General insurance companies will be expected to pay the Australian Prudential Regulation Authority (APRA) $22 million in supervision levies for the 2012 financial year.

This is a slight reduction on this financial year’s levies of $23.5 million collected from the sector.

General insurers will be paying 17.9% of the total levies collected by APRA.

APRA is planning to raise $127.1 million in total from the sectors it supervises, up 9.8% on the 2011 financial year.

The funding will be used to oversee insurance risk, liability valuations and the quality of reinsurance cover with a focus on the impact of the recent spate of natural disasters. 

APRA will also continue to look at general insurers’ capital requirements.

In addition to the supervisory levy, APRA will also continue to apply the National Claims and Policies Database special levy.

In the next financial year, the minimum levy for professional indemnity insurers will range from $5000 to $32,000.

The levy for policies that are in run-off is unchanged at $2500.

For insurers offering public and product liability insurance, the levy will range from $5000 to $50,000 with a run-off levy again set at $2500.

The database levy is based on earned premium.

The life insurance supervision levy for the 2012 financial year will be $12.8 million, up from $12.1 million collected in 2011.

Life insurers will pay 10.1% of the total amount APRA collects through its supervision levies.

Again the regulator will focus on the capital adequacy of life insurers given the continued volatility in investment markets.

It will continue a fundamental review of life insurance capital standards during next year.