Document ID: chunk:federal_register_of_legislation:F2023L00678:body:0:p4
Version: federal_register_of_legislation:F2023L00678
Segment Type: other
Provision Reference: 
Character Range: 8814–11999

the regulated institution's ReMS) and the regulated institution's risk management framework.

    17.         A regulated institution must ensure that its reinsurance management framework is subject to effective and comprehensive review, as part of the risk management framework review, by operationally independent, appropriately trained and competent staff, and that the frequency and scope of this review is appropriate having regard to such factors as the size, business classes, complexity of the regulated institution's operations and the extent of any change to its business profile or its risk appetite. The review must include:

      (a)       a review of the ReMS; and

      (b)      a review of the internal control system.

    18.         A Limited Risk Transfer Arrangement may only be considered reinsurance for the purpose of calculating a regulated institution's net exposure and its Insurance Concentration Risk Charge (ICRC) where it has been approved by APRA as a reinsurance arrangement. The requirements of this Prudential Standard in relation to the ReMS and the Reinsurance Statement apply to any Limited Risk Transfer Arrangement approved as a reinsurance arrangement. Refer to paragraphs 45 to 49 and Attachment A for further requirements relating to the treatment of Limited Risk Transfer Arrangements.

Reinsurance Management Strategy
19.         The ReMS is a high level, strategic document intended to describe the key elements of the reinsurance management framework as set out in paragraph 14(a).
    20.         A regulated institution must review its ReMS at least annually (or as close to annually as is practicable) to ensure that it accurately documents the regulated institution's reinsurance management framework.

    21.         Where there are material changes to the operations of a regulated institution, the regulated institution must review and amend its reinsurance management framework and its ReMS to take into account the changes. This ReMS must be approved by the Board and submitted to APRA within 10 business days of Board Approval.

    22.         A regulated institution must not intentionally deviate in a material way from its ReMS except where this deviation has been approved by the Board and notified to APRA prior to the deviation occurring.

    23.         A regulated institution must inform APRA immediately if it anticipates that a problem is likely to arise out of its reinsurance arrangements that may materially and adversely affect its current or future capacity to meet its obligations. The regulated institution must put in place plans to redress any such problem and advise APRA accordingly.

    24.         A regulated institution's ReMS must:

       (a)          define and document the regulated institution's objectives and strategy for reinsurance management and control, reflecting the regulated institution's appetite for risk[2];
       (b)          identify the key elements of the regulated institution's policies and procedures, processes and controls that comprise the regulated institution's reinsurance management framework;
       (c)          document the process and methodologies