Insurers could face similar regime to bankers.
The Banking Executive Accountability Regime (BEAR) came into effect in July 2018 for Australia's largest banks. It imposed greater accountability obligations on senior executives of Authorised Deposit-taking Institutions (ADIs) and put in place restrictions on executive remuneration packages
Meanwhile, this year has seen intense scrutiny of the financial services industry at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and the role of senior executives has been under the spotlight. This will remain a major area of focus into the future.
The Australian Prudential Regulation Authority (APRA) set out in its Statement of Intent in September 2018 that it is committed to continue to facilitate the improvement of accountability, governance and risk culture within financial institutions and that there will be greater regulatory attention to these areas.
APRA is expected to use the BEAR to enhance its practices and procedures to take enforcement action to hold relevant individuals to account. If BEAR proves to be successful in the banking sector, we expect a similar regime will be implemented for insurers. At a minimum, APRA is likely to may set new prudential standards for insurers that are similar to BEAR, even if the full regime is not implemented.
You can read the rest of our insurance predictions here.