Reports by mainstream media that the Australian Prudential Regulation Authority (APRA) is no longer a “toothless tiger” because of its dealings with those involved with the HIH collapse is hardly news to the general insurance industry.

APRA today is a very different to the APRA of 2001 that allegedly didn’t spot HIH falling over, but the changes certainly didn’t occur overnight.

The tough new APRA is mainly thanks to the actions of Federal Treasurer Peter Costello, who scrapped the regulator’s board and replaced it with a three-member executive committee.

Muscle flexing on the part of the regulator has not come only in the past year as the press suggest. In fact, it was following the release of the HIH Royal Commission report in April 2003, when APRA moved to clean up its image in a flash.

Mr Costello also made changes that meant APRA employees had no choice but deal with problem companies.

Increased legislation, including the Financial Services Reform Act, have also toughened-up the regulator’s image.