Annex 6.A3

APRA was formed in 1998. It is responsible for the prudential regulation of deposit taking institutions, general and life insurers, and much of the superannuation (pension) industry, and is responsible for their financial soundness (prudential regulation). Its counterpart, the Australian Securities and Investments Commission, regulates securities business, superannuation funds and insurance, and is responsible largely for regulating the manner in which those firms conduct their business. APRA introduced a risk-based approach to supervision in 1999. A new framework was introduced in 2003-04, the Probability and Impact Rating System (PAIRS) and the Supervisory and Oversight Response System (SOARS). PAIRS has been subsequently refined, the latest refinements being introduced in 2008.

Risk and Regulatory Policy: Improving the Governance of Risk

Annex 6.A3

Outline of the Different Risk-based Inspection Systems Included in the Research