Superannuation fund and insurance company executives face being treated the same way as their banking counterparts under a move by the Federal Government to extend the Bank Executive Accountability Regime (BEAR) and to give the Australian Securities and Investments Commission (ASIC) joint oversight.
The move has been announced by the Treasurer, Josh Frydenberg, with the BEAR regime morphing into a Financial Accountability Regime (FAR) covering all general and life insurance licensees, all private health insurance licensees, and all superannuation fund licensees and licensed non-operating holding companies.
Frydenberg said the move was in line with the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Sector.
The Government has issued a proposal paper with industry participants having until 14 February to make submissions.
The proposal paper said that the BEAR established clear standards of conduct by imposing a strengthened responsibility and accountability framework for directors and the most senior executives in ADIs.
“The Financial Accountability Regime (FAR) will extend this responsibility and accountability framework across all APRA regulated industries. In doing so, the FAR is intended to increase the transparency and accountability of financial entities in these industries and improve risk culture and governance for both prudential and conduct purposes,” it said.
“The FAR will also require financial entities to clarify responsibilities attaching to particular officers and positions. As a result, individuals will be held to account for failure to perform their obligations.”