Division Risk Management Strategy - Insurance (prudential standard) determination No. 1 of 2006 - Prudential Standard GPS 220 - Risk Management - Risk Management Strategy

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Risk Management Strategy

The RMS is a high level, strategic document intended to describe the key elements of an insurer’s risk management framework set out in subparagraph 9(a)(i).
The insurer must review its RMS at least annually (or as close to annually as is practicable) to ensure that it accurately documents the insurer’s risk management framework.
Where there are material changes to the operations of an insurer, it must review and amend its risk management framework and, if appropriate, its RMS to take account of the changes. Such RMS must be approved by the Board and submitted to APRA within 10 business days of Board approval.
An insurance group may submit to APRA an RMS in respect of the insurance group where the risk management framework covers that insurance group and it is practical to produce a single over-arching RMS covering that insurance group. An insurance group RMS must consider and deal with the risk management framework of each insurer within the insurance group as required by this Prudential Standard.
Where APRA is of the view that the insurance group RMS does not adequately address the risk management framework of each insurer, or is of the view that a different form of RMS is desirable to ensure that the requirements of this Prudential Standard are met, APRA may, in writing, do either or both of the following:

(a) require one or more insurers within the insurance group to prepare and submit to APRA a separate RMS;

(b) require the preparation and submission to APRA of an RMS for a different insurance group within the corporate group;

within a reasonable time specified by APRA.

An insurer must not intentionally deviate in a material way from its RMS except where this deviation has been approved by the Board and notified to APRA prior to the deviation occurring.
Where there are institutional, operational or other developments relating to the insurer’s operations that materially affect the risk profile of the insurer, the insurer must notify APRA as soon as practicable after the event has happened and amend its risk management framework and, if appropriate, the RMS to take account of the change.
An insurer’s RMS must, at a minimum:

(a) outline the risk governance relationship between the Board, Board committees and senior management;

(b) describe the processes for identifying and assessing risks;