Regulator reveals light super enforcement
Regulator reveals light super enforcement
APRA has only filed an enforcement action against a super fund over a sole purpose test breach once in the last three decades, but it has rejected that there is an issue with its regulatory approach.
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Appearing before the Senate economics legislation committee, APRA deputy chair Helen Rowell said that the regulator needed to “look at issues on their merit” and that actual enforcement actions were rare.
“There is a historic action – and we’re going back quite some time – where we did take action against a small fund for, in essence, making an investment that was in breach of the sole-purpose test. That is the only case to date,” Ms Rowell said.
Fix regulators, not the law: AIST 08 April 2021
The proposed update to the best interests duty has sparked debate for stakeholders across superannuation, but a peak industry body has declared the law doesn’t need to change, regulators have held back on fully using their current powers.
One of the government’s proposals under the Your Future, Your Super reforms is an amendment to
Superannuation Industry Supervision Act (
SIS Act), which would change the best interests duty to specifically requiring trustees act in members’ “best financial interests”.
The draft bill has also proposed to reverse the evidential burden of proof, so it is up to trustees and directors to show they performed their duties in line with the best financial interests of beneficiaries, rather than requiring regulators to prove their guilt.
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APRA releases consultation to enhance oversight of life reinsurance market
The Australian Prudential Regulation Authority (APRA) has released for consultation a package designed to address concerns regarding the increased use of offshore reinsurers by life insurers. These concerns are particularly heightened in relation to the group risk market, which plays an important role in Australia’s superannuation system.
The proposed updates to Prudential Standard LPS 117 Capital Adequacy: Asset Concentration Risk Charge (LPS 117) will impose an aggregate limit on the exposure of life insurers to offshore reinsurers, which are not regulated by APRA. Offshore reinsurers that enter the domestic market and become an APRA-registered entity will not be subject to the aggregate limit.
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Australia’s insurance regulator on Thursday proposed to limit the exposure of life insurers to offshore reinsurers, given its lack of oversight of foreign players.
The Australian Prudential Regulation Authority (APRA) said it was starting a consultation period that would end on June 25, to set a standard by the end of the year.
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“The recent growth in life insurers placing business with offshore reinsurers has been a prudential concern, as APRA does not have regulatory authority over these reinsurers,” the regulator’s Deputy Chair Helen Rowell said. (https://bit.ly/3rZK41M)
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