(Re)Insurance and Regulation focus - fortnight commencing 13 April

Key developments in the last fortnight

Genetic testing Bill passes the Senate

Australia’s life insurance industry has welcomed the passage of new federal legislation banning the use of predictive genetic test results in underwriting, marking a shift from the current voluntary moratorium to a legal requirement.  The Bill amends the Insurance Contracts Act 1984 (Cth) so that from the date of commencement, an insurer cannot use genetic test results to decide whether to offer cover or to set its terms, although individuals can still voluntarily disclose results with written consent where it benefits them. Any insurer who violates the new ban will face civil and criminal penalties. The legislation is described as world-leading in its totality and enforcement strength, and is expected to take effect later this year.

Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025

APRA – Remaking Level 3 conglomerate standards

APRA has launched a consultation on remaking three Level 3 conglomerate prudential standards, covering aggregate risk exposures, intra-group transactions, and audit matters, which are set to sunset on 1 October 2026. The proposed updates involve only minor amendments to keep the standards current, and impose no new requirements on Level 3 conglomerate groups. This is a focused, housekeeping-style exercise, but one that matters for any financial conglomerate operating across banking, insurance and other regulated sectors under APRA’s oversight. Submissions are open until 29 May 2026. Industry participants should review the marked-up draft standards and consider if the changes affect their group structure or compliance frameworks.

Remaking Level 3 conglomerate standards

APRA grants general insurance licence to Europ Assistance Australia

APRA has authorised Europ Assistance Australia as a general insurer under the Insurance Act, marking a new entrant in Australia’s prudentially regulated insurance sector. Europ Assistance Australia has commenced underwriting travel insurance products under its own licence. Europ Assistance Australia is part of the Europ Assist group, a leading leisure travel insurance provider globally. The addition of Europ Assistance Australia reflects APRA’s ongoing role in facilitating a strong, well-regulated insurance market that serves policyholders effectively. It also signals APRA’s continued support for innovation and diversification within the sector.

APRA grants new general insurance licence to Europ Assistance Australia

APRA imposes extra $2million capital requirement on insurer

APRA has imposed an additional $2 million capital requirement on a general insurer, citing a heightened risk profile stemming from weaknesses in non-financial risk management and regulatory reporting. APRA identified serious deficiencies in the insurer’s risk management framework, failures to remediate issues in a timely manner, and a failure to lodge audited financial accounts with the regulator. The measure takes immediate effect and will remain until APRA is satisfied the underlying issues have been fully resolved, with the regulator flagging it will take further action if necessary to protect policyholder interests. This enforcement action is a timely reminder that APRA’s supervisory purview extends well beyond capital adequacy – operational risk governance and regulatory reporting obligations are non-negotiable.

APRA applies additional $2m capital requirement on general insurer

Key dates

• 29 May 2026 – Submissions close on APRA’s proposal to remake Level 3 conglomerate standards.
• 1 July 2026 – AML/CTF obligations commence for tranche 2 entities.
• 1 July 2026 – Mandatory climate related financial reporting annual reporting period commences for Group 2 entities.

In case you missed it

The Financial Accountability Regime (FAR) commenced for insurers on 15 March 2025 and has been in-force for over a year. The Sparke Helmore team has been advising on the application of FAR and compliance measures, including conducting FAR simulation exercises for Accountable Persons, embedding and testing the effectiveness of entities’ FAR implementations. If this is of interest to you, please reach out and let us know.