The Australian Prudential Regulation Authority (APRA) has commenced a second round of consultation on modifications to its capital framework for longevity products, including annuities. The changes are designed to create an environment that supports the development and availability of longevity products for Australian retirees, while safeguarding policyholder interests.
In June 2025, APRA released a consultation inviting industry feedback on proposed changes to the life insurance capital framework. The responses have informed refinement of the proposals, including a shift towards a more principles-based approach for determining capital requirements.
The updated proposals align with APRA's commitment to regulatory balance, which means to promote financial system safety and stability in an efficient way. The initiative aims to support a resilient and innovative insurance sector by facilitating the growth and competitive pricing of longevity products.
APRA's response to industry feedback and updated proposals is provided in a paper available on the APRA website at: Adjustments to the capital settings for longevity products.
Industry feedback on draft prudential standards is invited by 17 December 2025.
