APRA released a package of prudential standards and guides to improve governance and decision-making in the private health insurance (PHI) industry. The package contains three new prudential standards, along with two prudential guides designed to assist insurers fulfill the requirements of the standards. The revised prudential standards will come into effect from July 01, 2019.
The measures, which were first outlined in a consultation package that was released in February this year, introduce stronger prudential standards that have successfully lifted capabilities across other APRA-regulated industries. The new prudential standards for private health insurers are:
- Prudential Standard CPS 510 Governance (CPS 510), a stronger cross-industry standard on board governance and renewal, which replaces the equivalent PHI-specific standard, HPS 510 Governance
- Prudential Standard CPS 520 Fit and Proper (CPS 520), which requires boards to establish and apply a written policy to ensure the competence and integrity of anyone exercising material influence over the company
- Prudential Standard HPS 310 Audit and Related Matters (HPS 310), which requires private health insurers to appoint an auditor to provide independent advice on their operations, financial position, and risk controls
APRA has also released two Prudential Practice Guides, CPG 510 and CPG 520, to help private health insurers meet the requirements of the new standards. Additionally, HPS 001 is the prudential standard that defines key terms referred to in other prudential standards that are applicable to private health insurers (also effective from July 09, 2019). APRA also confirmed that it will revoke the Prudential Standard HPS 350 Disclosure to APRA, which is no longer necessary. This is the culmination of Phase Two of the APRA roadmap for reviewing the PHI prudential framework. Phase One, focused on risk, resulted in the adoption of CPS 220 in April, the cross-industry risk management prudential standard of APRA. Phase Three will examine the capital standards in the industry and will commence later this year.
Effective Date: July 01, 2019
Keywords: Asia Pacific, Australia, Insurance, Private Health Insurers, CPS 510, CPS 520, HPS 310, HPS 001, APRA
Previous ArticleBank of France Hosts Meeting to Discuss Cyber Security of FMIs
Next ArticleIFRS Releases Taxonomy Formula Linkbase 2018
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.
FED released hypothetical scenarios for a second round of stress tests for banks.
FED is proposing to temporarily revise the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes necessary to conduct stressed analysis in connection with the re-submission of capital plans, using data as of June 30, 2020.
FED adopted a proposal to extend for three years, with revision, the information collection under the market risk capital rule (FR 4201; OMB No. 7100-0314).
EBA published a voluntary online survey seeking input from credit institutions on their practices and future plans for Pillar 3 disclosures on the environmental, social, and governance (ESG) risks.