The general insurance industry is expected to contribute about $29.5 million in levies to support the Australian Prudential Regulation Authority’s (APRA) operational costs in 2023/24, according to a Treasury consultation paper. 

Treasury anticipates the prudential regulator will require underlying net levies of $222 million for the next financial year, an increase of $7.2 million or 3.4% from 2022/23. 

About $29.5 million of the proposed $222 million levies is to be recovered from the general insurance industry, compared with $30.2 million in 2022/23. 

Contributions from general insurers represent 11.2% the total levies funding required – in 2022/23 it was 11.7% – and the levy minimum has increased to $22,500 for 2023/24 and the levy maximum is unchanged at $1.45 million. 

The consultation paper says in 2023/24 APRA’s activities in the general insurance industry will aim to build resilience in the industry through improved risk management requirements across the sector, particularly as it faces challenges posed by natural disasters, rising reinsurance costs, heightened cyber operational risks, and an adverse economic environment. 

APRA will also continue to focus on strengthening insurance risk management capabilities across the industry and supervise the progress and completion of remediation plans for insurers who participated in the regulator’s insurance risk management thematic review. 

The regulator intends as well to conduct a climate exercise focusing on affordability and availability issues in general insurance and is engaging with industry over its planning and design. 

In addition to the levy for general insurers, a separate levy of $1.1 million to cover the costs of operating the National Claims and Policies Database (NCPD) will continue in 2023/24, the paper says. 

The NCPD contains policy and claims information relating to public/product liability (PL) and professional indemnity (PI) insurance from institutions within the general insurance industry. 

Closing date for submissions to the discussion paper is June 9. 

Click here for the Proposed Financial Institutions Supervisory Levies for 2023-24 paper.