APRA consults on financial claims scheme changes

APRA consults on financial claims scheme changes | Insurance Business Australia

Insurance News

APRA consults on financial claims scheme changes

Scheme due to sunset in October

Insurance News

By
Roxanne Libatique

The Australian Prudential Regulation Authority (APRA) has sought industry feedback on its plans to amend Prudential Standard APS 910 Financial Claims Scheme (APS 910), due to sunset on October 01, 2023.

APS 910 assists APRA with its crisis management framework by requiring locally incorporated authorised deposit-taking institutions to be pre-positioned for the Financial Claims Scheme (FCS).

The FCS aims to provide financial protection in case an insurer, bank, credit union, or building society fails. It protects depositors of locally incorporated ADIs to a limit of $250,000 per account holder per ADI.

“As demonstrated by international events earlier this year, effective crisis preparedness is a critical attribute of a safe and stable financial system and one which cannot be understated,” APRA said.

Feedback on APS 910

In its consultation letter, APRA said it aims to amend APS 910 before its sunsetting date. It proposed to leave APS 910 unchanged at this stage, other than for minor updates to ancillary provisions.

“This approach will ensure that APS 910 continues to apply to ADIs, supporting crisis preparedness. APRA plans to commence a comprehensive review of APS 910 at a later date, so as to consider lessons learned from recent international events,” APRA said.

Submissions are open until August 23, 2023.