Document ID: chunk:federal_register_of_legislation:F2023L00306:body:0:p8
Version: federal_register_of_legislation:F2023L00306
Segment Type: other
Provision Reference: 
Character Range: 20436–23709

asset from one party, the protection buyer, to another, the protection seller, in isolation from other risks.

         1.5.1.         Credit derivatives in which the reporting insurer is providing credit protection

    This refers to credit derivatives that have been sold, or written, by the reporting insurer.

         1.5.2.         Credit derivatives in which the reporting insurer is purchasing credit protection

    This refers to credit derivatives that have been purchased by the reporting insurer.

     1.6.               Other

This is defined as the totality of all other over the counter derivative financial instruments not separately identified above.

It is automatically calculated as Item 1.7 less the sum of Items 1.1, 1.2, 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1 and 1.5.2.

     1.7.               Total over the counter derivative financial instruments

This is the total of derivative financial instruments that are not traded on recognised exchanges.

    2.             Total exchange traded derivative financial instruments:

    2.1.      Exchange traded derivatives subject to daily mark-to-market & margin payments

This refers to derivatives that are transacted on a recognised futures or options exchange and which are subject to daily mark-to-market and margin payment. These contracts are transacted in standardised parcels and a clearing house effectively becomes the counterparty to all derivative positions.

    3.             Total derivative financial instrument exposure

This is the total of derivative financial instruments that are over the counter and traded on recognised exchanges.

It is automatically calculated as the sum of Items 1.7 and 2.1.

    3.1.      Investment portfolio

This refers to derivatives exposures that relate to the reporting insurer's investment assets, either as hedging a component of the underlying investments or as an outright investment.

    3.2.      Other assets

This refers to derivatives exposures that relate to assets other than those classified as the reporting insurer's investment assets.

    3.3.      Claims liabilities

This refers to derivatives exposures in relation to claims liabilities as determined in accordance with Australian Accounting Standard AASB 1023 General Insurance Contracts. Claims liabilities represent the total estimated ultimate cost to an insurer of settling all claims arising from events which have occurred as at the relevant date, whether reported or not.

    3.4.      Debt funding / borrowings

This refers to derivatives exposures in relation to debt funding / borrowing.

    3.5.      Other

This refers to derivatives exposures in relation to off-balance sheet exposures of the reporting insurer, or on-balance sheet liabilities not classified as claims liabilities or debt funding / borrowing.

It is automatically calculated as Item 3 less the sum of Items 3.1 to 3.4.

    4.             Total derivative financial instruments which are with the following related parties:

    4.1.      Parent entity

This refers to derivatives that are purchased from or sold to the parent entity of the reporting insurer.

    4.2.      Controlled entities / other branches of the parent entity

This refers to derivatives that