Document ID: chunk:federal_register_of_legislation:F2018L00243:body:0:p2
Version: federal_register_of_legislation:F2018L00243
Segment Type: other
Provision Reference: 
Character Range: 2986–6055

to the financial year of the company within 3 months after the end of each financial year.[1]
7.             The reinsurance report must set out the particulars of each reinsurance contract or group of reinsurance contracts in force between the company and a reinsurer during the financial year. The particulars are outlined under Attachment A.

Referable Reinsurance Arrangements
8.             A life company may only enter into:
(a)          a proposed 'Referable Reinsurance Arrangement';[2] or
(b)          a proposed modification to an existing arrangement that would, if undertaken, result in the existence of a Referable Reinsurance Arrangement
with the prior written approval of APRA.
9.             A life company may apply to APRA for approval under paragraph 8.[3]  Any application by a life company seeking APRA's approval must be submitted prior to entering into the arrangement or modification and address the matters detailed in Attachment B.
10.         Where APRA approves a Referable Reinsurance Arrangement it may do so as either a reinsurance arrangement or a financing arrangement. This approval may be subject to conditions that require the life company to modify the proposed arrangement. These conditions may involve the life company being required to modify the proposed arrangement in a manner which will result in two arrangements, one to be approved as a reinsurance arrangement and the other as a financing arrangement.
11.         APRA will generally consider a Referable Reinsurance Arrangement to be a reinsurance arrangement where the purpose and effect of the arrangement is to genuinely transfer significant insurance risk from the life company to the reinsurer.
12.         A Referable Reinsurance Arrangement (or part thereof) that is approved by APRA as a reinsurance arrangement must be treated accordingly by the life company for prudential purposes.[4]
13.         A Referable Reinsurance Arrangement (or part thereof) that is approved by APRA as a financing arrangement must be accounted for by the life company so that:
(a)          the arrangement has a legitimate purpose and effect; and
(b)          the arrangement is not likely to misrepresent, or is not designed to disguise a material risk to, the life company's current or continuing profitability, financial position, solvency or capital adequacy.
14.         Where APRA approves a Referable Reinsurance Arrangement (or part thereof) as a financing arrangement, the life company must not account for the arrangement as a reinsured policy liability for the purposes of determining its capital base or prescribed capital amount under the capital adequacy standards or treat the arrangement as reinsurance for any other purpose.

Adjustments and exclusions
15.         APRA may adjust or exclude a specific requirement in this Prudential Standard in relation to a life company.

Determinations made under previous prudential standards
16.         This Prudential Standard only applies to new reinsurance contracts (or material changes to existing reinsurance contracts)