Life Insurance (prudential standard) determination No. 1 of 2023 (Cth)

Life Insurance (prudential standard) determination No. 1 of 2023

Prudential Standard LPS 100 Solvency Standard

Life Insurance Act 1995

I, Clare Gibney, a delegate of APRA:

(a) under subsection 230A(5) of the Life Insurance Act (the Act) revoke Life Insurance (prudential standard) determination No. 8 of 2012, including Prudential Standard LPS 100 Solvency Standard made under that Determination; and

(b) under subsection 230A(1) of the Act, determine Prudential Standard LPS 100 Solvency Standard, in the form set out in the Schedule, which applies to all life companies, including friendly societies.

This instrument commences on 29 March 2023.

Dated: 7 March 2023

Clare Gibney Executive Director Policy and Advice Division

Interpretation

In this instrument:

APRA means the Australian Prudential Regulation Authority. friendly society has the meaning given in section 16C of the Act. life company has the meaning given in the Schedule to the Act.

Schedule

Prudential Standard LPS 100 Solvency Standard comprises the document commencing on the following page.

Prudential Standard LPS 100

Solvency Standard

Objective and key requirements of this Prudential Standard

This Prudential Standard is made for the purposes of the Life Insurance Act 1995.

The Life Insurance Act 1995 makes provision for prudential standards in relation to the solvency of statutory funds.

This standard is a prudential standard in relation to solvency for the purposes of sections 3, 52, 62, 63 and 159 of the Life Insurance Act 1995. This Prudential Standard is satisfied in relation to a statutory fund if the capital base of the fund exceeds 90 per cent of the fund's prescribed capital amount.

Authority 1. This Prudential Standard is made under paragraph 230A(1)(a) of the Life Insurance Act 1995 (the Act).

Application 2. This Prudential Standard applies to all life companies including friendly societies (together referred to as life companies) registered under the Act[1], except where expressly noted otherwise. 3. A life company must apply this Prudential Standard separately: (a) for a life company other than a friendly society: to each of its statutory funds; and (b) for a friendly society: to each of its approved benefit funds. 4. This Prudential Standard only applies to the business of an Eligible Foreign Life Insurance Company which is carried on through its Australian statutory funds but not otherwise.[2] 5. This Prudential Standard applies to life companies from 1 January 2013. 6. This Prudential Standard applies only for the purposes of sections 3, 52, 62, 63 and 159 of the Act. Should these sections cease to contain references to prudential standards in relation to solvency, this Prudential Standard will cease to have effect.