Insurance - PricewaterhouseCoopers

Risk Management Declaration (RMD)
The board of a general insurer is required to submit a RMD to APRA stating that:
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it has systems in place for the purpose of ensuring compliance with the Insurance
Act, the Financial Sector (Collection of Data) Act, and the regulations, prudential
standards reporting standards, authorisation conditions, directions and any other
requirements imposed by APRA, in writing;
the board and senior management are satisfied with the efficacy of the processes
and systems surrounding the production of financial information at the insurer;
there is an RMS in place that sets out its approach to risk management,
which was developed in accordance with the requirements of GPS 220;
there is a Reinsurance Management Strategy (REMS) in place for selecting
and monitoring reinsurance programs, which was developed in accordance
with GPS 230;
over the last financial year, the insurer has substantially complied with its RMS
and REMS obligations and that these strategies are operating effectively in
practice, having regard to the risks they are designed to control; and
copies of the insurer’s current RMS and REMS have been lodged with APRA.
This declaration is to be signed by two directors (or the senior officer if a branch)
and is due within four months of the financial year-end. If this declaration contains
any qualifications, the deviation from the risk management framework should be
disclosed, as well as any mitigating factors or steps taken to rectify.
Financial Information Declaration (FID)
An insurer is required to submit an FID to APRA on or before the day that the annual
statutory accounts are required to be submitted to APRA. The FID must be signed by
the CEO and CFO, stating that:
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the financial information lodged with APRA by the insurer has been prepared
in accordance with relevant legislation, prudential standards and any other
mandatory professional standard and is accurate and complete;
the information provided to the Appointed Auditor and Appointed Actuary is
accurate and complete.
Changes to GPS 220, effective 1 July 2008
A number of changes were made to GPS 220 in July 2008. The main change is
with respect to run-off insurers. The business plan and FCR for a run-off insurer is
replaced by a run-off plan which is to be prepared by the insurer on a rolling three
year basis and is to be reviewed by the Appointed Actuary. The updated standard
also specifies that the business plan can be prepared on an insurance group basis
provided there is adequate detail on each APRA-authorised insurer in the group.
42 | Insurance facts and figures 2009