APRA says two new rules to boost insurer accountability

APRA also called for greater transparency in claims processes.

The Australian Prudential Regulation Authority (APRA) emphasised the importance of two new regulations set to take effect this year, aimed at strengthening resilience, governance, and accountability in the insurance sector. 

These regulations are FAR and CPS 230. 

FAR aims to “sharpen accountability arrangements, clarify the lines of accountability to head off potential problems, and ultimately become more resilient. CPS 230 aims “to strengthen the management of operational risk, respond to business disruptions and manage the risks from the use of material service providers for APRA-regulated entities,”

Speaking at the Future of Insurance conference, APRA Executive Director for General Insurance and Banking, Jane Magill, urged general insurers to act on recent review findings and apply lessons from past natural disasters, including the recent Tropical Cyclone Alfred.

Magill stressed the need for insurers to fully understand their business models, supply chains, and accountability structures. 
She also called for greater transparency in claims processes to align with community expectations. 

With increased scrutiny on insurers’ responses to natural disasters, she noted that the latest catastrophe presents an opportunity for the industry to demonstrate its commitment to supporting affected communities.

“Whilst the cyclone didn’t hit the mainland with quite the force we expected, there is still enormous damage. In fact, the industry has already received more than 75,000 insurance claims across home, motor and commercial policie,” Magill said.