The Australian Prudential Regulation Authority (APRA) has directed Sureplan Friendly Society Limited (Sureplan) to rectify the incorrect capital treatment of one of its assets.
Sureplan is a mutual friendly society based in Brisbane with approximately 30,000 members and $160m in assets. It offers funeral expense products.
The matter was brought to APRA's attention by an independent auditor conducting a Special Purpose Engagement1 (SPE) for the purposes of validating actuarial calculations and assessing the robustness of processes for reporting data to APRA.
APRA ordered the SPE after losing confidence in the accuracy of the quarterly capital data submitted by Sureplan, in part due to the frequency of the entity's data resubmissions. An independent review provided by an SPE enables APRA to obtain independent assurance of an entity's practices supporting key prudential requirements.
In addition to the instance of incorrect capital treatment, the SPE also recommended a range of enhancements to Sureplan's reporting practices. While the capital matter did not raise immediate concerns about Sureplan's prudential soundless, APRA has instructed the entity to remediate the issue in a timely manner. Sureplan has now taken action to remediate the matter.
APRA Member Suzanne Smith said: "Accurate data reporting, particularly of capital positions, is essential for APRA to monitor the prudential soundness of its regulated entities and thereby protect depositors, policyholders and members. APRA expects regulated entities to adhere to the law and takes failure to comply with legal obligations extremely seriously. APRA also places a high degree of importance on robust and independent SPEs where they are required to assist APRA in performing its oversight of an entity."
Footnote
1 See paragraph 26 of Prudential Standard LPS 310 Audit and Related Matters.
