Request For Documents Detailing Apra's Calculation Formula For SRI And PAIRS Ratings.

Written by Claude Haiku 4.5 from the extracted text on 16 May 2026. It can miss or misread redacted and scanned pages. Check the source before relying on it.

This February 2018 APRA document outlines the Probability and Impact Rating System (PAIRS), APRA's risk assessment framework introduced in 2002 for supervising regulated entities across banking, insurance, and superannuation sectors. PAIRS evaluates two dimensions—probability of failure and impact of failure—to enable consistent risk-based supervisory decisions. The framework assesses entities across multiple risk categories including board and management quality, governance, strategy, liquidity, operational, credit, market, and insurance risk, plus earnings and capital adequacy. The system incorporates inherent risk ratings, management control assessments, net risk calculations, and capital support evaluations, with quality assessments and significance weights determining overall failure probability scores. PAIRS generates a Supervisory Attention Index to guide APRA's supervisory response intensity, enabling faster identification of problem entities and more effective regulatory action.