General insurers face more regulatory changes in the next financial year, according to KPMG partner Craig Davis.

The changes follow 12 months of intense reform activity from regulators and the Federal Government.

Mr Davis says the next year will see ongoing anti-money laundering and anti-bribery changes, the final Future of Financial Advice reforms and financial claims scheme regulations.

Liquidity reporting to the Australian Prudential Regulation Authority begins on July 1, and in the following financial year insurers could be required to introduce recovery-planning standards.

This is currently limited to major banks, but KPMG predicts it will be expanded.

The volume and complexity of regulation could lead to increased project risk for insurers, Mr Davis says.

“There is so much to do and the volume determines that work, which should be strategic, is often tactical and responsive, with the expense of compliance often running higher than anticipated.

“At the same time, regulators are becoming more intrusive as they become more explicit in their expectations about effective risk governance, including at a board level.”

The extra workload comes as the economic outlook is beginning to turn, Mr Davis says.

“Institutions are completing these major reforms against a backdrop of slow credit growth, efficiency and productivity drives, margin pressure and a competitive funding environment.

“The new normal in regulatory reform will continue well into the next financial year and beyond.”