Australian Prudential Regulation Authority increases KeyInvest’s capital requirement by AUD 5.5 million and imposes licence conditions after risk management review

The Australian Prudential Regulation Authority (APRA) has imposed an additional AUD 5.5 million capital requirement and new licence conditions on KeyInvest Limited, following a review of the firm’s risk management framework. KeyInvest is a life insurance company and friendly society that primarily offers funeral bonds. An independent review commissioned at APRA’s request found shortcomings in KeyInvest’s risk management framework and raised questions about the board’s oversight of the insurer’s long-term objectives. APRA has applied the AUD 5.5 million to KeyInvest’s management fund as an operational risk capital add-on, to remain in place until APRA is satisfied the concerns have been addressed. Licence conditions require KeyInvest to design and implement a remediation plan addressing the review’s recommendations and to develop an APRA-approved board renewal plan; APRA noted that while KeyInvest has accepted the findings and taken steps, further work is needed to implement and confirm the effectiveness of the remediation plan.