Document ID: chunk:federal_register_of_legislation:F2024L01525:body:0:p38
Version: federal_register_of_legislation:F2024L01525
Segment Type: other
Provision Reference: 
Character Range: 102143–105039

would become non-viable.
 2.              Conversion or write-off of an Additional Tier 1 or Tier 2 Capital instrument must generate an unequivocal addition to the private health insurer's Common Equity Tier 1 Capital (for Additional Tier 1 and Tier 2 Capital instruments) and the net assets of the relevant fund (for Tier 2 Capital instruments) under Australian Accounting Standards.
 3.              For the purposes of conversion or write-off, in whole or in part, of an Additional Tier 1 Capital or Tier 2 Capital instrument as a result of a non-viability event, the amount to be converted must be the face value of the instrument or relevant part thereof. Dividends and interest associated with the instrument which have been converted or written off, but which are not yet due and payable must also be extinguished.
 4.              In order to comply with the immediate conversion or write-off in paragraph 1 to this Attachment, the instrument must be capable of conversion or write-off taking place at any time of day:
         1.           during a business day; or
         2.           on a day that is not a business day.
 5.              To qualify as eligible Additional Tier 1 or Tier 2 Capital, an instrument issued by a locally-incorporated private health insurer that is a subsidiary of a foreign entity must satisfy the requirements in this Attachment. A non-viability event of the private health insurer, however, need not trigger any loss absorption requirement upon the foreign parent.
 6.              A locally-incorporated private health insurer that is a subsidiary of a foreign entity may, either individually or as part of a group, also be subject to non-viability requirements applied by authorities in the overseas country of incorporation of the foreign parent, provided that the requirements are disclosed by the authorities, and issue documentation for the instrument discloses that the instrument is subject to potential loss as a result of the requirements. A locally-incorporated private health insurer that is a subsidiary of a foreign parent, is permitted to, but not required to, provide for the application of a non-viability event based on the non-viability requirements[45] applied to the foreign parent. As a result, a non-viability requirement applicable to the foreign parent may function as a non-viability event for the private health insurer itself in relation to Additional Tier 1 Capital or Tier 2 Capital instruments issued by the private health insurer.
 7.              When a non-viability event occurs in accordance with this Attachment, the amount of conversion or write off of Additional Tier 1 or Tier 2 Capital instruments is to be determined in accordance with paragraphs 10 and 11 of this Attachment. If a non-viability event occurs as a result of only host or home regulator or statutory non-viability requirements (refer to paragraph