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APRA publishes updated FAQs on the capital framework for COVID-19 related disruptions

Monday 27 September 2021

The Australian Prudential Regulation Authority (APRA) has updated the frequently asked questions (FAQs) for private health insurers on the application of the capital framework for COVID-19 related disruptions.

The ongoing uncertainty associated with the impact of the pandemic on the private health insurers continues to create difficulty in valuing the Deferred Claims Liability (DCL). As at 31 September 2021, APRA has updated the minimum limits and guidelines applicable to insurers preparing this provision. This guidance intends to clarify the considerations and communication protocols required for an insurer to prepare a prudentially sound provision for the DCL.

The FAQs replace the version of the FAQs issued in March 2021 and are available on the APRA website at: Application of the capital framework for COVID-19 related disruptions - frequently asked questions.

COVID-19

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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 $7.7 trillion in assets for Australian depositors, policyholders and superannuation fund members.