Document ID: chunk:federal_register_of_legislation:F2024L01525:body:0:p41
Version: federal_register_of_legislation:F2024L01525
Segment Type: other
Provision Reference: 
Character Range: 110053–113097

requirements in paragraph 33 in Attachment C to this Prudential Standard for an Additional Tier 1 Capital instrument, and the write-off provisions must satisfy paragraph 34 of Attachment D to this Prudential Standard for a Tier 2 Capital instrument.
16.          The contractual terms and conditions of an Additional Tier 1 Capital or Tier 2 Capital instrument must provide that, on conversion or write-off of the instrument upon a non-viability event, any residual claims associated with the portion of the instrument converted or written-off, are not senior to claims associated with ordinary shares or mutual equity interests of the private health insurer and not senior to claims associated with ordinary shares or mutual equity interests of the parent entity.
17.          A private health insurer must notify APRA, if the private health insurer anticipates that:
         1.           the private health insurer may be exposed to the occurrence of a non-viability event; or
         2.           the private health insurer may be subject to a non-viability event contained in non-viability requirements imposed by a home regulator or statute upon the private health insurer's foreign parent.

Attachment F – Mutual Equity Interests
 1.              To be classified as a mutual equity interest, an instrument must satisfy all of the criteria in this Attachment and Attachment A to this Prudential Standard, except that paragraphs 1(b), 1(c), 1(e), 1(g), and 1(h) of Attachment A are to be read as follows:
         1.           the mutual equity interest represents a claim against the issuer in liquidation that is subordinate to all claims other than members' rights to residual assets;
         2.           the holder of the mutual equity interest is entitled to a claim on the residual assets of the issuer after all senior claims, including the aggregate subscription price paid for all member shares, have been repaid in liquidation and;
                 1.             the holder's claim ranks equally and proportionately with all other mutual equity interests directly issued or created on conversion of Additional Tier 1 Capital or Tier 2 Capital instruments in accordance with Attachment E to this Prudential Standard; and
                 2.          the holder's claim cannot exceed the principal amount of the mutual equity interest, that amount being measured as:
                         1.         if the mutual equity interest was issued directly, the paid-up amount of the mutual equity interest; or
                         2.         if the mutual equity interest was created on conversion of Additional Tier 1 Capital and Tier 2 Capital instruments, the nominal dollar value of the Additional Tier 1 Capital or Tier 2 Capital instrument prior to conversion into the mutual equity interest;
         3.           distributions on the mutual equity interest are paid out of distributable items (including retained earnings) of the issuer, and there are no features that require the issuer to make payments in kind. The