The Australian Prudential Regulation Authority (APRA) today released for comment a draft Prudential Standard on reinsurance arrangements for insurers, as part of the current review of prudential supervisory arrangements for the general insurance industry.
The draft Standard is designed to ensure that insurers have in place prudent reinsurance arrangements commensurate with a high likelihood that the insurer will be able to meet its policyholder liabilities.
The draft Standard will require insurers to have in place a Reinsurance Management Strategy directed toward ensuring that an insurance company selects reinsurance arrangements appropriate to its risk profile. Insurers will be required to develop their own Reinsurance Management Strategy and have it approved by APRA. Once approved, insurers will be required to rigorously assess and certify their compliance with the reinsurance management strategy on an annual basis.
Comments on the draft Standard are invited by 4 July 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 http://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
