ASIC notes the decision by Generation Development Group Limited (Generation) to change disclosures relating to its controlled life insurance company, General Life Limited (Generation Life), in its financial report for the year ended 30 June 2019.
Generation has shown the assets, liabilities, revenues and expenses of its 100% owned Generation Life subsidiary on a line-by-line basis. Previously, Generation consolidated Generation Life by showing three single lines aggregating all policyholder assets, all policyholder liabilities and all policyholder profits, with a note to the financial statements showing the disaggregated assets, liabilities, revenue and expenses of the life insurance business.
Generation has now also disclosed information on the risks arising from the financial instruments held by the life insurance policyholder funds, previously included only in the Generation Life Limited financial statements. Policyholder fund investments in unlisted financial assets of $736.9 million that had been previously disclosed as valued on quoted prices in an active market by the controlled life company are now disclosed as valued by reference to observable inputs other than quoted prices. These disclosure changes have no impact on net assets and net profit of Generation.
ASIC had raised concerns with Generation about not consolidating on a line-by-line basis the life insurance business, which forms a significant part of Generation’s business operations, in its financial report for the year ended 30 June 2018. ASIC also raised concerns about the controlled life company disclosing that unlisted financial assets were valued by reference to quoted prices in an active market.
