After extensive industry consultation, the Australian Prudential Regulation Authority (APRA) has aligned its general insurance framework with the international financial reporting standards in a bid to reduce duplication.

The revised standards will apply from January 1 and will relate to capital requirements for general insurers.

APRA has “de-coupled” the definition of Tier 1 capital instruments and the assessment of securitised assets for capital adequacy purposes from Australian accounting standards.

APRA Executive Member John Trowbridge says the aim is to align as closely as possible financial reporting and prudential reporting for general insurers, thereby reducing the level of dual reporting.

“However, some differences to international standards are necessary to ensure that there are no substantial adverse prudential implications for the capital base of general insurers,” he said.

Mr Trowbridge says such measures will ensure that the financial position of general insurers continues to be underpinned by adequate levels of high-quality capital.