Additional Reporting Requirements under the Life Insurance Act
The Life Act specifies under section 80(3) that the apportionment of income and outgoings for a life company carrying on other business as well as its Life Insurance business is not effective unless a report given by the auditor of the life company for the purposes of FSCODA states that the apportionment has been made equitably and in accordance with generally accepted accounting principles. Section 80(2) of the Life Act states that before an apportionment is made, those charged with governance of the company concerned must obtain the appointed actuary’s written advice whether the basis of the proposed apportionment is appropriate.
This report is provided by the auditor as part of the annual return(s) audit opinion. An example is given in Appendix 1 Part A.
Under section 88 of the Life Act, the auditor has certain obligations to report to the company or those charged with governance any matters that come to the attention of the auditor that the auditor thinks requires action to be taken by the company or its directors. If the auditor of a life company concludes that there are reasonable grounds for believing that the company or those charged with governance have contravened the Life Act or any other law and it may significantly affect the interests of the policy holders the auditor must immediately inform APRA in writing. It is a serious offence under sub section 137.1 and 137.2 of the Criminal Code 1995 to provide, whether directly or indirectly, false or misleading documents or information to a Commonwealth entity such as APRA.
Section 89 of the Life Act applies the concept of qualified privilege to auditors of a life company and is in addition to any privilege conferred on a person by the Corporations Act 2001.
Auditor may provide information to APRA
Section 88A of the Life Act states:
- a person who is or was the auditor of a life company may give information, or produce books, accounts or documents, about the life company to APRA if the person considers that doing so will assist APRA in performing its functions under this Act or under the FSCODA.
- a person who, in good faith and without negligence, gives information to APRA in accordance with this section is not subject to any action, claim or demand by, or any liability to, any other person in respect of the information.