How we cover our promises made to you
Challenger annuities are provided by Challenger Life, a Life Company regulated by the Australian Prudential Regulation Authority (APRA). They continuously monitor our investments with the aim of ensuring that we can meet the promises that we have made to you both now and into the future. APRA is the authority that regulates the banking, insurance and superannuation industries.
When you buy an annuity with Challenger, your money is placed into a secure fund, along with money received from other annuity customers. Challenger also contributes money into this fund, which is known as the Statutory Fund. All regular payments to our annuity customers are made from the Statutory Fund.
How is the money invested?
Challenger makes investments subject to restrictions outlined by the Life Insurance Act. Money is invested into cash, shares, government and corporate bonds, convertible notes, debt instruments, property investments, infrastructure investments and other assets.
These investments are chosen to match the primary objectives of the fund – consistent returns, and to match cash flow in with payments out to annuity customers.
How can I know my investment is in safe hands?
Challenger Life (and any investment it makes in relation to the statutory fund) is regulated under the Life Insurance Act and the prudential standards made under it. Compliance with these requirements is supervised by the Australian Prudential Regulation Authority (APRA) to ensure we are able to meet our obligations to investors now, and in the future.
We are also required to hold enough capital within each statutory fund to withstand a significant shock event. So even if an unfortunate financial event occurs like a significant share market or property crash, your annuity payments out of that statutory fund will still be made.
We have a number of measures in place and actions we will take if our capital falls below the minimum amount required to ensure the security of annuity payments. APRA is also authorised to take action if our capital falls below the minimum amount required in order to safeguard the interests of our annuity customers.
To find out more, refer to the PDS of the product you are interested in.