APRA hikes general insurance levy by 16%
The Australian Prudential Regulation Authority (APRA) is set to increase its levy on general insurers at the same rate as banks to cover additional costs imposed by the global financial crisis.
Both banks and general insurers face a 16% hike in rates under 2009/10 financial sector levies proposed by APRA and the Federal Treasury last week.
APRA’s costs are forecast to rise 11% to $121 million in 2009/10 with staff numbers expected to rise from 570 to 604.
The fees cover operational costs of APRA in overseeing the banking, insurance and superannuation industries as well as some functions undertaken by the Australian Securities and Investments Commission and the Australian Tax Office.
Financial institutions face an 11% overall increase in levies in the next financial year as total financial sector levies rise from $107.9 million to $119.8 million.
The general insurance industry will contribute a total of $23.4 million, a 16% rise on $20.1 million levied in 2008/09.
APRA says it intends to pay close attention to insurance risk, liability valuations and the quality of reinsurance cover during the next financial year. The regulator will also assess the impact of the economic downturn on “underwriting profits, claims experience and the pricing of risk”.
“Prudential policy work will include the closer alignment of prudential reporting requirements with accounting standards,” APRA said in a proposal paper issued last week.
The regulator partly attributed the increased levies to the economic downturn, despite a Federal Government pledge of $45 million over four years to help manage those issues. Finalised levies are expected by June 30.
Both banks and general insurers face a 16% hike in rates under 2009/10 financial sector levies proposed by APRA and the Federal Treasury last week.
APRA’s costs are forecast to rise 11% to $121 million in 2009/10 with staff numbers expected to rise from 570 to 604.
The fees cover operational costs of APRA in overseeing the banking, insurance and superannuation industries as well as some functions undertaken by the Australian Securities and Investments Commission and the Australian Tax Office.
Financial institutions face an 11% overall increase in levies in the next financial year as total financial sector levies rise from $107.9 million to $119.8 million.
The general insurance industry will contribute a total of $23.4 million, a 16% rise on $20.1 million levied in 2008/09.
APRA says it intends to pay close attention to insurance risk, liability valuations and the quality of reinsurance cover during the next financial year. The regulator will also assess the impact of the economic downturn on “underwriting profits, claims experience and the pricing of risk”.
“Prudential policy work will include the closer alignment of prudential reporting requirements with accounting standards,” APRA said in a proposal paper issued last week.
The regulator partly attributed the increased levies to the economic downturn, despite a Federal Government pledge of $45 million over four years to help manage those issues. Finalised levies are expected by June 30.