Insurance (prudential standard) determination No. 3 of 2006 - Prudential Standard GPS 310 - Audit and Actuarial Reporting and Valuation
Exemption from requirement to appoint anExemption from requirement to appoint an actuary
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Exemption from requirement to appoint an actuary
- For the purpose of subsection 47(3) of the Act, an insurer is exempt from the requirement to appoint an actuary when:
(a) the gross insurance liabilities of the insurer are less than $20 million; and
(b) the gross insurance liabilities of the insurer do not include a material amount in respect of long-tail business (comprising classes of business where the claims are typically settled one year or more after the date of occurrence of the event that gives rise to the claim). In cases where APRA considers the insurer to have a material amount of long-tail business based on the documentary evidence required to be submitted by the insurer to APRA in accordance with subparagraph (d) or on other relevant information, APRA may notify the insurer in writing that this criterion has not been satisfied; and
(c) the gross insurance liabilities of the insurer are valued in accordance with this Prudential Standard; and
(d) the insurer has provided APRA with documentary evidence that the criteria in subparagraphs (a) to (c) have been met; and
(e) the insurer has attested to APRA, in writing, that it will meet the criteria in subparagraphs (a) to (c) for the next 12 months. This attestation must be provided by the chief executive officer (CEO) of the insurer.
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To maintain the exemption, the insurer must annually attest to APRA, in writing, that it has met the criteria in subparagraphs 14(a) to (c) for the past 12 months and expects to meet these same criteria for the next 12 months. This attestation must be provided by the CEO of the insurer.
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An insurer may also be exempt from the requirement to appoint an actuary where APRA considers that the circumstances of the case merit an exemption (for example, insurers in full run-off). In such cases, APRA must seek the approval of the Treasurer before granting an exemption.[9]
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Notwithstanding any exemption, APRA may at any time require an insurer to commission, at the insurer’s expense, an independent actuarial investigation of its insurance liabilities in accordance with the Act.[10] The insurer must appoint an actuary that meets the criteria specified in the Act and APRA must approve the actuary.[11]