The Australian Prudential Regulation Authority (APRA) has released two technical papers as part of its review of the capital standards for general and life insurers.

The first paper describes APRA’s proposals for determining the asset risk capital charge for both life and general insurers, while the second covers APRA’s proposals for determining the capital base and insurance risk capital charge for life insurers.

APRA is undertaking the review in order to introduce a consistent framework across the general and life insurance industries as well as across authorised deposit-taking institutions.

While life insurers face significant changes under the proposals, APRA has forecast only modest changes for general insurers.

Among the proposals is an improvement in risk sensitivity measures in the regulation of capital standards for both general and life insurers.

APRA is inviting comment on the proposals by October 29.