The Insurance Act Amendment Bill has been introduced into Federal Parliament, with a fast-track schedule towards a commencement date of July 1 next year.

The Bill updates the 1974 Insurance Act. It will create a three-tiered supervisory regime similar to the Banking Act, giving APRA greater power to make and enforce prudential standards, with greater flexibility built in through the regulator’s ability to change the prudential standards as they are required.

The minimum statutory capital requirement for small insurers will rise from $2 million to $5 million. That’s expected to cause a lot of concern for the smallest insurers operating in the Australian market.

The Insurance Act will also be renamed the General Insurance Act.