Welcome to the latest issue of the KHQ Super Alert. This week Treasury released draft regulations for public consultation in relation to the new breach reporting rules introduced as part of the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 last year. APRA has also published an insurance letter sent to the industry this week, as well as issue one of its Insight newsletter.
Treasury – Breach reporting regulations consultation
On 10 March 2021, Treasury released for public consultation draft regulations to ‘support the breach reporting rules in Schedule 11 of the Financial Sector Reform (Hayne Royal Commission Response) Act 2020′. Among other things, the regulations propose to amend the Corporations Regulations 2001 (Cth) to:
- ‘prescribe civil penalty provisions that are not taken to be significant (and therefore may not be reportable) under the relevant breach reporting regime if those provisions are contravened’; and
- ‘ensure certain breach reporting offences and civil penalty provisions are subject to an infringement notice’.
It is intended that these regulations will commence on 1 October 2021 when the amended breach reporting requirements in section 912D of the Corporations Act 2001 (Cth) will commence.
The consultation period closes on 9 April 2021.
Click here for details.
APRA – Life insurance letter for trustees
On 9 March 2021, APRA published a letter than was sent to all RSE licensees in relation to the sustainability of life insurance in superannuation. It urged trustees ‘to address concerning trends and practices in the provision of insurance to superannuation members’ as it had ‘noted significant deterioration in group life insurance claims experience in 2019 and 2020’.
According to APRA, it has identified the need for:
- ‘trustees to maintain, and make available to insurers, high quality and sufficiently granular data to facilitate sustainable insurance design and pricing’;
- ‘clear insurance strategies developed and maintained by trustees, that reflect a scheme design for default insurance which carefully considers and appropriately balances their members’ needs and the cost of insurance’; and
- ‘tender processes that provide adequate information and time to all participants, to enable them to consult on scheme design and appropriately price the risks and benefits’.
Click here for details.
APRA – Insight Newsletter
On 9 March 2021, APRA published issue one of its APRA Insight newsletter for 2021. The key items for superannuation trustees to note are:
- ‘APRA’s response to climate-related financial risks’ – APRA intends to issue a new climate risk prudential practice guide as well as conduct ‘climate vulnerability assessments’ in 2021;
- ‘Life insurance in superannuation: Improving outcomes for members’ – APRA provides its observations after monitoring industry trends and practices across the insurance and superannuation sectors; and
- ‘Successor fund transfers in superannuation’ – an ‘APRA Explains’ article designed to explain to members what a successor fund transfer is.
Click here for details.
