Document ID: chunk:federal_register_of_legislation:F2023L00634:body:0:p6
Version: federal_register_of_legislation:F2023L00634
Segment Type: other
Provision Reference: 
Character Range: 13897–17128

a single event.

Basis for determination of NP VR           The insurer must enter 'gross' if it has determined that the NP VR would be greater, if it is based on the gross loss arising from the occurrence of a single event, than the net loss arising from the occurrence of a single event.

                                           The insurer must enter 'net' if it has determined that the NP VR would be greater, if it is based on the net loss arising from the occurrence of a single event, than the gross loss arising from the occurrence of a single event.

C

Commencement date of catastrophe reinsurance program  The insurer is required to report the commencement date of catastrophe reinsurance program. Where the insurer has multiple inception dates for its catastrophe reinsurance program it must consult with APRA to determine the relevant commencement date.

E

End date of catastrophe reinsurance program  The insurer is required to report the end date of catastrophe reinsurance program. Where the insurer has multiple inception dates for its catastrophe reinsurance program it must consult with APRA to determine the relevant end date.

H

H3 aggregate offset          H3 aggregate offset is the amount of potential reinsurance recoverables from aggregate reinsurance cover. The insurer must not allow for any reinstatements of aggregate reinsurance cover unless these have been contractually agreed with the reinsurer(s). If reinstatements are included, the cost of reinstatement must be netted from the offset. The insurer must agree with APRA a methodology for the determination of this adjustment.

                             This methodology may allow for any portion of paid and outstanding claims and premiums liabilities (PL) that contribute to the insurer's retained losses for the purposes of the retention on any aggregate reinsurance cover, provided it does not result in a double-count between this offset and the PL offset.

                             The total H3 aggregate offset is calculated as the sum of:

                                 * first event;
                                 * second event; and
                                 * third event.

H3 loss per event            The H3 loss per event is calculated for each H3 event as the sum of:

                                 * single event loss from H3 event;
                                 * H3 reinstatement cost;

                             less:

                                 * H3 reinsurance recoverables;
                                 * H3 aggregate offset; and
                                 * H3 reinstatement premiums.

H3 reinstatement cost        The insurer is not required to determine a H3 reinstatement cost after the third event.

                             H3 reinstatement cost is the cost (if any) of reinstating catastrophe reinsurance cover after the occurrence of the first two H3 losses.

                             The cost (if any) must reflect the cost of reinstating reinsurance cover up to the size of the third event. In determining this cost, if the insurer does not have contractually agreed rates for the reinsurance cover, the insurer must estimate the cost based on the