The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have published new guidance materials to help insurers and superannuation trustees prepare for the commencement of the Financial Accountability Regime (FAR).
The FAR already applies to the banking industry and takes effect for the insurance and superannuation industries from 15 March 2025.
APRA and ASIC have registered the Financial Accountability Regime Regulator Rules Amendment Instrument No. 1 of 2024 to finalise amendments to the FAR Regulator rules to prescribe key functions information for inclusion in the FAR register of accountable persons for insurance and superannuation industries
ASIC and APRA have also published an updated information paper to assist entities and their accountable persons in understanding and complying with their obligations under the FAR, with changes made to reflect the final list of key functions and their descriptions for insurance and superannuation entities.
They have also published an updated accountability statement guide and template to help entities subject to the FAR enhanced notification obligations to prepare accountability statements and reporting form instructions to assist insurance and superannuation entities in providing the required information to ASIC and APRA.
Insurance Key Functions and their descriptions
The Regulators have:
- removed ‘collections and enforcement’ as an Insurance Key Function;
- removed references that are not specific to insurance from the key function descriptions of ‘product origination’ and ‘training and monitoring of relevant representatives and staff’;
- refined the key function description for ‘insurance risk management’ to remove any overlap with other Insurance Key Functions;
- tightened the key function description for ‘scam management’ to be more specific to insurance entities’ operations; and
- clarified that some Insurance Key Functions may not apply to private health insurers (PHIs).
RSE licensee Key Functions and their descriptions
The Regulators have:
- given greater detail to the key function descriptions for ‘member outcomes and member engagement’ and ‘product origination’ to remove overlap with other RSE licensee Key Functions;
- tightened the key function description for ‘scam management’ and ‘marketing and advertising’ to be more specific to superannuation entities’ operations; and
- clarified the ‘investment management’ key function description in response to consultation feedback.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
