The Australian Prudential Regulation Authority (APRA) has today released for consultation a discussion paper which proposes to apply APRA’s cross-industry Prudential Standard CPS 220 Risk Management (CPS 220), and associated guidance, to private health insurers.
The discussion paper is the first in a series of reviews of components of the private health insurance prudential framework which APRA will undertake over the next three years to ensure the framework remains fit for purpose.
The paper proposes that the risk management requirements for private health insurers be aligned with CPS 220 as APRA considers the fundamental principles of risk management do not vary materially across APRA-regulated industries.
APRA Member Geoff Summerhayes said ‘this proposal is intended to strengthen enterprise-wide risk management and increase the capacity for strategic advice to be provided to the boards of all private health insurers on the identification and mitigation of key risks.'
The proposal has been informed by a year-long thematic review by APRA of private health insurers’ risk governance and operational risk management arrangements and industry discussions on APRA’s longer term policy review program for the industry.
APRA is inviting written submissions on the proposed prudential standard and guidance material by 15 April 2017. APRA expects to finalise the standard mid-year in 2017, with the standard coming into effect in 2018.
The discussion paper and attachments can be found on the APRA website.