Insurance (prudential standard) determination No 1 of 2017-Prudential Standard GPS 114 Capital Adequacy: Asset Risk Charge [F2017L00101]-Concluded matters [2017] AUSStaCSDLM 167 (5 October 2017)

---

Instrument	Insurance (prudential standard) determination No. 1 of 2017 - Prudential Standard GPS 114 Capital Adequacy: Asset Risk Charge [F2017L00101]
Purpose	Determines Prudential Standard GPS 114 Capital Adequacy: Asset Risk Charge
Authorising legislation	Insurance Act 1973
Department	Treasury
Disallowance	15 sitting days after tabling (tabled Senate 9 February 2017) Notice of motion to disallow must be given by 10 May 2017
Scrutiny principle	Standing Order 23(3)(a)
Previously reported in	Delegated legislation monitor 3 of 2017

Drafting

The committee previously commented as follows:

Paragraph 81 of the determination contains a transitional provision that refers to relief granted by the Australian Prudential Regulation Authority (APRA) under the paragraph having effect until no later than December 2014. The committee notes that paragraph 81 appears in the same form in the determination as in the version of the determination being replaced (Insurance (prudential standard) determination No. 4 of 2012 - Prudential Standard GPS 114 - Capital Adequacy: Asset Risk Charge [F2012L02360]). The committee is therefore unable to determine whether paragraph 81 is still operative, or whether the inclusion of paragraph 81 in the current version of the determination is unnecessary.

The committee requests the advice of the minister in relation to the above.

Minister's response

The Minister for Finance, on behalf of the Minister for Revenue and Financial Services advised:

APRA has re-examined paragraph 81 of the Instrument and is of the view that the paragraph is no longer operative and is unnecessary. As APRA considers the risk of an authorised general insurer seeking retrospective relief under paragraph 81 to be extremely low, it proposes to remove the paragraph when amendments are next made to the prudential standard.

Committee's response

The committee thanks the minister for his response and has concluded its examination of the instrument.

The committee notes the minister's undertaking that when the determination is next amended APRA will remove paragraph 81.