The insurance industry has welcomed moves to expand the Australian Prudential Regulation Authority’s (APRA) remit.

Federal Budget papers outline the abolition of the Private Health Insurance Administration Council, with health fund prudential regulation functions taken on by APRA.

The Insurance Council of Australia (ICA) told insuranceNEWS.com.au it has previously canvassed for a level regulatory playing field for all insurance products “irrespective of type or class”.

In its submission to the financial system inquiry it said it is “regrettable” that prudential supervisory arrangements for health products are different from those on life and general offerings.

National Insurance Brokers Association CEO Dallas Booth agrees it “makes sense to combine all the prudential regulatory functions”.

The budget also features a funding cut of $120.1 million over five years for the Australian Securities and Investments Commission (ASIC), which will be expected to “adjust its priorities to ensure it continues to meet its statutory objectives”.

The Government will conduct a review of future ownership options for the commission’s registry function.

An ICA spokesman told insuranceNEWS.com.au it is up to the Federal Government to decide on ASIC funding and “for ASIC to work how it can fulfil its role effectively”.

Mr Booth says the changes will be a challenge for ASIC, which will have to be “very focused on what it does and how it does it”.

“The good thing is that at the moment there is no great sign of systemic risks from brokers that would require ASIC involvement,” he told insuranceNEWS.com.au.

He does not believe the funding cut will lead to a greater burden on brokers.

“The ASIC submission to the financial system inquiry raised the prospect of full cost recovery, which would mean the financial services sector would pay significantly more.

“But I’m not sure the Government wants to go down that route. I think it wants to keep the status quo on a smaller resource base.”