Australia : Financial Sector Assessment Program-Technical Note-Bank Resolution and Crisis Management

Author/Editor:

International Monetary Fund. Monetary and Capital Markets Department

Publication Date:

February 21, 2019

Electronic Access:

Free Full Text. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This technical note provides an update on the Australian insurance sector and an analysis of certain key aspects of the regulatory and supervisory regime. The note analyzes the practice in relation to selected Insurance Core Principles in the context of a wider discussion of key issues in regulation and supervision. Despite the negative impact of the low-interest-rate environment, the life insurance industry retains sufficient loss absorption capacity. The Australian Prudential Regulation Authority (APRA) has undertaken a comprehensive reform of prudential regulation while improving the consistency of the framework between life and general insurers. This focused review confirms that prudential regulation and supervision by APRA are reasonably conservative. The risk-based capital framework is reasonably conservative, which facilitates supervisory risk assessments. APRA has high technical capacity to conduct effective supervision. While there are some gaps in the regulatory regime, APRA seeks to address these through its supervisory process. The report recommends that APRA expand and deepen its scrutiny of group activities, especially those entailing risky investments and material intragroup transactions.

Series:

Country Report No. 19/48

Subject:

English

Publication Date:

February 21, 2019

ISBN/ISSN:

9781484398845/1934-7685

Stock No:

1AUSEA2019001

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

33

Please address any questions about this title to publications@imf.org