Risk Charge for each health benefits fund and the general fund.

Report all items gross of any associated outwards reinsurance expense.

Units of measurement

This values in this table must be completed in whole Australian dollars.

Table 1: Operational Risk Charge

1. Operational Risk Charge (ORC)