Life insurance (prudential standard) determination No. 4 of 2006
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority (APRA)
Life Insurance Act 1995 (the Act), subsection 230A(5)
Under subsection 230A(1) of the Act, APRA has the power to determine standards (prudential standards), in writing, in relation to prudential matters to be complied with by all life companies. Under subsection 230A(5) of the Act, APRA may, in writing, vary or revoke a prudential standard.
Life insurance (prudential standard) determination No. 4 of 2006 (the instrument) varies Life insurance (prudential standard) determination No. 3 of 2006 - Prudential Standard LPS 231 Outsourcing (LPS 231).
- Background
After discussion with industry, APRA has become aware that the intended effective date of LPS 231 of 1 January 2007 poses potential implementation problems for some life companies.
Also, APRA has identified that LPS 231 contains two minor typographical errors:- footnote 3 on page 3 refers to ‘ADI s’ and ‘an ADI’s’, instead of ‘life companies’ and ‘a life company’s’ respectively, while the word ‘conducting’ in paragraph 26 is redundant.
2. Purpose of the instrument
The instrument varies the effective date of LPS 231 from 1 January 2007 to 1 April 2007. Delaying the effective date of LPS 231 will allow life companies sufficient time to ensure that they are able to comply with the standard from its commencement.
The instrument also varies LPS 231 to correct the minor typographical errors in footnote 3 on page 3 and paragraph 26 of LPS 231.
3. Consultation
APRA consulted extensively with industry prior to determining LPS 231.
APRA has consulted with industry in relation to the change to the effective date. Industry is supportive of this change.