ARTICLE · 01 MAY 2008

APRA Eases Up On Recognition Of Reinsurance Recoverables

Clayton Utz

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Insurers should welcome the latest changes to APRA's package of refinements to the general insurance prudential framework, as they will allow unsecured reinsurance recoverables from non-APRA authorised reinsurers to be recognised.

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Peter Mann

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Insurers should welcome the latest changes to APRA's package of refinements to the general insurance prudential framework, as they will allow unsecured reinsurance recoverables from non-APRA authorised reinsurers to be recognised.

Reinsurance Recoverables

In December APRA had proposed that the reinsurance recoverables charge would be calculated using a 100 percent capital factor on and after the second balance date after the date of loss unless the recoverables are from APRA-authorised reinsurers or are otherwise supported by suitable security arrangements in Australia.

This would have meant that any reinsurance recoverables from non-APRA authorised reinsurers from the second balance date following claim occurrences would not be recognised, except where the recoverables are supported by security arrangements in Australia.

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