Document ID: chunk:federal_register_of_legislation:F2023L00604:reg:14:p5
Version: federal_register_of_legislation:F2023L00604
Segment Type: reg
Provision Reference: reg 14 (pt 5/12)
Character Range: 19536–22926

materially different outcome from applying the outlined definition) to report this item if accrued premium which meets the outlined definition is not readily available.

Actual net renewal commission incurred          This is actual renewal commissions incurred over the reporting period, net of reinsurance. Commissions include rebates. The basis of this item must reflect the basis used for the RFBEL calculation.

Annuity and investment liability amount         Annuity and investment liability value are to be treated as past premium liabilities and not as future premium liabilities.

                                                In respect of annuities (L2 and L18 product groups), these items report the total liability value in respect of future annuity payments and expenses arising from the premiums received prior to the reporting date.

                                                In respect of investment products (L15, L16 and L17 product groups), these items report the total liability value in respect of amounts owing to policy owners arising from deposit premiums received prior to the reporting date.

APRA product group                              This is APRA product group which is defined in LRS 001 Reporting Requirements. Life companies must report data items by the listed APRA product groups where required.

C

Capital requirement excluding hedging               This is the estimate of capital requirement for variable annuities covering the associated insurance and asset risks under the combined scenario, in the absence of any hedging / risk mitigation arrangements as per Prudential Standard LPS 110 Capital Adequacy (LPS 110).

(Variable Annuity Capital Charge Calculation Item)

Capital requirement including hedging               This is the estimate of capital requirement for variable annuities covering the associated insurance and asset risks under the combined scenario, allowing for the effect of any hedging / risk mitigation arrangements as per LPS 110.

(Variable Annuity Capital Charge Calculation Item)

Claims in Course of Payment (CICP) reserve          This is the total expected claim payments and expenses in respect of claims in course of payment, that are associated with past premiums received prior to the reporting date.

                                                    This also includes other related liabilities such as reopened claims and closed but not reported liabilities.

                                                    This is part of past premium liabilities of RFBEL.

D

Diversification factor between asset and insurance risks  This is the diversification factor, where readily determined, that has been estimated between asset and insurance risks in calculating the capital requirement (including hedging) for variable annuities.

E

Effectiveness factor                              This is the effectiveness factor E used to reflect the level of sophistication of the assumed model of dynamic hedging for the variable annuity capital calculation.

Event pre-diversified                             This is the change in risk-free best estimate liabilities (RFBEL) (net of reinsurance) or participating policy liability (net of reinsurance), whichever that is applicable, as a result of applying the event stress prior to any allowance for diversification benefits between the insurance