The Australian Prudential Regulation Authority today announced that it has denied insurance company, Rural and General Insurance Limited (Rural and General) reauthorisation under the general insurance reforms that took effect on 1 July 2002.

The decision to deny reauthorisation follows Rural and Generals failure to satisfy APRA in relation to the reauthorisation requirements and to demonstrate to APRAs satisfaction that it has adequate risk management systems and controls in place, or sufficient capital, to satisfy the new Prudential Standards.

"The bar is set much higher now and general insurers who have met the new requirements have worked hard and now meet some of the strictest prudential requirements in the world. APRA is committed to applying the new Standards to ensure the continued safety, sustainability and soundness of the Australian industry," said Mr Graeme Thompson APRA CEO.

Rural and General has appealed to the Administrative Appeals Tribunal following APRAs refusal to approve reauthorisation. Pending the outcome of the appeal Rural and General is not permitted to write any new insurance policies.

The amending legislation and new Standards substantially upgrade the capital and governance requirements, and have required every general insurer wishing to operate after 30 June this year (around 150 in total) to apply for reauthorisation.

Information on companies reauthorised under the new regime are available on the APRA website at http://www.apra.gov.au/General/General-Insurance-Reforms.cfm See previous APRA media releases.

Australian General Insurance Industry Achieves High Marks in APRA Reauthorisation (02.19) (Sunday, 30 June 2002)

Australia's World Class Insurance Reforms Come Into Effect (02.18) (Friday, 28 June 2002)