The Australian Prudential Regulation Authority (APRA) has today released the final version of its new risk management standard, and associated guidance.
APRA consulted extensively during 2013 and 2014 on both the risk management standard and prudential practice guide. The package released today includes final versions of Prudential Standard CPS 220 Risk Management (CPS 220) and Prudential Practice Guide CPG 220 Risk Management (CPG 220) as well as a letter to industry summarising APRA’s response to submissions on the most recent consultation, which commenced on 7 October 2014. The letter sets out a small number of minor refinements that were made to the prudential practice guide as a result of the submissions received; there were no further changes to the prudential standard.
The new requirements are applicable to authorised deposit-taking institutions (ADIs), general insurers and life companies, and authorised non-operating holding companies (authorised NOHCs), and take effect from 1 January 2015.
APRA Chairman Wayne Byres said the new standard harmonises risk management requirements across the banking and insurance industries, bringing together a range of risk management requirements into a single standard.
‘The new standard, together with the new practice guide, reflect APRA’s heightened expectations with regards to risk management, consistent with the increased emphasis that has been placed on sound governance and robust risk management practices in response to the global financial crisis.’
The response to submissions and the final versions of CPS 220 and CPG 220 are available on APRA’s website.