APRA and ASIC release Financial Accountability Regime guidance for insurers

The Australian Prudential Regulation Authority (APRA), in collaboration with the Australian Securities and Investments Commission (ASIC), has released additional resources aimed at preparing financial institutions for the implementation of the Financial Accountability Regime (FAR).

Enforced starting today for banking institutions and extending to the insurance and superannuation sectors by March 15, 2025, the FAR seeks to enhance the accountability and responsibility framework within APRA-regulated entities. The objective is to foster improved governance related to risk among these entities, their boards, and senior leadership teams.

Cross-industry information package on FAR

The package released contains several components designed to facilitate compliance with the FAR across various sectors:

• a detailed information paper providing insights into the obligations under the FAR for entities and their accountable individuals
• an enhanced guide and template for accountability statements, aimed at aiding entities in meeting the FAR's increased notification requirements
• guidance on the submission process for reporting breaches under the FAR to both APRA and ASIC, ensuring entities are equipped to maintain transparency and regulatory compliance

For the insurance and superannuation sectors specifically, the package includes consultative documents:

• a joint communication outlining the consultation's scope and advising insurance and superannuation entities on preparatory actions before the FAR's activation date in March 2025
• suggested revisions to regulatory rules and initial descriptions of key functions pertinent to insurance and superannuation entities, aiming to clarify expectations and requirements under the new regime

APRA and ASIC seek feedback on proposed key functions

The consultation period invites industry stakeholders to contribute their views on the outlined key functions and their descriptions for the insurance and superannuation sectors, with responses requested by April 19.

Last week, APRA and ASIC finalised the rules and provided additional guidelines for the implementation of FAR.

Updated information regarding the consultation and the guidance materials is accessible through APRA's website under the Financial Accountability Regime section, providing stakeholders with the necessary tools and information to navigate the new requirements.