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Life insurance (prudential standards) determination No. 1 of 2018

Prudential Standard LPS 230 Reinsurance Management

Life Insurance Act 1995

I, Geoff Summerhayes, delegate of APRA:

    (a)                under subsection 230A(5) of the Life Insurance Act 1995 (the Act) REVOKE Life insurance (prudential standard) determination No. 12 of 2007, including Prudential Standard LPS 230 Reinsurance, made under that Determination; and

    (b)               under subsection 230A(1) of the Act DETERMINE Prudential Standard LPS 230 Reinsurance Management, in the form set out in the Schedule, which applies to all life companies.

This instrument commences on 1 April 2018.

Dated: 6 March 2018

[Signed]

Geoff Summerhayes
Member

Interpretation

      In this Determination:

APRA means the Australian Prudential Regulation Authority.

Life company has the meaning given in the schedule to the Act.

Schedule

Prudential Standard LPS 230 Reinsurance Management comprises the 9 pages commencing on the following page.

Prudential Standard LPS 230

Reinsurance Management
Objectives and key requirements of this Prudential Standard
This Prudential Standard is designed to ensure that reinsurance arrangements of life companies are subject to minimum standards of independent oversight by APRA. To that end, it addresses the regular reporting of reinsurance arrangements to APRA, and APRA's oversight of Referable Reinsurance Arrangements.
The key requirements of this Prudential Standard include:
     * a life company must report on prescribed matters in relation to its reinsurance arrangements annually;
     * a life company must not enter into a Referable Reinsurance Arrangement unless prior written approval has been granted by APRA; and
     * a life company must comply with any condition imposed by APRA in respect of an approved reinsurance or financing arrangement.

Table of Contents
Authority
Application
Interpretation
Reinsurance reporting
Referable Reinsurance Arrangements
Adjustments and exclusions
Determinations made under previous prudential standards
Attachment A - particulars of reinsurance arrangements to be set out in reinsurance report
Attachment B - Referable Reinsurance Arrangements

Authority
     1. This Prudential Standard is made under subsection 230A(1) of the Life Insurance Act 1995 (the Act).

Application
2.             This Prudential Standard applies to all life companies, including friendly societies, registered under the Act.
3.             This Prudential Standard commences on 1 April 2018 (the commencement date).

Interpretation
4.             Terms that are defined in LPS 001 appear in bold the first time they are used in this Prudential Standard.
5.             Where this Prudential Standard provides for APRA to exercise a power or discretion, this power or discretion is to be exercised in writing.

Reinsurance reporting
6.             A life company must give APRA a reinsurance report relating to the financial year of the company within 3 months after the end of each financial year.[1]
7.             The reinsurance report must set out the particulars of each reinsurance contract or group of reinsurance contracts in force between the company