The Australian Prudential Regulation Authority (APRA) has today released a package containing a response paper and the final prudential standards that complete its review of life and general insurance capital requirements.
The aims of APRA’s review have been to improve the risk-sensitivity of the capital standards for insurers and achieve better alignment of these standards across APRA-regulated industries. APRA commenced its review in 2010 and has been consulting extensively with industry and other stakeholders.
The paper released today outlines APRA’s response to submissions on its proposals on the composition of the capital base and also sets out a small number of other minor refinements. It is accompanied by final versions of all the prudential standards that have been amended through the capital review.
APRA Member Ian Laughlin said that in finalising the composition of the capital base requirements, APRA considered feedback from the insurance industry and, where relevant, from other stakeholders including authorised deposit-taking institutions.
‘Taking the package as a whole, the feedback from the latest round of submissions was mainly focused on relatively minor and technical matters, as might be expected at the end of a multi-year consultation process. A small number of amendments have been made in response to improve the clarity of APRA’s requirements,’ Mr Laughlin said.
‘Industry is working towards implementation of the revised framework by the commencement date. We encourage insurers to discuss any implementation issues with APRA as early as possible.’
The revised capital framework will take effect from 1 January 2013, with reporting commencing in 2013 for reporting periods ending on or after 1 January 2013. The final reporting forms and instructions are expected to be released later this month.
The response paper and relevant prudential standards are available on the APRA website.