Federal Register of Legislation - Australian Government

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Determinations/Prudential as made
This instrument revokes Insurance (prudential standard) determination No. 1 of 2019, including Prudential Standard GPS 110 Capital Adequacy.
Administered by: Treasury
Registered 25 Jun 2019
Tabling HistoryDate
Tabled HR02-Jul-2019
Tabled Senate02-Jul-2019
Date of repeal 17 Sep 2019
Repealed by Division 1 of Part 3 of Chapter 3 of the Legislation Act 2003

Insurance (prudential standard) determinations Nos. 10 to 13 of 2019

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Insurance Act 1973, section 32

Under subsection 32(1) of the Insurance Act 1973 (the Act), APRA has the power to determine standards (prudential standards), in writing, in relation to prudential matters to be complied with by general insurers, authorised non-operating holding companies (authorised insurance NOHCs), and subsidiaries of general insurers and authorised NOHCs. Under subsection 32(4) of the Act, APRA may, in writing, vary or revoke a prudential standard.

On 19 June 2019, APRA made the following determination instruments (the Instruments):

(1)          Insurance (prudential standard) determination No. 10 of 2019 (the instrument) which revokes Prudential Standard GPS 110 Capital Adequacy made under Insurance (prudential standard) determination No. 1 of 2019;

(2)          Insurance (prudential standard) determination No. 11 of 2019 (the instrument) which revokes Prudential Standard GPS 116 Capital Adequacy: Insurance Concentration Risk Charge made under Insurance (prudential standard) determination No. 6 of 2019;

(3)          Insurance (prudential standard) determination No. 12 of 2019 (the instrument) which revokes Prudential Standard GPS 110 Capital Adequacy made under Insurance (prudential standard) determination No. 3 of 2014 and determines a new Prudential Standard GPS 110 Capital Adequacy (GPS 110);

(4)          Insurance (prudential standard) determination No. 13 of 2019 (the instrument) which revokes Prudential Standard GPS 116 Capital Adequacy: Insurance Concentration Risk Charge made under Insurance (prudential standard) determination No. 6 of 2012 and determines a new Prudential Standard GPS 116 Capital Adequacy: Insurance Concentration Risk Charge (GPS 116);

(5)          Insurance (prudential standard) determination No. 10 of 2019 and Insurance (prudential standard) determination No. 11 of 2019 commence on the date they are signed, and Insurance (prudential standard) determination No. 12 of 2019 and Insurance (prudential standard) determination No. 13 of 2019 commence on 1 July 2019.

1.             Background

On 17 April 2019, APRA determined nine general insurance prudential standards reflecting consequential amendments arising from the introduction of the new Prudential Standard CPS 320 Actuarial and Related Matters (CPS 320) and Prudential Standard GPS 340 Insurance Liability Valuation (GPS 340).

During the process of revoking the former versions of those nine general insurance prudential standards and determining new versions of those standards, several words were inadvertently omitted from GPS 110 and GPS 116 as made under Insurance (prudential standard) determination No. 1 of 2019 and Insurance (prudential standard) determination No. 6 of 2019 (respectively).

2.             Purpose and operation of the instruments

The purpose of these instruments is to revoke the versions of GPS 110 and GPS 116 as made under Insurance (prudential standard) determination No. 1 of 2019 and Insurance (prudential standard) determination No. 6 of 2019 (respectively) containing the minor omissions, and to determine new versions of GPS 110 and GPS 116 correcting those minor omissions. The instruments do not make any other changes.

3.             Consultation

The instruments are minor and machinery in nature and do not substantially alter existing arrangements.

4.             Regulation Impact Statement

The Office of Best Practice and Regulation advised that a Regulation Impact Statement was not required for the prudential standards (CPS 320 and GPS 340) that gave rise to these consequential amendments.

5.             Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

A Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is provided at Attachment A to this Explanatory Statement.


 

ATTACHMENT A

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Insurance (prudential standard) determination Nos. 10 to 13 of 2019

These Legislative Instruments (instruments) are compatible with the human rights and freedoms recognised or declared in the international instrument listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (HRPS Act).

Overview of the Legislative Instrument

The purpose of these instruments is to correct minor omissions in the versions of GPS 110 and GPS 116 as made under Insurance (prudential standard) determination No. 1 of 2019 and Insurance (prudential standard) determination No. 6 of 2019 (respectively) arising from consequential amendments made to GPS 110 and GPS 116 in April 2019 to reflect the introduction of CPS 320 and GPS 340.

Human rights implications

APRA has assessed the instruments against the international instruments listed in section 3 of the HRPS Act and has determined that the instruments do not engage any of the applicable rights or freedoms.

Conclusion

These instruments are compatible with human rights as they does not raise any human rights issues.