The Australian Prudential Regulation Authority (APRA) has finalised its response to a consultation regarding minor adjustments to the prudential framework for insurers, authorised deposit-taking institutions (ADIs), and registrable superannuation entity (RSE) licensees.
These updates, originally proposed in September 2024, aim to provide technical clarifications and corrections within the framework, rather than making substantive changes to policy.
APRA described the amendments as part of its strategy to maintain the framework’s relevance between comprehensive reviews.
During the consultation process, APRA received two submissions supporting changes to capital adequacy standards (APS 110 and APS 112).
No feedback was submitted on other proposals. The finalised updates, effective from various dates, include:
APRA’s website hosts the finalised standards along with non-confidential submissions for public reference.
Aside from making minor amendments to the prudential framework for insurers, APRA reaffirmed its commitment to financial stability amidst evolving risks such as economic shifts, geopolitical uncertainty, and inflation.
Cybersecurity and operational resilience remain key focus areas as financial institutions continue to expand their digital operations.
In the insurance sector, APRA is actively addressing issues of coverage availability and affordability. The regulator continues to collaborate with stakeholders through programs like the Hazards Insurance Partnership, which targets risks linked to natural disasters.
Looking ahead, APRA is developing Australia’s first systemic financial stress test to evaluate interconnections between banks and superannuation funds during crises. Additional plans include:
APRA has also released findings from its second voluntary climate risk survey, highlighting how financial institutions manage and disclose climate-related risks.