{"id":"F2022L00741","name":"Superannuation (prudential standard) determination No. 1 of 2022","slug":"superannuation-prudential-standard-determination-no-1-of-2022","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":102445,"registerId":"commonwealth-F2022L00741-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Superannuation (prudential standard) det","sectionType":"part","heading":"Superannuation (prudential standard) determination No. 1 of 2022","content":"# Superannuation (prudential standard) determination No. 1 of 2022\n\nPrudential Standard SPS 250 Insurance in Superannuation\n\nSuperannuation Industry (Supervision) Act 1993\n\nI, Renée Roberts, delegate of APRA:\n\n    (a) under subsection 34C(6) of the Superannuation Industry (Supervision) Act 1993 (the Act) REVOKE Superannuation (prudential standard) determination No. 5 of 2012, including Prudential Standard SPS 250 Insurance in Superannuation made under that determination; and\n\n    (b) under subsection 34C(1) of the the Act DETERMINE Prudential Standard SPS 250 Insurance in Superannuation in the form set out in the Schedule, which applies to all RSE licensees.\n\nThis instrument commences on 1 July 2022. Dated: 27 May 2022\n\nRenée Roberts Executive Director Policy & Advice","sortOrder":0},{"sectionNumber":"Interpretation","sectionType":"division","heading":"Interpretation","content":"### Interpretation\n\nIn this instrument:\n\nAPRA means the Australian Prudential Regulation Authority.\n\nRSE licensee has the meaning given in section 10(1) of the Act.","sortOrder":1},{"sectionNumber":"Prudential Standard SPS 250 Insurance in","sectionType":"part","heading":"Prudential Standard SPS 250 Insurance in Superannuation","content":"![](image.002.png)\n\n# Prudential Standard SPS 250 Insurance in Superannuation\n\n## ![](image.003.png)Objectives and key requirements of this Prudential Standard\n\nThe purpose of this Prudential Standard is to ensure that an RSE licensee, consistent with its obligations to act in the best financial interests of beneficiaries, maintains insurance arrangements for the benefit of the beneficiaries. An RSE licensee is required to implement a sound insurance management framework for making insured benefits available to beneficiaries, including prudently selecting and monitoring insurers.\n\nThe Board of an RSE licensee is ultimately responsible for having an insurance management framework that reflects the risks associated with making available insured benefits, and ensuring that the framework is appropriate to the size, business mix and complexity of the RSE licensee’s business operations. The insurance management framework must include the insurance strategies for each registrable superannuation entity required in the Superannuation Industry (Supervision) Act 1993.\n\nThe key requirements of this Prudential Standard are that an RSE licensee must also:\n\n    ensure that insurance arrangements adequately address the minimum requirements set out in this Prudential Standard;\n\n    formulate and give effect to appropriate selection processes for, and due diligence of, insurers and monitor relationships with insurers on an ongoing basis; and\n\n    obtain and provide to APRA an independent certification of an insurance arrangement, where the arrangement is with an insurer that is a connected entity of the RSE licensee or where otherwise required by APRA.","sortOrder":2},{"sectionNumber":"Objectives and key requirements of this ","sectionType":"part","heading":"Objectives and key requirements of this Prudential Standard","content":"## ![](image.003.png)Objectives and key requirements of this Prudential Standard\n\nThe purpose of this Prudential Standard is to ensure that an RSE licensee, consistent with its obligations to act in the best financial interests of beneficiaries, maintains insurance arrangements for the benefit of the beneficiaries. An RSE licensee is required to implement a sound insurance management framework for making insured benefits available to beneficiaries, including prudently selecting and monitoring insurers.\n\nThe Board of an RSE licensee is ultimately responsible for having an insurance management framework that reflects the risks associated with making available insured benefits, and ensuring that the framework is appropriate to the size, business mix and complexity of the RSE licensee’s business operations. The insurance management framework must include the insurance strategies for each registrable superannuation entity required in the Superannuation Industry (Supervision) Act 1993.\n\nThe key requirements of this Prudential Standard are that an RSE licensee must also:\n\n    ensure that insurance arrangements adequately address the minimum requirements set out in this Prudential Standard;\n\n    formulate and give effect to appropriate selection processes for, and due diligence of, insurers and monitor relationships with insurers on an ongoing basis; and\n\n    obtain and provide to APRA an independent certification of an insurance arrangement, where the arrangement is with an insurer that is a connected entity of the RSE licensee or where otherwise required by APRA.","sortOrder":3},{"sectionNumber":"Authority","sectionType":"division","heading":"Authority","content":"### Authority\n\n    This Prudential Standard is made under section 34C of the Superannuation Industry (Supervision) Act 1993 (SIS Act).","sortOrder":4},{"sectionNumber":"Application and commencement","sectionType":"division","heading":"Application and commencement","content":"### Application and commencement\n\n    2. This Prudential Standard applies to all registrable superannuation entity (RSE) licensees (RSE licensees).1\n\n    3. Where an RSE licensee of a defined benefit fund is permitted to self-insure benefits, paragraphs 23 to 29 inclusive do not apply with respect to the self-insured benefits.2\n\n    4. This Prudential Standard commences on 1 July 2022 (effective date).","sortOrder":5},{"sectionNumber":"Adjustments and exclusions","sectionType":"division","heading":"Adjustments and exclusions","content":"### Adjustments and exclusions\n\n    7. APRA may adjust or exclude a specific requirement in this Prudential Standard in relation to:\n\n    (a) a particular RSE licensee of an RSE;\n\n![](image.004.png)  \n\n1 For the purposes of this Prudential Standard, ‘RSE licensee’ has the meaning given in section 10(1) of the SIS Act.\n\n2 Refer to Prudential Standard SPS 160 Defined Benefit Matters for additional requirements applying to RSE licensees that are permitted to self-insure insurance benefits and to regulation 4.07E(8) of the Superannuation Industry (Supervision) Regulations 1994 which exempts defined benefit funds, that self-insure on 1 July 2013, from the general prohibition on self-insurance (subject to certain conditions).\n\n3 For the purposes of this Prudential Standard, a reference to ‘beneficiaries’ is a reference to ‘beneficiaries of an RSE within the RSE licensee’s business operations’.","sortOrder":7},{"sectionNumber":"RSE licensees that are part of a group4","sectionType":"division","heading":"RSE licensees that are part of a group4","content":"### RSE licensees that are part of a group4\n\n    8. Where an RSE licensee is part of a corporate group, and the RSE licensee utilises group policies or functions, the Board must approve the use of group policies and functions and must ensure that these policies and functions give appropriate regard to the RSE licensee’s business operations and its specific requirements.5","sortOrder":8},{"sectionNumber":"Insurance management framework","sectionType":"division","heading":"Insurance management framework","content":"### Insurance management framework\n\n    9. An RSE licensee must have in place an insurance management framework to manage making insured benefits available to beneficiaries.\n\n    10. An RSE licensee’s insurance management framework is the totality of systems, structures, policies, processes and people to manage making insured benefits available to beneficiaries.\n\n    11. An RSE licensee’s insurance management framework must be appropriate to the size, business mix and complexity of the RSE licensee’s business operations and to the types of insured benefits made available.\n\n    12. The Board is ultimately responsible for the insurance management framework.\n\n    13. An RSE licensee’s insurance management framework must, at a minimum, include:\n\n    (a) the insurance strategy required under section 52(7) of the SIS Act (which must also comply with the requirements of this Prudential Standard);\n\n    (b) policies and procedures of the RSE licensee relevant to making insured benefits available to beneficiaries, that cover but are not limited to:\n\n    (i) the process by which the cost to the RSE licensee of insurance premiums is recovered from the RSE(s);\n    (ii) the process for monitoring and reviewing the administration of insurance;\n\n![](image.004.png)  \n\n4 For the purposes of this Prudential Standard, a reference to ‘a group’ is a reference to a group comprising the RSE licensee and all connected entities of the RSE licensee and ‘connected entity’ has the meaning given in section 10(1) of the SIS Act.\n\n5 For the purposes of this Prudential Standard, a reference to the ‘Board’ is a reference to the Board of directors or group of individual trustees of an RSE licensee and ‘group of individual trustees’ has the meaning given in section 10(1) of the SIS Act. For the purposes of this Prudential Standard, an ‘RSE licensee’s business operations’ includes all activities as an RSE licensee (including the activities of each RSE of which it is the licensee), and all other activities of the RSE licensee to the extent that they are relevant to, or may impact on, its activities as an RSE licensee.","sortOrder":9},{"sectionNumber":"Insurance strategy","sectionType":"division","heading":"Insurance strategy","content":"### Insurance strategy\n\n    17. In addition to complying with section 52(7) of the SIS Act, an RSE licensee’s insurance strategy for an RSE must, at a minimum, document:\n\n    (a) how the RSE licensee has regard to each of the factors in section 52(7) of the SIS Act;\n\n    (b) the processes for monitoring, reviewing and renewing the insured benefits made available to beneficiaries;\n\n    (c) the RSE licensee’s approach to claims management, regardless of who is\n\n![](image.004.png)  \n\n6 For the purposes of this Prudential Standard, where an RSE licensee is not required under RSE licensee law to provide for opt-out insurance cover, this requirement does not apply, and ‘RSE licensee law’ has the meaning given in section 10(1) of the SIS Act.\n\n7 ‘Reporting framework’ means the reporting standards made under the Financial Sector (Collection of Data) Act 2001.","sortOrder":10},{"sectionNumber":"Insurance arrangements","sectionType":"division","heading":"Insurance arrangements","content":"### Insurance arrangements\n\n    18. For the purposes of this Prudential Standard, ‘insurance arrangement’ means:\n\n    (a) where an RSE licensee makes available insured benefits as described in paragraph 5(a) – an insurance policy document9; or\n\n    (b) where an RSE licensee makes available insured benefits as described in paragraph 5(b) – appropriate documentation of the terms and conditions of the insured benefits;\n\nand any agreement between the RSE licensee and the insurer or any other party, to the extent that the agreement concerns making available insured benefits.10\n\n    19. At a minimum, the insurance arrangement must address:\n\n    (a) the level and type of insured benefits made available, including any exclusions;\n\n    (b) the term of the insured benefits;\n\n    (c) automatic acceptance limits (to the extent relevant);\n\n    (d) availability of opt in and/or opt out cover;\n\n    (e) requirements for the beneficiaries’ eligibility for, cessation of, and any reinstatement of entitlements to insured benefits where available;\n\n    (f) premium structure, including any variable components;\n\n    (g) procedures for notification and payment of claims;\n\n    (h) dispute resolution arrangements;\n\n    (i) agreed service standards;\n\n    (j) reporting requirements for monitoring agreed service standards;\n\n![](image.004.png)  \n\n8 Refer to Prudential Standard SPS 521 Conflicts of Interest for details of conflicts management requirements.\n\n9 For the purposes of this Prudential Standard, a reference to ‘an insurance policy document’ is a reference to a contract of insurance issued by an insurer.\n\n10 An agreement that meets the definition of outsourcing in Prudential Standard SPS 231 Outsourcing must meet the requirements of that Prudential Standard.","sortOrder":11},{"sectionNumber":"Selection and monitoring of insurers","sectionType":"division","heading":"Selection and monitoring of insurers","content":"### Selection and monitoring of insurers\n\n    23. An RSE licensee must:\n\n    (a) develop and implement a selection process for choosing an insurer that includes, at a minimum, consideration of the prospective insurer’s terms of cover and exclusions, claims philosophy, the reasonableness of the premiums to be charged and terms of any delegation to any other person of functions associated with making available insured benefits;\n\n    (b) undertake a due diligence review of the selected insurer; and\n\n    (c) be able to demonstrate to APRA the appropriateness of the selection process and due diligence review and how it is applied.\n\n    24. An RSE licensee must be able to satisfy itself, and demonstrate to APRA, that the engagement of an insurer is conducted at arm’s length and is in the best financial interests of beneficiaries.\n\n    25. Where an insurer that is a connected entity of an RSE licensee is party, or will be party, to an insurance arrangement with the RSE licensee under which the RSE licensee makes, or will make, insured benefits available to beneficiaries, the RSE licensee must obtain an\n\n![](image.004.png)  \n\n11 Refer to section 52(2)(c) of the SIS Act. Note that only insurance arrangements entered into from the effective date of this Prudential Standard are required to include a right for the RSE licensee to terminate the insurance arrangement, or the relevant part of the insurance arrangement, if the RSE licensee is not satisfied that the arrangement is in the best financial interests of the beneficiaries.","sortOrder":12},{"sectionNumber":"Review of insurance management framework","sectionType":"division","heading":"Review of insurance management framework","content":"### Review of insurance management framework\n\n    30. An RSE licensee must ensure that the appropriateness, effectiveness and adequacy of its insurance management framework are subject to a comprehensive review by operationally independent, appropriately trained and competent persons at least every three years.\n\n    31. The scope of the comprehensive review of an RSE licensee’s insurance management framework must have regard to the size, business mix and complexity of the RSE licensee's business operations, the extent of any change to those operations and any changes to the external environment in which the RSE licensee operates.\n\n    32. At a minimum, the comprehensive review of the insurance management framework must consider:\n\n    (a) all the matters identified in paragraph 13;","sortOrder":13},{"sectionNumber":"Transitional arrangements","sectionType":"division","heading":"Transitional arrangements","content":"### Transitional arrangements\n\n    33. Where:\n\n    (a) an RSE licensee has entered into an insurance arrangement with a connected entity of the RSE licensee prior to the effective date; and\n\n    (b) the insurance arrangement ends on or after 1 July 2023,\n\nthe RSE licensee must, before 1 July 2023, seek an independent certification that states it is reasonable for the RSE licensee to form the view that the insurance arrangement is in the best financial interests of the beneficiaries.\n\n    34. An RSE licensee must provide APRA with an independent certification obtained for the purposes of paragraph 33 no later than 10 business days after the RSE licensee receives the certification.\n\n    35. Where an RSE licensee is unable to obtain an independent certification, for the purposes of paragraph 33, that states it is reasonable for the RSE licensee to form the view that the insurance arrangement is in the best financial interests of the beneficiaries, the RSE licensee must notify APRA no later than 10 business days after becoming aware that it cannot obtain an independent certification containing that statement.","sortOrder":14}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":5,"scope_assessment":{"changed":false,"description":"This legislation appears to be a straightforward replacement/update of the previous 2012 prudential standard (SPS 250). The scope remains focused on insurance in superannuation, with the core purpose unchanged: ensuring RSE licensees maintain appropriate insurance arrangements for beneficiaries. While there are new specific requirements (such as the independent certification for related-party arrangements), these represent tightening of existing obligations rather than expansion into new areas. The standard does not appear to have grown beyond its original intent of prudential oversight of superannuation insurance."},"complexity_factors":["Moderate cross-referencing to other legislation (SIS Act, Life Insurance Act 1995, Insurance Act 1973, SPS 160, SPS 521, SPS 231)","Multiple defined terms scattered throughout the document rather than consolidated in one place (e.g., 'insured benefits', 'insurance arrangement', 'connected entity', 'RSE licensee law')","Conditional application provisions — some paragraphs don't apply to defined benefit funds that self-insure (paragraph 3), and opt-out insurance requirements don't apply where not required by law (footnote 6)","Transitional arrangements creating time-bound exceptions (paragraphs 33-35) with specific deadlines (before 1 July 2023)","Nested concepts requiring understanding of corporate group structures (paragraph 8 on group policies, paragraph 25 on connected entities)","Dual structure — the determination instrument plus the attached prudential standard, creating two layers of legal effect","Mixture of prescriptive requirements ('must') and principles-based standards ('appropriate to the size, business mix and complexity')"],"plain_english_summary":"This prudential standard tells superannuation trustees how to arrange, monitor and disclose life and disability insurance for members. It affects RSE licensees, their members and insurers, requiring a documented insurance management framework, due diligence when appointing insurers, independent certification for related-party insurers, clear contract terms, and periodic independent reviews. The aim is to protect members’ interests, prevent conflicts of interest with related insurers, and ensure claims and service standards are properly overseen."},"flash_summary":{"complexity_score":7,"scope_assessment":{"changed":false,"description":"The instrument revokes the prior prudential standard and enacts Prudential Standard SPS 250, which applies to all RSE licensees (revocation and para 2). The text supplied does not indicate an expansion or contraction of the set of entities covered beyond 'all RSE licensees', so scope as to who is covered is not shown to have changed."},"complexity_factors":["Universal application to all RSE licensees (para 2) creates wide coverage across diverse fund types and sizes.","Mixture of governance, operational and contractual requirements: board responsibility, insurance strategy, policies, selection processes and monitoring (paras 9–13, 17, 23).","Related-party/connected insurer rules require independent certification and transitional deadlines, adding compliance and evidentiary burdens (paras 25, 33–35).","APRA discretion to adjust or exclude requirements, exercised in writing, increases regulatory uncertainty and case-by-case variability (para 7).","Mandatory triennial comprehensive reviews by operationally independent reviewers create periodic external assurance obligations (paras 30–32).","Interdependencies with other prudential standards and SIS Act obligations (section 52(7) and references to SPS 160, SPS 231, SPS 521) increase cross-references to apply.","Detailed minimum content requirements for insurance arrangements and documentation (para 19) generate substantive administrative burden."],"plain_english_summary":"Requires all RSE licensees to maintain an insurance management framework for making insured benefits available; the Board is ultimately responsible, must select and monitor insurers, and obtain independent certification for arrangements with connected insurers. (paras 9–13, 23–25, 33–35, 7)\n\nMembers pay insurance costs through premiums recovered by the RSE; APRA decides adjustments or exclusions in writing and may require evidence. RSEs must commission comprehensive independent reviews at least every three years and keep prescribed documentation. (para 13(a)(i), 30–32)"},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/superannuation-prudential-standard-determination-no-1-of-2022","history":"/api/acts/superannuation-prudential-standard-determination-no-1-of-2022/history","analysis":"/api/acts/superannuation-prudential-standard-determination-no-1-of-2022/analysis","conflicts":"/api/acts/superannuation-prudential-standard-determination-no-1-of-2022/conflicts","importantCases":"/api/acts/superannuation-prudential-standard-determination-no-1-of-2022/important-cases","documents":"/api/acts/superannuation-prudential-standard-determination-no-1-of-2022/documents"}}