APRA aligns standards with IFRS
The Australian Prudential Regulation Authority (APRA) has amended its general insurance prudential framework to be consistent with the International Financial Reporting Standards (IFRS).
The changes relate to capital requirements for general insurers and reflect the international standards as closely as possible.
As part of the reforms, APRA has separated both the definition of tier one capital instruments and the assessment of securitised assets for capital adequacy purposes from the Australian Accounting Standards.
From this modification, new definitions, limits and technical aspects have been introduced, with the revised standards operating from January 1, 2007.
APRA member John Trowbridge said the aim of the alignment was to reduce the degree of dual reporting and came after extensive industry consultation.
“Overall, APRA’s approach to IFSR is intended to ensure the financial position of general insurers continues to be underpinned by adequate levels of high quality capital,” he said.
“The feedback received during the consultation was particularly useful in ensuring that APRA’s approach is appropriate to the realities of the general insurance industry.”
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