5.1 Introduction

This Chapter sets out the prudential reporting requirements for Insurance Intermediaries and Insurance Managers.

5.2 Preparing Returns

(1) An Authorised Firm must submit quarterly and annual prudential returns to the AFSA using the templates prescribed for this purpose by the AFSA from time to time.

(2) Annual prudential returns of an Authorised Firm must contain a certification by the same auditor that is responsible for auditing the Authorised Firm's annual financial statements. The certification must relate to the annual prudential returns and each set of unaudited quarterly returns that have been submitted to the AFSA by the PRU Investment Firm in the previous year.

5.3 Signing Returns

(1) A prudential return must be signed by 2 individuals, and in each case:

1. (a) one of those individuals must be the individual approved to exercise the Finance Officer Function; and
2. (b) the other individual must be either the individual approved to exercise the Senior Executive Officer Function for the Authorised Firm or one of the individuals approved to exercise the Director Function for the Authorised Firm.

(2) In paragraph (1), Senior Executive Officer Function and Director Function have the same meanings as in GEN.

5.4 Reductions in paid-up share capital and other capital instruments

An Authorised Firm must not reduce its paid-up share capital, or repay or redeem any part of any capital instrument the liabilities under which are included in its Capital Resources in accordance with Chapter 3, without the AFSA’s written approval.

5.5 Breaches of PRU(INT)

If an Authorised Firm becomes aware, or has reasonable grounds to believe, that it is or may be (or may be about to be) in breach of any of the rules in PRU(INT), it must:

1. (a) notify the AFSA in writing about the breach and the relevant circumstances immediately and not later than within 1 Business Day; and
2. (b) not make any cash transfers or payments or transfer of liquid assets to its Affiliates or Related Persons, whether by way of dividends or otherwise, without the AFSA’s written permission.

Guidance

In dealing with a breach, or possible breach, of this part, the AFSA’s primary concern will be the interests of existing and prospective policyholders and Clients. The AFSA recognises that there will be circumstances in which a problem may be resolved quickly, for example by support from a Parent Entity, without jeopardising the interests of policyholders and Clients. In such circumstances, it will be in the interests of all parties for there to be minimum disruption to the firm’s business. The AFSA’s normal approach will be to seek to work cooperatively with firms to deal with any problems. There will, however, be circumstances in which it is necessary to take regulatory action to avoid exposing further policyholders and Clients to the risk of the firm’s Failure, and the AFSA will not hesitate to take appropriate action if it considers this necessary.