Document ID: chunk:federal_register_of_legislation:F2024L00075:reg:38:p54
Version: federal_register_of_legislation:F2024L00075
Segment Type: reg
Provision Reference: reg 38 (pt 54/76)
Character Range: 185827–189018

recognition and measurement requirements consistent with the proposals in ED 223, but noted that it had concluded on an approach to measuring defined benefit member liabilities, and therefore insurance liabilities, that is different from ED 223.  The AASB also concluded that further guidance should be provided on:
(a)                   factors that are indicative of a superannuation entity acting as an agent in respect of the insurance cover provided to members (or their beneficiaries); and
(b)                   factors that are indicative of a superannuation entity acting as an insurer.
BC166        The AASB noted that, in the case of superannuation entities acting as agents in relation to insurance arrangements provided to members, whilst these arrangements do not give rise to revenues and expenses of the entity, amounts from members account balances are typically applied to pay insurance premiums and some claims may be received via member accounts.  (Many claims would be received directly by members/beneficiaries and would not appear in a superannuation entity's financial statements.)  The AASB concluded that, in respect of the premium amounts and any claim amounts that flow through the superannuation entity, it provides useful information about insurance arrangements a superannuation entity provides as an agent for the statement of cash flows and statement of changes in member benefits to reflect those amounts.
BC167        In arriving at the above conclusions, the AASB was aware of the relatively new regulation designed to phase out so-called 'self-insurance' through prudential regulation.  Nevertheless, the AASB concluded that the requirements relating to recognising assets, liabilities, revenues and expenses in relation to insurance arrangements might still apply.  This is because a superannuation entity that has insurance policies with registered insurers that 'fully support' insurance cover provided to members may still leave the superannuation entity acting in the capacity of an insurer (albeit one with reinsurance cover).

Consolidated and separate financial statements

Consolidated financial statements
BC168        At the time of preparing both ED 179 and ED 223, the AASB noted there is an expectation that under AASB 127 Consolidated and Separate Financial Statements and AASB 10 Consolidated Financial Statements,[15] superannuation entities would generally be required to prepare consolidated financial statements.  Following the developments explained below, the IASB (and ultimately the AASB) changed the landscape for consolidation when it decided to apply a different approach to 'investment entities' that, generally, would not require consolidation.
BC169        The AASB deliberated at length on the manner in which superannuation entities should prepare consolidated financial statements.  Those deliberations were conducted prior to the issue of AASB 2013-5 Amendments to Australian Accounting Standards – Investment Entities.  They included considering feedback on an AASB Consultation Paper Consolidation of Subsidiaries by Superannuation Entities (September 2007) and the consolidation proposals in ED 179 and ED 223.  During