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Glossary

You can find commonly used terms: 

Term Explanation
Account holder            An individual, body corporate, partnership, association, trust, superannuation fund, with an eligible account at a bank, building society or credit union incorporated in Australia.
ADIs Authorised deposit-taking institutions - banks, building societies and credit unions authorised by APRA to conduct banking business in Australia.
APRA members APRA members are collectively responsible and accountable for its operation and performance. A member is appointed by the Governor-General, on the advice of the Australian Government, for terms of up to five years.
Appointed actuaries A person within a financial institution who provides impartial advice to the institutions’ board and senior management, acting on behalf of the interest of policy holders. 
APRA Australian Prudential Regulation Authority
APRA-regulated entity The regulation of financial institutions by APRA as determined under the following legislation: 
•    Banking Act 1959;
•    Insurance Act 1973; 
•    Life Insurance 1995;
•    Private Health Insurance (Prudential Supervision) Act 2015; and 
•    Superannuation Industry (Supervision) Act 1993. 
APRA supervisor  An employee of APRA who conducts prudential supervision activities for APRA-regulated entities. 
ASIC Australian Securities Investment Commission
BEAR Banking and Accountability Executive Regime - establishes heightened expectations of accountability for ADIs, their directors and senior executives. The regime is administered and enforced by APRA.
Breach reporting If an APRA-regulated entity becomes aware that it has breached (or will breach) a prudential requirement, and that breach is ‘significant’, it must give APRA a written report.
Capital adequacy This is an amount of funds that a financial institution must keep as a reserve. The amount is determined as a percentage of total risk-weighted assets. APRA has prudential standards which sets the minimum capital requirements for supervised institutions. 
Claimant A person or institution making a claim against an insurance policy.
CLF Committed Liquidity Facility
Counter-cyclical buffer An additional amount of capital funds that APRA instructs a financial institutions to hold in the event of an economic downturn to minimise any risk that they will fail. 
Creditors A person or institution to whom money is owed.
Direct to APRA

This is a secure electronic data submission system that allows APRA-regulated financial institutions to lodge statutory returns. Also known as D2A.

APRA is replacing D2A with a new Data Collection Solution in 2020.  

Disqualification register List of individuals disqualified from holding prudentially significant roles within APRA-regulated entities.
Enforceable Undertaking These are undertakings given to APRA (and accepted by APRA) which are enforceable in a court. They are generally accepted by APRA as an alternative to civil or administrative action where there has been a contravention of the legislation APRA administers. 
Exempt Public Sector Superannuation Schemes These are public sector superannuation schemes that choose not to be regulated by APRA. However, for statutory purposes, a number of these schemes report to APRA under an agreement between the Commonwealth Government and each of the State and Territory Governments.
Financial Claims Scheme In the unlikely event an APRA-regulated institution were to fail, APRA has the role of administering the Financial Claims Scheme when activated by the Australian Government. 
This Scheme allows depositors of a failed deposit-taker to access their funds (up to a limit) in a timely manner, or provides general insurance policyholders with access to funds (up to a limit) to meet an eligible claim.
Incorporated in Australia Banking institutions incorporated in Australia are: Australian banks, foreign subsidiary banks, building societies, credit unions and certain other authorised deposit-taking institutions.
Insolvent Being unable to pay debts when they are due and payable.
Levy Fee or tax
Liquidation The process of winding up a company by selling its assets and paying its debts, in full or in part, from the proceeds of the sale.
PAIRS Probability and Impact Rating System is APRA’s risk assessment model and considers both the probability and impact of the failure of an APRA-regulated entity. 
Plain English Taxonomy This provides a description and interpretation of APRA data collection requirements as set out in the Prudential Standards, Prudential Practice Guides and Reporting Guidelines.
Policy A contract that contains terms and conditions of a particular insurance cover (home, contents, car, etc).
Policyholder A person or institution with an insurance policy.
Premiums The price charged by an insurer for an insurance policy.
Prudential framework The framework refers to the legislation, including prudential standards and associated guidance material, which applies to the prudential regulation of ADIs, insurers and superannuation funds regulated by APRA.
Prudential practice guide Provides guidance on how supervised institutions might best satisfy the prudential standards. 
Prudential review A key supervisory activity that allows supervisors to form detailed assessments of a regulated entity’s (or group’s) key inherent risk and the adequacy of its management and controls to address those risks. 
Prudential standard Set out minimum capital and risk management requirements for supervised institutions, which are legally binding. 
NCPD A comprehensive database of policy and claim on professional indemnity and public and product liability insurance. It contains data on every open, reopened or finalised claim and policy underwritten since 2003 by APRA-regulated general insurers.
Non-operating holding companies A type of company that invests money in other companies. They do not take part in their day to day operation. 
Non-regulated entities Financial institutions not regulated by APRA, these include  Registered Financial Corporations and Discretionary Mutual Funds, but are required to submit data to APRA under the Financial Sector (Collection of Data) Act 2001 and Financial Sector Shareholdings Act 1998.
Registered financial corporations Corporations registered under the Financial Sector (Collection of Data) Act 2001. 
Recovery planning A key component of crisis preparedness will be the institution’s own recovery plan, which focuses on the actions it can take to respond to a significant stress and restore itself to a financially sound position.
Reinsurer A company that provides financial protection to insurance companies. 
RSE Registered superannuation licensee - an entity that is a regulated superannuation fund or an approved deposit fund or a pooled superannuation trust but does not include a self-managed superannuation fund. 
RBA Reserve Bank of Australia 
Restricted ADI license Authorisation under section 9 of the Banking Act to conduct banking business for a limited period with specific requirements and restrictions.  
Stress test A type of test APRA uses to measure the resilience of a financial institution or industry that APRA regulates. 
SOARS Supervisory Oversight and Response System - is used to determine the appropriate supervisory response based on PAIRS risk assessments. APRA has four supervision stances: 
•    Normal;
•    Oversight;
•    Mandated Improvement; and
•    Restructure. 
Unexpired premiums An amount paid in advance for, but yet to be earned against, an insurance policy.
Unsecured creditors A creditor who does not hold assets as collateral, which is used to guarantee the payment of a debt.