Welcome to the latest issue of the KHQ Super Alert. It was a quieter week this week, with APRA releasing new Prudential Standard (CPS 900) and two new Practice Guides which aim to strengthen the crisis preparedness of the financial services industry. APRA also published the final speech of outgoing Deputy Chair Helen Rowell.
APRA – Revised Prudential Standard and Guidance in relation to strengthening crisis preparedness
On 18 May 2023, APRA announced that it has ‘finalised new requirements and guidance’ which ‘aim to promote the stability of the financial system in times of stress’. Prudential Standard CPS 900 Resolution Planning and Prudential Practice Guides CPG 900 Resolution Planning and CPG 190 Recovery and Exit Planning were all released, along with a letter to industry addressing feedback received during the consultation process. CPG 190 relates to CPS 190 Recovery and Exit Planning, which was released in December 2022 (see our Super Alert from 2 December 2022).
Among other things, CPS 900 ‘introduces new requirements for entities to support APRA in the development and maintenance of bespoke resolution plans’ meaning that, where appropriate, ‘entities would be required to implement specific pre-positioning actions and maintain capabilities to support their orderly resolution’. CPG 900 will assist entities in understanding the intent of CPS 900.
APRA has informed the industry that neither the Prudential Standard nor the guidance have been materially revised from the draft proposals previously released for consultation (see our Super Alerts from 3 December 2021 and 9 September 2022).
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APRA – Outgoing Deputy Chair Helen Rowell’s final speech
On 17 May 2023, APRA released the final speech of outgoing Deputy Chair Helen Rowell. The speech touched on significant events in the financial services industry that had occurred over her ‘21 years as a prudential regulator’, including the ‘Stronger Super reforms of 2013’ when ‘APRA gained the power to create prudential standards for superannuation’, and the 2018 financial services Royal Commission which stressed the ‘importance of identifying and addressing…non-financial risks…early’.
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ATO – Updated transfer balance caps displayed to members
On 15 May 2023, the ATO announced that a member’s updated personal transfer balance caps will be displayed in the ATO online services platform from 11 July 2023. The ATO had previously announced that transfer balance caps would be indexed from 1 July 2023 (see our Super Alert from 10 February 2023).
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ASIC – Action commenced against life insurer for unfair contract terms
On 12 May 2023, ASIC announced it had ‘commenced proceedings in the Federal Court alleging that three types of insurance policies issued by HCF Life Insurance Company Pty Limited (HCF Life) contain unfair contract terms and could mislead the public’.
ASIC alleges that the ‘standard form contracts’ in question contain an unfair contract term (the ‘pre-existing condition’ term) that could mislead the public because ‘the term suggests that [the insurer] can deny coverage even if the customer was not aware of the pre-existing condition’ – which is contrary to section 47 of the Insurance Contracts Act 1984 (Cth).
ASIC Deputy Chair Sarah Court said ‘it should serve as a reminder to providers of financial services, whose contracts are subject to the regime, that potentially unfair terms should be removed from their standard form consumer contracts’.
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This alert was written by Kiara Leslie (Lawyer), Sanela Osmanovic (Senior Associate), and Natalie Cambrell (Director).
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