APRA decided to apply an additional $250 million capital requirement to Allianz Australia Limited to reflect the issues identified in the risk governance self-assessment by the insurer. With this, Allianz Australia Limited becomes the fifth APRA-regulated entity to have an additional capital requirement imposed due to heightened operational risk, after Commonwealth Bank of Australia, ANZ, National Australia Bank, and Westpac. APRA has advised Allianz Australia Limited that the extra capital requirement will remain in place until it completes the remediation work underway to strengthen risk management and closes gaps identified in its self-assessment.
Allianz Australia Limited was one of the 36 banks, insurers and superannuation licensees that APRA had asked to undertake a self-assessment last year. The self-assessments were intended to gauge whether governance weaknesses identified by the Prudential Inquiry of APRA into the Commonwealth Bank of Australia also existed in other institutions. Overall, the self-assessments confirmed that many of the issues identified in the inquiry were not unique to Commonwealth Bank of Australia, including the need to strengthen non-financial risk management; ensure accountabilities are clear, cascaded, and enforced; and enhance risk culture. A number of common themes have emerged from the self-assessments:
- Non-financial risk management requires improvement
- Accountabilities are not always clear, cascaded, and effectively enforced
- Acknowledged weaknesses are well-known and some have been long-standing
- Risk culture is not well-understood and, therefore, may not be reinforcing the desired behaviors
Keywords: Asia Pacific, Australia, Insurance, Capital Requirements, Operational Risk, Allianz Australia Limited, Self Assessment, Governance, Prudential Inquiry, APRA
Previous ArticlePRA Letter from Sid Malik Presents Results of Proxy Modeling Survey
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.
The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).
The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.
The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.
The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.