The Australian Prudential Regulation Authority (APRA) is proposing minor changes to the prudential and reporting framework of level two general insurance groups.

The aim of the changes is to align these insurers with the prudential and reporting standards of level one insurers.

The changes include a definition of level two group insurers, intra-group transactions and the standards required for the appointment of a group actuary.

APRA is looking at reinsurance recovery and expenses in the reporting framework changes – a move that will require these insurers to make changes to their reporting forms. This will affect prudential standards.

The regulator expects these changes to affect almost all level two insurers. And while it doesn’t believe the implementation costs will be very high, it is asking insurers to submit details of the implementation costs to estimate the overall impact on the general insurance industry.

Submissions on the proposals need to be lodged with APRA by July 15. The regulator is looking to implement the new prudential standards from December 1.