June 26, 2019

APRA issued minor corrections to two prudential standards for general insurers: GPS 110 on capital adequacy requirements and GPS 116 on insurance concentration risk charge as part of the capital adequacy. The minor corrections reinstate words that were inadvertently deleted from the standards when they were remade in April 2019. The updated standards have been now published in the Federal Register of Legislation, with the effective date for the revised versions being July 01, 2019.

APRA, on April 17, 2019, had determined nine general insurance prudential standards, reflecting the consequential amendments arising from the introduction of the new Prudential Standard CPS 320 Actuarial and Related Matters (CPS 320) and Prudential Standard GPS 340 Insurance Liability Valuation (GPS 340). During the process of revoking the former versions of those nine general insurance prudential standards and determining the new versions of those standards, several words were inadvertently omitted from GPS 110 and GPS 116. The omitted words have been reinstated through this revision. 

GPS 110 requires a general insurer or Level 2 insurance group to maintain adequate capital against the risks associated with its activities. GPS 116, however, requires a general insurer or Level 2 insurance group to maintain adequate capital against the risks associated with insurance concentration in its activities. The key requirements of GPS 110 are that a general insurer or Level 2 insurance group must:

  • Have an Internal Capital Adequacy Assessment Process and must maintain required levels of capital
  • Determine its prescribed capital amount having regard to a range of risk factors that may adversely impact a general insurer or Level 2 insurance group’s ability to meet its obligations. These factors include insurance risk, insurance concentration risk, asset risk, asset concentration risk and operational risk
  • Comply with any supervisory adjustment to capital imposed by APRA
  • Make certain public disclosures about the capital adequacy position of the general insurer or Level 2 insurance group
  • Seek consent from APRA for certain planned capital reductions of the general insurer or Level 2 insurance group
  • Inform APRA of any significant adverse changes in the general insurer or Level 2 insurance group’s capital position

 

Related Links

Effective Date: July 01, 2019

Keywords: Asia Pacific, Australia, Insurance, General Insurers, Prudential Standards, GPS 110, GPS 116, Capital Adequacy, Concentration Risk, APRA

Related Articles
News

US Agencies Consult on Capital Treatment of Land Development Loans

US Agencies (FDIC, FED, and OCC) issued a proposed rule on the treatment of loans that finance the development of land for purposes of the one- to four-family residential properties exclusion in the definition of high volatility commercial real estate (HVCRE) exposure in the regulatory capital rule.

July 12, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Second Update for July 2019

Under the Single Rulebook question and answer (Q&A) updates for this week, EBA published answers to five questions related to supervisory reporting.

July 12, 2019 WebPage Regulatory News
News

ESMA Updates Manual for European Single Electronic Format in EU

ESMA updated the reporting manual for European Single Electronic Format (ESEF).

July 12, 2019 WebPage Regulatory News
News

FED Updates Supplemental Instructions for Reporting Form FR Y-9C

FED updated the supplemental instructions for FR Y-9C reporting.

July 12, 2019 WebPage Regulatory News
News

EBA Publishes Report on Monitoring Implementation of LCR in EU

EBA published its first report on the monitoring of the implementation of liquidity coverage ratio (LCR) in EU.

July 12, 2019 WebPage Regulatory News
News

APRA Applies Additional Capital Requirements to Three Australian Banks

APRA is applying additional capital requirements to three major banks in Australia to reflect higher operational risk identified in their risk governance self-assessments.

July 11, 2019 WebPage Regulatory News
News

IMF Report on 2019 Article IV Consultation on Euro Area Policies

IMF published its staff report in context of the 2019 Article IV consultation on euro area policies with member countries.

July 11, 2019 WebPage Regulatory News
News

FSB to Survey Practices on Cyber Incident Response and Recovery

FSB launched a survey on the industry practices on cyber incident response and recovery.

July 11, 2019 WebPage Regulatory News
News

ECB Appoints New Members of Supervisory Board

The Governing Council of ECB appointed Edouard Fernandez-Bollo, Kerstin af Jochnick, and Elizabeth McCaul as representatives to the Supervisory Board of ECB Banking Supervision, for a five-year non-renewable term.

July 11, 2019 WebPage Regulatory News
News

OSFI Consults on Applying Proportionality to Pillar 1 Rules in Canada

OSFI published a discussion paper seeks input on possible tailoring of the capital and liquidity requirements for small and medium-size deposit-taking institutions.

July 11, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3435