APRA Revises the Prudential Standard LPS 230 on Reinsurance Management
APRA published the final revised Prudential Standard LPS 230 on Reinsurance Management and the standard will come into effect from April 01, 2018. LPS 230 applies to all life companies, including friendly societies, registered under the Act.
The current LPS 230 requires reinsurance contracts that are potentially financial reinsurance arrangements, or that include non-standard features or clauses that may impact on the extent of risk transfer, to be submitted to APRA for approval. APRA, on November 03, 2017, had proposed amendments to LPS 230 to refine the regulatory approach for such arrangements. The proposal was to replace the current approach with a more principles-based approach to assessing whether arrangements between a life company and a reinsurer require APRA approval. APRA had not intended to significantly widen the range of arrangements that must be submitted for approval. Rather, APRA would only expect to be consulted on arrangements that may give rise to potentially adverse prudential or policy owner outcomes.
APRA has received three submissions in response to the consultation, two of which were non-confidential. APRA amended its proposals in response to the submissions and these amendments have been incorporated in the final version of LPS 230, with key changes to the draft version of LPS 230 being listed in Attachment A to the APRA notification letter. APRA noted the feedback that it would be appropriate to support the principles-based approach in LPS 230, with some additional guidance on interpretation. Thus, APRA will release responses to the frequently asked questions (FAQs) in submissions, including the topics listed in Attachment B, which covers referable reinsurance arrangements.
Related Link: Consultation on LPS 230
Effective Date: April 01, 2018
Keywords: Asia Pacific, Australia, Insurance, Reinsurance, LPS 230, Reinsurance Management, APRA
Previous Article
IMF Publishes Reports on 2018 Article IV Consultation with AlgeriaRelated Articles
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA Issues Erratum for Technical Package on Reporting Framework 3.0
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
EBA Publishes Risk Dashboard for Third Quarter of 2020
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Finalizes Guide on Supervisory Approach to Bank Consolidation
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.
SRB Chair Outlines Work Priorities for 2021
The SRB Chair Elke König published an article setting out work priorities for 2021.
FDIC Selects Companies to Compete in Final Phase of Tech Sprint
FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.