The Insurance Council of Australia (ICA) wants further changes to an Australian Prudential Regulation Authority risk management standard due to take effect in January.

It flags unintended consequences for director liability arising from a clause outlining areas where boards are “ultimately responsible”.

“The words could extend liability to board members for any failure in the risk management framework, including factors beyond their control,” ICA says in a letter to the regulator.

It calls for further explanation of “ultimate responsibility” and clarification to show application of the standard to specific obligations.

The regulator released an amended CPS 220 Risk Management draft and practice guide last month, after an earlier version raised concerns.

ICA also wants changes to the practice guide, including new wording to avoid an onerous requirement for boards to obtain independent reviews on risk issues.

It says suggested publication of risk management policy outlines in annual reports does not relate to any disclosure obligations in CPS 220, and should be deleted.

The standard aims to harmonise and strengthen risk management across general and life insurers and authorised deposit-taking institutions.