The Assistant Treasurer Chris Bowen and the Minister for Superannuation and Corporate Law, Senator Nick Sherry, today announced that the Government will shortly introduce legislation to regulate the non-operating holding companies (NOHCs) of life insurers and enhance the Federal Court of Australia's ability to issue injunctions on prudential matters.
This Bill will remove a gap in the prudential regulation regime by regulating the life insurance NOHCs. It will also strengthen the Australian Prudential Regulation Authority (APRA)'s powers to enforce the prudential laws through a comprehensive and consistent set of injunctions.
"The Government is committed to maintaining a world-leading prudential regulation regime in Australia," Minister Bowen said.
"In this difficult environment, we are ensuring that APRA has access to full information about the financial entities it regulates and can respond quickly and decisively to prudential concerns," Minister Bowen said.
"It is important that the regulator has the tools at its disposal to effectively regulate for today's corporate structures," Minister Sherry said.
"This is good news for the life insurance industry and its policyholders," Minister Sherry said.
APRA currently regulates the NOHCs of general insurers and authorised deposit-taking institutions (ADIs). Under this Bill, it will have the power to register and supervise the NOHCs of life insurance companies and enforce their compliance with prudential requirements.
With the passage of the Bill, APRA will be able to seek a consistent and comprehensive range of injunctions from the Federal Court of Australia on prudential matters, and this power will apply to ADIs, general insurance, life insurance and superannuation.
CANBERRA
2 March, 2009