The Australian Prudential Regulation Authority has provided an update on its review of governance standards for insurers and other regulated entities.

It will not proceed with a proposal to make insurers and banks have at least two independent directors, including the chair, who are not on any other boards in the group.

“Instead, APRA intends to remove the presumption of independence for directors on multiple group boards,” chair Johns Lonsdale says in a letter to regulated entities.

“APRA also proposes that intra-group conflicts be explicitly addressed as part of conflicts management and board performance reviews.”

Mr Lonsdale says the regulator remains focused on addressing intra-group conflicts via updates to its governance standards, but it recognises the original proposal is not appropriate for all entities.

Another scrapped proposal relates to making significant financial institutions engage early with the authority on responsible person appointments and succession planning.

“APRA still considers early engagement on critical appointments to be best practice,” Mr Lonsdale says. “However, APRA will not make it a legal requirement given the process and privacy risks.”

In the second quarter of 2026, the authority will provide a detailed response to stakeholder feedback on eight proposals outlined in a discussion paper earlier this year, and will provide draft standards and guidance.

“APRA received a broad range of feedback from recent consultation,” Mr Lonsdale says.

“Many entities indicated their current practices already align with APRA’s proposals. There was also strong support for initiatives that can reduce burden and address regulatory overlap.”