AST INS CNCL welcomed the opportunity to comment on the Exposure Draft Financial Accountability Regime (Consequential Amendments and Transitional Provisions) Bill 2021 (FAR Consequential Amendments Bill ED) and linked explanatory memorandum.
It notes that FAR Consequential Amendments Bill ED will amend APRA Act and ASIC Act to require AST APRA and AST ASIC to publish details of FAR investigations made.
Section 59(4) of the APRA Act will prohibit AST APRA from disclosing information about the affairs of a particular person, but there is no similar section contained in ASIC Act.
AST INS CNCL queried whether this is an oversight or a deliberate measure by AST GVT to create uneven environment between the two regulatory bodies and their roles.
AST INS CNCL believes that as FAR is to be jointly administered by AST APRA and AST ASIC, both regulators should be subject to same prohibition on disclosing information.
Application for Registration
Item 22, Schedule 2 to FAR Consequential Amendments Bill ED gives early application for registration of accountable persons for certain entities, including general insurers.
Assuming Jul. 1, 2023 FAR start date for general insurers, there will be a significant number of early registration applications in the 30-day period before that start date.
Also, item 22(4) states that the registration of an accountable person comes into force at the later of the FAR start time or at the point when a regulator registers the person.
However, as discussed at Aug. 3, 2021 Treasury roundtable, the FAR framework will not impose requirement on regulator to notify accountable entities of a registration.
Given this framework, an accountable entity may have taken all steps to ensure its accountable persons are registered by Jul. 1, 2023, but may not be fully registered.
AST INS CNCL contends that an accountable entity should not be in breach of its FAR obligations under such circumstances, seeks assurance this is also Treasury’s view.