Apra Seeks Wider Powers Over Conglomerates
The Age
Tuesday May 17, 2005
THE Australian Prudential Regulation Authority is looking to broaden its supervisory powers beyond stand-alone general insurers, in a move that will put conglomerates and foreign insurance companies under tougher scrutiny. Local conglomerates such as Wesfarmers and foreign insurance groups like Munich Re and Swiss Re could be forced to change their corporate structures to fit with APRA's proposed rules, outlined in a paper yesterday. At the same time, general insurers, with wholly owned reinsurance companies, will have to prove they have enough capital to cover related risks. And APRA will be able to lift capital requirements on a case-by-case basis. The move is part of APRA's response to the $5 billion collapse of HIH and the recommendations that came out of the HIH royal commission. But insurers are concerned the industry is becoming over-regulated. APRA has its sights set on foreign companies with local branches operating in Australia.
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