The Australian Prudential Regulation Authority (APRA) today said that it would be seeking to increase disclosure of prudential information and to expand supervision over financial conglomerates for general insurance.

Speaking at the ICAs National Conference in Canberra today, APRAs Chief Executive Officer, Mr Graeme Thompson, said that the reforms would bring the insurance industry closer into line with practice in banking.

"APRAs recently introduced reforms to the regulatory regime for general insurance go a long way in increasing protection for policyholders. However, there is no room for complacency and reforms must be on going. While not industry specific, APRAs new internal rating index, PAIRS, is a good example," he said.

APRAs targeting of group supervision reflects increasing recognition internationally of the difficulty of "ring-fencing" well managed and financially sound insurers that are members of conglomerates and protecting them from "contagion risk" coming from elsewhere in the group.

Disclosure of useful prudential information in the insurance industry is relatively scant and APRA believes that market disciplines will reinforce supervisory requirements by creating additional strong incentives for insurers to conduct their business prudently.

Mr Thompson added, "Industry has generally been wary of expanded disclosure, primarily due to the additional costs involved and reluctance to disclose proprietary information. We are confident that these issues are not insurmountable and we will be working with industry to ensure that any concerns are properly addressed."

A copy of Mr Thompsons speech is available on APRAs website: www.apra.gov.au.

APRA is the prudential regulator of the financial services industry including banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. It currently regulates and maintains $1.5 trillion in assets for 20 million Australians.