Challenger (ASX:CGF) welcomed the Australian Prudential Regulation Authority's (APRA) announcement on the final changes to capital standard settings for providers of longevity products, and they will support greater take-up of lifetime income products, according to a Tuesday Australian bourse filing.
The regulator introduced an option for insurers to use an advanced illiquidity premium (AILP) when determining capital requirements for longevity products, which, it said, better reflects the long‑term nature of these liabilities.
It also introduced additional risk controls relating to the governance, reporting, and asset composition of portfolios to which the AILP option is applied. The changes will come into effect on July 1.
Challenger's shares rose 1% in recent trading on Tuesday.