APRA Prudential Requirements

13

The Act provides for the prudential supervision of insurers by APRA, the national prudential regulator created on 1 July 1998[5].

14

APRA formulates, promulgates and enforces prudential policy and practice applicable to insurers and insurance groups. It does this through General Insurance Prudential Standards (GPSs), which have the force of law. Non-enforceable best practice guidance in relation to prudential matters is contained in Prudential Practice Guides (GPGs).

15

Without limiting the role of the Prudential Standards in their entirety, the Prudential Standard of most relevance to the auditor of an insurer and/or insurance group is GPS 310.

16

Under GPS 001, the term ‘Prudential Requirements’ [6] includes requirements imposed by:

  1. the Act;
  2. Insurance Regulations 2002;
  3. APRA Prudential Standards;
  4. Financial Sector (Collection of Data) Act 2001 (the Collection of Data Act);
  5. APRA Reporting Standards (made under the Collection of Data Act);
  6. APRA conditions on the insurer’s authorisation;
  7. Directions issued by APRA pursuant to the Act; and
  8. Any other requirements imposed by APRA in writing[7].

 

Access to the Prudential Standards, Practice Guides and legislation relevant to insurers is available through APRA’s website (http://www.apra.gov.au)

5

Australian Prudential Regulation Authority Act 1998.

6

These requirements may differ between locally incorporated and foreign insurers.

7

In relation to the Prudential Review Report, the auditor will report on the Prudential Requirements specified in writing by APRA of which the auditor is aware. Also refer to paragraphs 18 and 89.