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APRA launches review of insurance risk management frameworks
The Australian Prudential Regulation Authority (APRA) will require a number of general insurers to review the soundness of their risk management frameworks in light of recent issues with business interruption (BI) insurance.
Lockdowns and other restrictions associated with COVID-19 have triggered a spate of potential BI claims, with many insurers exposed through policy wordings that had not kept up-to-date with changing legislation. The resultant legal uncertainty, and significant financial exposure for insurers, has raised concerns about the strength of insurers’ risk management frameworks.
In response, APRA has written to a number of insurers asking them to undertake a self-assessment of their risk management frameworks in the context of BI, so as to prevent similar problems occurring in the future. The review will also focus on cyber risk, however APRA expects insurers to ensure their risk frameworks are
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APRA releases consultation to enhance oversight of life reinsurance market
The Australian Prudential Regulation Authority (APRA) has released for consultation a package designed to address concerns regarding the increased use of offshore reinsurers by life insurers. These concerns are particularly heightened in relation to the group risk market, which plays an important role in Australia’s superannuation system.
The proposed updates to Prudential Standard LPS 117 Capital Adequacy: Asset Concentration Risk Charge (LPS 117) will impose an aggregate limit on the exposure of life insurers to offshore reinsurers, which are not regulated by APRA. Offshore reinsurers that enter the domestic market and become an APRA-registered entity will not be subject to the aggregate limit.
APRA completes first phase of its Superannuation Data Transformation miragenews.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from miragenews.com Daily Mail and Mail on Sunday newspapers.