The Australian Prudential Regulation Authority (APRA) has released key observations from a recent recovery planning thematic review of life and general insurers.
In a letter to industry, APRA has outlined the main findings from the review with a group of large and medium‑sized insurers to develop recovery plans, including areas of better practice. APRA encourages insurers to consider these observations in the ongoing development and improvement of credible recovery plans*.
This letter is intended to be considered alongside the recovery planning guidance (the Guidance), which was provided to the in-scope insurers of the thematic review. The Guidance can be made available to out-of-scope insurers through their APRA supervision team.
The observations from the thematic review will be used to inform the development of the recovery and resolution prudential framework, which will include a prudential standard and accompanying guidance. APRA plans to publicly consult on this framework next year.
Copies of the letter are available on the APRA website at Letters to general insurers 2016 to 2019.
*A recovery plan comprises a menu of recovery options designed by a financial institution to enable it to survive a financial shock and restore itself to a sound financial condition without the need to seek public sector support.
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 $6.5 trillion in assets for Australian depositors, policyholders and superannuation fund members.