(Re)Insurance and Regulation Focus - week commencing 29 June
29 June 2026
Key developments in the last fortnight
APRA pens open letter to regulated entities on geopolitical shock readiness
On 17 June 2026, APRA wrote to banks, insurers, and superannuation funds setting out its expectations for their readiness to withstand geopolitical shocks such as sanctions, trade restrictions, and armed conflicts. The letter identified common gaps: nation-state actions like sanctions or restricted market access are often not built into business credit, funding, and investment strategies; risk practices lag behind emerging threats such as personnel risks and disinformation; boards’ technical literacy on AI and overseas third-party reliance is still developing; and crisis-preparedness exercises are not always robust. While the letter does not impose any new requirements, it directs entities to use existing standards to better integrate geopolitical risk into governance, risk management and crisis preparedness. APRA will shortly ask a group of large, high-exposure entities to complete a targeted readiness assessment, and has signalled it will take supervisory action where it finds weak governance or inadequate preparedness.
APRA sets out minimum expectations to strengthen industry readiness for geopolitical shocks | APRA
APRA announces next phase of governance review
On 16 June 2026, APRA commenced the final phase of its governance review, releasing a response to industry feedback and an updated draft of Prudential Standard CPS 510 Governance for further consultation. The package strengthens requirements for board governance, conflicts management, and the fit and proper standards for directors and senior executives, and harmonises five existing prudential standards into one, setting consistent minimum standards for all APRA-regulated entities. Further, the reforms remove duplicative fit and proper reporting requirements now that Financial Accountability Regime (FAR) reporting is in place, substantially reducing regulatory compliance burdens. Consultation is open until August 2026, with the final standard expected later this year, taking effect from early 2028.
APRA commences next phase of push to strengthen and streamline governance requirements | APRA
APRA finalises longevity capital reporting template
Following its consultation period ended 12 May 2026, which closed without industry submissions, APRA has finalised its proposed amendments to the prudential standards governing the capital treatment of longevity products. These products, which include annuities, have the stated aim of strengthening the retirement income market. The primary change is the option for insurers to apply for an advanced illiquidity premium (AILP) when determining capital requirements, which better reflects the long-term nature of longevity liabilities. To support the AILP option, APRA has introduced additional risk controls covering the governance, reporting, and asset composition of the portfolios to which it applies, producing a more sensitive and principles-based approach intended to reduce procyclicality. The reforms commence 1 July 2026.
Finalising amendments to the capital treatment for longevity products | APRA | APRA finalises changes to the capital treatment of longevity products to improve retirement outcomes | APRA
APRA and ASIC streamline FAR regime
On 16 June 2026, APRA and ASIC jointly announced changes to reduce the administrative burden of the Financial Accountability Regime (FAR) while preserving accountability standards. The Regulators will remove key functions requirements from the FAR Regulator Rules, raise the materiality threshold for notifying changes in accountability, and no longer require information on accountable person’ direct reports in accountability maps. These changes are estimated to reduce reporting for all accountable entities, and 4,500 accountable persons who are impacted, halving the number of accountability map updates that accountable entities must make. Separately, ASIC will reduce the evidence of competence requirements for responsible managers at accountable entities from October 2026, benefiting roughly 2,000 Australian financial services licensees.
26-121MR ASIC and APRA announce FAR changes to reduce administrative burden | ASIC
APRA launches website upgrade
On 18 June 2026, APRA launched an upgraded website aimed at improving navigation, search and functionality for regulated entities and the general public. Changes include reformatted prudential and reporting standards, dedicated sector landing pages, integration of the prudential handbook and compliance with the Government’s Digital Inclusion Standard and Web Content Accessibility Guidelines (WCAG). Alongside improving user experience for industry participants, the website updates aim to increase data security in compliance with the Government’s latest digital service standards.
APRA launches upgraded website to improve user experience | APRA
Key dates
- 1 July 2026 – CPS 230 applies to existing material service provider contracts from the earlier of this date, or the next renewal date.
- 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.
- 3 July 2026 – Submissions close on APRA’s proposal to transition life insurance data collections to APRA Connect.
In case you missed it
The Financial Accountability Regime 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.
