August 30, 2018

APRA issued reporting guidance for large exposures and reinsurance central counterparties in the form of lists of counterparty groups and exposure descriptions. While reporting, insurers should match the exact spelling specified in these lists, where applicable. The two lists are included in the Appendices to the notification letter issued by APRA. The guidance applies to all general insurers and level 2 insurance groups.

Currently, insurers are required to submit details of large exposures on the forms reporting forms GRF 117.0 and GRF 117.0(G), including free text fields for the “name of counterparty,” “counterparty group name,” “ACN/ABN,” and “description.” Due to the free text nature of these fields, different insurers have been using slightly different wording (for example, ”Australian Government,” ‘’Aus Govt,” “Commonwealth Govt”). This limits the comparability of submissions and the usefulness of the data to the APRA supervision. To address this issue and to help insurers submit consistent data that are fit for analytical purposes, APRA has developed lists of standard wordings for two of these text fields: “counterparty group name” and “exposure description.” These lists consist of a link to an existing list of reinsurance counterparties and a list of other common counterparty group names and common exposure types. Insurers should match the exact spelling specified by these lists where applicable.

Where a counterparty group or exposure description does not correspond to an entry on the lists, insurers should continue to report the item unchanged. APRA will review all entity submissions and periodically update the lists as the nature of insurers’ counterparty groups and exposure types change over time. APRA also reminds insurers to report the counterparty ACN or ABN when reporting large exposures, as required in the reporting standard. This helps to properly identify the large exposure counterparty, in addition to the use of standard counterparty group names and descriptions. APRA is committed to ensuring that data submitted to it continues to meet its supervisory needs. Data submitted on reporting forms GRF 117.0 and GRF 117.0(G) provide APRA with useful information about insurers’ concentration risk and exposures to various counterparties.

 

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Keywords: Asia Pacific, Australia, Insurance, Reinsurance, CCPs, Large Exposures, Reporting, GRF 117, APRA

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