Document ID: chunk:federal_register_of_legislation:F2023L00699:body:0:p11
Version: federal_register_of_legislation:F2023L00699
Segment Type: other
Provision Reference: 
Character Range: 28225–30474

and premiums liabilities of a Level 2 insurance group because the Australian business already has outstanding claims liability and premiums liability estimates from its AVR that is used as a component of the group results.
9.             The determination of the capital base of a Level 2 insurance group where premiums liabilities are reported on the basis of paragraphs 7 and 8 of this Attachment will, in some circumstances, differ to that prescribed under GPS 112. Any amount of premiums liabilities determined using accounting entries which is higher than the premiums liabilities defined by this standard at a 75 per cent level of sufficiency (i.e. a surplus) cannot be included in the capital base of the Level 2 insurance group as a surplus technical provision. Any amount of premiums liabilities determined using accounting entries which is lower than the premiums liabilities defined by this prudential standard at a 75 per cent level of sufficiency (i.e. a deficit) must be included in the capital base of the Level 2 insurance group as a deficit technical provision.
[1]  Material net written premium, for exposure not already included in the calculation of the premiums liabilities is to be treated in line with the requirements of Prudential Standard GPS 115 Capital Adequacy: Insurance Risk Charge.
[2]  Such reporting is required in both an AVR and in statutory reporting (refer to reporting standards made under the Collection of Data Act).
[3]  This is also required to comply with reporting standards made under the Collection of Data Act.
[4]  For further detail in respect of documentation of reinsurance arrangements, refer to Prudential Standard GPS 230 Reinsurance Management.
[5]  Refer to reporting standards made under the Collection of Data Act for recognition of the reinsurance recoverables and expected reinsurance recoveries. Refer to Prudential Standard GPS 112 Capital Adequacy: Measurement of Capital (GPS 112) and Prudential Standard GPS 110 Capital Adequacy for detail in respect of capital requirements in relation to these risks.
    [6]  If an insurer is exempt from the requirement to appoint an actuary, the insurer must make the assessment and comment as required by this paragraph.

[7]  See paragraph 43.