The draft Standard aims to remedy inconsistencies in the valuation of insurance liabilities across the insurance industry. At present, there is no standard approach to estimating the amount and frequency of future claims payments and, in some cases, the estimation of liabilities is influenced by factors such as taxation, reported profit or the statutory solvency position of the insurer. The draft Standard aims to address this by ensuring that there is consistency, rigour and robustness in the estimation of liabilities and to align the measurement and reporting basis of insurance liabilities with the market value basis used for valuing assets.

Along with the valuation of insurance liabilities and estimation of recoveries, the Standard also covers the involvement of actuaries in the estimation of insurance liabilities and reporting requirements imposed on the actuary.

Comments on the draft Standard are invited by 15 June 2000. A copy of the draft Standard and a Discussion Paper concerning this and other proposed reforms to the prudential supervision of general insurance companies in Australia, can be found on the APRA web site www.apra.gov.au.

Enquiries: giregime@apra.gov.au

Comments in writing can be made to:

Mr Brian Gray
Executive General Manager
Policy, Research and Consulting
Australian Prudential Regulation Authority
GPO Box 9836
Sydney NSW 2001

For further information:

Gloria Peterson
Public Affairs Manager
02 9210 3385