Maximum Event Retention and Risk Charge for Lenders Mortgage Insurers

Transcription

1 Reporting Standard GRS Maximum Event Retention and Risk Charge for Lenders Mortgage Insurers Objective This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 ( the Collection of Data Act ). It requires lenders mortgage insurers (LMIs), including foreign lenders mortgage insurers (foreign LMIs) operating in Australia through branch operations, to report to APRA, generally on a quarterly basis, in relation to their maximum event retention and risk charge. This standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with: the version of Form GRF Maximum Event Retention and Risk Charge for Lenders Mortgage Insurers designated for a Licensed Entity and the version designated for a Consolidated Insurance Group, and the instructions to each of those forms (which forms and instructions constitute part of this standard); and Prudential Standard GPS 110 Capital Adequacy for General Insurers and associated Guidance Notes GGN Concentration Risk Capital Charge and GGN Concentration Risk Capital Charge for Lenders Mortgage Insurers. Purpose 1. Data collected in each version of Form GRF is used by APRA for the purpose of prudential supervision including assessing an LMI s compliance with Prudential Standard GPS Capital Adequacy for General Insurers. Application and Commencement 2. This standard applies to all LMIs. Reporting Standard GRS

2 Information Required 3. An LMI must provide APRA with the information required by the version of Form GRF designated for a Licensed Insurer for each reporting period An LMI that is a highest parent entity in relation to a consolidated insurance group must also provide APRA the information required by the version of Form GRF designated for a Consolidated Insurance Group for the first and subsequent reporting periods. Forms and Method of Submission 5. An LMI must provide the information required by this reporting standard either: (a) in electronic form via the Direct to APRA application and using one of the electronic submission mechanisms provided by that application; or (b) by manually completing the forms on paper and faxing or mailing them to APRA s head office at Level 26, 400 George Street, Sydney, New South Wales by the due date required for lodgment. Note: The application software and forms may be obtained from APRA. Reporting Periods 6. Subject to paragraphs 7 and 8, an LMI must provide the information required by this standard for the reporting periods comprising the quarters ending 30 September, 31 December, 31 March and 30 June, the first reporting period being the quarter ending 31 December APRA may, by notice in writing, change the reporting periods for a particular LMI so that it is required to provide the information in respect of quarterly reporting periods based upon the LMI s own accounting financial year. 8. APRA may, by notice in writing change the reporting periods for a particular LMI to require it to provide the information: (a) more frequently (APRA may require this when, having regard to the particular circumstances of the LMI, APRA considers it necessary or desirable to obtain information more frequently for the purposes of the prudential supervision of the entity); or 1 For most LMIs, the first reporting period will be the quarter ending 31 December Reporting Standard GRS

3 (b) less frequently (APRA may do so when, having regard to the particular circumstances of the LMI and the extent to which it requires prudential supervision, it is unnecessary to require it to provide the information on a quarterly basis). Due Dates 9. The information required by this reporting standard must be provided to APRA by the following times: (a) in the case of the information required from all LMIs by paragraph 1 20 business days after the end of the reporting period; and (b) in the case of the information required from a highest parent entity by paragraph 2 30 business days after the end of the reporting period. 10. APRA may grant an LMI an extension of a due date in writing in which case the new due date for the provision of the information will be the date on the notice of extension. Audit 11. The information provided by an LMI in the version of Form GRF designated for a Licensed Insurer, must be the product of processes and controls that have been reviewed and tested by the approved auditor of the LMI. This will require the auditor to review and test the systems, processes, and controls supporting the reporting of the information to ensure that they produce accurate data and are otherwise reliable. This review and testing must be done on an annual basis or more frequently if necessary to enable the approved auditor to form an opinion on the accuracy and reliability of the data. Authorisation 12. The information provided by an LMI in accordance with this reporting standard must be subject to processes and controls developed by the LMI for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the LMI to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place. 13. If an LMI submits information required by this reporting standard using the Direct to APRA software, it will be necessary for an officer of the insurer to digitally sign, authorise and encrypt the relevant data. For this purpose APRA s certificate authority will issue digital certificates, for use with the software, to officers of the insurer who have authority from the insurer to transmit the data to APRA. Reporting Standard GRS

4 14. If Form GRF is completed and provided on paper, it must be signed by either: (a) (b) the Principal Executive Officer of the insurer; or the Chief Financial Officer of the insurer (whatever his or her official title may be). Minor Alterations to Forms and Instructions 15. APRA may make minor variations to: (a) (b) Form GRF 170.1, and the instructions to that form, to correct technical, programming or logical errors, inconsistencies or anomalies; or the instructions, to clarify their application to the form without changing any substantive requirement in the form or instructions. 16. If APRA makes such a variation it must notify LMIs in writing. Interpretation 17. In this standard: approved auditor means an auditor whose appointment has been approved by APRA under section 40 of the Insurance Act branch or branch operation means the Australian operations of a foreign LMI. business day means an ordinary business day, exclusive of Saturdays, Sundays and public holidays. consolidated insurance group means a group comprising: (a) an Australian-incorporated general insurer that is the highest parent entity in the group; and (b) all subsidiaries under the control (within the meaning of Accounting Standard AASB 1024) of the highest parent entity, whether those subsidiaries are incorporated in Australia or not. foreign general insurer has the meaning given in section 3 of the Insurance Act foreign lenders mortgage insurer or foreign LMI means a foreign general insurer that is required to comply with Guidance Note GGN Concentration Risk Capital Charge for Lenders Mortgage Insurers. general insurer has the meaning given in section 3 of the Insurance Act Reporting Standard GRS

5 Note: In Reporting Form GRF and the instructions, the terms authorised insurer, authorised insurance entity and licensed insurer mean an LMI. The term authorised reinsurance entity refers to an LMI whose business consists only of undertaking liability by way of reinsurance. highest parent entity means an Australian-incorporated general insurer in a consolidated insurance group that is not itself a subsidiary of another Australian-incorporated general insurer. lenders mortgage insurer or LMI is a general insurer which is required to comply with Guidance Note GGN Concentration Risk Capital Charge for Lenders Mortgage Insurers. Principal Executive Officer means the principal executive officer of the LMI for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the entity. Reporting Standard GRS