Prudential and Reporting Standards for General insurance (2022)

  • 220

    Risk Management

    CPS

    220

    CPG

    220

    Prudential Standards (1)

    Status: In Force

    In effect from 1 July 2019

    This Prudential Standard requires an APRA-regulated institution and a Head of a group to have systems for identifying, measuring, evaluating, monitoring, reporting, and controlling or mitigating material risks that may affect its ability, or the ability of the group it heads, to meet its obligations to depositors and/or policyholders. These systems, together with the structures, policies, processes and people supporting them, comprise an institution’s or group’s risk management framework.

    Guidance (1)

    Status: Current

    April 2018

    DownloadCPG 220 Risk Management

    This PPG aims to assist APRA-regulated institutions in complying with Prudential Standard CPS 220 Risk Management (CPS 220) and, more generally, to outline prudent practices in relation to risk management. | File type: PDF | File size: 675.49 KB

  • 220

    Credit Risk

    GPG

    220

    Guidance (1)

    Status: Current

    July 2008

    DownloadGPG 220 Credit Risk

    Prudential Standard GPS 220 Risk Management (GPS 220) sets out APRA’s requirements of insurers in relation to risk management. This prudential practice guide aims to assist insurers in complying withthose requirements in relation to credit risk and, more generally, to outline prudent practices in relation to credit risk management. | File type: PDF | File size: 63.35 KB

  • 221

    Aggregate Risk Exposures

    3PS

    221

    3PG

    221

    Prudential Standards (1)

    Status: In Force

    In effect from 1 July 2017

    This Prudential Standard requires a Level 3 Head to ensure that an aggregate risk exposure external to the Level 3 group does not expose prudentially regulated institutions within the group to excessive risk. The ultimate responsibility for the aggregate risk exposure policy of a Level 3 group rests with the Board of its Level 3 Head.

    Guidance (1)

    Status: Current

    (Video) IFRS versus prudential reporting

    July 2017

    Download3PG 221 Aggregate Risk Exposures

    Prudential Standard 3PS 221 Aggregate Risk Exposures (3PS 221) sets out APRA’s requirements in relation to the aggregation of risks across a Level 3 group. This PPG aims to assist Level 3 Heads to comply with those requirements and, more generally, to outline prudent practices in relation to certain aggregation matters. | File type: PDF | File size: 503.56 KB

  • 222

    Intra-group Transactions and Exposures

    3PS

    222

    3PG

    222

    Prudential Standards (1)

    Status: In Force

    In effect from 1 July 2017

    This Prudential Standard requires a Level 3 Head to ensure that associations and dealings within the Level 3 group do not expose prudentially regulated institutions within the group to excessive risk.

    Guidance (1)

    Status: Current

    July 2017

    Download3PG 222 Intra-group Transactions and Exposures

    Prudential Standard 3PS 222 Intra-group Transactions and Exposures (3PS 222) sets out APRA’s requirements in relation to the associations and dealings between institutions in a Level 3 group. This PPG aims to assist Level 3 Heads to comply with those requirements and, more generally, to outline prudent practices in relation to certain intra-group matters. | File type: PDF | File size: 505.33 KB

  • 226

    Margining and Risk Mitigation for Non-centrally Cleared Derivatives

    CPS

    226

    Prudential Standards (1)

    Status: In Force

    18 April 2022

    This Prudential Standard requires an APRA covered entity to have appropriate margining practices in relation to non-centrally cleared derivatives. An APRA covered entity must exchange variation margin and post and collect initial margin with a covered counterparty, subject to certain criteria.

    Related resources (2)

  • 229

    Climate Change Financial Risks

    CPG

    229

    Guidance (1)

    Status: Current

    26 November 2021

    DownloadCPG 229 Climate Change Financial Risks
    (Video) Current Topics Paper (Presentation) 2020.

    This PPG aims to assist an APRA-regulated institution in complying with Prudential Standards CPS 220 Risk Management (CPS 220), SPS 220 Risk Management (SPS 220), CPS 510 Governance(CPS 510), SPS 510 Governance (SPS 510) and, more generally, to outline prudent practices in relation to climate change financial risk management. | File type: PDF | File size: 1.38 MB

  • 230

    Reinsurance Management

    GPS

    230

    GPG

    230

    Prudential Standards (1)

    Status: In Force

    In effect from 1 January 2014

    This Prudential Standard requires a general insurer and a Level 2 insurance group to maintain, as part of its overall risk management framework, a specific reinsurance management framework to manage the risks arising from its reinsurance arrangements.

    Guidance (1)

    Status: Current

    February 2006

    DownloadGPG 230 Operational Risk

    Prudential Standard GPS 220 Risk Management (GPS 220) sets out APRA’s requirements of general insurers (insurers) in relation to risk management. This prudential practice guide aims to assist insurers in complying with those requirements in relation to operational risk and, more generally, to outline prudent practices in relation to operational risk management. | File type: PDF | File size: 63.84 KB

  • 231

    Outsourcing

    CPS

    231

    CPG

    231

    Prudential Standards (1)

    Status: In Force

    In effect from 1 July 2017

    This Prudential Standard requires that all outsourcing arrangements involving material business activities entered into by an APRA-regulated institution and a Head of a group be subject to appropriate due diligence, approval and ongoing monitoring. All risks arising from outsourcing material business activities must be appropriately managed to ensure that the APRA-regulated institution, or the group it heads, is able to meet its financial and service obligations to its depositors and/or policyholders.

    Guidance (1)

    Status: Current

    October 2006

    DownloadCPG 231 Outsourcing

    Prudential Standard APS 231 Outsourcing, Prudential Standard GPS 231 Outsourcing and Prudential Standard LPS 231 Outsourcing (Prudential Standards) set out the Australian Prudential Regulation Authority’s (APRA's) requirements in relation to outsourcing. This prudential practice guide aims to assist regulated institutions in complying with those requirements and, more generally, to outline prudent practices in relation to managing outsourcing arrangements. For the purposes of this guide, ‘regulated institution’ refers to an authorised deposit-taking institution (ADI) or a generalinsurer or a life company (including a friendly society) regulated by APRA. | File type: PDF | File size: 85.64 KB

    Related resources (1)

  • 232

    Business Continuity Management

    CPS

    232

    Prudential Standards (1)

    Status: In Force

    In effect from 1 July 2017

    This Prudential Standard requires each APRA-regulated institution and Head of a group to implement a whole-of-business approach to business continuity management that is appropriate to the nature and scale of the operations. Business continuity management increases resilience to business disruption arising from internal and external events and may reduce the impact on the institution’s or group’s business operations, reputation, profitability, depositors, policyholders and other stakeholders.

    (Video) 2021 OSFI Risk Management Webcast for Life Insurers

  • 232

    Custody Arrangements

    GPG

    232

    Guidance (1)

    Status: Current

    October 2006

    This prudential practice guide applies to external custody arrangements (where an insurer engages an external party to act as its custodian), including arrangements with a related entity (or entities) in the same corporate group. This prudential practice guide does not apply to arrangements that either insurers or their custodians have with securities depositories, whether in Australia or overseas. | File type: PDF | File size: 87.99 KB

  • 233

    Pandemic Planning

    CPG

    233

    Guidance (1)

    Status: Current

    May 2013

    DownloadCPG 233 Pandemic Planning

    This PPG aims to assist regulated institutions in considering and prudently managing the risks posed by a potential influenza pandemic, or any other widespread outbreak of contagious disease that could affect their operations. Theinformation in this guide supports compliance with Prudential Standards CPS 232 Business Continuity Management (CPS 232) and SPS 232 Business Continuity Management (SPS 232), which set out the Australian Prudential Regulation Authority’s (APRA) requirements in relation to business continuity management for authorised deposit-taking institutions (ADIs), general insurers, life companies and registrable superannuation entity (RSE) licensees (RSE licensees). This guide also supports compliance with risk management and other relevant prudential requirements. | File type: PDF | File size: 268.63 KB

    Related resources (2)

  • 234

    Information Security

    CPS

    234

    CPG

    234

    Prudential Standards (1)

    Status: In Force

    In effect from 1 July 2019

    This Prudential Standard aims to ensure that an APRA-regulated entity takes measures to be resilient against information security incidents (including cyber-attacks) by maintaining an information security capability commensurate with information security vulnerabilities and threats.

    Guidance (1)

    Status: Current

    June 2019

    DownloadCPG 234 Information Security
    (Video) Part 1 ICAEW-IAI-AFA Webinar Understanding IFRS 17 Insurance Contracts - Opening

    This PPG aims to assist regulated entities in maintaining information security. It is designed to provide guidance to Boards, senior management, risk management and information security specialists (management and operational). | File type: PDF | File size: 837.05 KB

    Related resources (2)

  • 235

    Managing Data Risk

    CPG

    235

    Guidance (1)

    Status: Current

    September 2013

    DownloadCPG 235 Managing Data Risk

    This PPG aims to assist regulated entities in managing data risk. It is designed to provide guidance to senior management, risk management and technical specialists (both management and operational). The PPG targets areas where APRA continues to identify weaknesses as part of its ongoing supervisory activities. The PPG does not seek to provide an allencompassing framework, or to replace or endorse existing industry standards and guidelines. | File type: PDF | File size: 328.44 KB

  • 240

    Insurance Risk

    GPG

    240

    Guidance (1)

    Status: Current

    February 2006

    DownloadGPG 240 Insurance Risk

    Prudential Standard GPS 220 Risk Management (GPS 220) sets out APRA’s requirements of generalinsurers (insurers) in relation to risk management. This prudential practice guide aims to assist insurers in complying with those requirements in relation to insurance risk and, more generally, to outline prudent practices in relation to insurance risk management. | File type: PDF | File size: 71.3 KB

  • 245

    Reinsurance Management Strategy

    GPG

    245

    Guidance (1)

    Status: Current

    July 2008

    DownloadGPG 245 Reinsurance Management Strategy

    Prudential Standard GPS 230 Reinsurance Management (GPS 230) sets out APRA’s requirements of insurers in relation to reinsurance management. This prudential practice guide aims to assist insurers in complying with those requirements and, more generally, to outline prudent practices in relation to reinsurance management. | File type: PDF | File size: 68.24 KB

  • 250

    Balance Sheet and Market Risk

    GPG

    250

    Guidance (1)

    Status: Current

    February 2006

    DownloadGPG 250 Balance Sheet and Market Risk

    Prudential Standard GPS 220 Risk Management (GPS 220) sets out APRA’s requirements of general insurers (insurers) in relation to risk management. This prudential practice guide aims to assist insurers in complying with those requirements in relation to balance sheet and market risk and, more generally, to outline prudent practices in relation to balance sheet and market risk management. | File type: PDF | File size: 68.48 KB

  • FAQs

    What is a prudential standard? ›

    This Prudential Standard aims to ensure that an authorised deposit-taking institution adopts prudent practices to manage the risks associated with securitisation and to ensure sufficient regulatory capital is held against the associated credit risk.

    What are APRA standards? ›

    APRA's standards set out minimum capital, governance and risk management requirements. The prudential practice guides provide direction on how institutions may adhere to these prudential standards, as well as to other related expectations.

    Who needs to report to APRA? ›

    Registered Financial Corporations (RFCs) with more than $50 million assets are required, under the Financial Sector (Collection of Data) Act 2001 and its reporting standard, to provide data to APRA. The data is defined in the set of reporting forms and instructions.

    Who regulates insurance companies in Australia? ›

    The Australian Securities and Investments Commission (ASIC) is responsible for the licensing and regulating of insurance brokers and agents.

    What is prudential regulatory reporting? ›

    Prudential regulation is a type of financial regulation that requires financial firms to control risks and hold adequate capital as defined by capital requirements, liquidity requirements, by the imposition of concentration risk (or large exposures) limits, and by related reporting and public disclosure requirements ...

    What is the main focus of prudential regulation? ›

    The PRA has three statutory objectives: to promote the safety and soundness of these firms; and. to contribute to the securing of an appropriate degree of protection for policyholders (for insurers).

    What is APRA responsible for in general insurance? ›

    APRA licenses banking, insurance and superannuation businesses to operate and supervises them to ensure that under all reasonable circumstances, the financial promises made to their beneficiaries (i.e. depositors, policyholders and superannuation fund members) are kept.

    What entities are regulated by APRA? ›

    APRA is an independent statutory authority that is accountable to the Australian Parliament. APRA oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurers, private health insurers, friendly societies, and a large part of the superannuation industry.

    How do you write a reporting requirement? ›

    In the course of creating strong general reporting requirements for any given system, an analyst must consider the following:
    1. The report's purpose. What is the purpose of this report? ...
    2. Industry standards. ...
    3. User expectations. ...
    4. Unique Identifiers. ...
    5. The design of the report function. ...
    6. The design of the report look.

    What are general insurance companies regulated by? ›

    General insurers are prudentially regulated under the Insurance Act 1973, which mandates that companies must be authorised in order to provide general insurance products.

    Who monitors the compliance of insurance companies? ›

    Companies are required to submit a SAR to the Department of Treasury's Financial Crimes Enforcement Network. Insurance companies must obtain relevant customer information from agents, brokers and any other sources to report such transactions.

    Who are the main regulators of insurance companies? ›

    Insurance is regulated by the states. This system of regulation stems from the McCarran-Ferguson Act of 1945, which describes state regulation and taxation of the industry as being in “the public interest” and clearly gives it preeminence over federal law. Each state has its own set of statutes and rules.

    What is RSA and APRA? ›

    If you've got an account with a retail or industry super fund, you should put an X in the first box where it says 'The APRA fund or retirement savings account (RSA)'. All superannuation funds are regulated under APRA, and therefore called an 'APRA fund'.

    What are prudential policies? ›

    The objective of macro-prudential policy is to mitigate the risk of a disruption to the provision of financial services, caused by an impairment of all or parts of the financial system, with serious negative consequences for the real economy. This risk is known as systemic risk.

    What is prudential risk management? ›

    Prudential risks are those that can reduce the adequacy of a firm's financial resources, and as a result adversely affect confidence in the financial system or prejudice consumers. This includes credit risk, market risk, liquidity risk, and operational risk.

    What is difference between FCA and PRA? ›

    The PRA and the FCA are two separate entities – although we do work closely with the FCA Opens in a new window on certain issues/firms. The main difference is that the FCA works with firms to ensure fair outcomes for consumers.

    What are regulatory reporting requirements? ›

    Regulatory reporting is the submission of data to a relevant authority in order to demonstrate compliance with the necessary regulatory provisions. In simpler terms, it is the process businesses and individuals must continually go through to show they are following all the rules.

    What is PRA reporting? ›

    Firms in the banking sector (banks, building societies, investment firms and credit unions) need to provide regulatory returns to the Prudential Regulation Authority (PRA). This section explains the returns and how firms should report them.

    Who is responsible for prudential regulation? ›

    We are the Prudential Regulation Authority

    As part of the Bank of England, we are responsible for the prudential regulation and supervision of around 1,500 banks, building societies, credit unions, insurers and major investment firms.

    What are the 5 principles of better regulation? ›

    1998 Better Regulation Task Force publishes a set of basic principles of Better Regulation (transparency, accountability, targeting, consistency, proportionality), which are later endorsed by the government.

    What is the importance of prudential? ›

    The main aim of prudential regulations is to increase the stability of financial systems; however, such regulations also increase the risk-taking tendency of banks, they encourage them to combine and limit their lending possibilities with, at the same time, lowering the efficiency of monetary policy in affecting ...

    Are general insurers regulated by APRA? ›

    General insurers listed as being in run-off are restricted by APRA from writing new or renewal insurance business. However, the company may still be acting as an insurance agent, broker or underwriting agent for other general insurers.

    What is covered under general insurance? ›

    General insurance covers home, your travel, vehicle, and health (non-life assets) from fire, floods, accidents, man-made disasters, and theft. Different types of general insurance include motor insurance, health insurance, travel insurance, and home insurance.

    What are the 2 types of APRA funds? ›

    super funds regulated by the Australian Prudential Regulation Authority (APRA), including small funds (SAFs) exempt public sector funds.

    What is an APRA covered entity? ›

    (a) the APRA covered entity belongs to a margining group whose aggregate. month-end average notional amount of non-centrally cleared derivatives for. the relevant reference period in the first column of Table 1 exceeded the. corresponding qualifying level in the second column of Table 1; and.

    What legislation does APRA enforce? ›

    These Acts are the Banking Act 1959, the Insurance Act 1973, the Life Insurance Act 1995, the Private Health Insurance (Prudential Supervision) Act 2015 and the Superannuation Industry (Supervision) Act 1993. See APRA Act, s8(2).

    Which of the following institutions are supervised by APRA? ›

    APRA oversees: authorised deposit-taking institutions (such as banks, building societies and credit unions) general insurers. life insurers.

    What are the four major categories of reporting requirements? ›

    Answer:
    • Report requirements.
    • Plan of Action.
    • Plan of Milestone.
    • Charting the progress of a risk management plan.
    20 Oct 2019

    What are the five requirements of a report? ›

    What Are the Five Elements of Report Writing? Include Them for Effective Work
    • Executive Summary. An executive summary is one of the most important elements of the report writing. ...
    • Introduction. Introduction undoubtedly holds great importance to any document. ...
    • Discussion. ...
    • Conclusion. ...
    • Recommendations.
    21 Jan 2020

    What are 3 criteria for a good report? ›

    An ideal report should be Clear, concise, accurate and well organised with clear section headings. Easy for the audience to understand. Presentation is a key element in successful report writing.

    What regulates the insurance sector? ›

    Federal Regulation

    Although most insurance operations are regulated by the states, there are some areas where the federal government has exercised its regulatory authority. For example, federal law imposes penalties for fraud and false statements made in connection with insurance transactions.

    Do general insurance companies need an AFS Licence? ›

    If you want to run a financial services business, you generally need to be authorised under an AFS licence. An AFS licence authorises you and your representatives to provide financial services to clients.

    Who underwrites the general insurance? ›

    The General (an agency) offers auto insurance online underwritten by the following insurance companies: Permanent General Assurance Corporation (NAIC #37648), Permanent General Assurance Corporation of Ohio (NAIC #22906), and The General Automobile Insurance Company, Inc.

    What is compliance in the insurance industry? ›

    Regulatory compliance and risk management for insurance companies requires organizations to abide by comprehensive Know Your Customer (KYC) standards and, of course, impeccable anti-money laundering (AML) and anti-corruption practices. Transparency is key to all businesses, but especially insurance providers.

    What is coverage compliance role? ›

    A compliance officer is responsible for keeping a check on the company for transparency and to comply with rules and regulations. This applies to national as well as international regulations pertaining to the industry.

    Which form do insurance companies use to file the SAR report? ›

    Until such time as that form has been adopted and is available for use, insurance companies should use FinCEN Form 101 – Suspicious Activity Report by Securities and Futures Industries to report suspicious transactions.

    What are 4 reasons for the role of regulation in insurance? ›

    Maintain insurer solvency. Compensate for inadequate consumer knowledge. Ensure reasonable rates. Make insurance available.

    Who holds insurance accountable? ›

    Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state's consumers by fairly regulating the insurance industry.

    What does NAIC stand for insurance? ›

    The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia, and five U.S. territories.

    What is a prudential measure? ›

    Prudential measures create restrictions on the credit market – to reduce systematic risk – but, on the other hand, can lead to greater market power for financial institutions.

    What are prudential policies? ›

    The objective of macro-prudential policy is to mitigate the risk of a disruption to the provision of financial services, caused by an impairment of all or parts of the financial system, with serious negative consequences for the real economy. This risk is known as systemic risk.

    What is a prudential matter? ›

    Prudential Matters means in respect of a Member those aspects of its structure and operations that affect its financial integrity including, without limitation, Sample 1Sample 2Sample 3.

    What is prudential supervision and why is it necessary? ›

    Prudential supervision, in which the government establishes regulations to reduce risk taking and then supervi- sors monitor banks to see that they are complying with these regulations and not taking on excessive risk, is thus needed to ensure the safety and soundness of the banking system.

    What is difference between FCA and PRA? ›

    The PRA and the FCA are two separate entities – although we do work closely with the FCA Opens in a new window on certain issues/firms. The main difference is that the FCA works with firms to ensure fair outcomes for consumers.

    What is prudential risk management? ›

    Prudential risks are those that can reduce the adequacy of a firm's financial resources, and as a result adversely affect confidence in the financial system or prejudice consumers. This includes credit risk, market risk, liquidity risk, and operational risk.

    What is prudential capital requirement? ›

    Capital requirements

    For insurers, the prudential capital requirement is specified as a dollar amount, resulting in a minimum ratio that is effectively at least 100 per cent1. Banks and insurers are expected to maintain prudent buffers above these minimum amounts.

    What are the 4 key elements of an insurance policy? ›

    In general, an insurance contract must meet four conditions in order to be legally valid: it must be for a legal purpose; the parties must have a legal capacity to contract; there must be evidence of a meeting of minds between the insurer and the insured; and there must be a payment or consideration.

    What is the prudential called now? ›

    Prudential is part of M&G plc. See our companies and their registration numbers.

    Is prudential the largest insurance company? ›

    Prudential

    The fourth-largest life insurance company, Prudential, has been in business for over 140 years. It's one of the few life insurance carriers that doesn't exclude customers with chronic conditions, such as HIV.

    What is the importance of prudential? ›

    The main aim of prudential regulations is to increase the stability of financial systems; however, such regulations also increase the risk-taking tendency of banks, they encourage them to combine and limit their lending possibilities with, at the same time, lowering the efficiency of monetary policy in affecting ...

    What is the prudential authority responsible for? ›

    What is the Prudential Authority? The PA is the financial sector regulator that is responsible for regulating and supervising, in terms of financial sector laws, financial institutions that provide financial products and securities services as well as market infrastructures (MIs) in South Africa.

    What does prudential mean in law? ›

    Prudential standing requires plaintiffs to raise claims based on individual, as opposed to generalized grievances. This doctrine, unlike Article III standing, is based on prudential rather than constitutional constraints.

    What are the 5 principles of supervision? ›

    They include:
    • Principle 1: Volunteers are real staff. ...
    • Principle 2: Volunteers aren't free. ...
    • Principle 3: Supervision is about forming and maintaining relationships. ...
    • Principle 4: The functions of a supervisor can be shared. ...
    • Principle 5: Supervision cannot be isolated from other aspects of volunteer program management.
    10 Mar 2013

    What are the 5 main elements of effective supervision? ›

    Over the course of the semester we compiled our own list of “good enough” clinical supervision ingredients: A list of what we considered the basic core components of competent and responsible supervision. We distilled these into 5 basic components: support, trust, respect, time, and investment.

    What are the 4 major functions of supervision? ›

    This tool focuses on four core functions of supervision – management, development, support and mediation.

    Videos

    1. Recording: AASB & NZASB Roundtable Discussion (2 May 22) – Insurance Contracts in the Public Sector
    (Australian Accounting Standards Board)
    2. Prudential PLC. Is it a good investment?
    (Newton UK Equities)
    3. IASB's Insurance Contracts Project
    (WorldBank CFRR)
    4. Part 1 - EFRAG Conference - IFRS & Regulation: Searching for Common Ground - 28 11 19
    (EFRAG)
    5. Part 4 ICAEW-IAI-AFA Webinar Understanding IFRS 17 Insurance Contracts - QnA Session
    (IAI IKATAN AKUNTAN INDONESIA)
    6. IMU654: Issues of financial reporting
    (Anissa Kamaruddin)

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