APRA consultation on annuities receives industry tick of approval
The Council of Australian Life Insurers (CALI) has welcomed the news that the Australian Prudential Regulation Authority (APRA) will undertake a public consultation into annuity products.
The consultation will enquire into the “capital settings” for annuity products and proposes to change the way the ‘illiquidity premium’ is calculated, which would help to lower the capital requirements on life insurers to offer annuity products to members.
On behalf of its members, the Australian life insurance association said that while there is approximately five million Australians either preparing for or in retirement, the use of annuity products remains low.
“With Australians living longer, they are spending more time in retirement and need access to stable and secure solutions to help them manage their finances over their whole life. Australia’s life insurers stand ready to help,” Christine Cupitt, CALI CEO, said.
“No one wants to worry about outliving their savings. We want people to have a lot more choice and control over how they manage their finances once they stop working.”
The consultation comes as the regulator outlined its objective to better support life insurers in offering more product opportunities to retirees in its Corporate Plan 2024-25.
CALI also confirmed it would actively participate in the consultation and looked forward to the release of the final proposal in the second quarter of 2025.
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