{"id":"F2012L02467","name":"Life Insurance (prudential standard) determination No. 10 of 2012","slug":"life-insurance-prudential-standard-determination-no-10-of-2012","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"repealed","isInForce":false,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":126553,"registerId":"commonwealth-F2012L02467-current","compilationNumber":null,"startDate":"2026-04-03","status":"Repealed","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Prudential Standard LPS 310 Audit and Re","sectionType":"section","heading":"Prudential Standard LPS 310 Audit and Related Matters comprises the 7 pages commencing on the following page.","content":"Interpretation\n\nIn this Determination:\n\nAPRA means the Australian Prudential Regulation Authority.\n\nfriendly society has the meaning given in section 16C of the Act.\n\nlife company has the meaning given in the Dictionary to the Act.\n\nSchedule\n\n##### Prudential Standard LPS 310 Audit and Related Matters comprises the 7 pages commencing on the following page.","sortOrder":0},{"sectionNumber":"Prudential Standard LPS 310","sectionType":"section","heading":"Prudential Standard LPS 310","content":"##### Prudential Standard LPS 310\n\nAudit and Related Matters\n\n# Objectives and key requirements of this Prudential Standard\n\nThis Prudential Standard sets out the roles and responsibilities of a life company’s Auditor. It also sets out the obligations of a life company to make arrangements to enable its Auditor to fulfil his or her responsibilities.\n\nThe ultimate responsibility for providing impartial advice in relation to the operations, financial condition and internal control of a life company rests with the Auditor. This advice is designed to assist the Board and senior management in carrying out their responsibility for the sound and prudent management of the life company.\n\nThe key requirements of this Prudential Standard include:\n\n- the life company must make arrangements to enable the Auditor to undertake his or her role and responsibilities;\n- the Auditor must prepare the reports required in accordance with the requirements of and timeframes specified in this Prudential Standard;\n- the life company must submit to APRA all reports to be prepared by the Auditor;\n- the Auditor must audit certain returns of the life company to APRA and provide a report to the Board of the life company; and\n- the Auditor must review other aspects of the life company’s operations on an annual basis and provide a report to the Board of the life company.\n\n \n\n# Authority\n\n1. This Prudential Standard is made under paragraph 230A(1)(a) of the Life Insurance Act 1995 (the Act).\n\n# Application\n\n2. This Prudential Standard applies to all life companies including friendly societies (together referred to as life companies) registered under the Act.[\\[1\\]](#_ftn1)\n\n3. This Prudential Standard includes requirements that apply to all auditors appointed under the Act. These requirements are functions of an auditor for the purposes of subsection 83(2) of the Act.\n\n4. This Prudential Standard applies to life companies from 1 January 2013.\n\n# Interpretation\n\n5. Terms that are defined in Prudential Standard LPS 001 Definitions appear in bold the first time they are used in this Prudential Standard.\n\n# Obligations of a life company\n\n6. Under the Act, a life company must appoint an auditor (Auditor).[\\[2\\]](#_ftn2)\n\n7. A life company must ensure that its Auditor:\n\n(a) satisfies the eligibility criteria in Prudential Standard CPS 520 Fit and Proper (CPS 520) applicable to an Auditor;\n\n(b) is a fit and proper person in accordance with the life company’s fit and proper policy as required by CPS 520, including those requirements that apply specifically to the Auditor; and\n\n(c) satisfies the auditor independence requirements in Prudential Standard CPS 510 Governance.\n\n8. A life company must ensure that its Auditor has access to all relevant data, information, reports and staff of the life company (and must take all reasonable steps to ensure access to contractors of the life company) that its Auditor reasonably believes are necessary to fulfil his or her responsibilities.[\\[3\\]](#_ftn3) This will include access to the life company’s Board[\\[4\\]](#_ftn4), Board Audit Committee and internal auditors as required.\n\n9. A life company must ensure that its Auditor is fully informed of all prudential requirements applicable to the life company. In addition, the life company must ensure that the Auditor is provided with any other information APRA has provided to the life company that may assist the Auditor in fulfilling his or her role and responsibilities under this Prudential Standard.\n\n10. A life company must ensure that the following are provided to its Board or Board Audit Committee (if not already sighted by the Board or Board Audit Committee):\n\n(a) reports, provided by the Auditor in accordance with this Prudential Standard, and any associated assessments and other material prepared in connection with fulfilling the requirements of this Prudential Standard;\n\n(b) commentary or responses provided by APRA to the life company on reports provided by the Auditor, and any associated assessments and other material; and\n\n(c) any commentary or response on the reports, associated assessments and other material provided by the Auditor that are given by the life company to APRA.\n\n11. A life company, if requested by APRA, must within a reasonable time provide APRA with the terms of engagement, other instructions or correspondence, including management letters, that may have a bearing on:\n\n(a) the scope or conduct of the work undertaken by the Auditor in accordance with this Prudential Standard; and\n\n(b) the form, content (including findings made or opinions expressed by the Auditor) or coverage of the reports provided in accordance with this Prudential Standard.\n\n12. A life company must submit to APRA the reports referred to in paragraphs 19 and 23. They must be submitted on or before the day that the life company’s auditable annual returns are required to be given to APRA in accordance with reporting standards made under the Financial Sector (Collection of Data) Act 2001 (FSCODA).\n\n# General requirements\n\n13. In preparing a report referred to in this Prudential Standard the Auditor must have regard to relevant AUASB Standards and Guidance Statements issued by the Auditing and Assurance Standards Board (AUASB), to the extent that they are not inconsistent with the requirements of this Prudential Standard and other prudential requirements.\n\n14. For the purposes of this Prudential Standard, ‘reasonable assurance’ and ‘limited assurance’ are defined in accordance with the Framework for Assurance Engagements issued by the AUASB.\n\n15. APRA liaison with an Auditor will normally be conducted under tripartite arrangements involving APRA, the life company and the Auditor. Notwithstanding the tripartite relationship, APRA and an Auditor may meet, at any time, on a bilateral basis at the request of either party.\n\n16. The Auditor, in preparing a report, must not place sole reliance on the work performed by APRA.\n\n17. The Auditor, or an auditor appointed under paragraph 27, must retain all working papers and other documentation in relation to the prudential requirements of the life company for a period of seven years from the date of the report to which the working papers or documentation relate. Where requested to do so in writing by APRA, the Auditor must provide the working papers and other documentation to APRA.\n\n18. Persons involved in the provision of information should note that it is a serious offence under subsection 137.1 and 137.2 of the Criminal Code 1995 to provide, whether directly or indirectly, false or misleading documents or information to a Commonwealth entity such as APRA.\n\n# Annual returns to APRA\n\n19. The Auditor must prepare a report that provides reasonable assurance on the life company’s annual returns to APRA, as specified in Attachment A.\n\n20. In particular, the report must specify whether, in the Auditor’s opinion, the annual returns are reliable and in accordance with the relevant prudential requirements.\n\n21. The report must also specify whether, in the Auditor's opinion, the prudential requirements in relation to the accounting for statutory funds have been met.\n\n22. The Auditor must provide the report to the life company and address it to the Board of the life company.\n\n# Review of systems, processes and internal controls\n\n23. The Auditor must prepare a report that provides limited assurance that the life company has systems, procedures and internal controls that are designed to ensure that the life company:\n\n(a) has complied with all applicable prudential requirements; and\n\n(b) has provided reliable data to APRA in the reporting forms prepared under FSCODA (including those provided quarterly).\n\nIn relation to (a) and (b), the report must also provide limited assurance that these internal controls have operated effectively throughout the financial year of the life company.\n\n24. The report must also provide limited assurance that the life company’s systems, procedures and internal controls relating to actuarial data integrity and financial reporting risks (the risks that incorrect source data will be used in completing the reporting forms under FSCODA) are adequate and effective.\n\n25. The Auditor must provide the report to the life company and address it to the Board of the life company.\n\n# Special purpose engagements\n\n26. When requested to do so in writing by APRA, a life company must arrange for its Auditor to:\n\n(a) undertake a special purpose engagement relating to matters set out in writing by APRA relating to the life company’s operations, risk management or financial affairs; and\n\n(b) prepare a report in respect of that engagement.\n\n27. A special purpose engagement may be conducted by an auditor other than the Auditor appointed under paragraph 6 but only where this is agreed to by APRA and the auditor satisfies the criteria set out in paragraph 7.\n\n28. The engagement must be completed in accordance with any relevant AUASB Standards and Guidance Statements (as appropriate to the nature of the special purpose review), to the extent that they are not inconsistent with the requirements of this Prudential Standard. Where APRA considers, having regard to the nature of the life company’s operations and the purpose of the special purpose engagement, that the engagement should not be completed in accordance with those AUASB Standards and Guidance Statements, APRA may advise the life company in writing that an alternative standard must be used (which is not inconsistent with the requirements of this Prudential Standard and the Act).\n\n29. The cost of a special purpose engagement will be borne by the life company.\n\n30. The auditor must submit the final report to APRA and the Board (or Board Audit Committee) of the life company simultaneously within three months of the engagement being commissioned, unless APRA grants an extension of time in writing.\n\n# Obligation to report to APRA under the Act\n\n31. The Act specifies certain circumstances where Auditors are required to report to APRA where a life company or its directors may have contravened the Act or any other law and the contravention may significantly prejudice the interests of the owners of policies issued by the life company.[\\[5\\]](#_ftn5)\n\n32. Where a report is made to APRA, the Auditor should not disclose this to the life company if the Auditor:\n\n(a) considers that by doing so the interests of policy owners may be jeopardised; or\n\n(b) has lost confidence in or mistrusts the Board or senior management of the life company.\n\n# Ascertainment of income and outgoings of statutory funds\n\n33. For the purposes of subsection 47(1) of the Act, income and outgoings of a statutory fund are, respectively, the amounts pertaining to that statutory fund that have the character of income and outgoings in accordance with the provisions of the reporting standards made under FSCODA, as in force from time to time, that provide for accountability for profit and loss.\n\n# Adjustments and exclusions\n\n34. APRA may, by notice in writing to a life company, adjust or exclude a specific requirement in this Prudential Standard in relation to that company.\n\n# Determinations made under previous prudential standards\n\n35. An exercise of APRA’s discretion (such as an approval, waiver or direction) under a previous version of this Prudential Standard continues to have effect as though exercised pursuant to a corresponding power (if any) exercisable by APRA under this Prudential Standard.\n\n \n\n# Attachment A\n\n# Auditable annual returns\n\nThe Auditor must provide assurance on the annual data provided to APRA in the forms as listed below. APRA determined these forms in reporting standards made under FSCODA.\n\n```html\n

Form Name

Form Number

Level of Assurance

1

Prescribed Capital Amount

LRF 110.1,

LRF 110.2

Reasonable[6]

2

Determination of Capital Base

LRF 112.0,

LRF 112.1,

LRF 112.2

Reasonable

3

Related Party Exposures

LRF 112.3

Reasonable

4

Asset Risk Charge

LRF 114.0

Reasonable

5

Derivatives Activity

LRF 114.2

Reasonable

6

Off-balance Sheet Business

LRF 114.3

Reasonable

7

Insurance Risk Charge

LRF 115.0,

LRF 115.1

Reasonable

8

Asset Concentration Risk Charge

LRF 117.0

Reasonable

9

Operational Risk Charge

LRF 118.0

Reasonable

10

Capital Adequacy Supplementary Information

LRF 200.0

None

11

Statement of Financial Position

LRF 300.1

Reasonable

LRF 300.2

Reasonable

12

Income Statement

LRF 310.1

Reasonable

LRF 310.2

Reasonable

13

Summary of Revenue and Expenses

LRF 330.0

Reasonable

14

Retained Profits

LRF 340.1

Reasonable

LRF 340.2

Reasonable

15

Statement of Policy Liabilities

LRF 400.0

None

16

Assets Backing Policy Liabilities

LRF 420.0

None

17

Sources of Profit

LRF 430.0

None

\n```","sortOrder":1},{"sectionNumber":"Objectives and key requirements of this ","sectionType":"part","heading":"Objectives and key requirements of this Prudential Standard","content":"# Objectives and key requirements of this Prudential Standard\n\nThis Prudential Standard sets out the roles and responsibilities of a life company’s Auditor. It also sets out the obligations of a life company to make arrangements to enable its Auditor to fulfil his or her responsibilities.\n\nThe ultimate responsibility for providing impartial advice in relation to the operations, financial condition and internal control of a life company rests with the Auditor. This advice is designed to assist the Board and senior management in carrying out their responsibility for the sound and prudent management of the life company.\n\nThe key requirements of this Prudential Standard include:\n\n- the life company must make arrangements to enable the Auditor to undertake his or her role and responsibilities;\n- the Auditor must prepare the reports required in accordance with the requirements of and timeframes specified in this Prudential Standard;\n- the life company must submit to APRA all reports to be prepared by the Auditor;\n- the Auditor must audit certain returns of the life company to APRA and provide a report to the Board of the life company; and\n- the Auditor must review other aspects of the life company’s operations on an annual basis and provide a report to the Board of the life company.","sortOrder":2},{"sectionNumber":"Authority","sectionType":"part","heading":"Authority","content":"# Authority\n\n1. This Prudential Standard is made under paragraph 230A(1)(a) of the Life Insurance Act 1995 (the Act).","sortOrder":3},{"sectionNumber":"Application","sectionType":"part","heading":"Application","content":"# Application\n\n2. This Prudential Standard applies to all life companies including friendly societies (together referred to as life companies) registered under the Act.[\\[1\\]](#_ftn1)\n\n3. This Prudential Standard includes requirements that apply to all auditors appointed under the Act. These requirements are functions of an auditor for the purposes of subsection 83(2) of the Act.\n\n4. This Prudential Standard applies to life companies from 1 January 2013.","sortOrder":4},{"sectionNumber":"Interpretation","sectionType":"part","heading":"Interpretation","content":"# Interpretation\n\n5. Terms that are defined in Prudential Standard LPS 001 Definitions appear in bold the first time they are used in this Prudential Standard.","sortOrder":5},{"sectionNumber":"Obligations of a life company","sectionType":"part","heading":"Obligations of a life company","content":"# Obligations of a life company\n\n6. Under the Act, a life company must appoint an auditor (Auditor).[\\[2\\]](#_ftn2)\n\n7. A life company must ensure that its Auditor:\n\n(a) satisfies the eligibility criteria in Prudential Standard CPS 520 Fit and Proper (CPS 520) applicable to an Auditor;\n\n(b) is a fit and proper person in accordance with the life company’s fit and proper policy as required by CPS 520, including those requirements that apply specifically to the Auditor; and\n\n(c) satisfies the auditor independence requirements in Prudential Standard CPS 510 Governance.\n\n8. A life company must ensure that its Auditor has access to all relevant data, information, reports and staff of the life company (and must take all reasonable steps to ensure access to contractors of the life company) that its Auditor reasonably believes are necessary to fulfil his or her responsibilities.[\\[3\\]](#_ftn3) This will include access to the life company’s Board[\\[4\\]](#_ftn4), Board Audit Committee and internal auditors as required.\n\n9. A life company must ensure that its Auditor is fully informed of all prudential requirements applicable to the life company. In addition, the life company must ensure that the Auditor is provided with any other information APRA has provided to the life company that may assist the Auditor in fulfilling his or her role and responsibilities under this Prudential Standard.\n\n10. A life company must ensure that the following are provided to its Board or Board Audit Committee (if not already sighted by the Board or Board Audit Committee):\n\n(a) reports, provided by the Auditor in accordance with this Prudential Standard, and any associated assessments and other material prepared in connection with fulfilling the requirements of this Prudential Standard;\n\n(b) commentary or responses provided by APRA to the life company on reports provided by the Auditor, and any associated assessments and other material; and\n\n(c) any commentary or response on the reports, associated assessments and other material provided by the Auditor that are given by the life company to APRA.\n\n11. A life company, if requested by APRA, must within a reasonable time provide APRA with the terms of engagement, other instructions or correspondence, including management letters, that may have a bearing on:\n\n(a) the scope or conduct of the work undertaken by the Auditor in accordance with this Prudential Standard; and\n\n(b) the form, content (including findings made or opinions expressed by the Auditor) or coverage of the reports provided in accordance with this Prudential Standard.\n\n12. A life company must submit to APRA the reports referred to in paragraphs 19 and 23. They must be submitted on or before the day that the life company’s auditable annual returns are required to be given to APRA in accordance with reporting standards made under the Financial Sector (Collection of Data) Act 2001 (FSCODA).","sortOrder":6},{"sectionNumber":"General requirements","sectionType":"part","heading":"General requirements","content":"# General requirements\n\n13. In preparing a report referred to in this Prudential Standard the Auditor must have regard to relevant AUASB Standards and Guidance Statements issued by the Auditing and Assurance Standards Board (AUASB), to the extent that they are not inconsistent with the requirements of this Prudential Standard and other prudential requirements.\n\n14. For the purposes of this Prudential Standard, ‘reasonable assurance’ and ‘limited assurance’ are defined in accordance with the Framework for Assurance Engagements issued by the AUASB.\n\n15. APRA liaison with an Auditor will normally be conducted under tripartite arrangements involving APRA, the life company and the Auditor. Notwithstanding the tripartite relationship, APRA and an Auditor may meet, at any time, on a bilateral basis at the request of either party.\n\n16. The Auditor, in preparing a report, must not place sole reliance on the work performed by APRA.\n\n17. The Auditor, or an auditor appointed under paragraph 27, must retain all working papers and other documentation in relation to the prudential requirements of the life company for a period of seven years from the date of the report to which the working papers or documentation relate. Where requested to do so in writing by APRA, the Auditor must provide the working papers and other documentation to APRA.\n\n18. Persons involved in the provision of information should note that it is a serious offence under subsection 137.1 and 137.2 of the Criminal Code 1995 to provide, whether directly or indirectly, false or misleading documents or information to a Commonwealth entity such as APRA.","sortOrder":7},{"sectionNumber":"Annual returns to APRA","sectionType":"part","heading":"Annual returns to APRA","content":"# Annual returns to APRA\n\n19. The Auditor must prepare a report that provides reasonable assurance on the life company’s annual returns to APRA, as specified in Attachment A.\n\n20. In particular, the report must specify whether, in the Auditor’s opinion, the annual returns are reliable and in accordance with the relevant prudential requirements.\n\n21. The report must also specify whether, in the Auditor's opinion, the prudential requirements in relation to the accounting for statutory funds have been met.\n\n22. The Auditor must provide the report to the life company and address it to the Board of the life company.","sortOrder":8},{"sectionNumber":"Review of systems, processes and interna","sectionType":"part","heading":"Review of systems, processes and internal controls","content":"# Review of systems, processes and internal controls\n\n23. The Auditor must prepare a report that provides limited assurance that the life company has systems, procedures and internal controls that are designed to ensure that the life company:\n\n(a) has complied with all applicable prudential requirements; and\n\n(b) has provided reliable data to APRA in the reporting forms prepared under FSCODA (including those provided quarterly).\n\nIn relation to (a) and (b), the report must also provide limited assurance that these internal controls have operated effectively throughout the financial year of the life company.\n\n24. The report must also provide limited assurance that the life company’s systems, procedures and internal controls relating to actuarial data integrity and financial reporting risks (the risks that incorrect source data will be used in completing the reporting forms under FSCODA) are adequate and effective.\n\n25. The Auditor must provide the report to the life company and address it to the Board of the life company.","sortOrder":9},{"sectionNumber":"Special purpose engagements","sectionType":"part","heading":"Special purpose engagements","content":"# Special purpose engagements\n\n26. When requested to do so in writing by APRA, a life company must arrange for its Auditor to:\n\n(a) undertake a special purpose engagement relating to matters set out in writing by APRA relating to the life company’s operations, risk management or financial affairs; and\n\n(b) prepare a report in respect of that engagement.\n\n27. A special purpose engagement may be conducted by an auditor other than the Auditor appointed under paragraph 6 but only where this is agreed to by APRA and the auditor satisfies the criteria set out in paragraph 7.\n\n28. The engagement must be completed in accordance with any relevant AUASB Standards and Guidance Statements (as appropriate to the nature of the special purpose review), to the extent that they are not inconsistent with the requirements of this Prudential Standard. Where APRA considers, having regard to the nature of the life company’s operations and the purpose of the special purpose engagement, that the engagement should not be completed in accordance with those AUASB Standards and Guidance Statements, APRA may advise the life company in writing that an alternative standard must be used (which is not inconsistent with the requirements of this Prudential Standard and the Act).\n\n29. The cost of a special purpose engagement will be borne by the life company.\n\n30. The auditor must submit the final report to APRA and the Board (or Board Audit Committee) of the life company simultaneously within three months of the engagement being commissioned, unless APRA grants an extension of time in writing.","sortOrder":10},{"sectionNumber":"Obligation to report to APRA under the A","sectionType":"part","heading":"Obligation to report to APRA under the Act","content":"# Obligation to report to APRA under the Act\n\n31. The Act specifies certain circumstances where Auditors are required to report to APRA where a life company or its directors may have contravened the Act or any other law and the contravention may significantly prejudice the interests of the owners of policies issued by the life company.[\\[5\\]](#_ftn5)\n\n32. Where a report is made to APRA, the Auditor should not disclose this to the life company if the Auditor:\n\n(a) considers that by doing so the interests of policy owners may be jeopardised; or\n\n(b) has lost confidence in or mistrusts the Board or senior management of the life company.","sortOrder":11},{"sectionNumber":"Ascertainment of income and outgoings of","sectionType":"part","heading":"Ascertainment of income and outgoings of statutory funds","content":"# Ascertainment of income and outgoings of statutory funds\n\n33. For the purposes of subsection 47(1) of the Act, income and outgoings of a statutory fund are, respectively, the amounts pertaining to that statutory fund that have the character of income and outgoings in accordance with the provisions of the reporting standards made under FSCODA, as in force from time to time, that provide for accountability for profit and loss.","sortOrder":12},{"sectionNumber":"Adjustments and exclusions","sectionType":"part","heading":"Adjustments and exclusions","content":"# Adjustments and exclusions\n\n34. APRA may, by notice in writing to a life company, adjust or exclude a specific requirement in this Prudential Standard in relation to that company.","sortOrder":13},{"sectionNumber":"Determinations made under previous prude","sectionType":"part","heading":"Determinations made under previous prudential standards","content":"# Determinations made under previous prudential standards\n\n35. An exercise of APRA’s discretion (such as an approval, waiver or direction) under a previous version of this Prudential Standard continues to have effect as though exercised pursuant to a corresponding power (if any) exercisable by APRA under this Prudential Standard.","sortOrder":14},{"sectionNumber":"Attachment A","sectionType":"part","heading":"Attachment A","content":"##### ![](image.002.png)\n\n##### Prudential Standard LPS 310\n\nAudit and Related Matters\n\n# Objectives and key requirements of this Prudential Standard\n\nThis Prudential Standard sets out the roles and responsibilities of a life company’s Auditor. It also sets out the obligations of a life company to make arrangements to enable its Auditor to fulfil his or her responsibilities.\n\nThe ultimate responsibility for providing impartial advice in relation to the operations, financial condition and internal control of a life company rests with the Auditor. This advice is designed to assist the Board and senior management in carrying out their responsibility for the sound and prudent management of the life company.\n\nThe key requirements of this Prudential Standard include:\n\n- the life company must make arrangements to enable the Auditor to undertake his or her role and responsibilities;\n- the Auditor must prepare the reports required in accordance with the requirements of and timeframes specified in this Prudential Standard;\n- the life company must submit to APRA all reports to be prepared by the Auditor;\n- the Auditor must audit certain returns of the life company to APRA and provide a report to the Board of the life company; and\n- the Auditor must review other aspects of the life company’s operations on an annual basis and provide a report to the Board of the life company.\n\n \n\n# Authority\n\n1. This Prudential Standard is made under paragraph 230A(1)(a) of the Life Insurance Act 1995 (the Act).\n\n# Application\n\n2. This Prudential Standard applies to all life companies including friendly societies (together referred to as life companies) registered under the Act.[\\[1\\]](#_ftn1)\n\n3. This Prudential Standard includes requirements that apply to all auditors appointed under the Act. These requirements are functions of an auditor for the purposes of subsection 83(2) of the Act.\n\n4. This Prudential Standard applies to life companies from 1 January 2013.\n\n# Interpretation\n\n5. Terms that are defined in Prudential Standard LPS 001 Definitions appear in bold the first time they are used in this Prudential Standard.\n\n# Obligations of a life company\n\n6. Under the Act, a life company must appoint an auditor (Auditor).[\\[2\\]](#_ftn2)\n\n7. A life company must ensure that its Auditor:\n\n(a) satisfies the eligibility criteria in Prudential Standard CPS 520 Fit and Proper (CPS 520) applicable to an Auditor;\n\n(b) is a fit and proper person in accordance with the life company’s fit and proper policy as required by CPS 520, including those requirements that apply specifically to the Auditor; and\n\n(c) satisfies the auditor independence requirements in Prudential Standard CPS 510 Governance.\n\n8. A life company must ensure that its Auditor has access to all relevant data, information, reports and staff of the life company (and must take all reasonable steps to ensure access to contractors of the life company) that its Auditor reasonably believes are necessary to fulfil his or her responsibilities.[\\[3\\]](#_ftn3) This will include access to the life company’s Board[\\[4\\]](#_ftn4), Board Audit Committee and internal auditors as required.\n\n9. A life company must ensure that its Auditor is fully informed of all prudential requirements applicable to the life company. In addition, the life company must ensure that the Auditor is provided with any other information APRA has provided to the life company that may assist the Auditor in fulfilling his or her role and responsibilities under this Prudential Standard.\n\n10. A life company must ensure that the following are provided to its Board or Board Audit Committee (if not already sighted by the Board or Board Audit Committee):\n\n(a) reports, provided by the Auditor in accordance with this Prudential Standard, and any associated assessments and other material prepared in connection with fulfilling the requirements of this Prudential Standard;\n\n(b) commentary or responses provided by APRA to the life company on reports provided by the Auditor, and any associated assessments and other material; and\n\n(c) any commentary or response on the reports, associated assessments and other material provided by the Auditor that are given by the life company to APRA.\n\n11. A life company, if requested by APRA, must within a reasonable time provide APRA with the terms of engagement, other instructions or correspondence, including management letters, that may have a bearing on:\n\n(a) the scope or conduct of the work undertaken by the Auditor in accordance with this Prudential Standard; and\n\n(b) the form, content (including findings made or opinions expressed by the Auditor) or coverage of the reports provided in accordance with this Prudential Standard.\n\n12. A life company must submit to APRA the reports referred to in paragraphs 19 and 23. They must be submitted on or before the day that the life company’s auditable annual returns are required to be given to APRA in accordance with reporting standards made under the Financial Sector (Collection of Data) Act 2001 (FSCODA).\n\n# General requirements\n\n13. In preparing a report referred to in this Prudential Standard the Auditor must have regard to relevant AUASB Standards and Guidance Statements issued by the Auditing and Assurance Standards Board (AUASB), to the extent that they are not inconsistent with the requirements of this Prudential Standard and other prudential requirements.\n\n14. For the purposes of this Prudential Standard, ‘reasonable assurance’ and ‘limited assurance’ are defined in accordance with the Framework for Assurance Engagements issued by the AUASB.\n\n15. APRA liaison with an Auditor will normally be conducted under tripartite arrangements involving APRA, the life company and the Auditor. Notwithstanding the tripartite relationship, APRA and an Auditor may meet, at any time, on a bilateral basis at the request of either party.\n\n16. The Auditor, in preparing a report, must not place sole reliance on the work performed by APRA.\n\n17. The Auditor, or an auditor appointed under paragraph 27, must retain all working papers and other documentation in relation to the prudential requirements of the life company for a period of seven years from the date of the report to which the working papers or documentation relate. Where requested to do so in writing by APRA, the Auditor must provide the working papers and other documentation to APRA.\n\n18. Persons involved in the provision of information should note that it is a serious offence under subsection 137.1 and 137.2 of the Criminal Code 1995 to provide, whether directly or indirectly, false or misleading documents or information to a Commonwealth entity such as APRA.\n\n# Annual returns to APRA\n\n19. The Auditor must prepare a report that provides reasonable assurance on the life company’s annual returns to APRA, as specified in Attachment A.\n\n20. In particular, the report must specify whether, in the Auditor’s opinion, the annual returns are reliable and in accordance with the relevant prudential requirements.\n\n21. The report must also specify whether, in the Auditor's opinion, the prudential requirements in relation to the accounting for statutory funds have been met.\n\n22. The Auditor must provide the report to the life company and address it to the Board of the life company.\n\n# Review of systems, processes and internal controls\n\n23. The Auditor must prepare a report that provides limited assurance that the life company has systems, procedures and internal controls that are designed to ensure that the life company:\n\n(a) has complied with all applicable prudential requirements; and\n\n(b) has provided reliable data to APRA in the reporting forms prepared under FSCODA (including those provided quarterly).\n\nIn relation to (a) and (b), the report must also provide limited assurance that these internal controls have operated effectively throughout the financial year of the life company.\n\n24. The report must also provide limited assurance that the life company’s systems, procedures and internal controls relating to actuarial data integrity and financial reporting risks (the risks that incorrect source data will be used in completing the reporting forms under FSCODA) are adequate and effective.\n\n25. The Auditor must provide the report to the life company and address it to the Board of the life company.\n\n# Special purpose engagements\n\n26. When requested to do so in writing by APRA, a life company must arrange for its Auditor to:\n\n(a) undertake a special purpose engagement relating to matters set out in writing by APRA relating to the life company’s operations, risk management or financial affairs; and\n\n(b) prepare a report in respect of that engagement.\n\n27. A special purpose engagement may be conducted by an auditor other than the Auditor appointed under paragraph 6 but only where this is agreed to by APRA and the auditor satisfies the criteria set out in paragraph 7.\n\n28. The engagement must be completed in accordance with any relevant AUASB Standards and Guidance Statements (as appropriate to the nature of the special purpose review), to the extent that they are not inconsistent with the requirements of this Prudential Standard. Where APRA considers, having regard to the nature of the life company’s operations and the purpose of the special purpose engagement, that the engagement should not be completed in accordance with those AUASB Standards and Guidance Statements, APRA may advise the life company in writing that an alternative standard must be used (which is not inconsistent with the requirements of this Prudential Standard and the Act).\n\n29. The cost of a special purpose engagement will be borne by the life company.\n\n30. The auditor must submit the final report to APRA and the Board (or Board Audit Committee) of the life company simultaneously within three months of the engagement being commissioned, unless APRA grants an extension of time in writing.\n\n# Obligation to report to APRA under the Act\n\n31. The Act specifies certain circumstances where Auditors are required to report to APRA where a life company or its directors may have contravened the Act or any other law and the contravention may significantly prejudice the interests of the owners of policies issued by the life company.[\\[5\\]](#_ftn5)\n\n32. Where a report is made to APRA, the Auditor should not disclose this to the life company if the Auditor:\n\n(a) considers that by doing so the interests of policy owners may be jeopardised; or\n\n(b) has lost confidence in or mistrusts the Board or senior management of the life company.\n\n# Ascertainment of income and outgoings of statutory funds\n\n33. For the purposes of subsection 47(1) of the Act, income and outgoings of a statutory fund are, respectively, the amounts pertaining to that statutory fund that have the character of income and outgoings in accordance with the provisions of the reporting standards made under FSCODA, as in force from time to time, that provide for accountability for profit and loss.\n\n# Adjustments and exclusions\n\n34. APRA may, by notice in writing to a life company, adjust or exclude a specific requirement in this Prudential Standard in relation to that company.\n\n# Determinations made under previous prudential standards\n\n35. An exercise of APRA’s discretion (such as an approval, waiver or direction) under a previous version of this Prudential Standard continues to have effect as though exercised pursuant to a corresponding power (if any) exercisable by APRA under this Prudential Standard.\n\n \n\n# Attachment A\n\n# Auditable annual returns\n\nThe Auditor must provide assurance on the annual data provided to APRA in the forms as listed below. APRA determined these forms in reporting standards made under FSCODA.\n\n```html\n

Form Name

Form Number

Level of Assurance

1

Prescribed Capital Amount

LRF 110.1,

LRF 110.2

Reasonable[6]

2

Determination of Capital Base

LRF 112.0,

LRF 112.1,

LRF 112.2

Reasonable

3

Related Party Exposures

LRF 112.3

Reasonable

4

Asset Risk Charge

LRF 114.0

Reasonable

5

Derivatives Activity

LRF 114.2

Reasonable

6

Off-balance Sheet Business

LRF 114.3

Reasonable

7

Insurance Risk Charge

LRF 115.0,

LRF 115.1

Reasonable

8

Asset Concentration Risk Charge

LRF 117.0

Reasonable

9

Operational Risk Charge

LRF 118.0

Reasonable

10

Capital Adequacy Supplementary Information

LRF 200.0

None

11

Statement of Financial Position

LRF 300.1

Reasonable

LRF 300.2

Reasonable

12

Income Statement

LRF 310.1

Reasonable

LRF 310.2

Reasonable

13

Summary of Revenue and Expenses

LRF 330.0

Reasonable

14

Retained Profits

LRF 340.1

Reasonable

LRF 340.2

Reasonable

15

Statement of Policy Liabilities

LRF 400.0

None

16

Assets Backing Policy Liabilities

LRF 420.0

None

17

Sources of Profit

LRF 430.0

None

\n```","sortOrder":15},{"sectionNumber":"Auditable annual returns","sectionType":"part","heading":"Auditable annual returns","content":"# Auditable annual returns\n\nThe Auditor must provide assurance on the annual data provided to APRA in the forms as listed below. APRA determined these forms in reporting standards made under FSCODA.\n\n```html\n

Form Name

Form Number

Level of Assurance

1

Prescribed Capital Amount

LRF 110.1,

LRF 110.2

Reasonable[6]

2

Determination of Capital Base

LRF 112.0,

LRF 112.1,

LRF 112.2

Reasonable

3

Related Party Exposures

LRF 112.3

Reasonable

4

Asset Risk Charge

LRF 114.0

Reasonable

5

Derivatives Activity

LRF 114.2

Reasonable

6

Off-balance Sheet Business

LRF 114.3

Reasonable

7

Insurance Risk Charge

LRF 115.0,

LRF 115.1

Reasonable

8

Asset Concentration Risk Charge

LRF 117.0

Reasonable

9

Operational Risk Charge

LRF 118.0

Reasonable

10

Capital Adequacy Supplementary Information

LRF 200.0

None

11

Statement of Financial Position

LRF 300.1

Reasonable

LRF 300.2

Reasonable

12

Income Statement

LRF 310.1

Reasonable

LRF 310.2

Reasonable

13

Summary of Revenue and Expenses

LRF 330.0

Reasonable

14

Retained Profits

LRF 340.1

Reasonable

LRF 340.2

Reasonable

15

Statement of Policy Liabilities

LRF 400.0

None

16

Assets Backing Policy Liabilities

LRF 420.0

None

17

Sources of Profit

LRF 430.0

None

\n```","sortOrder":16}],"analysis":{"kimi_summary":{"_metrics":{"model":"kimi-k2.5","source":"moonshot-realtime","completionTokens":3559},"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"The legislation maintains its original focus on establishing audit and assurance requirements for life insurance companies. It has not expanded beyond the scope of prudential oversight of external audit functions and auditor responsibilities."},"complexity_factors":["Cross-references to multiple external prudential standards (CPS 510 Governance, CPS 520 Fit and Proper, LPS 001 Definitions)","Technical auditing terminology requiring knowledge of AUASB Framework for Assurance Engagements (reasonable assurance vs limited assurance)","Detailed Attachment A specifying 17 distinct reporting forms (LRF 110.1 through LRF 430.0) with varying assurance levels (Reasonable vs None)","Conditional whistleblower obligations with specific thresholds for reporting to APRA and exceptions to disclosure","Integration with multiple Acts: Life Insurance Act 1995, Financial Sector (Collection of Data) Act 2001, and Criminal Code 1995","Tripartite liaison arrangements involving APRA, the life company, and the auditor with provisions for bilateral meetings"],"plain_english_summary":"This Prudential Standard sets rules for how life insurers, their external auditors, and APRA must interact so independent auditors can verify insurers’ financial health and protect policyholders. Insurers must appoint fit‑and‑proper, independent auditors, give full access, and submit auditor reports to APRA. Auditors must provide reasonable and limited assurance over returns and controls, keep seven years’ records, and report serious legal breaches to APRA. APRA can require special engagements on specific risks, funded by the insurer."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"The Determination applies to all life companies (including friendly societies) and establishes auditors’ functions, reporting and access obligations; it also preserves previous APRA exercises of discretion as continuing (paras 2–4, 35). The instrument does not, on its face, expand or narrow the types of entities covered beyond that stated application."},"complexity_factors":["Cross-references to multiple other prudential standards and statutes (CPS 520, CPS 510, AUASB guidance, FSCODA) create interdependent compliance obligations (paras 7, 13, 12).","Two assurance levels (reasonable and limited) apply to different reports plus a detailed list of auditable forms in Attachment A, increasing procedural complexity (paras 14, 19, 23; Attachment A).","APRA discretion to commission special engagements, to prescribe alternative standards, and to adjust or exclude requirements introduces case-by-case variation and regulatory judgment (paras 26–30, 28, 34).","Tripartite and bilateral liaison paths between APRA, the life company and the Auditor, plus required simultaneous report submissions and specified timeframes, add coordination and timing constraints (paras 15, 12, 30).","Mandatory documentation retention and potential APRA access to working papers, plus criminal penalties for false information, raise evidentiary and disclosure obligations (paras 17, 11, 18).","Broad application to all life companies (including friendly societies) and to all appointed auditors expands the universe of entities and auditors covered (paras 2–4)."],"plain_english_summary":"This Prudential Standard requires every life company to appoint an Auditor and to give that Auditor access to staff, data and the Board so the Auditor can produce annual assurance reports on APRA returns and on systems and controls; those reports must be provided to APRA and to the Board (paras 6–12, 19–25).\n\nAPRA can require additional special‑purpose engagements paid for by the company (paras 26–30), may vary requirements for an individual company (para 34), and auditors must retain working papers for seven years and have regard to AUASB standards (paras 17, 13)."}},"importantCases":[],"_links":{"self":"/api/acts/life-insurance-prudential-standard-determination-no-10-of-2012","history":"/api/acts/life-insurance-prudential-standard-determination-no-10-of-2012/history","analysis":"/api/acts/life-insurance-prudential-standard-determination-no-10-of-2012/analysis","conflicts":"/api/acts/life-insurance-prudential-standard-determination-no-10-of-2012/conflicts","importantCases":"/api/acts/life-insurance-prudential-standard-determination-no-10-of-2012/important-cases","documents":"/api/acts/life-insurance-prudential-standard-determination-no-10-of-2012/documents"}}