(Re)Insurance and Regulation Focus - week commencing 8 June 2026

Key developments in the last fortnight

ASIC flags compliance gaps in mandatory sustainability reports

ASIC has released the results of its review of the first mandatory sustainability reports lodged by Group 1 entities, identifying six recurring compliance themes. ASIC reviewed 259 sustainability reports for entities with financial years ending 31 December 2025 and found patterns of non-compliance, including inappropriate disclaimers, failures to draw on information on prior weather-related losses when assessing climate-related risks, unexplained assumptions, mandatory disclosures not clearly separated from voluntary content, incorrect cross-references and incorrect application of regulatory emissions targets. These findings provide guidance to the industry on where ASIC’s attention is focused in relation to sustainability reports, and may be indicative of future enforcement priorities. ASIC’s review of the reports is ongoing, and ASIC will publish its final observations in the second half of 2026.

ASIC issues early observations on sustainability reporting ahead of 30 June 2026 | ASIC

APRA disqualifies former chair of Xinja Bank under FAR

APRA has disqualified the former chair of Xinja Bank Limited (Xinja) from being an accountable person of any ADIs under the Financial Accountability Regime (FAR) for six years, being the third accountable person of Xinja disqualified by APRA under FAR. This decision follows APRA’s investigation on how Xinja’s undisclosed side agreements with some of its investors in 2020 impacted its capital position and whether Xinja misled APRA about its true capital position. APRA found that the former chair failed to comply with the accountability obligations as an accountable person in relation to Xinja’s capital position, including the obligations to act with due skill, care and diligence, deal with APRA in an open, constructive and cooperative way and take reasonable steps to prevent matters arising that would adversely affect Xinja’s prudential standing. This outcome demonstrates APRA’s commitment to hold directors and senior executives to account when they fail to meet their accountability obligations.

APRA disqualifies former chair of Xinja Bank under the Financial Accountability Regime | APRA

APRA publishes Executive Director’s remarks to the All Actuaries Summit

APRA has published remarks delivered by Jane Magill, Executive Director Life and Private Health Insurance and Superannuation, to the All Actuaries Summit in Melbourne. She discussed the need to innovate and adjust Total and Permanent Disability (TPD) insurance products to ensure their sustainability. She noted that the current form of TPD insurance is being tested by a sharp rise in mental health claims, which now account for one in three claims paid, noting that mental health claims for people in their 30s have risen by more than 700% over the past decade. Ms Magill emphasised that 'it will require disciplined risk management and coordinated action across claims, product design and stakeholder alignment' to innovate TPD products to ensure their sustainability.

APRA publishes Jane Magill's remarks to the 2026 All Actuaries Summit | APRA

General insurance Industry Data and Compliance Report FY25

The General Insurance Code Governance Committee has published its Annual Industry Data and Compliance Report 2024–25, which analyses compliance with the General Insurance Code of Practice along with insights and recommendations for improvement. The latest data shows some positive developments, including a reduction in the overall financial impact of breaches on customers. However, it also shows ongoing problems in claims handling. Namely, that insurers reported over 40,000 claims handling breaches, which accounts for 59% of all breaches. These breaches include failures to update customers on claims progress at least every 20 business days and failures to decide claims within 10 business days, once all enquiries are complete. Some insurers were unable to report how long customers were left waiting, indicating a limited ability to identify patterns and address root causes. Beyond claims, financial hardship complaints rose by 119% and vulnerability complaints rose by 70%. The Committee encourages insurers to consider the Report carefully, to understand the key insights and implement improvements.

Industry Data and Compliance Report 2024-25 – CGC

APRA revokes Eric Insurance’s general insurance licence

APRA has revoked the authorisation of Eric Insurance Limited (Eric) to carry on general insurance business in Australia under the Insurance Act 1973 (Cth), following a request by Eric’s deed administrators. Eric was a small, privately-owned general insurer that provided add-on motor vehicle related insurance products. It entered voluntary administration in July 2025 and executed a deed of company arrangement (DOCA) in September 2025 with its creditors, as it was under the pressure of mounting complaint handling costs and had a winding up application brought by APRA. Now, by virtue of the execution of the DOCA, which governs how Eric’s debts will be paid including claims by its policyholders, Eric has no remaining liabilities in respect of its insurance business. APRA has been playing an active role monitoring Eric’s exit from the general insurance market for some time, demonstrating the importance of its function as the prudential regulator in managing and overseeing regulated entities.

APRA revokes Eric Insurance’s general insurance licence | APRA

Key dates

• 16 June 2026 – Submissions close on APRA’s proposed changes to the National Claims and Policies Database.
• 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.