The Australian Prudential Regulation Authority (APRA) will scrutinise remuneration in insurance companies as it tackles corporate culture.

Chairman Wayne Byres told a conference in Sydney last week it is time to review the regulations, which date back five years.

“Specific requirements came into force in 2010 with the goal of ensuring personal rewards appropriately take account of risk-taking behaviour,” he said. “These requirements are no longer new. They are now fully in force and meaningfully applied.”

Mr Byres says APRA will examine how Australian regulations compare with international practices.

“We’ll not necessarily copy what’s done offshore, but will at least make sure we are fully aware of differences in industry and regulatory practices and satisfy ourselves that we are not falling behind the game.”

Mr Byres says the regulator considers insurers’ implementation of its risk management prudential standard a priority this year.

“This standard came into effect at the beginning of this year and contains an ostensibly simple requirement for boards to form a view of the risk culture in the firm.

“Forming a view sounds relatively simple, but making sure the board’s view of risk culture is well informed and reliable is more challenging.”

He says APRA will take stock of practices boards employ to fulfil this obligation.

“This stock-take will not only help us to refine and hone our supervisory approach to assessing risk culture, but it will also hopefully help firms benchmark their own practices and understand a little better how they stack up against their peers.”