Insurance Act 1973 - Determination of Prudential Standards - GPS 110 - Capital Adequacy for General Insurers; GPS 120 - Assets in Australia for General Insurers; GPS 210 - Liability Valuation for General Insurers; GPS 220 - Risk Management for General Insurers; GSP 230 - Reinsurance Arrangements for General Insurers; GPS 410 - Transfer and Amalgamation of Insurance Business for General Insurers and Transitional Prudential Standard GPS 900- Early Approvals of Auditors and Actuaries (07/02/2002)
Board DeclarationBoard Declaration
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Turn the raw legal text into a practical explanation grounded in Insurance Act 1973 - Determination of Prudential Standards - GPS 110 - Capital Adequacy for General Insurers; GPS 120 - Assets in Australia for General Insurers; GPS 210 - Liability Valuation for General Insurers; GPS 220 - Risk Management for General Insurers; GSP 230 - Reinsurance Arrangements for General Insurers; GPS 410 - Transfer and Amalgamation of Insurance Business for General Insurers and Transitional Prudential Standard GPS 900- Early Approvals of Auditors and Actuaries (07/02/2002).
Board Declaration
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An insurer must provide APRA with a Board Declaration signed by 2 directors, or in the case of a foreign insurer, by a senior officer from outside Australia delegated the requisite authority from the Board, at the same time it lodges its yearly statutory accounts.
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The purpose of the Board Declaration is to ensure the Board undertakes a regular informed assessment of all key risks. The Board Declaration is to certify that strategies have been put in place to monitor those risks. Broadly, the Board is required to confirm that the insurer has systems in place to ensure compliance with legislative and prudential requirements, and that the Board has satisfied itself as to the adequacy of, and compliance with, the insurer’s risk management and reinsurance arrangements. Details of the Board Declaration are set out in Guidance Note GGN 220.2.
Business Plan
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A business plan is an important management and control tool that enables a company to communicate its strategic direction and objectives, identify opportunities in the market place, forecast results and establish benchmarks. A sound business plan also needs to consider the impact of differing assumptions or scenarios on the insurer’s financial position.
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Each insurer must at all times maintain a business plan approved by the Board that is revised in response to developments in the insurer’s operational environment. This plan must be submitted to APRA annually (as well as whenever material changes to the plan are made).
Other Reporting Requirements - Insurance Business Outside Australia
- Where an insurer conducts insurance business outside Australia, it must notify APRA in writing if its right to conduct that business ceases, or if the insurer’s right to conduct insurance business has been limited or otherwise materially affected under a law of the jurisdiction in which the business is being conducted. Notification must be provided within 14 days of the event occurring.