Tighter reporting arrangements for non-authorised insurers are being mooted by the Australian Prudential Regulation Authority (APRA) to improve capital adequacy reporting in the industry.

Under pressure to rein in consolidated groups by domestic insurers, APRA says its latest proposals aim to strike a balance between compliance costs and regulatory oversight.

In a discussion paper released in August, non-authorised groups must lodge regular updates on their capital holdings, although the new regulations fall well short of reporting requirements for local insurers.

APRA's moves towards greater scrutiny are a product of the HIH Royal Commission, which recommended general insurance groups be held to a minimum capital requirement.

A discussion paper on consolidated group reporting was released by APRA in May 2005, followed by a response paper in October last year.

APRA Executive Member John Trowbridge says the regulator accepts the new regulations will place an additional burden on insurers.

"Group reporting requirements will contain less than half the detail required of each individual insurer within the group, and reporting will only be required semi-annually rather than quarterly," he said.

APRA is also waiving actuarial requirements on non-authorised insurers to complete a financial condition report, and the annual Insurance Liability Valuation Report will not be subject to an external peer review.

"Although group reporting will be less detailed than that for individual APRA-authorised insurers, it will still provide APRA with the necessary information for it to carry out its supervisory role effectively for insurance groups," Mr Trowbridge said.