Risk management functionRisk management function

Risk management function

15. Where a Level 2 insurance group complies with the requirement to have a risk management function (or role) within the group under GPS 220 read with this Prudential Standard, a Level 1 insurer within the group does not need to have its own risk management function unless otherwise required to by APRA.

Business Plan

16. Where:

(a) a Level 2 insurance group complies with the requirement to maintain a Business Plan under GPS 220 read with this Prudential Standard; and

(b) the Business Plan includes adequate detail about Level 1 insurers within the group

the Level 1 insurers within the group are not required to maintain separate Business Plans under GPS 220.

17. A Level 2 insurance group must assess the adequacy of capital levels of non-consolidated subsidiaries. Details of this assessment must be included in the group's business plan.

Risk management declaration and financial information declaration

18. In addition to the requirements relating to the risk management declaration and financial information declaration applicable to a Level 2 insurance group under GPS 220 read with this Prudential Standard, a Level 2 insurance group must:

(a) ensure that its risk management declaration and financial information declaration cover its international business; and

(b) make an attestation, in its risk management declaration, as to the compliance of any entity in the group carrying on insurance business in a foreign jurisdiction with the applicable minimum capital requirements, if any, in that jurisdiction. Any instances where an entity of the group does not satisfy the local minimum capital requirements in a foreign jurisdiction must be noted in the attestation. Reasons for not complying with any relevant capital requirements must also be provided.

Reinsurance Management Strategy

19. In addition to the requirements relating to REMS applicable to a Level 2 insurance group under GPS 230 read with this Prudential Standard, a Level 2 insurance group must ensure that its REMS covers its international business.

Reinsurance Arrangements Statement

20. APRA may vary the requirements of paragraph 28 of GPS 230 in relation to a Level 2 insurance group's Reinsurance Arrangements Statement. A Level 2 insurance group's application for this variation must be made by the parent entity and set out how the proposed content of the Reinsurance Arrangements Statement (as varied) will provide substantiation of the group’s Reinsurance Management Strategy. In deciding whether to vary the requirements of paragraph 28 of GPS 230, APRA must have regard to the matters stated in the application and any other relevant considerations.