Document ID: chunk:federal_register_of_legislation:F2024L01525:body:0:p15
Version: federal_register_of_legislation:F2024L01525
Segment Type: other
Provision Reference: 
Character Range: 40004–42868

requirements in this Attachment, the instrument will be ineligible to be included in the private health insurer's Common Equity Tier 1 Capital.
 2.              Where an instrument is subject to the laws of a foreign jurisdiction, the private health insurer must also ensure that the instrument satisfies all relevant qualifying criteria for Common Equity Tier 1 Capital under this Attachment and the laws of the foreign country do not override the provisions within the instrument designed to meet these criteria.
 3.              APRA may require the private health insurer to provide an independent expert opinion, addressed to APRA by a firm or practitioner of APRA's choice and at the expense of the private health insurer, confirming that the instrument meets all or any criteria applied to Common Equity Tier 1 Capital instruments in this Prudential Standard.
 4.              For the purposes of Attachment F to this Prudential Standard, a reference in this Attachment (except in paragraphs 1(b), 1(c), 1(e), 1(g), and 1(h) of this Attachment) to 'paid up ordinary shares' is to be read as a reference to 'paid up mutual equity interests'.

Attachment B – Regulatory adjustments

General rules for regulatory adjustments
 1.              In determining the size of regulatory adjustments (i.e. deductions) from a category of a private health insurer's capital base, items must be valued on the same basis as a private health insurer's accounts prepared in accordance with the FSCODA.
 1.              For the purposes of deductions to Additional Tier 1 Capital and Tier 2 Capital:
         1.           where the amount of Additional Tier 1 Capital is insufficient to cover the amount of deductions required to be made from this category of capital, the shortfall must be deducted from Common Equity Tier 1 Capital; and
         2.           where the amount of Tier 2 Capital is insufficient to cover the amount of deductions required to be made from this category of capital, the shortfall must be deducted from Additional Tier 1 Capital and, if Additional Tier 1 Capital is insufficient to cover the amount of the deductions required, the remaining amount must be deducted from Common Equity Tier 1 Capital.
 2.              Where a capital instrument is required to be deducted and it is not possible to determine whether it should be deducted from Common Equity Tier 1 Capital, Additional Tier 1 Capital or Tier 2 Capital, the deduction must be made from Common Equity Tier 1 Capital. A private health insurer must consult APRA if there is uncertainty about the category of capital against which a deduction must be made.
 3.              For the purposes of deducting from the relevant category of the capital base, a private health insurer may net any provisions against the relevant exposures or holdings, or the relevant non-defaulted exposures or