Extra breathing space on risk management
Life insurance companies and other institutions will receive a 12-month transition period on implementing the Australian Prudential Regulation Authority's (ARPA's) risk management requirements, the regulator has announced.
In its letter to authorised deposit-taking institutions (ADIs), general insurers and life companies, APRA referred to a paper it released in May which proposed a cross-industry prudential standard to harmonise, consolidate and enhance its risk management requirements.
The regulator proposed that these changes would be effective from 1 January next year. However, it has decided to provide the industry with extra breathing space, it announced.
"Further, submissions received identified several practical constraints to implementing these enhancements by 1 January 2014. APRA acknowledges these concerns," the letter read.
"APRA still proposes to respond to submissions and finalise the prudential standards by
1 January 2014 but the standards will not be fully effective until 1 January 2015."
Despite the 12-month transition period, APRA said it expected all affected entities and groups to develop and introduce implementation plans to ensure they are able to meet all requirements by the proposed date.
"APRA will monitor the progress of these implementation plans," the regulator said. "APRA considers this additional 12-month transition period will provide the industry with sufficient time to comply fully with the proposed enhancements."
AUTHOR
Staff Writer
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
