Featured Product

    APRA Consults on Options to Revise the Prudential Standard LPS 117

    March 04, 2019

    APRA is consulting on revisions to LPS 117, which is the prudential standard on the asset concentration risk charge (ACRC) as part of the capital adequacy requirements. The consultation document (Attachment A) outlines the main areas where APRA is considering options for revising LPS 117, particularly in terms of the restrictions on exposures to offshore reinsurers to ensure that the risks are constrained within the APRA appetite. The comment period on the consultation ends on May 10, 2019. Based on the inputs received, APRA expects to release a discussion paper, accompanied by draft revised prudential standards, for consultation in the second half of 2019.

    The review considers, among other factors, aspects of LPS 117 that relate to the prudential requirements in relation to reinsurance arrangements. APRA is reviewing the following:

    • Asset concentration limits of LPS 117 relevant to exposures arising from reinsurance arrangements
    • The treatment of risk mitigants under LPS 117
    • Other issues, including investment risk-sharing and consequential amendments

    LPS 117 prescribes the method for calculating the asset concentration risk charge component of the prescribed capital amount for a life company. The purpose of the standard is to ensure a life company maintains adequate capital against the asset concentration risks associated with its activities. The review is being undertaken to ensure that the standard remains fit-for-purpose and in line with the objectives of the mandate of APRA. The review is being undertaken in the context of APRA’s observation of an increase in the use of offshore reinsurers, particularly in the group risk market, which can put at risk the ability of APRA to effectively supervise the Australian life insurance industry as a whole. 

     

    Related Links

    Comment Due Date: May 10, 2019

    Keywords: Asia Pacific, Australia, Insurance, LPS 117, Asset Concentration Risk Charge, Capital Adequacy, Offshore Reinsurer, APRA

    Related Articles
    News

    BIS Examines Use of Big Data and Machine Learning at Central Banks

    BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.

    March 04, 2021 WebPage Regulatory News
    News

    APRA Finalizes Reporting Standard for Operational Risk Requirements

    APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.

    March 03, 2021 WebPage Regulatory News
    News

    ECB Publishes Guide for Determining Penalties for Regulatory Breaches

    ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.

    March 02, 2021 WebPage Regulatory News
    News

    MAS Sets Out Good Practices to Manage Operational Risks Amid COVID

    MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.

    March 02, 2021 WebPage Regulatory News
    News

    ACPR Announces New Data Collection Application for Banks and Insurers

    ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.

    March 02, 2021 WebPage Regulatory News
    News

    BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox

    BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.

    March 02, 2021 WebPage Regulatory News
    News

    EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models

    EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.

    March 01, 2021 WebPage Regulatory News
    News

    SRB Publishes Overview of Resolution Tools Available in Banking Union

    SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.

    March 01, 2021 WebPage Regulatory News
    News

    EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR

    EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).

    March 01, 2021 WebPage Regulatory News
    News

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    March 01, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6655