The Australian Prudential Regulation Authority (APRA) has today released a consultation package relating to proposed changes to prudential reporting for general insurers.
The proposed changes will align prudential reporting closely with statutory reporting and thereby deliver three important benefits. They will simplify reporting by general insurers to APRA, give APRA more effective information for assessing insurer performance and enhance the dialogue between APRA and individual insurers on their performance.
The consultation package contains a discussion paper that outlines the changes proposed by APRA, together with draft prudential standards, reporting forms and instruction guides that include the planned changes.
APRA Executive Member John Trowbridge said the proposed changes will reduce the reporting burden that currently causes general insurers to prepare full accounts on two different bases. Instead, insurers’ statutory accounts will form the basis of reporting to APRA and, with certain supplementary information, will enable APRA to maintain substantially the same capital framework.
‘The changes will allow improved performance analysis and a clearer view of profitability for APRA at a level of detail previously not available through the APRA returns,’ Mr Trowbridge said.
APRA is seeking comment from industry and other interested stakeholders on the changes proposed in the discussion paper. APRA is also requesting general insurers to complete a quantitative impact study, as part of the consultation, to test the practicality of the proposals and to assess the possible need for any capital recalibrations.
APRA is seeking submissions by 12 February 2010. It is expected the final prudential standards and reporting standards will be released with an effective date of 1 July 2010.
The discussion paper and accompanying draft standards, reporting forms and instruction guides are available on APRA’s website.