The Australian Prudential Regulation Authority (APRA) will increase its levies on users by 13.8% to $112.9 million this year and says it will maintain a heightened level of supervision in response to global uncertainty.

APRA says it will focus on how the institutions it regulates adapt to the “continued caution of households and much of the business sector. This will test the strategic ambition of regulated institutions accustomed to more buoyant conditions.”

General insurers can expect to contribute $19.4 million of the $112.9 million levy and life insurers and friendly societies about $10.6 million. Both are hardly changed on last year’s levy.

Superannuation funds and approved deposit-taking institutions such as banks will contribute most of the increased budget.

Life insurers will also contribute $2.3 million to the costs of the Australian Securities and Investments Commission (ASIC), with general insurers giving $2.9 million.

APRA says in the year ahead it will continue to focus on the capital adequacy of life insurers and friendly societies “given the continued volatility in investment markets and will be implementing fundamental changes to life insurance capital standards”.

It says in general insurance it will continue to focus on insurance risk, liability valuations and the quality of reinsurance cover.

The regulator adjusts its funding requirement if it over or under-collects in any year and says it expects to over-collect $3.1 million in 2011/12, which will be refunded through levies this financial year.

APRA determines the levies based on the time it spends on supervision, using a four-year moving average to smooth out variations.

The finance sector in total will be hit by a 109.6% rise in regulatory levies this financial year, mainly due to the introduction of the SuperStream reforms designed to standardise back-office and reporting functions across the superannuation industry.