APRA Consults on Prudential Standard on Insurance in Superannuation
APRA proposed revisions to the prudential standard SPS 250 on insurance in superannuation. SPS 250 establishes requirements for registrable superannuation entity (RSE) licensees with respect to making insured benefits available to beneficiaries. The proposed changes to SPG 250 are aimed at improving superannuation member outcomes by helping trustees select the most appropriate policies for their members and monitor their ongoing relationships with insurers. The consultation ends on February 03, 2020 and APRA is expected to finalize SPS 250 by mid-2020. The revised standard will come into effect on January 01, 2021.
APRA has proposed that certain transitional requirements will commence on the date of registration of revised SPS 250 (anticipated to be in July 2020), with the remaining requirements to commence on January 01, 2021. The proposed revisions will require:
- a process that enables beneficiaries to easily opt-out of insurance cover
- that the level and type of insurance cover not inappropriately erode the retirement income of beneficiaries
- that any status attributed to a beneficiary in connection with the provision of insurance is fair and reasonable (Royal Commission Recommendation 4.15)
- independent certification that insurance arrangements are in the best interests of beneficiaries (Royal Commission Recommendation 4.14)
APRA decided to update SPS 250 following the post-Implementation review of the superannuation prudential framework. The review recommended enhancements to the APRA requirements and guidance on the strategy, design, and selection of insurers and how these affect member outcomes. The proposed changes also respond to two of the recommendations from the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry Final Report. The insights from this consultation will also form the basis of a revised Prudential Practice Guide SPG 250 on Insurance in Superannuation, which APRA will consult on early next year.
Related Links
Comment Due Date: February 03, 2019
Effective Date: January 01, 2021
Keywords: Asia Pacific, Australia, Insurance, Superannuation, Pensions, Royal Commission Recommendations, SPS 250, APRA
Previous Article
EBA Publishes 2020 Stress Test Templates After Testing with BanksRelated Articles
EBA Launches Stress Tests for Banks, Issues Other Updates
The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
