Objective of this prudential standardObjective of this prudential standard

Objective of this prudential standard

This prudential standard is made under subsection 230A(1) of the Life Insurance Act 1995 (the Act), with effect from 1 January 2008. It replaces the following Prudential Rules, which were made by the Insurance and Superannuation Commission between 1995 and 1996 under subsection 252(1) of the Act:

• Prudential Rules No. 15 Consequences of Transfer of Policy Between Statutory Funds (s 55(2) & (3));
• Prudential Rules No. 18 Single Bank Account for Statutory Funds (s 34(4));
• Prudential Rules No. 22 Non-Participating Benefits (s 15(3));
• Prudential Rules No. 27 Starting Amount (s 61(1)); and
• Prudential Rules No. 28 Distribution of Shareholders’ Retained Profits (Australian Participating) (s 62(5)).

The text of the above Prudential Rules (as varied) has been retained in this prudential standard, except for the following references which have been removed because they are no longer relevant or applicable:

• the words “in Form R1 in the Schedule to the Prudential Rules made for the purposes of subsections 244(1) and (2) of the Act” at the end of paragraphs 4(c)(ii) and 8(b) of Prudential Rules No. 18; and
• Notes 2 and 3 at the end of Prudential Rules No. 22, which set out, respectively, the commencement day of Prudential Rules No. 22 and the revocation of the previous Prudential Rules for the purposes of subsection 15(3).

This prudential standard does not change any substantive aspect of the Prudential Rules. APRA intends that, as far as possible, life companies should comply with the Prudential Standard in the same way that they complied with the Prudential Rules.

This prudential standard also specifies, for the purposes of the Act, the maximum permissible amount of unsecured borrowings of a statutory fund.