Aussies Expand Life Reinsurance Reporting, Including Alternative Deals

Australia’s top financial regulator has adopted new reporting requirements for life reinsurance deals, “enhancing” the data collection that will include more information needed from alternative finance providers.

The Australian Prudential Regulation Authority (APRA) approved new “enhanced” life reinsurance counterparty reporting requirements on Tuesday after a year-long comment period.

Under the new regime, reinsurance assets would be reported using reinsured “adjusted policy liabilities” rather than as single balance sheet exposures, according to APRA documents. Life companies would need to  report all reinsurance exposures “even if the reinsured adjusted policy liabilities were less than one per cent of total assets.”

Separately, total “stressed policy liabilities gross of reinsurance and total stressed policy liabilities net of reinsurance would also be required to be reported under the new regime.

“Life insurers are exposed to reinsurance counterparty risks when using reinsurance as a mechanism to transfer insurance risk and augment their capital position,” a December 23 letter to the industry stated. “The failure of an insurer could have a significant impact on the capital adequacy of a life insurer by both reducing the insurer’s capital base and increasing its prescribed capital amount. This could, in the extreme, result in the insolvency of the insurer.”

APRA said intends that the final reporting standard will apply to all life companies and will come into effect for reporting periods ending on June 30, 2015.


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