Independent Review – Australian Prudential Regulation Authority
On 27 September 2022, the Australian Prudential Regulation Authority (APRA) announced that it had finalised the capital framework for private health insurers.
The new framework is designed to enhance policyholder protection by ensuring that private health insurers maintain an appropriate level of financial resilience. The new prudential standards better reflect the risks faced by insurers, improve comparability across insurers and align with international best practice. The new standards also align with the introduction of new accounting standards for insurance AASB 17 Insurance Contracts. The framework takes effect from 1 July 2023.
Consistent with the Government’s Impact Analysis (IA) requirements, the independent review has been certified by APRA as meeting the requirements of an IA. The Office of Impact Analysis (OIA) does not assess the quality of independent reviews and IA-like documents used in lieu of a IA, but does assess whether the options analysed in the independent review are relevant to the regulatory proposal. The OIA assessed that the options analysed in the independent review were sufficiently relevant to the regulatory proposal.
The agency estimates the average annual regulatory costs at $1.8 million.