Australian Prudential Regulation Authority

The Australian Prudential Regulation Authority supervises financial entities doing business in the country. It protects consumers by maintaining the safety and soundness of the financial system. The APRA accomplishes this by setting standards and enforcing them through examinations, inspections, and investigations.

History of the Australian Prudential Regulation Authority

The Australian government established the APRA on 1 July 1998 following the recommendation of the Wallis Inquiry into the Financial System. The Reserve Bank of Australia, the Office of the Commissioner of Taxation, and the Australian Securities and Investment Commission comprise the entities superseded by the APRA. It operates as an independent statutory authority.

Goal and Purpose of the Australian Prudential Regulation Authority

The APRA focuses on protecting depositors, policyholders, and superannuation fund members. It creates a buffer from loss due to poor financial practices. To that end, it strives to ensure that all financial entities under its supervision maintain a high standard of prudential regulation.

Industries Regulated by the Australian Prudential Regulation Authority

The APRA must identify what organizations fall within its jurisdictions when carrying out its duties. More often than not, these include the following.

Life Insurance and Friendly Societies

The APRA regulates all life insurers in Australia, whether local or foreign. A product can take the form of a policy, contract, or agreement. Note that three main types of Friendly Societies exist in Australia:

  1. Fraternal Societies: These aim to provide financial and social benefits to their members, who often share a common interest, belief, or characteristic.
  2. Mutual Benefit Societies: The purpose of these organizations is to provide financial protection to their members in the event of death, disablement, or illness.
  3. Cooperative Societies: These are business entities that return any surplus to their members through distributions, patronage refunds, or lower prices on goods and services.

General Insurance

The APRA regulates general insurers offering products sold in Australia, regardless of the country of origin. Like life insurance policies, a general insurance product can be a policy, contract, or agreement. The APRA sets licensing guidelines, reporting requirements and other regulations for this industry.

Private Health Insurance

Private organizations can provide health insurance coverage to Australian residents through policies, contracts, or agreements. Private health insurance allows Australians to receive treatment as private patients, thereby reducing the burden on the public health system. Private health insurers must comply with similar regulations as other insurers.

Authorized Deposit-Taking Institutions

The APRA regulates all authorized deposit-taking institutions in Australia and sets the prudential standards for this industry. These include banks, building societies, and credit unions. They also include entities that operate as branches of foreign-based organizations.


Superannuation funds are retirement savings plans that receive concessional tax treatment. The APRA regulates these entities under one of these two headers:

  1. Registrable superannuation entity licensees, or 
  2. Corporate trustees of a superannuation fund

Australian Prudential Regulation Authority Enforcement

The APRA has several compliance and enforcement powers at its disposal. These allow it to take action against entities that breach prudential standards or fail to meet other obligations. Unlike many other regulatory bodies, reactive enforcement is not its focus. Instead, it aims to prevent violations from occurring in the first place. With this goal in mind, it divides its tools into formal and non-formal measures.

Non-formal tools include the following:

  • Reporting requirements
  • Heightened engagement
  • Financial analysis
  • Prudential reviews
  • Thematic reviews

Formal measures are more severe and tend to involve taking the violators to court. In this capacity, it can instruct entities to cease particular actions. The act of imposing licensing conditions also falls under this header.

How LeapXpert Can Help With APRA Compliance

Virtually all financial regulatory bodies worldwide require entities to maintain records of transactions. More often than not, this also includes communications related to these and other aspects of the business. When companies use multiple forms of communication, they introduce the risk of non-compliance by failing to record all relevant conversations.

By providing automated capturing and archiving solutions, LeapXpert makes it easier for businesses to meet these requirements. This, in turn, makes it possible for institutions to facilitate the use of multiple forms of communication without fragmenting data. Authorized persons can access this data easily for internal use.

Are you ready to begin the journey to improving or preserving your compliance reputation? Book your demo to get started.