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APRA Insight - Issue 2 2018

Sunday 1 July 2018

Thematic reviews point to better super practice

In May this year, APRA released the findings of two thematic reviews into the superannuation industry, conducted over 2016 and 2017. APRA examined RSE licensees’ oversight and management of related party arrangements and, separately, governance practices in respect of board appointments, renewal and performance assessment.

Seeking sustainability: challenges facing individual disability income insurance

Disability income insurance (DII), also known as income protection insurance, is a protective cover that provides replacement income to policyholders when they are unable to work due to illness or injury. DII offered to individuals outside of superannuation (individual DII) has been an area of heightened focus for APRA over the last 12 months due to its ongoing poor performance and adverse experience.

Restricted area: APRA's new ADI licencing route

Obtaining a banking licence is a significant undertaking, requiring substantial time and resources to demonstrate the necessary capabilities and frameworks to run a sound and safe bank. To address this, APRA now provides companies seeking an ADI licence with the choice of two distinct routes: the established “direct route” and the new restricted route. APRA will provide the same level of guidance and engagement irrespective of licensing route, however different routes will suit different applicants.

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, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $8.6 trillion in assets for Australian depositors, policyholders and superannuation fund members.