Australian regulator releases guides for pandemic preparedness

The Australian Prudential Regulation Authority (APRA) has released an information paper and prudential practice guide (PPG) to assist APRA-regulated institutions including insurers and reinsurers with their planning for a potential pandemic.”The advice is being released following consultation with industry and research into pandemic planning that is taking place around the world,” APRA said in a press release.APRA’s existing prudential standards cover business continuity planning requirements in the event of a major event or crisis. But its pandemic advice is designed to bring into focus specific planning for a pandemic scenario.”While not wanting to overstate the likelihood of a pandemic occurring in Australia, APRA’s interest is in ensuring that regulated institutions have conducted prudent and reasonable planning to meet core obligations to depositors, policyholders and other beneficiaries,” the press release stated.APRA chairman John Laker said APRA believes that many financial institutions are already taking seriously the risk of a pandemic by updating their business continuity plans and reviewing financial exposures, although there remains work to do to ensure the Australian financial sector is as prepared as is practically possible.”Global developments with respect to the spread of avian influenza have raised concerns about the risk of a human influenza pandemic,” Dr Laker said. “The World Health Organization, the Australian government and other authorities have issued guides and plans that outline measures to prepare for and manage the risk of an influenza pandemic.”APRA said it has prepared its advice which does not impose any mandatory requirements on institutions to highlight good practice, identify industry-level issues and assess potential financial impacts on regulated institutions.APRA prepared its advice after discussions in recent months with large institutions, industry associations, other financial regulators and the government.