Document ID: chunk:federal_register_of_legislation:F2024L01525:body:0:p13
Version: federal_register_of_legislation:F2024L01525
Segment Type: other
Provision Reference: 
Character Range: 34643–37511

general fund exceeds the PCR of the fund.

Transition
 1.          Capital instruments issued before 1 July 2025 that complied with APRA's prudential capital requirements in force at the time of issue may be eligible for the transitional arrangements. APRA will determine in writing whether an instrument is eligible for transition on a case by case basis.
 2.          Subject to paragraph 2 of Attachment G, a private health insurer must notify APRA by 30 June 2023, and provide the data (using a template provided by APRA) described in paragraphs 3(a) and 3(b) of Attachment G by 30 September 2023, if they adopt the transitional arrangements set out in Attachment G. A private health insurer that adopts the transitional arrangements set out in Attachment G may only do so until 30 June 2025.

Attachment A – Criteria for classification as paid-up ordinary shares
 1.              To be classified as paid-up ordinary shares in Common Equity Tier 1 Capital, an instrument must satisfy the following criteria:
         1.           the instrument must be the only class of ordinary shares, except for the distinction between voting and non-voting ordinary shares. Non-voting ordinary shares must be identical to voting ordinary shares of the issuer in all respect except the absence of voting rights;
         2.           the instrument represents the most subordinated claim in liquidation of the issuer;
         3.           the instrument holder is entitled to a claim on the residual assets that is proportional to its share of issued capital, after all senior claims have been repaid in liquidation (i.e. there is an unlimited and variable claim, not a fixed or capped claim);
         4.           the principal amount of the instrument is perpetual (i.e. it has no maturity date) and is never repaid outside of liquidation (other than discretionary repurchases subject to APRA approval);
         5.           distributions on the instrument are paid out of distributable items (retained earnings included) of the issuer, and there are no features that require the issuer to make payments in kind. The level of distributions must not be tied or linked to the amount paid up at issuance, or to the credit standing of the issuer, and must not be subject to a contractual cap, except to the extent that restrictions applied to the payment of distributions are in accordance with Prudential Standard HPS 110 Capital Adequacy (HPS 110);
         6.            there are no circumstances under which the distributions are obligatory. Non-payment of a distribution does not trigger any restrictions on the issuer or any other member of the group to which the issuer belongs. Any waived distributions are non-cumulative (i.e. they are not required to be made up by the issuer at a later date). Non-payment of distributions must not be an event of default of the