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Australia regulator proposes exposure limits of life insurers to offshore reinsurers

Thu 8th April, 2021 7:07am
April 8 (Reuters) - Australia's insurance regulator on
Thursday proposed to limit the exposure of life insurers to
offshore reinsurers, given its lack of oversight of foreign
players.
    The Australian Prudential Regulation Authority (APRA) said
it was starting a consultation period that would end on June 25,
to set a standard by the end of the year.
    "The recent growth in life insurers placing business with
offshore reinsurers has been a prudential concern, as APRA does
not have regulatory authority over these reinsurers," the
regulator's Deputy Chair Helen Rowell said. (https://bit.ly/3rZK41M)
    As part of the draft proposal, APRA plans to raise its
aggregate limit for the value of assets of statutory fund for
offshore reinsurers to 12.5% from the 5.0% proposed in 2019.
    The proposal will not materially increase the vulnerability
of the country's financial system to global events and allows
APRA to oversee enough of the Australian life insurance market,
according to the regulator.

 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Shounak Dasgupta)
 ((NikhilKurian.Nainan@thomsonreuters.com; Twitter:
@NikhilKurianN; +91 806 182 2724))
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