Review of the private health insurance capital framework
This page contains consultation documents outlining APRA's planned approach to reviewing the capital framework applicable to private health insurers, including the impacts of AASB 17 Insurance Contracts, as part of Phase Three of the PHI Policy Roadmap released in August 2016. This follows completion of Phase One (Risk) and Phase Two (Governance) in 2018.
June 2023
On 6 June 2023, APRA released a response to consultation and the finalised reporting standards for insurers impacted by the introduction of the Australian Accounting Standards Board 17 Insurance Contracts (AASB 17).
This package follows APRA's consultation in early May on its proposed minor amendments to 5 private health insurance reporting standards, to improve the functionality of the finalised reporting framework released in November 2022.
The response letter, finalised reporting standards and marked up versions of the standards can be found below:
Letter
Reporting standards
May 2023
On 4 May 2023, APRA released for consultation minor amendments to the finalised reporting standards impacted by the introduction of the Australian Accounting Standards Board 17 Insurance Contracts (AASB 17), LAGIC updates, and revisions to the capital framework for private health insurers.
During the recent development of data collections in APRA Connect, resulting from the introduction of accounting standard AASB 17, some minor corrections and improvements have been made to the general, life and private health insurance reporting standards.
The proposed changes can be categorised as:
- Correct errors that could lead to incorrect reporting;
- Remove ambiguity of instructions; and
- Improve usability.
APRA seeks feedback on these changes by 19 May 2023.
The letter to industry, marked up and clean version of the private health insurance reporting standards can be found below.
Consultation letter
Draft reporting standards
Capital and reporting framework
Insurers should refer to round five of the AASB 17 consultation page for detailed information on minor amendments to the finalised insurance capital and reporting framework.
Round five - Minor amendments to the finalised capital and reporting framework for insurers.
September 2022
On 27 September 2022, APRA finalised the capital framework for private health insurers.
The new framework enhances policyholder protection by seeking to ensure that private health insurers maintain an appropriate level of financial resilience to absorb unanticipated losses.
The information paper, response paper, prudential and reporting standards and non-confidential submissions are available below.
Media release: APRA finalises new capital framework for private health insurers
Response paper
Information paper
Information paper - The new Private Health Insurance Capital Framework
Prudential Standards
Reporting Standards
Non-confidential submissions
April 2022
On 6 April 2022, APRA released for consultation further revisions to the private health insurer (PHI) reporting standards.
Written submissions are requested by 3 June 2022.
The letter to industry and draft reporting standards can be found below:
Letter
Draft reporting standards
December 2021
On 13 December 2021, APRA released the detailed proposals in relation to its review of the private health insurance capital framework. The release includes the draft capital standards, draft reporting standards, Quantitative Impact Study (QIS) workbooks and a response paper setting out APRA’s response to stakeholder feedback provided to date.
The release also includes an information paper which provides an overview of the standards for Board’s and Senior Management.
Insurers are strongly encouraged to complete the QIS workbooks and provide submissions on the draft Standards by 31 March 2022. Written submissions from other stakeholders are also welcome and are also requested by 31 March 2022.
The Reporting Standards released focus on those required for the QIS. Additional Reporting Standards not related to the QIS will be released early next year.
APRA’s intention is to release the final standards in the second half of 2022 for implementation on 1 July 2023.
As part of the consultation APRA will be holding industry forums in early 2022 and welcomes discussions with industry on the proposals prior to the close of submissions. Questions can be directed to Insurance.policy@apra.gov.au.
The information paper, response paper, draft standards and non-confidential submissions are available below.
Media release: APRA moves to strengthen capital standards in private health insurance
Information paper
Response paper
Draft prudential standards
APRA is releasing six new prudential standards and amending three existing prudential standards. A clean and tracked version is provided for each amended standard. The standards incorporate changes arising from both AASB 17 and the PHI capital review.
Draft reporting standards
APRA is releasing the following draft reporting standards as part of a Quantitative Impact Study. The standards incorporate changes arising from both AASB 17 and the PHI capital review.
Quantitative Impact Study
APRA strongly encourages all insurers to participate in the QIS, as the data received will allow APRA to:
- assess the impact the integration of AASB 17 and PHI capital review proposals would have on insurers’ financial statements and their capital position;
- use insights to inform the development of the final prudential standards.
Participation in the QIS would also be beneficial for insurers in terms of assessing their own preparedness to adopt AASB 17 and the revised PHI capital framework. The QIS workbooks requiring completion and instructions are included in the download.
Non-confidential submissions to the December 2019 discussion paper
Integrating AASB 17 into the capital and reporting framework
Insurers should refer to the AASB 17 consultation page, for detailed information on APRA’s proposals on updates to the insurance capital and reporting framework in recognition of the implementation of AASB 17.
APRA proposes changes to align capital and reporting frameworks for insurance with AASB 17
December 2019
On 3 December 2019, APRA released a discussion paper setting out its proposed structure for the future PHI capital framework. APRA’s review of the PHI capital framework represents the third and final phase of the PHI Policy Roadmap. Information on how to respond is contained in the discussion paper below.
Please note: Submissions on this proposal have been extended and will now close on 30 September 2020.
Discussion paper: Private Health Insurance Capital Standards Review
November 2018
Note on submissions
It is APRA's policy to publish all submissions on the APRA website unless the respondent specifically tells APRA in writing that all or part of the submission is to remain confidential. An automatically generated confidentiality statement in an email does not satisfy this purpose. If you would like only part of your submission to be confidential, you should provide this information marked as 'confidential' in a separate attachment.
Submissions may be the subject of a request for access made under the Freedom of Information Act 1982 (FOIA). APRA will determine such requests, if any, in accordance with the provisions of the FOIA. Information in the submission about any APRA-regulated entity that is not in the public domain and that is identified as confidential will be protected by section 56 of the Australian Prudential Regulation Authority Act 1998 and will therefore be exempt from production under the FOIA.