Document ID: chunk:federal_register_of_legislation:F2024L01525:body:0:p18
Version: federal_register_of_legislation:F2024L01525
Segment Type: other
Provision Reference: 
Character Range: 48252–51387

and other similar transaction-related costs that are capitalised as an asset;
                 2.          costs associated with issuing capital instruments if not already charged to profit and loss;
                 3.        capitalised information technology software costs; and
                 4.         other capitalised expenses including capitalised expenses of a general nature such as strategic business development initiatives. These include, in addition to the above listed items, other forms of transaction costs and like costs that are required to be deferred/capitalised and amortised as part of the measurement of assets and liabilities under Australian Accounting Standards.
 2.          The balance of any transaction costs and like items that are capitalised and deferred as an asset must be netted off against the balance of any income deferred as a liability relating to the products giving rise to the capitalised transaction costs (i.e. only deferred costs and income in particular product portfolios may be netted). Any net balance of capitalised transaction costs must be deducted from Common Equity Tier 1 Capital in accordance with this Prudential Standard. Any surplus of fee income received from sources other than the insurer's health insurance policies over deferred costs may be included in Common Equity Tier 1 Capital provided the fee income received satisfies the criteria in paragraph 35 of this Prudential Standard. Otherwise, up-front fee income received from sources other than the insurer's health insurance policies must not be added to capital.
 3.          An investment in a subsidiary, joint venture or associate that:
         1.           is operationally independent;
         2.           represents a genuine arm's length investment;
         3.           is not subject to prudential capital requirements; and
         4.           does not undertake 'health insurance business' or business related to health insurance business[16];
    does not have its intangible assets (including the intangible component that could arise after or outside of acquisition) deducted under paragraph 16 of this Attachment.

Superannuation funds
 1.          A private health insurer must deduct any surplus in a defined benefit superannuation fund, of which the private health insurer is an employer-sponsor, unless otherwise approved in writing by APRA. The surplus must be net of any associated deferred tax liability that would be extinguished if the assets involved become impaired or derecognised under Australian Accounting Standards. A private health insurer may apply to APRA to include a surplus as an asset for capital adequacy purposes where the private health insurer is able to demonstrate unrestricted and unfettered access to a superannuation fund surplus in a timely manner. Subject to APRA approval the private health insurer may include the surplus in its capital base. This surplus will no longer be required to be deducted from Common Equity Tier 1 Capital.
 2.          A private health insurer must deduct any deficit in a defined benefit superannuation fund of which a private