The Australian Prudential Regulation Authority (APRA) has released its policy and supervision priorities for the next 12 to 18 months.

In relation to general insurance, APRA’s Policy Priorities Paper says next year the prudential regulator is planning to review and refresh guidance for general insurers on product design, underwriting and risk management in Prudential Practice Guide GPG 240 Insurance Risk (GPG 240) and Reinsurance Risk (LPG 240).

“The intention of this review is to ensure a consistent standard in insurance risk management is maintained across these industries, following supervisory observations and measures in recent years,” the paper said.

APRA says for the first-half of this year, consultation with industry on the integration of new accounting standard AASB 17 to align with the regulator’s general insurance capital standards is a key priority.

It expects industry feedback on the draft standards, as well as input to a quantitative impact study by March 31. APRA plans to release final standards in the second half of the year before they commence in July next year.

APRA says its insurance-related supervision priorities will focus on how the industry is addressing availability, affordability and sustainability of offerings to consumers.

“It is clear that in a number of areas, individuals and businesses are finding it increasingly difficult to acquire adequate and sustainable insurance coverage at an affordable price,” APRA’s Supervision Priorities Information Paper said.

“In contributing to solving this complex issue, APRA is focused on ensuring that an appropriate balance is maintained between the sustainability of insurance and access to affordable and well-designed insurance products for consumers.”

APRA Chairman Wayne Byres says the regulator’s 2022 priorities are designed to counter the current risks regulated entities face, while ensuring they are well-prepared for future challenges.

“While the financial system has demonstrated its resilience throughout the pandemic, Covid-19 has underlined the potential for unexpected shocks to emerge at any time,” he said.

“With that in mind, a substantial emphasis of our policy and supervision agenda this year is bolstering entities’ ability to withstand shocks, whether it be financial or operational.”

Click here for the Policy Priorities Information Paper and here for the Supervision Priorities Information Paper.