## Australia: Financial Sector Assessment Program-Technical Note-Insurance Sector: Regulation and Supervision

_IMF Staff Country Reports, February 21, 2019_

## Source details

**Canonical URL:** [Australia: Financial Sector Assessment Program-Technical Note-Insurance Sector: Regulation and Supervision](https://www.imf.org/en/publications/cr/issues/2019/02/13/australia-financial-sector-assessment-program-technical-note-insurance-sector-regulation-and-46606)

## Other formats

- [Markdown version](/en/publications/cr/issues/2019/02/13/australia-financial-sector-assessment-program-technical-note-insurance-sector-regulation-and-46606/index.md)
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## Bibliographic details
- Published: February 21, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484398890.002

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### Summary and scope
- 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 practice in relation to selected Insurance Core Principles (ICPs) in the context of a wider discussion of key issues in regulation and supervision.

### Key findings
- 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 is 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.

### Policy recommendations and supervisory focus
- The report recommends that APRA should expand and deepen its scrutiny of group activities, especially those entailing risky investments and material intragroup transactions.

### Subject areas and keywords
- Subject: Economic sectors; Financial institutions; Financial sector; Financial sector policy and analysis; Financial services; Insurance; Insurance companies; Stress testing
- Keywords: APRA issues requirement; APRA member; ASIC capability; ASIC commissioner; ASIC employee; ASIC enforcement; ASIC enforcement review taskforce; ASIC IT infrastructure; ASIC resource; CR; data management system; enforcement power; Financial sector; Global; Insurance; Insurance companies; ISCR; risk management; Stress testing; unit trust

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## Content in this bundle

- **1ausea2019002 - Executive Summary**
  - [1ausea2019002 - Executive Summary (Markdown version)](/-/media/files/publications/cr/2019/1ausea2019002.pdf.md){rel="alternate" type="text/markdown"}
  - [1ausea2019002 - Executive Summary (PDF)](/-/media/files/publications/cr/2019/1ausea2019002.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2019/02/13/australia-financial-sector-assessment-program-technical-note-insurance-sector-regulation-and-46606_