General insurers are being issued with consultation packages in response to the International Financial Reporting Standards (IFRS). The Australian Prudential Regulation Authority (APRA) has issued the first of two packages for use by authorised deposit-taking institutions and general insurers.

A discussion paper released in February proposed a number of changes to existing prudential requirements resulting from specific IFRS-related changes to Australian accounting standards, and requested feedback from interested parties.

The first consultation package outlines the proposed prudential response on a range of issues, including fair value measurement, excess of market value over net assets, employer-sponsored defined benefit superannuation fund surpluses and deficits, as well as loan loss provisioning.

APRA Chairman John Laker says the package seeks to align its prudential and reporting standards with IFRS-based financial reports to the extent practicable.

“Where APRA has chosen to depart from accounting standards, it has done so in the interests of depositors and policyholders and after taking into account the approach of other prudential regulators,” he said.