APRA seeks feedback on life insurance prudential standards

The Australian Prudential Regulation Authority (APRA) is seeking industry feedback on remaking four life insurance prudential standards due to sunset on April 1, 2023.

The regulator is consulting on the following prudential standards:

• Prudential Standard LPS 100 Solvency Standard (LPS 100);
• Prudential Standard LPS 115 Capital Adequacy: Insurance Risk Charge (LPS 115);
• Prudential Standard LPS 360 Termination values Minimum Surrender Values and Paid-up Values (LPS 360); and
• Prudential Standard LPS 370 Cost of Investment Performance Guarantees (LPS 370).

In its consultation letter, APRA proposes to remake the standards without any amendments before their sunsetting date.

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APRA explained that its proposal resulted from its assessment that the four standards continue to broadly fit for purpose and are a required part of the prudential framework. However, it welcomes industry feedback on the four standards, including any issues.

“APRA intends to consider more broadly the existing structure of the insurance prudential framework as part of the strategic initiative to Modernise the Prudential Architecture (MPA). Feedback received as part of this consultation will be helpful in informing that approach. This will be in addition to further industry engagement and consultation on the MPA programme,” the regulator wrote in the letter.

Written submissions on the consultation paper are due by December 15, 2022. Submissions should be sent to [email protected].