(Reuters) - Australia's prudential regulator on Monday directed general insurers to review their risk management frameworks after a spate of claims over COVID-19-related business interruptions.
Many insurers were exposed to such claims through policy wordings that had not kept up to date with changing legislation, the Australian Prudential (NYSE:PUK) Regulation Authority (APRA) said.
"The resultant legal uncertainty, and significant financial exposure for insurers, has raised concerns about the strength of insurers' risk management frameworks," the regulator said in a statement.
The regulator's directive also came after a class action lawsuit against Australia's largest listed insurer, QBE Insurance, for allegedly denying cover to policy holders for losses from business interruptions.
APRA has set a Nov. 30 deadline for completing and submitting the self-assessments.