Notice imposing conditions on a registration to carry on life insurance business in Australia – KeyInvest Ltd

Administered by Department of the Treasury

Legislation au C2025G00497 In force Gazette

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Notice imposing conditions on a registration to carry on life insurance business in Australia – KeyInvest Ltd

Life Insurance Act 1995

 

To:  KeyInvest Ltd ABN 74 087 649 474 (the life insurer)

 

Since APRA issued to the life insurer a registration under section 21 of the Act to carry on life insurance business in Australia (the registration), I, Carmen Beverley-Smith, a delegate of APRA, under section 22(1)(a) of the Act, impose conditions on the registration in the manner specified in the Schedule.

 

This instrument, and the conditions imposed on the registration, commences on the day the instrument is made.

 

 

Dated: 1 August 2025

 

 

 

 

 

 

 

Carmen Beverley-Smith Executive Director

Life & Private Health Insurance & Superannuation Division

Interpretation

Act means the Life Insurance Act 1995.

APRA means the Australian Prudential Regulation Authority

Board Renewal Plan means the Board approved plan developed by KeyInvest, and approved by APRA, in compliance with Prudential Standard CPS 510 to address the deficiencies identified in the GT Report regarding KeyInvest’s Board effectiveness (pages 4 to 6, 17 to 18 of the GT Report).

Benefit Funds means the KeyInvest benefit funds in the form of Defined Contribution Capital Guaranteed and Unit Linked Funds

BFR amendments means any amendments of approved benefit fund rules.

CPS 190 means Prudential Standard – Recovery and Exit Planning as at the date of these conditions

CPS 220 means Prudential Standard – Risk Management as at the date of these conditions CPS 234 means Prudential Standard – Information Security as at the date of these conditions CPS 510 means Prudential Standard – Governance as at the date of these conditions Exposure to Private Credit means:

  1.    purchasing or investing in a non-bank lender that provides or facilitates credit, or

 

  1.    providing funds to such a business to enable it to provide or facilitate loans, including loans secured by mortgage.

Funeral Fund means the KeyInvest Funeral Bond Fund

GT Report means the final Grant Thornton independent review report of KeyInvest’s Risk

Management Framework dated 30 September 2024

Independent Assurance Assessment means the Board approved assurance assessment completed by the Independent Expert on the design, implementation and effectiveness of the Remediation Plan

Independent Expert means the independent expert appointed by KeyInvest, and approved by APRA, to conduct an assurance assessment of the implementation of the Remediation Plan in the form of an Independent Assurance Assessment

KeyInvest means KeyInvest Ltd (ABN 74 087 649 474) the APRA-regulated friendly society

Keystone means Keystone Capital Limited, Australian Financial Services Licence (Licence Number 439327)

Keystone Capital Acquisition means when the subsidiary of KeyInvest, KeyInvest Private Capital Ltd, purchased fifty (50) per cent in the shares of Keystone on 9 June 2023

Management Fund means the KeyInvest Management Fund

Remediation Plan means a Board approved plan developed by KeyInvest for the remediation of:

  1.    the following deficiencies identified in the GT Report:
  1.             KeyInvest’s Board effectiveness (pages 4 to 6, 17 to 18 of the GT Report),

 

  1.             KeyInvest’s uplift in its Risk Management Framework (pages 13 to 14, 16 to 23 of the GT Report), and
  2.             KeyInvest’s management of material or potential conflicts of interest and investment governance (pages 7 to 8, and 18 of the GT Report).

 

  1.    the concerns identified by APRA including upgrading its controls for managing material or potential conflicts of interest and investment governance and uplifting its Board effectiveness as set out in APRA’s correspondence on 17 July 2024 and 13 November 2024 (Pages 8 to 11 of APRA’s Show Cause Notice) and in the GT Report (Pages 11 to 14), and

 

  1.     the underlying root cause(s) of the following:

 

  1.             the breaches of CPS 190 and CPS 220 notified to APRA between 4 April 2024 and 12 April 2024, and

 

  1.           the following deficiencies identified in the GT Report:
    1.      KeyInvest’s Board effectiveness (pages 4 to 6, 17 to 18 of the GT Report),

 

  1.      KeyInvest’s uplift in its Risk Management Framework (pages 13 to 14, 16 to 23 of the GT Report), and
  2.       KeyInvest’s Management of material or potential conflicts of interest and investment governance (pages 7 to 8, and 18 of the GT Report).

Show Cause Notice means APRA show cause notice to KeyInvest dated 24 February 2025 and attached documents.

Schedule – the conditions

 

Remediation Plan

  1.        KeyInvest must develop and design the Remediation Plan by 31 August 2025.
  2.        KeyInvest must implement and embed the activities specified in the Remediation Plan within the timeframes specified in the Remediation Plan.
  3.        KeyInvest must complete all the activities specified in the Remediation Plan by 30 November 2027.
  4.        If it becomes apparent to KeyInvest that any of the timeframes in the Remediation Plan may not be complied with, KeyInvest must inform APRA of the following within 5 business days:
    1.       the nature and extent of the delay
    2.       the reasons for the delay, and
    3.       the steps KeyInvest is taking to rectify the delay.
  5.        KeyInvest must provide progress reports against the Remediation Plan to APRA every quarter, commencing 30 September 2025.

Board Renewal Plan

  1.        KeyInvest must prepare a Board Renewal Plan and provide that plan to APRA for approval by APRA by 31 August 2025.

Restrictions on investment activity

  1.        Before the completion of the Independent Assurance Assessment (outlined at conditions 9 to 10 below) of the Remediation Plan or until APRA agrees otherwise, KeyInvest must not:
    1.       seek member approval for any BFR amendments to increase the percentage of the Funeral Fund that can be invested in Australian Registered First Mortgages, or
    2.       increase its Exposure to Private Credit either from its Management Fund or Benefit Funds.
  2.        KeyInvest must provide a report to APRA on a quarterly basis, with the first report due on 31 August 2025, setting out details of its Exposure to Private Credit, including the dollar amount that KeyInvest has invested from:
    1.       each of the Benefit Funds, and
    2.       the Management Fund.

Independent Assurance Assessment

  1.        By 30 November 2026, KeyInvest is to appoint an Independent Expert to prepare an Independent Assurance Assessment upon completion of the Remediation Plan.
  1.    Within five business days of the Board approving the Independent Assurance Assessment, KeyInvest must provide a copy of the Independence Assurance Assessment to APRA.

Chair Attestation

  1.    Within five business days of the Board approving the Independent Assurance Assessment, the Chair of KeyInvest must provide an attestation to APRA, confirming that the completion of the Remediation Plan:
    1.         addresses the following deficiencies identified in the GT Report:
      1.             KeyInvest’s Board effectiveness (pages 4 to 6, 17 to 18 of the GT Report),

 

  1.             KeyInvest’s uplift in its Risk Management Framework (pages 13 to 14, 16

to 23 of the GT Report), and

 

  1.             KeyInvest’s management of material or potential conflicts of interest and investment governance (pages 7 to 8, and 18 of the GT Report).
  1.         remediates KeyInvest’s breaches of CPS 190 and CPS 220 notified to APRA

between 4 and 12 April 2024,

  1.          addresses the root cause(s) of the following:
    1.             the breaches of CPS 190 and CPS 220 notified to APRA between 4 April 2024 and 12 April 2024, and the following deficiencies identified in the GT Report:

 

  1.   KeyInvest’s Board effectiveness (pages 4 to 6, 17 to 18 of the GT Report),

 

  1.    KeyInvest’s uplift in its Risk Management Framework (pages 13 to 14, 16 to 23 of the GT Report), and
  2.    KeyInvest’s management of material or potential conflicts of interest and investment governance (pages 7 to 8, and 18 of the GT Report).

 

 

  1.    If the Chair is unable to confirm the matters referred to in condition [10], the Chair must include a description of any material deviation from and the steps taken, or proposed to be taken, to remedy the material deviations.
  2.    If the Chair is unavailable to provide the Attestation in condition 11, the Chair Attestation may be provided by another Director of KeyInvest.

 

 

 

You may request APRA reconsider the decision in accordance with subsection 236(1)(d) of the Act. The request for reconsideration must be made in writing, must set out the reasons for making the request, and must be given to APRA within 21 days after the day on which you first received notice of this decision, or within such further period as APRA allows. If you are dissatisfied with the outcome of APRA’s reconsideration of the decision, you may, subject to the Administrative Review Tribunal Act 2024, apply to the Administrative Review Tribunal for review of the reconsidered decision.

Overview

The Life Insurance Act 1995, enacted by the Australian Parliament, serves to regulate life insurance businesses within Australia, ensuring the financial stability of insurers and the protection of policyholders. The Act was introduced to address gaps in the regulation of life insurance practices and to enhance consumer protection. Under the authority granted by the Act, the Australian Prudential Regulation Authority (APRA) has the power to impose conditions on the registration of life insurers. In this context, a notice imposing conditions on the registration of KeyInvest Ltd to carry on life insurance business in Australia was issued by Carmen Beverley-Smith, a delegate of APRA, on 1 August 2025. The conditions outlined in the notice are designed to ensure KeyInvest addresses deficiencies identified in a Grant Thornton review report and breaches of prudential standards, ultimately aiming to enhance the insurer's governance, risk management, and conflict of interest management frameworks. The policy objective is to safeguard the interests of policyholders and maintain the integrity of the life insurance sector.

Scope and Application

The Life Insurance Act 1995 applies to KeyInvest Ltd, a life insurer registered under section 21 of the Act, as evidenced by its Australian Business Number 74 087 649 474. The Act specifically imposes conditions on KeyInvest’s registration to carry on life insurance business in Australia, aiming to ensure compliance with regulatory standards and address identified deficiencies in governance, risk management, and conflict of interest management. This legislation is a Commonwealth Act and has jurisdiction over all life insurance businesses operating within Australia. There are no exclusions, exemptions, or thresholds specified within the text of the Act itself, though the application and interpretation of these conditions may extend through subordinate instruments or regulations issued by the Australian Prudential Regulation Authority (APRA). The conditions set out in the Schedule form an integral part of the Act's application, requiring KeyInvest to develop and implement a Remediation Plan and a Board Renewal Plan, adhere to restrictions on investment activities, and undergo an Independent Assurance Assessment.

Key Provisions

The key provisions of the notice impose a series of conditions on KeyInvest Ltd’s registration to carry on life insurance business in Australia. These provisions are detailed in the Schedule, which outlines specific actions KeyInvest must take to comply with regulatory requirements. Firstly, KeyInvest must develop and implement a Remediation Plan by 31 August 2025, with all specified activities completed by 30 November 2027 (Schedule condition 1). KeyInvest must also prepare and submit a Board Renewal Plan for APRA’s approval by the same deadline (Schedule condition 2). Restrictions on investment activities are imposed until the Independent Assurance Assessment of the Remediation Plan is completed or APRA otherwise agrees; KeyInvest must refrain from seeking member approval for certain benefit fund rule amendments and from increasing exposure to private credit (Schedule condition 3). By 30 November 2026, KeyInvest must appoint an Independent Expert to assess the Remediation Plan and provide APRA with a copy of the assessment upon Board approval (Schedule condition 4). The Chair of KeyInvest must also provide an attestation to APRA within five business days of the Board approving the Independent Assurance Assessment, confirming the completion of the Remediation Plan addresses specified deficiencies and breaches (Schedule condition 5). KeyInvest has obligations to develop and implement a Remediation Plan and a Board Renewal Plan, ensure timely completion of specified activities, and refrain from certain investment activities until the Independent Assurance Assessment is completed. KeyInvest must also appoint an Independent Expert to conduct the Independent Assurance Assessment and provide the results to APRA, and the Chair must provide an attestation confirming the Remediation Plan’s effectiveness. Breaches of the conditions outlined in the notice can result in serious consequences for KeyInvest. While the notice itself does not specify penalties for non-compliance, the overarching Life Insurance Act 1995 provides for a range of potential penalties for breaches. These may include fines, suspension, or cancellation of the life insurance business registration. Under the Administrative Review Tribunal Act 2024, KeyInvest may also apply for a review of APRA’s decision if dissatisfied with the outcome of any reconsideration. The specific penalties for breaches would depend on the nature and severity of the non-compliance and could include significant financial penalties, administrative sanctions, or further regulatory oversight and restrictions on business activities.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.