Are you an AFSL holder and authorised to deal in general insurance? If so, you should be aware of your obligations to provide data to APRA every six months by lodging a Form 701.
What is a Form 701?
This form collects data on contracts of insurance invoiced during the reporting period, including:
- aggregate premium data on contracts placed with APRA authorised insurers, Lloyd's underwriters or unauthorised foreign insurers (UFIs); and
- transaction data on contracts placed directly, or indirectly through a foreign intermediary, with UFIs.
A copy of Form 701 can be found here or by accessing the APRA website.
Why does APRA want to know?
These data collection arrangements allow APRA to increase the level of information they hold on the level and nature of insurance business placed with UFIs. They also permit ongoing monitoring of offshore insurance business under exemption arrangements, while facilitating a greater understanding of the Australian general insurance market and the impact of insurance failures.
What are the lodgement requirements?
The form must be lodged every six months. The reporting periods are from 1 July to 31 December and 1 January to 30 June. The data must be submitted within 20 business days of each period end, with late submissions attracting penalties. They can be lodged in either paper form or electronically using APRA's Direct2APRA (D2A) system. Submission using paper form is only available to those providing aggregate data – that is, those who do not have any UFI business to report in that period.
Is not lodging a report a licence breach?
Because the reporting obligation arises under the Corporations Regulations (see Part 7.6B), a failure to report to APRA is a breach of a financial services law and may need to be notified to ASIC.
Check your AFSL to see if you have a general insurance dealing authorisation. If you do then make sure that you include the six monthly APRA reporting obligation in your compliance diary.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.