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Member, Beacon International Group, Ltd.
SYDNEY, Australia--The Australian insurance regulator said it had aligned its prudential framework of capital requirements for general insurers with International Financial Reporting Standards.
The Sydney, Australia-based Australian Prudential Regulation Authority said it had produced the new framework after extensive industry consultation.
APRA said that, among other things, it had "decoupled" its definition of tier one capital instruments and the assessment of securitized assets for capital adequacy purposes from Australian Accounting Standards.
The regulator said this change was necessary because the adoption of IFRS definitions would have meant that a significant portion of the current stock of capital instruments of general insurers may not have been eligible for inclusion as tier one capital.
APRA said in a statement that it had aligned its prudential and reporting frameworks as closely as possible with IFRS wherever possible "except where this would not be consistent with the intent and integrity of the APRA frameworks."
The revised standards can be viewed at www.apra.gov.au/General/General-Insurance-Prudential-Standards-and-Guidance-Notes.cfm.