The Australian Prudential Regulation Authority (APRA) today issued a discussion paper on proposed reporting requirements for consolidated general insurance groups.

The proposals in the discussion paper ensure that reporting by general insurance groups is focused on APRA’s key objective of assessing the capital adequacy and financial performance of such groups.

The paper is part of APRA’s implementation of recommendation 38 of the HIH Royal Commission which states that APRA should prudentially regulate general insurance groups and apply a group minimum capital requirement.  APRA has previously issued a discussion paper in May 2005 and a response paper in October 2006 on this subject. 

In submissions on the earlier papers, a key theme was concern by insurers with the possible reporting burden for consolidated general insurance groups.

APRA Member Mr John Trowbridge said APRA has noted industry sensitivity to compliance costs and has undertaken extensive consultation with the industry to assist in the development of the reporting framework proposed in the paper.

“Group reporting requirements will contain less than half the detail required of each individual insurer within the group, and reporting will only be required semi-annually rather than quarterly,” he said.

“Although group reporting will be less detailed than that for individual APRA-authorised insurers, it will still provide APRA with the necessary information for it to carry out its supervisory role effectively for insurance groups,” Mr Trowbridge said.

This paper is an interim step in the development of consolidated general insurance group supervision and the full package of draft prudential standards and reporting standards will be released in late 2007 subsequent to the receipt of submissions on this paper.

APRA invites the insurance industry and other interested parties to comment by 12 October 2007 on the proposed consolidated group reporting requirements for general insurers. 

Released with the discussion paper are draft reporting forms and instructions, all of which can be found at www.apra.gov.au/General/Proposals-relating-to-GI.cfm.

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. APRA is funded largely by the industries that it supervises. It was established on 1 July 1998. APRA currently supervises institutions holding approximately $2.5 trillion in assets for 20 million Australian depositors, policyholders and superannuation fund members.

Media and industry inquiries only:
Andrew McCutcheon, Public Affairs Manager
Australian Prudential Regulation Authority
Telephone: 02 9210 3143
Mobile: 0417 528 660

All other inquiries:
APRA Contact Centre 1300 131 060