June 2009
Reporting Form GRF 450.0_G
Interest in Controlled Entities, Associates
and Joint Ventures (Level 2 Insurance
Group)
Instruction Guide
Introduction
This form collects information on the Level 2 insurance group’s interest in:
¾ consolidated entities of Level 2 insurance group;
¾ controlled entities that are non-consolidated subsidiaries of Level 2 insurance
group; and
¾ associates and joint ventures.
Audit requirements
The annual return of GRF 450.0_G Interest in Controlled Entities, Associates and
Joint Ventures (Level 2 insurance group) required under paragraphs 3 and 5(c) of
Reporting Standard GRS 450.0_G must be subject to a limited assurance1 review by
the Group Auditor (see Prudential Standard GPS 311 Audit and Actuarial Reporting
and Valuation: Level 2 Insurance Groups (GPS 311)).
The Group Auditor must prepare a review report on the basis of a limited assurance
engagement in accordance with the requirements of GPS 311. Assurance in the
review report will be provided in the form of negative assurance. To express negative
assurance in the review report, the auditor will use limited procedures to obtain
sufficient appropriate evidence. Enquiries of the group’s staff and analytical
procedures will be the primary tools used to obtain evidence. These procedures will
not provide all the evidence that would be required in an audit.
The scope and nature of audit testing required is outlined in the Standard on
Assurance Engagement ASAE 3000 Assurance Engagements Other than Audits or
Reviews of Historical Financial Information issued by the Auditing and Assurance
Standards Board.
1
Limited assurance is as defined according to Framework for Assurance Engagements issued by
the AUASB as may be amended from time to time.
GRF 450.0_G Instructions - 1
June 2009
Reporting entities
GRF 301.0_G Reinsurance Assets and Risk Charge (Level 2 Insurance Group) is to
be completed by the parent entity of a Level 2 insurance group as defined under GPS
001.
Consolidation at Level 2 should cover the Level 2 insurance group as defined under
GPS 001.
Unit of measurement
This form is to be presented in Australian currency, rounded to thousands of dollars,
with no decimal place.
Amounts denominated in foreign currency are to be converted to AUD in accordance
with Australian accounting standards.
Transactions arising under foreign currency derivative contracts at the reporting date must be prepared
in accordance with Australian accounting standards.
Basis of preparation
In completing this form, Level 2 insurance groups are requested to follow the
recognition and measurement requirements specified in the APRA forms.
Materiality
Level 2 insurance groups are required to report only material interests in controlled
entities, associates and joint ventures. Threshold levels for materiality are to be agreed
with APRA. Matters that APRA may take into account in determining whether a nonconsolidated subsidiary is material include, but are not limited to:
•
the net assets;
•
the total liabilities; and
•
the total revenue
of the non-consolidated subsidiary in comparison to those of the Level 2 insurance
group.
GRF 450.0_G Instructions - 2
June 2009
Reporting period
Level 2 insurance groups are required to report the information in the reporting form
on a half yearly and annual basis. A Level 2 insurance group will be required to
submit an unaudited and audited annual return. The audit will be based on a limited
assurance review by the Group Auditor (see audit requirements).
•
The annual information is to be completed in respect of the financial year of
the group.
•
The half year information is to be completed in respect of the 6 months from
the start of the financial year of the group.
•
The financial information requested in this form is to be reported as at the last
day of the reporting period on a financial year to date basis of the Level 2
insurance group.
Reporting lag
Submission times for Level 2 reporting forms are as follows:
•
The unaudited half yearly return is to be lodged within three months after the
end of the reporting period.
•
The unaudited annual return is to be lodged within three months after the end
of the reporting period.
•
The audited annual return is to be lodged within four months after the end of
the reporting period.
Where a Level 2 insurance group has its audited annual returns prepared and
submitted to APRA within three months, the submission of these returns may be in
lieu of the unaudited annual returns without any further lodgment required.
Adjustments
The parent entity of a Level 2 insurance group may apply in writing to APRA to vary
the reporting requirements of GRF 450.0_G Interest in Controlled Entities, Associates
and Joint Ventures in relation to that Level 2 insurance group. APRA may in its
discretion approve such an application in writing.
GRF 450.0_G Instructions - 3
June 2009
Specific instructions
This form is separated into the following parts:
1.
Part A: Interest in consolidated entities of the Level 2 insurance
group
2.
Part B: Interest in controlled entities that are non-consolidated
subsidiaries of the Level 2 insurance group
3.
Part C: Interest in Associates and Joint Ventures
The requirements for each of these are detailed below:
Part A: Interest in consolidated entities of the Level 2 insurance group
For the purposes of this form, ‘Entity’ means any legal, administrative, or fiduciary
arrangement, organisational structure or other party (including a person) having the
capacity to deploy scarce resources in order to achieve objectives.
For the purposes of this form, ‘consolidated entities’ includes reporting entities
included in Level 2 insurance group.
A.1: Interest in consolidated entities - Australian
For the purposes of this form, “consolidated entities - Australian” includes only the
Australian reporting entities included in Level 2 insurance group. Do not include
International reporting entities here.
(1)
Name of Consolidated Entity
Report the full name of each consolidated entity.
(2)
APRA Regulated General Insurer
If the consolidated entity is an APRA regulated general insurance entity input ‘yes’,
otherwise input ‘no’.
(3)
Ownership Percentage %
Disclose the percentage of the Level 2 insurance group’s ownership of shares or units
of the consolidated entity.
(4)
Goodwill and identifiable intangible assets
Report the carrying value of goodwill and identifiable intangible assets of each entity
within the Level 2 insurance group in accordance with Australian accounting
standards.
Where goodwill is assigned to cash generating units and these units do not align with
legal entities, an approach to completing this form needs to be agreed with APRA.
GRF 450.0_G Instructions - 4
June 2009
(5)
Gross Assets
Report the gross value of assets that relates to the Level 2 insurance group’s interest in
each consolidated entity.
(6)
Gross Liabilities
Report the gross value of liabilities that relates to the Level 2 insurance group’s
interest in each the consolidated entity.
A.2: Interest in consolidated entities - International
For the purposes of this form, “consolidated entities - International” includes only the
international reporting entities included in Level 2 insurance group. Do not include
Australian reporting entities here.
(1)
Name of Consolidated Entity
Report the full name of each consolidated entity.
(2)
Ownership Percentage %
Disclose the percentage of the Level 2 insurance group’s ownership of shares or units
of the consolidated entity. For the purposes of this form, where the reporting entity is
a branch, report as not applicable (N/A).
(3)
Goodwill and identifiable intangible assets
Report the carrying value of goodwill and identifiable intangible assets of each entity
in accordance with Australian accounting standards by geographic region.
Where goodwill is assigned to cash generating units and these units do not align with
legal entities, an approach to completing this form needs to be agreed with APRA..
(4)
Region (for which Gross Assets and Gross Liabilities are reported)
Report the region to which the gross assets and liabilities apply. These regions are to
be consistent with those defined in GRF 210.0_G Outstanding Claims Liability Insurance Risk Charge (Level 2 insurance group) and GRF 210.1_G Premiums
Liabilities - Insurance Risk Charge (Level 2 insurance group).
For prudential reporting purposes ‘Australian business’ is as defined in Prudential
Standard GPS 001 Definitions (GPS 001).
International business, as defined in GPS 001, is to be reported according to the
following geographical regions2:
2
•
New Zealand;
•
South East Asia;
For the purposes of prudential reporting, Lloyd’s syndicates are to be reported as international
business.
GRF 450.0_G Instructions - 5
June 2009
•
Asia Pacific;
•
USA
•
Americas;
•
UK/Europe; and
•
Other.
Once regions are defined, they should generally be maintained thereafter for
consistency. However, this does not prevent the Level 2 insurance group from altering
its reporting regions where necessary, provided APRA is notified of any changes.
(5)
Gross Assets
Report the gross value of assets that relates to the Level 2 insurance group's interest
in each consolidated entity by geographic region specified on the form. This is based
on where the assets are located.
(6)
Gross Liabilities
Report the gross value of liabilities that relates to the Level 2 insurance group's
interest in each consolidated entity by geographic region specified on the form. This is
based on where the assets are located.
Part B: Interest in controlled entities that are non-consolidated
subsidiaries3 of the Level 2 insurance group
For the purposes of this form, ‘controlled entities’ is to be interpreted as defined in
AASB 127 ‘Consolidated and Separate Financial Statements’. Report controlled
entities that are consolidated under Australian accounting standards but are treated,
for prudential reporting purposes, as non-consolidated subsidiaries of the Level 2
insurance group under Prudential Standard GPS 001 Definitions (GPS 001).
(1)
Name of Controlled Entity
Report the full name of each controlled entity.
(2)
Description/Nature of Business
In the space provided, detail a brief description of the main business conducted by the
entity.
(3)
APRA Regulated
If the controlled entity is an APRA regulated entity input ‘yes’, otherwise input ‘no’.
(4)
Country of Incorporation
Report the country in which the entity is incorporated.
3
See GPS 001.
GRF 450.0_G Instructions - 6
June 2009
(5)
Ownership Percentage %
Disclose the percentage of the Level 2 insurance group’s ownership of shares or units
of the controlled entity.
(6)
Value of Investment in Controlled Entity
Disclose the value of the investment in the Level 2 insurance group in the controlled
entity as represented by the value of the non-consolidated subsidiary per the
subsidiary's financial statements prepared in accordance with Australian accounting
standards.
(7)
Net tangible assets of the controlled entity
Report the net tangible assets of the associate or joint venture. Net tangible assets are
to be determined in accordance with the Australian accounting standards or the
relevant local equivalents of International Financial Reporting Standards.
(8)
Region (for which Gross Assets and Gross Liabilities are reported)
Report the region to which the gross assets and liabilities apply. These regions are to
be consistent with those defined in GRF 210.0_G Outstanding Claims Liability Insurance Risk Charge (Level 2 insurance group) and GRF 210.1_G Premiums
Liabilities - Insurance Risk Charge (Level 2 insurance group).
For prudential reporting purposes ‘Australian business’ is as defined in Prudential
Standard GPS 001 Definitions (GPS 001).
International business, as defined in GPS 001, is to be reported according to the
following geographical regions:
•
New Zealand;
•
South East Asia;
•
Asia Pacific;
•
USA
•
Americas;
•
UK/Europe; and
•
Other.
Once regions are defined, they should generally be maintained thereafter for
consistency. However, this does not prevent the Level 2 insurance group from altering
its reporting regions where necessary, provided APRA is notified of any changes.
GRF 450.0_G Instructions - 7
June 2009
(9)
Gross Assets
Report the gross value of assets that relates to non-consolidated subsidiaries of the
Level 2 insurance group reported by geographic region specified on the form. This is
based on where the assets are located.
(10) Gross Liabilities
Report the gross value of liabilities that relates to non-consolidated subsidiaries of the
Level 2 insurance group reported by geographic region specified on the form. This is
based on where the liabilities are located.
(11) Adequate Capital
APRA may, under paragraph 59 of GPS 111, require a Level 2 insurance group to
deduct from capital an amount to cover the undercapitalisation of a non-consolidated
subsidiary of the group. Consequently, Level 2 insurance groups are required to
undertake an assessment of the capital levels of non-consolidated subsidiaries. Details
of any assessment undertaken must be included in the Level 2 insurance group’s
business plan.
If the non-consolidated subsidiary is adequately capitalised on a standalone basis
input ‘yes’, otherwise input ‘no’.
Part C: Interest in Associates and Joint Ventures
For the purposes of this form, the reference to “associates” is to be interpreted as
defined in AASB 128 ‘Investments in Associates’.
Reference to joint ventures in this form includes joint venture entities and joint
venture operations. Joint venture entities and joint venture operations are to be
interpreted as defined in AASB 131 ‘Interests in Joint Ventures’.
(1)
Name of Associate/Joint Venture
Report the full name of each associate or joint venture.
(2)
Description/Nature of Main Business
Provide a brief description of the main business conducted by the associate the joint
venture.
(3)
APRA Regulated General Insurer
If the associate or joint venture is an APRA regulated general insurance entity input
‘yes’, otherwise input ‘no’.
(4)
Country of Incorporation
Report the country in which the associate or the joint venture is incorporated.
GRF 450.0_G Instructions - 8
June 2009
(5)
Percentage Ownership or Interest in Associate or Joint Venture
Disclose the percentage of the Level 2 insurance group’s ownership or interest in the
associate or the joint venture.
(6)
Value of Interest in Associate or Joint Venture
Report the value of the investment in the associate or joint venture using the
accounting method adopted in the financial statements of the Level 2 insurance group
in accordance with Australian accounting standards.
(7)
Net Tangible Assets of Associate or Joint Venture
Report the net tangible assets of the associate or joint venture. Net tangible assets are
to be determined in accordance with International Financial Reporting Standards
(IFRS) or any other recognised accounting framework (eg US GAAP) may be used
only when approved by APRA..
(8)
Net Income Recognised from Interest in Associate or Joint Venture
Disclose the net income recognised from the Level 2 insurance group’s interest in the
associate or joint venture.
(9)
Region (for which Gross Assets and Gross Liabilities are reported)
Report the region to which the gross assets and liabilities apply. These regions are to
be consistent with those defined in GRF 210.0_G Outstanding Claims Liability Insurance Risk Charge (Level 2 insurance group) and GRF 210.1_G Premiums
Liabilities - Insurance Risk Charge (Level 2 insurance group).
For prudential reporting purposes ‘Australian business’ is as defined in Prudential
Standard GPS 001 Definitions (GPS 001.
International business, as defined in GPS 001, is to be reported according to the
following geographical regions:
•
New Zealand;
•
South East Asia;
•
Asia Pacific;
•
USA
•
Americas;
•
UK/Europe; and
•
Other.
GRF 450.0_G Instructions - 9
June 2009
Once regions are defined, they should generally be maintained thereafter for
consistency. However, this does not prevent the Level 2 insurance group from altering
its reporting regions where necessary, provided APRA is notified of any change.
(10) Gross Assets
Report the gross value of assets that relates to associates and joint venture operations
of the Level 2 insurance group reported by geographic region specified on the form.
This is based on where the assets are located.
(11) Gross Liabilities
Report the gross value of liabilities that relates to associates and joint venture
operations of the Level 2 insurance group reported by geographic region specified on
the form. This is based on where the liabilities are located.
GRF 450.0_G Instructions - 10