Insurance (prudential standard) determination No. 9 of 2023 (Cth)

Insurance (prudential standard) determination

No. 9 of 2023

Prudential Standard GPS 230 Reinsurance Management

Insurance Act 1973

I, Helen Rowell, a delegate of APRA:

(a) under subsection 32(4) of the Insurance Act 1973 (the Act), revoke Insurance (prudential standard) determination No. 1 of 2013, including Prudential Standard GPS 230 Reinsurance Management, made under that Determination; and

(b) under subsection 32(1) of the Act determine Prudential Standard GPS 230 Reinsurance Management, in the form set out in the Schedule, which applies to:

(i) all general insurers and authorised NOHCs; and

(ii) a subsidiary of a general insurer or authorised NOHC, where that subsidiary is a parent entity of a Level 2 insurance group.

This instrument commences on 1 July 2023. Dated: 24 May 2023

[Signed]

Helen Rowell Deputy Chair

Interpretation

In this instrument:

APRA means the Australian Prudential Regulation Authority.

authorised NOHC has the meaning given in section 3 of the Act.

general insurer has the meaning given in section 11 of the Act.

Level 2 insurance group has the meaning given in Prudential Standard GPS 001 Definitions.

parent entity has the meaning given in Prudential Standard GPS 001 Definitions.

subsidiary has the meaning given in Prudential Standard GPS 001 Definitions.

Schedule

Prudential Standard GPS 230 Reinsurance Management, comprises the document commencing on the following page.

Prudential Standard GPS 230

Reinsurance Management Objectives and key requirements of this Prudential Standard This Prudential Standard requires a general insurer and a Level 2 insurance group to maintain, as part of its overall risk management framework, a specific reinsurance management framework to manage the risks arising from its reinsurance arrangements. The ultimate responsibility for the reinsurance management framework of a general insurer rests with its Board of directors. In the case of a Level 2 insurance group, it rests with the Board of directors of its parent entity. The Board must ensure that the reinsurance management framework manages the selection, implementation, monitoring, review, control and documentation of reinsurance arrangements. The key requirements of this Prudential standard are that a general insurer and Level 2 insurance group must: * have in its reinsurance management framework a documented Reinsurance Management Strategy, sound reinsurance management policies and procedures, and clearly defined managerial responsibilities and controls; * submit its Reinsurance Management Strategy to APRA when any material changes are made; and * submit a Reinsurance Arrangements Statement detailing its reinsurance arrangements to APRA at least annually. Additionally, a key requirement of this Prudential Standard for a general insurer is that it must: * make an annual reinsurance declaration based on the 'inception date rule' and 'two month rule' specified in this Prudential Standard and submit the declaration to APRA at the same time as the Reinsurance Arrangements Statement.