Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary for Social Inclusion and the Voluntary Sector) Share this | Hansard source

I thank the senators for their contributions to this important piece of legislation, and particularly Senator Coonan’s most recent remarks. The Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 enhances Australia’s prudential regulatory framework and ensures that the regulatory framework applying to financial entities will remain flexible and responsive going forward. The bill removes a gap in Australia’s prudential regulation framework by ensuring that APRA can effectively supervise life insurance in non-operating holding companies, or NOHCs, which can have a significant impact on the conduct and financial health of life insurance companies.

The scope of the regime introduced by this bill is closely modelled on the existing regulation of the NOHCs of general insurers and authorised deposit-taking institutions. The measure is consistent with insurance core principle ICP 17 of the International Association of Insurance Supervisors on group-wide supervision.

Also, the bill ensures that injunctions are an effective tool to enforce financial entities’ compliance with prudential requirements. The amendments will give APRA flexibility to respond to a range of circumstances relating to the financial health of an entity in a timely and appropriate way. I note that the Senate Standing Committee on Economics has recognised that in the current economic environment the government may want to act promptly to fill gaps in the prudential architecture. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.