For the third time, the Australian Prudential Regulation Authority (APRA) has proposed updates to life and general insurance reporting standards impacted by the introduction of the Australian Accounting Standards Board 17 Insurance Contracts (AASB 17).
The suggestions follow APRA's consultation published on December 13, 2021, on draft standards to integrate AASB 17 into the life and general insurance capital (LAGIC) framework and reporting framework – both based on the current accounting standards to be replaced when AASB 17 comes into effect on January 1, 2023.
According to APRA, failure to update the frameworks in response to the introduction of AASB 17 will require insurers to maintain two different valuation, actuarial, accounting, and reporting systems and might result in unintended and unnecessary changes to capital levels. Therefore, it seeks industry feedback through a consultation letter that includes a response paper, information paper, draft prudential standards, draft reporting standards, and Quantitative Impact Study (QIS).
APRA has also proposed further revisions to the private health insurer reporting standards, designed to increase minimum capital requirements.
The proposed updates follow APRA's detailed proposals published on December 13, 2021, related to its review of the private health insurance (PHI) capital framework. The release last year included the draft capital standards, draft reporting standards, QIS workbooks, and a response paper setting out the regulator's response to stakeholder feedback provided to date. It also included an information paper providing an overview of the standards for boards and senior management.
APRA aims to release the final standards in the second half of 2022 for implementation on July 1, 2023.
