Australian Frameworks

Life and General Insurance Capital Standards (LAGIC)

As of 1 January 2013, Life and General Insurers are required to follow the new Life and General Insurance Capital Standards (LAGIC) introduced by APRA. There have been significant changes from the previous legislation, with further additions to the responsibilities of the Appointed Actuary.

The standards come in response to the significant changes in legislation post GFC and aim to bridge the gap between different standards across industries. LAGIC has strong parallels to Solvency II and the ADI reporting standards, with the three pillars approach and the ICAAP (Internal Capital Adequacy Assessment Process).

Life Insurance

APRA have prudential standards and guidance notes to assist Life Insurers in establishing appropriate risk based measures and capital management. Particular risk management standards include:

• LPS 100: Solvency
• LPS 110: Capital Adequacy
• LPS 112: Capital Adequacy – Measurement of Capital
• LPS 114: Capital Adequacy – Asset Risk Charge
• LPS 115: Capital Adequacy – Insurance Risk Charge
• LPS 117: Capital Adequacy – Asset Concentration Risk Charge
• LPS 118: Capital Adequacy – Operational Risk Charge
• LPS 220: Risk Management

General Insurance

APRA have prudential standards and guidance notes to assist General Insurers in establishing appropriate risk based measures and capital management. Particular risk management standards include:

• GPS 110: Capital Adequacy
• GPS 112: Capital Adequacy -  Measurement of Capital
• GPS 113: Capital Adequacy – Internal Model-based method
• GPS 114: Capital Adequacy – Asset Risk Charge and FAQs
• GPS 115: Capital Adequacy – Insurance Risk Charge
• GPS 116: Capital Adequacy – Insurance Concentration Risk Charge
• GPS 117: Capital Adequacy – Asset Concentration Risk Charge
• GPS 118: Capital Adequacy – Operational Risk Charge
• GPS 120: Capital Adequacy -  Assets in Australia
• GPS 220: Risk Management