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13 May 2009

Life insurers' prudential regulation to change

APRA's regulation of life insurers is undergoing change, with the release of a discussion paper and draft prudential standards on audit and actuarial requirements, governance requirements and fit and proper requirements.

The changes are prompted by the Government's plans to enact the Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009, which would allow APRA to register non-operating holding companies of life companies (life NOHCs) and make prudential standards for them.

As preparation for the passage of the Bill, APRA has released this consultation package. The general approach will come as little surprise to anyone who has been following APRA's movements over the last few years, as the package seeks to harmonise its governance and fit and proper requirements for the life insurance industry with those for ADIs and general insurers.

APRA is planning to bring those revised prudential standards into force on 1 July 2010. Comments on the discussion paper must be made by 30 June 2009.

A further discussion paper will be released soon on, setting out a proposed Level 3 framework for the supervision of conglomerate groups that contain APRA-regulated entities.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.