Licensing guidelines for general insurers
Who needs a general insurance licence?
Under the Insurance Act 1973 (the Insurance Act), it is an offence to conduct insurance business in Australia without the proper authority. If your business intends to conduct any business that can be classed as insurance business, you need a licence from APRA giving you the authority to conduct insurance business in Australia.
Part 3 of the Insurance Act defines ‘insurance business’ as the business of undertaking liability by way of insurance (including reinsurance), in respect of any loss or damage. It includes liability to pay damages or compensation, contingent upon the happening of a specified event, and any business incidental to insurance business as so defined. There are some exclusions to the definition of insurance business, such as life insurance (covered by the Life Insurance Act 1995), health insurance (covered by the Private Health Insurance Act 2007) or the provision of benefits for funeral services.
The Insurance Act only allows corporations or Lloyd’s underwriters to carry out insurance business in Australia, which means APRA cannot consider applications from partnerships or unincorporated entities.
For more information on the licensing and authorisation of general insurers, see the guidelines on authorisation of general insurers. The guidelines outline APRA’s authorisation process for general insurers, including the minimum criteria to be addressed by applicants and the necessary information required to be lodged with an application.
Before you lodge your application to be a general insurer, ensure you have read and are familiar with the prudential framework for general insurers, including relevant legislation, prudential standards and prudential practice guides. You can find all of this information on the general insurance supervision pages.