Division Appointment and removal of Committee mem - Life Insurance (prudential standard) determination No. 2 of 2006 - Prudential Standard LPS 510 - Governance - Appointment and removal of Committee members

Appointment and removal of Committee memAppointment and removal of Committee members

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Appointment and removal of Committee members

The power to appoint and remove members of the Committee resides with the Board.
The Board must have appointed all members and formally constituted the Committee within seven days of receiving notification of registration.
Each member of the Committee must be fit and proper for the role.

(Note: The requirements for fitness and propriety are set out in Prudential Standard LPS 520 Fit and Proper Requirements).

The Board must ensure that the Committee as a whole possesses the necessary skills and expertise to ensure that the EFLIC complies with the requirements in, or imposed under, the Life Insurance Act, and to discharge the duties and responsibilities of the Committee provided for in this Prudential Standard.
The Committee must have a policy for dealing with conflicts of interest.
Notwithstanding the Board’s power to appoint and remove members, APRA may, under section 230B of the Life Insurance Act, direct an EFLIC to remove a member of the Committee.
While membership of the Committee is the responsibility of the Board, the powers to appoint and remove members of the Committee must not be used in a manner that impedes, discourages or otherwise hinders the Committee from discharging its duties and responsibilities. Examples that would be cause for concern by APRA would be an excessive turnover of members, or the removal of members at inappropriate times (for example at critical reporting periods). If requested to do so, by APRA, an EFLIC must, within a time stipulated by APRA, in writing (which must not be unreasonable), provide a written report to APRA responding to any queries APRA has regarding the removal of members.