APRA has commenced a review of the capital standards for private health insurers to ensure they remain sufficient to protect policyholders. APRA will shortly commence consulting with industry and other stakeholders ahead of releasing a discussion paper on the potential revisions to the capital framework toward the middle of 2019.
The review of the capital framework for private health insurance (PHI) is the final phase of APRA’s PHI Roadmap, launched in 2016 shortly after APRA took over regulatory responsibility for the sector from the Private Health Insurance Administration Council (PHIAC):
- Phase One was focused on risk management and took effect from April this year.
- Phase Two was aimed at lifting standards of governance and decision-making; it was finalized in September and comes into force from July 01 next year.
- Phase Three of the PHI Roadmap is expected to be finalized before the end of 2020, with transition arrangements put in place to help insurers adjust to the new framework.
APRA will now turn its attention the capital framework it inherited from PHIAC to ensure it remains fit for purpose. In addition to examining whether the minimum capital requirements sufficiently support PHI resilience, APRA will consider more closely aligning the framework to the capital framework used by life and general insurers.
Keywords: Asia Pacific, Australia, Insurance, Private Health Insurers, Capital Requirements, PHI Roadmap, APRA
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