The Australian Prudential Regulation Authority (APRA) today issued a prudential standard prescribing a minimum capital requirement for life insurance companies under the Life Insurance Act 1995.

The prudential standard seeks to preserve the current minimum capital requirement of $10 million applicable to life insurance companies under actuarial standard AS6.01. AS6.01 is shortly to be replaced by a new risk based actuarial standard (AS6.02) that harmonises management capital requirements for life insurers and friendly societies, necessitating the making of a separate minimum capital standard.

From 30 June 2002, the shareholders fund of a life company has to be in compliance with both the prudential standard and actuarial standard AS6.02. As the requirements are not additive, the prudential standard will result in capital over and above that needed to comply with the actuarial standard only when the capital established by the actuarial standard is not in the form prescribed by the prudential standard or is less than the prescribed amount.

To facilitate the reporting and monitoring of a life companys compliance with these new standards, a new reporting form has been introduced through a variation to Prudential Rule No. 35.

The prudential standard, actuarial standards, prudential rules and their variations, are available on the APRA website, www.apra.gov.au or by contacting APRA on 1300 13 1060.

The release of the new standards follows APRAs release of the draft prudential standard in April 2002 (see APRA media release dated 19 April 2002).

For further information:	Media Enquiries only:
APRA Call Centre	David Van
1300 131 060	APRA - Public Affairs
	02 9210 3143
	0418 649 474