ICP 20 Public Disclosure

The supervisor requires insurers to disclose relevant and comprehensive information on a timely basis in order to give policyholders and market participants a clear view of their business activities, risks, performance and financial position.


20.1

Subject to their nature, scale and complexity, insurers make audited financial statements available at least annually.

20.1.1    

Where audited financial statements are not required by the supervisor given the nature, scale and complexity of an insurer (for example, for a small local branch office of a foreign insurer), the supervisor may require that similar information is made publicly available by other means.

20.2
Insurers disclose, at least annually and in a way that is publicly accessible, appropriately detailed information on their:
  • company profile;
  • corporate governance framework;
  • technical provisions;
  • insurance risk exposure;
  • financial instruments and other investments;
  • investment risk exposure;
  • asset-liability management;
  • capital adequacy;
  • liquidity risk; and
  • financial performance.


20.2.1    
In developing disclosure requirements, the supervisor may consider whether such disclosures are:
  • easily accessible and up-to-date;
  • comprehensive, reliable and meaningful;
  • comparable between different insurers operating in the same market;
  • consistent over time so as to enable relevant trends to be discerned; and
  • aggregated or disaggregated so that useful information is not obscured.

20.2.2    

Information should be disseminated in ways best designed to bring it to the attention of policyholders and market participants, but taking into account the relative effectiveness and costs of different methods of dissemination (for example, printed versus digital methods).

20.2.3    

Information should be provided with sufficient frequency and timeliness to give a meaningful picture of the insurer to policyholders and market participants. The need for timeliness will need to be balanced against that for reliability.

20.2.4    

Disclosure requirements may also have to balance the interests of reliability against those of relevance or usefulness. For example, in some long-tail classes of insurance, realistic projections as to the ultimate cost of incurred claims are highly relevant. However, due to uncertainties, such projections are subject to a high degree of inherent errors of estimation. Qualitative or quantitative information can be used to convey to users an understanding of the relevance and reliability of the information disclosed.

20.2.5    
Information should be sufficiently comprehensive to enable policyholders and market participants to form a well-rounded view of an insurer’s financial condition and performance, business activities, and the risks related to those activities. In order to achieve this, information should be:
  • well-explained so that it is meaningful;
  • complete so that it covers all material circumstances of an insurer and, where relevant, those of the group of which it is a member; and
  • both appropriately aggregated so that a proper overall picture of the insurer is presented and sufficiently disaggregated so that the effect of distinct material items may be separately identified.

20.2.6    

Information should, so far as practicable, reflect the economic substance of events and transactions as well as their legal form. The information should be neutral (ie, free from material error or bias) and complete in all material respects..


Company Profile


20.3
Disclosures include information about the insurer’s company profile such as:
  • the nature of its business;
  • its corporate structure;
  • key business segments;
  • the external environment in which it operates; and
  • its objectives and the strategies for achieving those objectives.


20.3.1    

The overall aim for the company profile disclosure is for insurers to provide a contextual framework for the other information required to be made public.

20.3.2    

Disclosures on the nature of the insurer’s business and its external environment should assist policyholders and market participants in assessing the strategies adopted by the insurer.

20.3.3    

Disclosures may include information about the insurer’s corporate structure, which should include any material changes that have taken place during the year. For insurance groups, where provided, such disclosures should focus on material aspects, both in terms of the legal entities within the corporate structure and the business functions undertaken within the group. In the event of differences in the composition of a group for supervisory purposes and for public reporting purposes, it would be useful if a description of the entities constituting those differences was also provided.

20.3.4    

Disclosures may include information on the key business segments, main trends, factors and events that have contributed positively or negatively to the development, performance and position of the company.

20.3.5    

Disclosures may include information on the insurer’s competitive position and its business models (such as its approach to dealing and settling claims or to acquiring new business) as well as significant features of regulatory and legal issues affecting its business.

​20.3.6    
Disclosures may include information about company objectives, strategies and timeframes for achieving those objectives, including the approach to risk appetite, methods used to manage risks, and key resources available. To enable policyholders and market participants to assess these objectives, and the insurer's ability to achieve them, it may be appropriate if the insurer also explains significant changes in strategy compared to prior years.

​20.3.7     

Key resources available may include both financial and non-financial resources. For non-financial resources the insurer may, for example, provide information about its human and intellectual capital.


Corporate Governance Framework


20.4

The supervisor requires that disclosures about the insurer’s corporate governance framework provide information on the key features of the framework, including its internal controls and risk management, and how they are implemented.


Technical Provisions


20.5
The supervisor requires that disclosures about the insurer’s technical provisions are presented by material insurance business segment and include, where relevant, information on:
  • the future cash flow assumptions;
  • the rationale for the choice of discount rates;
  • the risk adjustment methodology where used; and
  • other information as appropriate to provide a description of the method used.


Insurance Risk Exposures


20.6
The supervisor requires that disclosures about the insurer’s reasonably foreseeable and material insurance risk exposures, and their management, include information on:
  • the nature, scale and complexity of risks arising from its insurance contracts;
  • the insurer’s risk management objectives and policies;
  • models and techniques for managing insurance risks (including underwriting processes);
  • its use of reinsurance or other forms of risk transfer; and
  • its insurance risk concentrations.


Financial Instruments and Other Investments


20.7
The supervisor requires that disclosures about the insurer’s financial instruments and other investments include information on:
  • instruments and investments by class;
  • investment management objectives, policies and processes; and
  • values, assumptions and methods used for general purpose financial reporting and solvency purposes, as well as an explanation of any differences, where applicable.


20.7.1    

For the purposes of disclosure, an insurer may group assets and liabilities with similar characteristics and/or risks into classes and then disclose information segregated by those classes.

20.7.2    

Where investment management objectives, policies and processes differ between segments of an insurer’s investment portfolio, disclosures should be sufficient to provide an understanding of those differences.

20.7.3    

When providing disclosures around the uncertainty of reported values of financial instruments and other investments, it may be useful if the effect of derivatives on that uncertainty is also disclosed.


Investment Risk Exposures


20.8

The supervisor requires disclosures about the insurer’s material investment risk exposures, and their management.


Asset-Liability Management


20.9
Disclosures about the insurer’s asset-liability management (ALM) include information on:
  • ALM in total and, where appropriate, at a segmented level;
  • the methodology used and the key assumptions employed in measuring assets and liabilities for ALM purposes; and
  • any capital and/or provisions held as a consequence of a mismatch between assets and liabilities.


Capital Adequacy


20.10
Disclosures about the insurer’s capital adequacy include information on:
  • its objectives, policies and processes for managing capital and assessing capital adequacy;
  • the solvency requirements of the jurisdiction(s) in which the insurer operates; and
  • the capital available to cover regulatory capital requirements. If the insurer uses an internal model to determine capital resources and requirements, information about the model is disclosed.


​Liquidity Risk


20.11
The supervisor requires that disclosures about the insurer’s liquidity risk include sufficient quantitative and qualitative information to allow a meaningful assessment by market participants of the insurer’s material liquidity risk exposures.


Financial Performance


20.12
Disclosures about the insurer’s financial performance, in total and at a segmented level include information on:
  • earnings analysis;
  • claims statistics including claims development;
  • pricing adequacy; and
  • investment performance.


​Non-GAAP Financial Measures


20.13

Insurers that publicly disclose non-GAAP financial measures are required to adhere to the specified practices regarding those measures, where applicable.