Document ID: chunk:federal_register_of_legislation:F2024L00884:body:0:p5
Version: federal_register_of_legislation:F2024L00884
Segment Type: other
Provision Reference: 
Character Range: 10854–13567

company exceeds the Prudential Capital Requirement (PCR) of the life company;
(d)          120 per cent of the net assets for the life company exceeds 60 per cent of the prescribed capital amount of the life company;
(e)          the sum of 120 per cent of the net assets and the Additional Tier 1 Capital for the life company exceeds 80 per cent of the prescribed capital amount of the life company; and
(f)           the sum of 120 per cent of the net assets, the Additional Tier 1 Capital and the Tier 2 Capital for the life company exceeds the PCR of the life company.
16.         APRA may require, by notice in writing, a life company to hold a higher percentage of its prescribed capital amount as Common Equity Tier 1 Capital and/or Tier 1 Capital.
17.         A life company must ensure that any item of capital that the life company includes in a particular category of its capital base satisfies, in both form and substance, all requirements in this Prudential Standard for the particular category of capital in which it is included.
18.         A life company must not include an item of capital in a particular category of its capital base if that item, when considered in conjunction with other related transactions that affect its overall economic substance, could be reasonably considered not to satisfy the requirements of this Prudential Standard for that category of the capital base.
19.         A life company must not include a capital instrument in a category of the capital base based on a future event[6], until such time as:
(a)          the future event occurs, and
(b)          the proceeds have been irrevocably received by the life company.
20.         APRA may require a life company to:
(a)          exclude from its capital base any item included as a component of capital that in APRA's opinion is not a genuine contribution to the financial strength of the life company; or
(b)          reallocate to a lower category of the capital base any component of capital that in APRA's opinion does not satisfy the requirements of this Prudential Standard for the category of the capital base to which it was originally allocated.
21.         A capital instrument is not eligible for inclusion in a category of the capital base if the nature or complexity of its terms, its location of issue, or its structure raises concerns over whether the instrument fully, and unequivocally, satisfies the requirements for the category of the capital base in this Prudential Standard.
22.         A life company must not include a capital instrument that involves the use of a special purpose vehicle (SPV), or a stapled security structure consisting of the issue of a preference share and a stapled