APRA to keep watch on insurance
The Australian Prudential Regulation Authority (APRA) has stated it will take a closer look at the area of disability insurance after continued concern by the regulator over losses in that area, according to APRA general manager Craig Thorburn.
The Australian Prudential Regulation Authority (APRA) has stated it will take a closer look at the area of disability insurance after continued concern by the regulator over losses in that area, according to APRA general manager Craig Thorburn.
Thorburn says APRA that while the regulator is aware of the problems facing the life industry, such as agreed value, lifetime benefits and disability definitions, it had no plans to interfere in the product design process.
“There are many reasons for the ongoing losses in the disability and life areas of insurance of which APRA is aware but it will not get involved these issues,” Thorburn says.
“It is not going to prescribe solutions to these issues but is ensuring steps are taken and the momentum for change is continuing.”
Thorburn says APRA will take a more proactive approach to the area of disability insurance and will make enquiries with relevant companies.
“We no longer plan to rely on things coming to us but will get out and cover those areas which relate to us, just with an element of greater detail,” Thorburn says.
“It is still a normal thing we do and have done so in the past. Sometimes there is a need to target an issue and we also felt there had not been a lot of activity in insurance recently.”
However Thorburn says this tightening of focus should not concern life companies as the aim is to ensure the life industry moves ahead.
“We plan to see what we find out and then get back to companies to give them feedback, which returns to them some of the time and value for their effort in working with us,” Thorburn says.
“If anything is found to be company specific we don’t expect it to be beyond the micro-level. Companies are not in mortal prudential danger.”
AUTHOR
Jason Spits
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