APRA Informs RSE Licensees About Reforms to Address Account Erosion
APRA published a letter informing the registrable superannuation entity (RSE) licensees about the change resulting from the recent passage of the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 (PYSP). PSYP will require all registrable superannuation entity licensees to implement a number of reforms to address account erosion due to excessive fees or unnecessary insurance. In this context, APRA also published a set of frequently asked questions (FAQs) addressed to the registrable superannuation entity licensees. The legislation to implement the PYSP reforms becomes effective from July 01, 2019.
The letter states that the government indicated to APRA that it will pursue amendments to the Superannuation Industry (Supervision) Act 1993 (SIS Act) to ensure that the government’s policy intent, which underpinned the PSYP legislative reforms, is achieved in the two areas that have been raised by industry. APRA understands that the government will seek to amend the SIS Act to provide that:
- Legislative requirements allow for the aggregation of a members’ interests in one or more products held within a superannuation account
- Rights of members under fixed term insurance cover are not affected and insurance cover is not inappropriately removed. This may affect conventional products where the switching off of cover would have a demonstrable adverse financial effect on the member, such as products that are already fully paid up or currently non-premium paying, whole of life and endowment products, and certain legacy products.
Related Link: Letter and FAQs
Effective Date: July 01, 2019
Keywords: Asia Pacific, Insurance, SIS Act, FAQ, Superannuation, PSYP, Pension Funds, APRA
Next Article
EBA Single Rulebook Q&A: First Update for July 2019Related Articles
ECA Recommends Actions to Enhance Resolution Planning for Banks
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE Publishes Key Elements of the 2021 Stress Testing for Banks in UK
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA Proposes Rules on Identity Verification of Depositor Protection
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB Publishes Work Program for 2021
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FED Revises Capital Planning and Stress Testing Requirements for Banks
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB Releases Results of Bank Lending Survey for Fourth Quarter of 2020
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
Bundesbank Publishes Derivation Rules for Reporting by Banks
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
ESAs Publish Reporting Templates for Financial Conglomerates
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.
EBA Publishes Report on Asset Encumbrance of Banks in EU
EBA published the annual report on asset encumbrance of banks in EU.
FCA Proposes Guidance on Mortgage and Consumer Credit Repossessions
FCA proposed two sets of guidance on the approaches to mortgage repossessions and consumer credit repossessions, with comment period ending on January 18, 2021.
