APRA published the first edition of APRA Insight for 2020. The newsletter features articles on the evolving approach to supervising risk culture, the new approach to quarterly reporting, and the to-date progress on the recommendations of the Royal Commission toward improved supervision. This edition also mentions that APRA has launched a series of consultations aimed at substantially increasing the amount of data published in the authorized deposit-taking institution, general insurance, and life insurance sectors.
The newsletter highlights that the breadth, depth and quality of the data collected as part of the APRA supervision of superannuation funds is undergoing an upgrade under the banner of the multi-year Superannuation Data Transformation project. Launched in November last year, consultation on the initial phase of this project is progressing, with focus on addressing the most urgent gaps in data collection by APRA. Phases two and three will focus on increasing the granularity and consistency of the entire superannuation data collection, with their own consultation stages to follow. APRA expects to release the finalized prudential standard SPS 250 on insurance in superannuation and to commence consultation on a revised prudential practice guide SPG 250 on insurance in superannuation by mid-2020.
This issue of the newsletter also highlights the following key developments that are on the horizon:
- APRA has completed the final testing phase of the Supervision Risk and Intensity Model, which is slated to replace the existing risk rating system, known as PAIRS and SOARS. The roll-out of the model is being planned across the financial sector during the financial year 2020-21. APRA will shortly begin industry engagement on how the new model works, its expected impact on regulated entities, and plans for implementation from April 2020. APRA expects to publish the detail and mechanics underpinning this model, along with its revised Supervision Philosophy and supervision approach, in June 2020.
- In the second quarter of 2020, APRA plans to release a second consultation package on offshore reinsurers and the review of the prudential standard LPS 117 on asset concentration risk charge as part of the capital adequacy.
- Submissions are closing soon on the proposed revisions to the capital framework for private health insurance, which commenced last December. The consultation closes on March 27.
Related Link: APRA Insight
Keywords: Asia Pacific, Australia, Banking, Insurance, Securities, Pensions, Superannuation, Data Collection, Reporting, SPS 250, LPS 117, Capital Adequacy, Rating System, Newsletter, APRA
Previous ArticleSAMA Publishes Guidelines and Rules for Banks and Insurers
BoE published a statistical notice (Notice 2020/9) explaining the approach for treatment of payment holidays on the profit and loss return or Form PL.
BoE updated the known issues document for the statistical reporting Forms AS and FV.
FED announced individual capital requirements for 34 large banks and these requirements go into effect on October 01, 2020.
SRB published a set of documents to give operational guidance to banks on implementation of the bail-in tool.
BIS published an update on the G20 TechSprint Initiative, which was launched in April 2020 and aims to highlight the potential for technologies to resolve regulatory compliance (regtech) and supervisory (suptech) challenges.
OSFI published a letter that provides an update on the milestones for the implementation of the IFRS 17 standard on insurance contracts.
EBA updated the report on the implementation of selected COVID-19 policies.
The Financial Stability Institute (FSI) of BIS published a brief note that examines the supervisory challenges associated with certain temporary regulatory relief measures introduced by BCBS and prudential authorities in response to the COVID-19 pandemic.
BCBS is consulting on the principles for operational resilience and the revisions to the principles for sound management of operational risk for banks.
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.