APRA oversees banks, credit unions, building societies, friendly societies, general insurance, health insurance, reinsurance, and life insurance companies, and most members of the superannuation industry. It ensures that these institutions keep their financial promises; that is, that they will remain financially sound and able to meet their obligations to depositors, fund members and policy holders. It was established on 1 July 1998. APRA is funded largely by the industries that it supervises. APRA currently supervises institutions holding A$5.4 trillion in assets for Australian depositors, policyholders and superannuation fund members. The current chairman of APRA is Wayne Byres and the deputy chairman is Helen Rowell. Geoff Summerhayes is the third APRA member.
History
The Insurance and Superannuation Commission was formally established on 23 November 1987, following the proclamation of the Insurance and Superannuation Commissioner Act 1987. The commission was based at the Australian Automobile Association Building, Canberra and also had offices in Melbourne and Sydney. The Insurance and Superannuation Commission was absorbed into the Australian Prudential Regulation Authority on 1 July 1998. In June 1996, the Financial System Inquiry was established to examine the results of the deregulation of the Australian financial system, to examine the forces driving further change, particularly technological, and recommend changes to the regulatory system to ensure an "efficient, responsive, competitive and flexible financial system to underpin stronger economic performance, consistent with financial stability, prudence, integrity and fairness." At the time, the regulators of the Australian financial services industry were based on the institutions and not the regulatory function. APRA's predecessor regulators were the Insurance and Superannuation Commission, the Reserve Bank of Australia and the Australian Financial Institutions Commission. The Wallis Inquiry recommended a new structure. The role of the Reserve Bank of Australia was amended to deal with monetary policy and systemic stability with the Payments System Board considering payments systems regulation. The role of the Australian Prudential Regulation Commission was amended to deal with prudential regulation of authorised deposit-taking institutions, life and general insurance, and superannuation including Industry superannuation. The Corporations and Financial Services Commission was renamed and its role expanded as the Australian Securities and Investments Commission to deal with market integrity, consumer protection and corporations. APRA was established on 1 July 1998 under the Australian Prudential Regulation Authority Act 1998. APRA became prominent in the collapse of HIH Insurance in 2001 and for its investigation into the National Australia Bankforeign currency deal scandal in 2004. APRA took over the previous role of the Private Health Insurance Administration Council in July 2015. In 2018 Peter Harris, the chair of the Productivity Commission, was critical of the role of APRA in limiting price competition in banking. Representatives of APRA appeared before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry during 2018. In 2018 APRA created the restricted authorised deposit-taking institution licensing framework to encourage new entrants and competition to the existing banking system.
