The Australian Prudential Regulation Authority (APRA) has released the second of two discussion papers setting out its proposed response to the adoption of International Financial Reporting Standards.

The paper includes the treatment of authorised deposit-taking institutions (ADIs) and general insurers.

APRA Chairman John Laker says that while the regulator wants to align prudential and reporting standards with Australian accounting standards as much as possible, there are “sound reasons” for some differences.

“In shaping its approach, nonetheless, APRA is seeking to ensure that adequate levels of high quality capital underpin the financial position of ADIs and general insurers,” he said.

APRA’s regulatory capital regime for general insurers is closely modelled on the ADI rules and came into effect as part of reforms to the prudential framework for general insurance from July 1 2002.

The regulator is inviting comments on the discussion paper. The deadline is October 28.