Document ID: chunk:federal_register_of_legislation:F2023L01348:front:0:p7
Version: federal_register_of_legislation:F2023L01348
Segment Type: other
Provision Reference: 
Character Range: 16830–19908

to general insurers, has the meaning given in the Insurance Act;
(iii)       in relation to life insurers, has the meaning given in the Life Insurance Act;
(iv)        in relation to private health insurers, means any person specified in paragraph (c) of the definition of officer in the PHIPS Act; and
(v)          in relation to RSE licensees, has the meaning given in Prudential Standard SPS 520 Fit and Proper;
(u)          significant financial institution (SFI) – means, in relation to RSE licensees, an RSE licensee that either:
(i)            has total assets in excess of AUD $30 billion in the case of a single RSE operated by an RSE licensee, or if the RSE licensee operates more than one RSE where the combined total assets of all RSEs exceed this amount; or
(ii)         is determined as such by APRA, having regard to matters such as complexity in its operations or its membership of a group;[9]
(v)          specified role – means a person who is a senior manager, executive director, material risk-taker (including highly-paid material risk-takers) and risk and financial control personnel;
(w)        third-party service provider – means an entity that provides, under a compensation arrangement, a service to an APRA-regulated entity that is not a related body corporate or connected entity of the APRA-regulated entity;
(x)          variable remuneration – means the amount of a person's total remuneration that is conditional on objectives, which include performance criteria, service requirements or the passage of time; and
(y)          vesting – means, in relation to variable remuneration, the process by which a person becomes the legal owner of the variable remuneration.

A. Requirements for SFIs

Remuneration framework
21.         An APRA-regulated entity must maintain a remuneration framework that:
(a)          aligns with the entity's business plan, strategic objectives and risk management framework;[10]
(b)          promotes effective management of both financial and non-financial risks, sustainable performance and the entity's long-term soundness;
(c)          for an RSE licensee, promotes performing its duties and exercising its powers in the best financial interests of beneficiaries; and
(d)          supports the prevention and mitigation of conduct risk.
22.         The remuneration framework must include a documented remuneration policy which at minimum sets out:
(a)          how the remuneration framework addresses paragraph 21 of this Prudential Standard;
(b)          at a high level, the structure and terms of remuneration arrangements that apply to a person who is:
(i)            employed directly by the APRA-regulated entity;
(ii)         retained directly by the APRA-regulated entity under contract; and
(iii)       employed by, or is a contractor of a body corporate (including a service company) that is a related body corporate or connected entity, of the APRA-regulated entity;
(c)          the approach to identify and mitigate material conflicts to the objectives of the remuneration framework, as specified in