The prudential regulator has released its final prudential practice guide for insurers in relation to group insurance arrangements.
Following release of the draft version of its Prudential Practice Guide SPG 223 Fraud Risk Management, APRA has released Prudential Practice Guide LPG 270 Group Insurance Arrangements, which outlines “prudent practices” in relation to group insurance arrangements.
APRA deputy chairman Ian Laughlin said over the past few years part of the group insurance market has “fallen short” of appropriate practices in respect of risk management and governance.
“The release of this prudential practice guide reflects APRA’s heightened focus on group insurance and forms part of APRA’s response to issues in both the superannuation and life industries,” Mr Laughlin said. “APRA expects industry to continue to improve practices in this market.”
APRA also said the release of the prudential guide is part of a suite of activities intended to address “poor practices” that have emerged in the group insurance market, which have contributed to “deteriorating experiences” for participants.
“Over the past few years, APRA has undertaken a coordinated effort to increase its focus on this area, through the release of standards and guidance for RSE licensees and increasing supervisory attention for participants in the market,” a statement from APRA said.
“Topics covered by the [guide] include the identification of risks in accordance with an insurer’s risk framework, responding to tenders and data management,” APRA said.
"[The guide] also discusses the implications of Prudential Standard SPS 250 Insurance in Superannuation for insurers. APRA expects the guidance contained in LPG 270 may also be useful to insurers of other types of group insurance arrangements,” the statement said.
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