Insurance Act 1973

APRA may determine (in writing) standards (prudential standards) relating to prudential matters that must be complied with by:

all general insurers; or

all authorised NOHCs; or

the subsidiaries of general insurers or authorised NOHCs; or

a specified class of general insurers, authorised NOHCs or subsidiaries of general insurers or authorised NOHCs; or

one or more specified general insurers, authorised NOHCs or subsidiaries of general insurers or authorised NOHCs.

A prudential standard may impose different requirements to be complied with:

by different classes of general insurers, authorised NOHCs, or subsidiaries of general insurers or authorised NOHCs; or

in different situations; or

in respect of different activities.

Without limiting the prudential matters in relation to which APRA may determine a prudential standard, a prudential standard may:

require the following companies to ensure that the company’s subsidiaries (or particular subsidiaries), or the company and the company’s subsidiaries (or particular subsidiaries), collectively satisfy particular requirements in relation to prudential matters:

each general insurer or authorised NOHC;

each general insurer or authorised NOHC included in a specified class of general insurers or authorised NOHCs;

a specified general insurer or authorised NOHC;

each of 2 or more specified general insurers or authorised NOHCs;

each subsidiary of a general insurer or of an authorised NOHC;

each subsidiary of a general insurer or of an authorised NOHC, included in a specified class of subsidiaries; or

provide for matters relating to:

the appointment of auditors; or

the conduct of audits.

APRA may modify a prudential standard to replace particular requirements in the standard with an in‑house capital adequacy model proposed by, or agreed to with, a general insurer, an authorised NOHC or a subsidiary of a general insurer or authorised NOHC for the purpose of setting its capital requirements. The in‑house capital adequacy model proposed by the general insurer, authorised NOHC or subsidiary must comply with criteria set out in the prudential standards.

In modifying a prudential standard, APRA must have regard to the particular business and circumstances of the general insurer, authorised NOHC or subsidiary concerned.

If APRA modifies a prudential standard in respect of a particular general insurer, authorised NOHC or subsidiary of a general insurer or authorised NOHC under subsection (3A), APRA must give written notice of the modification to the general insurer, authorised NOHC or subsidiary concerned.

APRA may vary or revoke a modification of a prudential standard and, if it revokes a modification, it may make under subsection (3A) a further modification of the standard in substitution for the previous modification. APRA must give written notice of a variation or revocation to the general insurer, authorised NOHC or subsidiary concerned.

The prudential standards may provide for APRA to exercise powers and discretions under the standards, including but not limited to discretions to approve, impose, adjust or exclude specific prudential requirements in relation to the following:

a particular general insurer, authorised NOHC or subsidiary of a general insurer or authorised NOHC;

specified general insurers, authorised NOHCs or subsidiaries of general insurers or authorised NOHCs.

APRA may, in writing, vary or revoke a standard. However, APRA must not, under this subsection, vary or revoke a standard in a way described in subsection (3A).

A standard referred to in paragraph (1)(e), or an instrument varying or revoking such a standard, has effect:

from the day on which the standard, variation or revocation is made; or

if the standard, variation or revocation specifies a later day—from that later day.

The following instruments made under this section are not legislative instruments:

a standard referred to in paragraph (1)(e);

an instrument varying or revoking a standard referred to in paragraph (1)(e);

a modification of a standard under subsection (3A);

an instrument varying or revoking a modification under subsection (3A).

Otherwise, an instrument made under this section is a legislative instrument.

Despite section 14 of the Legislation Act 2003 and section 46AA of the Acts Interpretation Act 1901, the standards may make provision for or in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time.

Part VI applies to a decision to determine, vary or revoke a standard referred to in paragraph (1)(e).