Document ID: chunk:federal_register_of_legislation:F2022L00741:body:0:p6
Version: federal_register_of_legislation:F2022L00741
Segment Type: other
Provision Reference: 
Character Range: 14431–17446

process and due diligence review and how it is applied.

    24.         An RSE licensee must be able to satisfy itself, and demonstrate to APRA, that the engagement of an insurer is conducted at arm's length and is in the best financial interests of beneficiaries.

    25.         Where an insurer that is a connected entity of an RSE licensee is party, or will be party, to an insurance arrangement with the RSE licensee under which the RSE licensee makes, or will make, insured benefits available to beneficiaries, the RSE licensee must obtain an

   11 Refer to section 52(2)(c) of the SIS Act. Note that only insurance arrangements entered into from the effective date of this Prudential Standard are required to include a right for the RSE licensee to terminate the insurance arrangement, or the relevant part of the insurance arrangement, if the RSE licensee is not satisfied that the arrangement is in the best financial interests of the beneficiaries.

    independent certification that states it is reasonable for the RSE licensee to form the view that the insurance arrangement is in the best financial interests of the beneficiaries.

    26.         Subject to paragraph 33, an RSE licensee that is required to obtain an independent certification under paragraph 25 must obtain the certification:

(a)          before the RSE licensee:

            (i)            enters into a new insurance arrangement; or

            (ii)         renews, or materially alters the terms of, an existing insurance arrangement; and

(b)          on at least a triennial basis.

    27.         An RSE licensee must provide APRA with the independent certification required under paragraph 25 no later than 10 business days after the RSE licensee receives the certification.

    28.         APRA may require an RSE licensee, by notice in writing, to seek an independent certification of an insurance arrangement under which the RSE licensee makes, or will make, insured benefits available to beneficiaries, that states it is reasonable for the RSE licensee to form the view that the insurance arrangement is in the best financial interests of the beneficiaries. An RSE licensee that receives such a notice from APRA is required to comply with the terms of the notice in writing.

    29.         An RSE licensee must ensure it has sufficient and appropriate resources to manage and monitor its relationship with an insurer at all times. At a minimum, the monitoring must include:

(a)          maintaining regular contact with the insurer at an appropriate frequency and level of seniority; and

(b)          a process for regular monitoring of performance under the insurance arrangement, including reporting to senior management against service levels.

Review of insurance management framework

    30.         An RSE licensee must ensure that the appropriateness, effectiveness and adequacy of its insurance management framework are subject to a comprehensive review by operationally independent, appropriately