The Australian Government (via The Treasury) has published Statements of Expectations for the Australian Prudential Regulation Authority (APRA), the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC).The Statements of Expectation are generally published upon a change of government and they are intended to provide greater clarity about government policies relevant to a statutory authority, including the policies and priorities those statutory authorities are expected to observe in conducting its operations.
The 2014 Statements of Expectations focus on the Government’s commitment to the reduction of the regulatory burden on business and the community.
All of ASIC, APRA and ACCC have released Statements of Intent in response to the Statements of Expectations. All three organisations are committing to:
implement measures to reduce red-tape in the execution of their objectives and strategic priorities;
maintain an communicative and co-operative relationship with the Government and other regulatory agencies; and
maintain open, transparent and accountable relationships with supervised entities and industry participants.
The insurance industry will be influenced by these broad policy frameworks as APRA, ASIC and ACCC commit to open, transparent and communicative relationships with supervised entities. This is important in light of the ongoing Financial Systems Inquiry (the Inquiry). The Interim Report for the Inquiry recently identified ‘stability and the prudential framework’ and ‘consumer outcomes and conduct regulation’ as two priority issues facing Australia’s Financial System.
In their Statement of Intent, APRA has expressly stated that they will continue to ‘consult thoroughly with Government and relevant stakeholders when making any material changes to the prudential framework.’ This provides a platform for the insurance industry to voice their concerns if the Inquiry’s recommended “refresher” to better integrate prudential standards in line with international standards is implemented.
In their Statement of Intent, ACCC has expressly stated that they will ‘commit to work closely with all stakeholders to make markets work through the promotion of competition among businesses; the promotion of fair trading; and effective regulation of infrastructure.’
For more information on the Financial Systems Inquiry Interim Report click here. To see the Statements of Intent, click here.