Banking, Insurance, Life Insurance and Health Insurance (prudential standard) determination No.1 of 2019
Additional requirements of the Head of aAdditional requirements of the Head of a group
Start here
Get a plain-English read of Additional requirements of the Head of a
Turn the raw legal text into a practical explanation grounded in Banking, Insurance, Life Insurance and Health Insurance (prudential standard) determination No.1 of 2019.
Additional requirements of the Head of a group
-
As part of the group risk management framework (see paragraphs 19 to 25), the Head of a group must maintain processes to coordinate the identification, measurement, evaluation, monitoring, reporting, and controlling or mitigation of all material risks across the group, in normal times and periods of stress. The Head of a group must ensure its Board has a comprehensive group-wide view of all material risks, including an understanding of the roles and relationships of subsidiaries to one another and to the Head of a group.
-
The group risk management function (see paragraphs 37 to 42) does not need to be a function of the Head of a group, but may be a function located elsewhere in the group. The group chief risk officer (CRO) cannot be the roles specified in paragraph 39 for any institution within the group.
-
The Head of a group must notify APRA in accordance with paragraphs 52 to 55 in respect of the group risk management framework, except where an APRA-regulated institution within the group has otherwise notified APRA of that information.
-
The Head of a group must maintain a Board-approved liquidity management policy for the group to adequately and consistently identify, measure, monitor, and manage its material liquidity risks. The policy must include a strategy that ensures the group has sufficient liquidity to meet its obligations as they fall due, including in stressed conditions, and outline processes to identify existing and potential constraints on the transfer of funds within the group. The Head of a group must submit to APRA a copy of its group liquidity management policy as soon as practicable, and no more than 10 business days, after Board approval.
-
Where an institution within the group that is not an APRA-regulated institution engages in business activities that may pose a material risk to the group, the Head of the group must ensure that the risk management framework addresses the risks posed by that institution to the group and depositors, policyholders or RSE beneficiaries.[4]