APRA plans to align its capital and reporting frameworks with AASB 17

The Australian Prudential Regulation Authority (APRA) is consulting on its plans to update its insurance capital and reporting frameworks for life, general and private health insurance to align, where appropriate, with the new insurance standard, AASB 17 Insurance Contracts.

Comments on APRA’s Discussion Paper, Integrating AASB 17 into the capital and reporting frameworks for insurers and updates to the LAGIC framework close 31 March 2021.

APRA’s prudential capital and reporting framework is based on current accounting standards, so it is vitally important for it to update these to reduce the dual regulatory burden for the industry because failure to do so will mean insurers will have to maintain two sets of records, that is, two systems for valuations, actuarial, accounting and reporting, with additional costs to policyholders.

APRA is also updating the Life and General Insurance Capital (LAGIC) framework, given it has not been substantively reviewed since it was implemented in 2013. The proposals are not expected to significantly change minimum capital requirements or materially impact premiums.

This publication has been carefully prepared, but is general commentary only. This publication is not legal or financial advice and should not be relied upon as such. The information in this publication is subject to change at any time and therefore we give no assurance or warranty that the information is current when read. The publication cannot be relied upon to cover any specific situation and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact the BDO member firms in Australia to discuss these matters in the context of your particular circumstances.

BDO Australia Ltd and each BDO member firm in Australia, their partners and/or directors, employees and agents do not give any warranty as to the accuracy, reliability or completeness of information contained in this article nor do they accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it, except in so far as any liability under statute cannot be excluded. Read full Disclaimer.