The Australian Prudential Regulation Authority has launched a consultation on insurers’ reinsurance counterparties, as it seeks “a complete picture” of how reinsurer downgrade or failure would affect groups.

The regulator has issued draft forms to be completed by general insurers and level-two insurance groups – consolidated groups of companies which it is monitoring because of concerns about contagion risk to insurers from other parts of the organisation.

One form addresses reinsurer downgrade and the other reinsurer failure; the latter assumes the reinsurer cannot meet claims.

Responses are due by August 14 and insurers can make submissions on data they believe should be confidential. The regulator plans to release final standards later this year.

Insurers with a balance date of next December 31 will be the first to file data, along with their annual reports.