The Australian Prudential Regulation Authority (APRA) has released a consultation package on its proposals to maintain the prudential framework for life companies, including friendly societies, in the light of amendments being made to the Life Insurance Act 1995 (Life Act) by the Financial Sector Legislation Amendment (Simplifying Regulation and Review) Bill 2007.
To ensure the continued operation of the existing prudential framework, APRA proposes to replicate most of the provisions removed from the Life Act in new and amended prudential standards. These include:
- two new prudential standards to ensure that key provisions relating to actuaries, auditors and reinsurance continue to operate;
- the reissue of actuarial standards, which are currently set by the Life Insurance Actuarial Standards Board, as APRA prudential standards; and
- minor amendments relating to governance and ‘fit and proper’ requirements.
APRA is proposing that the new prudential standards will be available in the fourth quarter of 2007 and take effect on 1 January 2008.