The new package of draft prudential standards and guidance for the life insurance industry is a “good news story” for policyholders, according to the Investment and Financial Services Association (IFSA).

CEO Richard Gilbert told Sunrise Exchange News the new Australian Prudential Regulation Authority (APRA) package – including a discussion paper, draft standards and draft prudential practice guides – are well crafted and good news for the industry and policyholders.

“Anything that raises the bar when it comes to the professional standards of the industry is a good thing,” he said.

APRA has introduced the package in a bid to establish its minimum expectations for risk management and business continuity in the life industry.

The standards include a set of principles-based requirements for risk management and business continuity management that are harmonised, where appropriate, with requirements applicable in other APRA-regulated industries.

APRA Executive Member John Trowbridge says some of the requirements in the draft prudential standards will already be part of the practices of some life insurers.

“The draft prudential standards will provide clarity to life companies about APRA’s minimum expectations for risk management and business continuity management and promote the continuing soundness of the life insurance industry.”

Mr Gilbert agrees that some insurers are already adhering to some of the proposed requirement, but adjustments may have to be made by some IFSA member companies.

“We’ll be making a submission, and we look forward to working further on the package,” he said.

APRA is seeking comments on the package until the end of the year.