Australia’s insurance regulator on Thursday proposed limiting the exposure of life insurers to offshore reinsurers, given its lack of oversight of foreign players.
The Australian Prudential Regulatory Authority (APRA) has said it is starting a consultation period that will end on June 25, to set a standard by the end of the year.
“The recent growth of life insurers doing business with offshore reinsurers has been a prudential concern, as APRA does not have regulatory authority over these reinsurers,” said the regulator’s vice president, Helen Rowell. (https://bit.ly/3rZK41M)
As part of the draft proposal, APRA plans to raise its overall limit for the value of statutory fund assets for offshore reinsurers to 12.5% from 5.0% proposed in 2019.
The proposal will not materially increase the vulnerability of the country’s financial system to global events and allows APRA to sufficiently monitor the Australian life insurance market, according to the regulator.
(Reporting by Nikhil Kurian Nainan in Bengaluru; editing by Shounak Dasgupta)
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