Prudential Standard LPS 230 Reinsurance – Australian Prudential Regulation Authority
On 6 March 2018, the Australian Prudential Regulation Authority (APRA) remade Prudential Standard LPS 230 Reinsurance (LPS 230) under subsection 230A(1) of the Life Insurance Act 1995, without significant amendment.
LPS 230 requires life insurance companies, including friendly societies, to provide APRA with a report of each reinsurance contract in force between a life insurance company and a reinsurer during the financial year. LPS 230 sets out the details of what this report is to include and the administrative arrangements for submitting the report to APRA. LPS 230 also requires that certain types of reinsurance arrangements be submitted to APRA for approval, to ensure that they don’t give rise to adverse prudential impacts. LPS 230 sets out requirements for the circumstances in which approval is required, what an application must address and that APRA’s approval may be subject to conditions.
Consistent with Government best practice regulation requirements for sunsetting instruments, APRA, after consulting stakeholders, has assessed the overall policy approach in LPS 230 as operating effectively and efficiently and has made amendments to simplify and enhance its operation.