The Australian Prudential Regulation Authority (APRA) has released a set of prudential standards in final form, a set of draft prudential standards and a response paper as part of its review of capital standards for general and life insurers. 

The aims of APRA’s review include improving the risk-sensitivity of the capital standards for insurers and achieving better alignment of these standards across APRA-regulated industries.

APRA commenced its review in 2010 and has consulted extensively with industry and stakeholders since then. The paper released outlines APRA’s response to the main issues raised in submissions on APRA’s December 2011 consultation package and invites comment on the few remaining areas to be finalised. Accompanying the response paper are: (i) final versions of most of the capital standards released in December 2011;  (ii) draft prudential standards setting out APRA’s proposals for the composition of the capital base (i.e. Prudential Standard GPS 112 Capital Adequacy: Measurement of Capital and an updated draft of Prudential Standard LPS 112 Capital Adequacy: Measurement of Capital); (iii) draft prudential standards with amendments that are, in the main, consequential to the revised capital framework, as well as a small number of other proposed amendments to enhance readability and address minor prudential matters; and  (iv) updated versions of two draft prudential standards — Prudential Standard GPS 001 Definitions and Prudential Standard LPS 001 Definitions.