The Australian Prudential Regulation Authority (APRA) has unveiled new prudential standards and guidance for the life insurance industry, including friendly societies. The principles-based package comes after extensive industry consultation and represents current practice among leading providers. It will apply from January 1 next year.

APRA Executive Member John Trowbridge says most players are already operating within the new standards. “Currently, there is no explicit prudential standard on risk management for life companies,” he said. “However, many of the requirements in the prudential standards are already part of the practices of prudently run life organisations.”

He says industry players are happy for the increased supervision. They predict it will benefit all stakeholders and help maintain public confidence.

The new standards replace seven existing standards that currently relate only to friendly societies. They are also designed to blend in easily with APRA’s approach to risk management across all financial services.