The insurance industry has “by and large” coped well with new capital requirements that took effect at the start of last year, Australian Prudential Regulation Authority (APRA) Chairman Wayne Byres said.

“As it stands at present, the industry is choosing to hold capital at almost twice the minimum level required by APRA,” Mr Byres told a House of Representatives economics committee.

He says the new requirements aim to better align capital standards across industries and also ensure they better reflect the risks to which each insurer is exposed.

APRA currently supervises 481 entities, which hold close to $5 trillion in assets across the financial sector, and all but 11 entities are in broadly good health, he said.

“In the insurance sector, the group life market is experiencing difficulties and we are keeping a close eye on how insurers manage through this,” he said.