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Superannuation (prudential standard) determination No. 1 of 2022

 Prudential Standard SPS 250 Insurance in Superannuation

 Superannuation Industry (Supervision) Act 1993

 I, Renée Roberts, delegate of APRA:

    (a)     under subsection 34C(6) of the Superannuation Industry (Supervision) Act 1993 (the Act) REVOKE Superannuation (prudential standard) determination No. 5 of 2012, including Prudential Standard SPS 250 Insurance in Superannuation made under that determination; and

    (b)     under subsection 34C(1) of the the Act DETERMINE Prudential Standard SPS 250 Insurance in Superannuation in the form set out in the Schedule, which applies to all RSE licensees.

 This instrument commences on 1 July 2022. Dated: 27 May 2022

 Renée Roberts Executive Director Policy & Advice

Interpretation

 In this instrument:

 APRA means the Australian Prudential Regulation Authority.

 RSE licensee has the meaning given in section 10(1) of the Act.
 Schedule

 Prudential Standard SPS 250 Insurance in Superannuation comprises the document commencing on the following page.

Prudential Standard SPS 250 Insurance in Superannuation

Objectives and key requirements of this Prudential Standard

 The purpose of this Prudential Standard is to ensure that an RSE licensee, consistent with its obligations to act in the best financial interests of beneficiaries, maintains insurance arrangements for the benefit of the beneficiaries. An RSE licensee is required to implement a sound insurance management framework for making insured benefits available to beneficiaries, including prudently selecting and monitoring insurers.

 The Board of an RSE licensee is ultimately responsible for having an insurance management framework that reflects the risks associated with making available insured benefits, and ensuring that the framework is appropriate to the size, business mix and complexity of the RSE licensee's business operations. The insurance management framework must include the insurance strategies for each registrable superannuation entity required in the Superannuation Industry (Supervision) Act 1993.

 The key requirements of this Prudential Standard are that an RSE licensee must also:

      * ensure that insurance arrangements adequately address the minimum requirements set out in this Prudential Standard;

      * formulate and give effect to appropriate selection processes for, and due diligence of, insurers and monitor relationships with insurers on an ongoing basis; and

      * obtain and provide to APRA an independent certification of an insurance arrangement, where the arrangement is with an insurer that is a connected entity of the RSE licensee or where otherwise required by APRA.

Authority

      1. This Prudential Standard is made under section 34C of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

Application and commencement

    2.             This Prudential Standard applies to all registrable superannuation entity (RSE) licensees (RSE licensees).1

    3.             Where an RSE licensee of a defined benefit fund is permitted to self-insure benefits, paragraphs 23 to 29 inclusive do not apply with respect to the self-insured benefits.2

    4.             This Prudential Standard commences