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Prudential Standard SPS 250 Insurance in Superannuation

Image unavailable in extracted textObjectives and key requirements of this Prudential Standard

The purpose of this Prudential Standard is to ensure that an RSE licensee, consistent with its obligations to act in the best financial interests of beneficiaries, maintains insurance arrangements for the benefit of the beneficiaries. An RSE licensee is required to implement a sound insurance management framework for making insured benefits available to beneficiaries, including prudently selecting and monitoring insurers.

The Board of an RSE licensee is ultimately responsible for having an insurance management framework that reflects the risks associated with making available insured benefits, and ensuring that the framework is appropriate to the size, business mix and complexity of the RSE licensee’s business operations. The insurance management framework must include the insurance strategies for each registrable superannuation entity required in the Superannuation Industry (Supervision) Act 1993.

The key requirements of this Prudential Standard are that an RSE licensee must also:

ensure that insurance arrangements adequately address the minimum requirements set out in this Prudential Standard;

formulate and give effect to appropriate selection processes for, and due diligence of, insurers and monitor relationships with insurers on an ongoing basis; and

obtain and provide to APRA an independent certification of an insurance arrangement, where the arrangement is with an insurer that is a connected entity of the RSE licensee or where otherwise required by APRA.