The Australian Prudential Regulation Authority is proposing to lower capital requirements to help life insurers offer more competitively priced annuity products without increasing risks to policyholders, according to a Thursday statement by the regulator.
In exchange, the regulator expects life insurers to implement stronger risk management practices, including tighter matching of assets and liabilities.
Submissions on the proposal are due by July 25, the regulator added.
In a Thursday filing with the Australian bourse, fund manager and annuity provider Challenger (ASX:CGF) said the proposals will ease the pressure on life insurers during market downturns and support growth in the annuity market.
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