PwC Insurance Facts and Figures 2011 - PricewaterhouseCoopers

Key development
National Injury Insurance
Scheme
APRA capital standards
Insurance contracts
exposure draft
Level 3 Groups
Summary of issue
The National Injury Insurance Scheme (NIIS) has been
proposed by the Productivity Commission and would
comprise a system of premium funded, nationally consistent
minimum care and support arrangements for people
suffering catastrophic injury.
This no fault system would be structured as a federation
of separate, state-based injury insurance schemes and has
obvious interactions with other compensation schemes
currently in place (e.g. Workers’ compensation). It is
foreseeable that there could be a transfer of such claims into
the NIIS, which would have implications on the nature of
claims and associated costs on existing schemes.
It is intended that the scheme will ultimately cover all causes
of catastrophic injuries, including motor vehicle accidents,
medical treatment and general accidents occurring within
the community or at home. Funding for the NIIS would
come mainly from existing insurance premium sources but
additional funding may come through state and territory
governments.
Refer to Chapter 1 for details of the key developments and a
summary of the potential impacts for general insurers.
Refer to section Chapter 1 for details of the key developments
and a summary of the potential impacts for general insurers.
In March 2011 APRA issued its discussion paper on the
proposed Level 3 supervision framework. The framework aims
to ensure that prudential supervision adequately captures the
risks to which APRA-regulated entities within a conglomerate
group are exposed. APRA will determine on a case-by-case
basis which groups will be subject to Level 3 supervision.
APRA is proposing two methods for the measurement of
eligible capital at Level 3. A top-down approach based on the
consolidated accounts of the Group and a ‘building block’
approach using the sum of eligible capital of blocks within
the Level 3 Group.
Responses on the discussion paper should be submitted by
18 June 2011.
Insurance Facts and Figures 2011 45