The Insurance Council of Australia (ICA) is examining the Australian Prudential Regulation Authority's (APRA) discussion paper on prudential supervision of corporate groups involving authorised general insurers.

ICA Executive Director Alan Mason says the discussion paper responds to key recommendations of the HIH Royal Commission, and also reflects international principles established by the International Association of Insurance Supervisors for prudential regulation.    

Mr Mason says APRA has had extensive discussions with a number of large insurers which form part of conglomerate groups.

“These proposals may add an extra layer of regulation to the industry, as the provisions are clearly designed to be in addition to existing regulation at the licensed insurer level,” he said. “ICA will be seeking some flexibility in the application of the regulatory framework to recognise this additional burden.”

The timeframe for implementation has been extended to 2007 to allow for any necessary corporate restructuring.