Document ID: chunk:federal_register_of_legislation:F2023L00686:body:0:p5
Version: federal_register_of_legislation:F2023L00686
Segment Type: other
Provision Reference: 
Character Range: 11085–13900

Capital Factor
                                        Claims Risk     (%)
                                        Capital Factor
                                        (%)
A         Householders                  9.0             13.5
          Commercial Motor
          Domestic Motor
B         Travel                        11.0            16.5
          Fire and ISR
          Marine and Aviation
          Consumer Credit
          Other Accident
C         Mortgage                      14.0            21.0
          CTP
          Public and Product Liability
          Professional Indemnity
          Directors and Officers
          Employers Liability
          Cyber

Table 2:  Inwards reinsurance business
Category          Class of business             Reinsurance type  Outstanding Claims Risk Capital Factor  Premiums Liability Risk Capital Factor
                                                                  (%)                                     (%)
A                 Householders                  Proportional      10.0                                    15.0
                  Commercial Motor
                  Domestic Motor
Non-proportional  12.0                          18.0

B                 Travel                        Proportional      12.0                                    18.0
                  Fire and ISR
                  Marine and Aviation
                  Consumer Credit
                  Other Accident
Non-proportional  14.0                          21.0
C                 Mortgage                      Proportional      15.0                                    22.5
                  CTP
                  Public and Product Liability
                  Professional Indemnity
                  Directors and Officers
                  Employers Liability
                  Cyber
Non-proportional  17.0                          25.5

[1]  The other class of business is as defined in paragraph 1(k) of Attachment B of GPS 001.
[2]  This requirement is based on the principle that an insurer should be able to meet its insurance obligations at all times, not just at the quarterly reporting date. With regards to written contracts for which insurers are not on risk in the current reporting period, APRA has not defined how far into the subsequent reporting period the capital requirement applies. APRA expects that at the reporting date, insurers will hold sufficient capital for all general insurance contracts for which the general insurer is committed, regardless of when the contract incepts.
[3]         For reinsurance contracts that are continuous but cancellable at regular intervals or on specified dates, the term of the contract can be measured to the earliest cancellation date that is not less than 12 months from the previous cancellable date.