New prudential reporting requirements are expected to simplify the process for general insurers, according to the Australian Prudential Regulation Authority (APRA).

The regulator last week issued final prudential standards governing the prudential reporting requirements for general insurers. They take effect from July 1 with the first reporting under the new standards required for the quarter ending September 30.

The changes seek to simplify reporting supplied by general insurers to APRA, improve dialogue between the regulator and insurers, and provide more effective information on insurer performance.

After consulting with industry, APRA has determined not to make any material changes to its initial proposals released in December, which it claims align local standards more closely with the International Financial Reporting Standards for insurers.

Retiring APRA Executive Member John Trowbridge says the new requirements will reduce reporting obligations by aligning prudential reporting more closely with statutory requirements.

“Importantly, APRA will also be able to gain a better understanding of insurer performance and profitability under these new arrangements,” he said.

APRA says responses to a quantitative impact study undertaken with insurers show the new proposals “would lead to no material capital changes for the industry as a whole and limited changes at an individual insurer level”.

They include a marginal increase in the solvency ratio to 1.84 times the minimum capital requirement compared to the previous 1.83 ratio. 

The regulator has also released draft reporting forms and instructions, with finalised documents due to be issued next month.