Featured Product

    APRA to Integrate AASB 17 into Capital and Reporting Frameworks

    November 16, 2018

    APRA published a notification describing its planned approach for the integration of the insurance contracts standard AASB 17 into the capital and reporting frameworks for insurers. The APRA notification is intended for all life insurers, general insurers, and level 2 insurance groups. APRA has a capital framework for life insurers and general insurers (referred to as the Life and General Insurance Capital, or LAGIC, framework). APRA prefers to align capital treatment with the accounting standards, unless departure is justified on prudential grounds.

    APRA has commenced a review on how to integrate AASB 17 into the LAGIC framework. APRA undertook a survey of insurers regarding the impact of AASB 17 and published the aggregate results in a letter dated May 31, 2018. Given the likelihood that most or all of the relevant capital prudential standards will be amended as part of the review, APRA intends to consider whether any further amendments should be made to the LAGIC framework in light of experience with the framework since its implementation. Finally, APRA is also reviewing the capital framework for private health insurers. APRA has written separately to that industry, outlining a process for that review, which aligns with the integration of AASB 17 discussed in this letter.

    As a next step, APRA will release a discussion paper that outlines the proposed approach at a principles level, including industry-specific adjustments where assessed as appropriate and necessary. APRA is engaging with the Actuaries Institute’s AASB 17 Task Force to build an understanding of the technical issues, along with the potential options for addressing them in the prudential framework. The options developed through this process will inform APRA’s development of a discussion paper currently planned for release toward the end of the 2019.

    AASB 17 will be effective for annual reporting periods beginning on or after January 01, 2021. However, IASB has voted on November 14, 2018 to propose a one-year deferral of the effective date of the international insurance contracts standard IFRS 17, to January 01, 2022. This proposed deferral is subject to public consultation in 2019.

     

    Related Links

    Keywords: Asia Pacific, Australia, Insurance, AASB 17, Insurance Contracts, IFRS 17, Capital Framework, Reporting, APRA

    Featured Experts
    Related Articles
    News

    FSB Examines Financial Stability Aspects of Bigtech and Cloud Services

    FSB published two reports that consider the financial stability implications from the offering of financial services by bigtech firms and the adoption of cloud computing and data services across a range of functions at financial institutions.

    December 09, 2019 WebPage Regulatory News
    News

    APRA Specifies Capital Treatment of Equity Investments in ABGF

    APRA published a letter to the authorized deposit-taking institutions outlining the regulatory capital treatment of their equity investments in the Australian Business Growth Fund (ABGF).

    December 09, 2019 WebPage Regulatory News
    News

    EBA Publishes Action Plan on Sustainable Finance

    EBA published the Action Plan on sustainable finance for banks.

    December 06, 2019 WebPage Regulatory News
    News

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

    EBA updated the Single Rulebook question and answer (Q&A) tool with answers to three questions under the Capital Requirements Regulation (CRR) and the second Payment Services Directive (PSD 2).

    December 06, 2019 WebPage Regulatory News
    News

    APRA Publishes Proposal to Increase Transparency of Banking Data

    APRA proposed to substantially increase the volume and breadth of data it makes publicly available on authorized deposit-taking institutions, including banks, credit unions, and building societies.

    December 05, 2019 WebPage Regulatory News
    News

    ESMA Consults on Guide to Internal Controls for Credit Rating Agencies

    ESMA launched a consultation on the guidelines on internal controls for credit rating agencies (CRAs).

    December 05, 2019 WebPage Regulatory News
    News

    EU Finalizes Directive and Prudential Rules for Investment Firms

    EU published, in the Official Journal of the European Union, the Directive (2019/2034) and Regulation (2019/2033) on the prudential requirements and supervision of investment firms.

    December 05, 2019 WebPage Regulatory News
    News

    OSFI Revises Guideline on Principles for Management of Liquidity Risk

    OSFI finalized Guideline B-6 on the principles for the management of liquidity risk.

    December 05, 2019 WebPage Regulatory News
    News

    ESAs Publish Draft Amendments to Bilateral Margin Requirements

    ESAs published joint draft regulatory technical standards to amend the Delegated Regulation on the risk mitigation techniques for non-cleared over-the-counter (OTC) derivatives as well as a joint statement on the introduction of fallbacks in OTC derivative contracts and the requirement to exchange collateral.

    December 05, 2019 WebPage Regulatory News
    News

    RBNZ Releases Final Decisions Related to Capital Review for Banks

    RBNZ released a paper that sets out its final decisions following the comprehensive review of its capital framework for banks, known as the Capital Review.

    December 05, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4279