The last 12 months have seen a number of significant events unfold, including major inquiries and policy reviews, legislative actions and the continuation of important industry trends. The existing policy agenda already reflected many of the potential outcomes of these events, but APRA has reviewed and updated priorities in light of these outcomes. This review of priorities will be ongoing, particularly as APRA and the Government move forward in implementing the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Royal Commission).
This is most notable in APRA's policy work program on governance, remuneration and accountability within financial institutions. In particular, APRA will be revising its prudential standards applicable across financial industry sectors in order to reflect the findings of the Royal Commission and APRA's Prudential Inquiry into the Commonwealth Bank of Australia. This will include findings relating to executive remuneration and non-financial risk management, among other things. APRA will also work with the Government and the Australian Securities and Investments Commission to extend the accountability model set out in the Banking Executive Accountability Regime (BEAR) to the insurance and superannuation industries and to address misconduct.
In the banking sector, APRA will progress its proposals to implement the Basel III capital reforms and give effect to its expectations for 'unquestionably strong' capital ratios for authorised deposit-taking institutions, to take effect in 2022. APRA will also finalise consultation on loss-absorbing capacity requirements. Other areas of focus include credit risk management, including for exposures to related parties, and updates to licensing guidelines and the purchased payment facility regime.
The insurance policy agenda continues the implementation of the next phase of the policy Roadmap for private health insurers, where APRA will be developing a proposal for consultation on capital reforms. APRA will continue to work with the insurance industry on understanding the impact and progressing towards implementation of AASB 17. APRA is also examining the appropriate prudential treatment of offshore reinsurance in the life insurance industry.
The finalisation of prudential requirements for superannuation trustees to regularly assess member outcomes sets in place a key pillar of APRA's policy framework for superannuation. Legislation currently pending may, if passed by the Parliament, require modifications to these requirements. In addition, in 2019 APRA will consider enhancements to the 2013 suite of prudential standards arising from its post-implementation review and from recommendations of the Royal Commission and the Productivity Commission. APRA will also commence a major update of superannuation data reporting requirements.
In summary, APRA has a broad agenda of policy work underway directed at the key areas of APRA's mandate, including strengthening financial safety while having regard to efficiency and competition. The agenda also responds to important influences from the external environment, including industry trends and the findings of the Royal Commission. The diagram below summarises the different streams of policy development according to key drivers of change.