Document ID: chunk:federal_register_of_legislation:F2024L01525:body:0:p6
Version: federal_register_of_legislation:F2024L01525
Segment Type: other
Provision Reference: 
Character Range: 15214–18082

insurer.
11.          A capital instrument is not eligible for inclusion in the capital base if it includes any 'repackaging' arrangements that have the effect of compromising the quality of capital raised.[3]
12.          A private health insurer must, and must ensure that other members of the group to which the private health insurer belongs, not create an expectation at issuance that a capital instrument will be bought back, redeemed or cancelled prior to maturity, and the statutory or contractual terms of the instrument must not include any feature that may give rise to such an expectation. A private health insurer must, and must ensure that any other members of the group to which the private health insurer belongs, not assume, or create market expectations, that supervisory approval will be forthcoming for the private health insurer or any other members of the group, to buy back, redeem or cancel an instrument prior to maturity.
13.          A private health insurer may not, without obtaining APRA's prior written approval, enter into an arrangement where it may purchase, or provide financial assistance with a dominant purpose of facilitating the purchase by another party of, its own capital instruments. Any such arrangement, if approved by APRA, shall be subject to a limit agreed with APRA.
14.          A private health insurer must provide APRA, as soon as practicable, with copies of documentation associated with the issue of Additional Tier 1 Capital and Tier 2 Capital instruments.
15.          Where the terms of a capital instrument depart from established precedent, a private health insurer must consult with APRA on the eligibility of the capital instrument for inclusion as a category of the private health insurer's capital base in advance of the issuance of the instrument, and provide APRA with all information it requires to assess the eligibility of the instrument.
16.          As part of the documentation provided for the purposes of paragraphs 27 and 28 of this Prudential Standard, a private health insurer must include a statement of compliance of the capital instrument signed by senior management of the private health insurer. The statement must:
         1.           address how the issuer is satisfied that each required capital eligibility criterion set out in this Prudential Standard is met and will continue to be met in the future; and
         2.           clearly set out references to supporting documents and opinions that demonstrate that the criteria are met.
17.          A private health insurer must obtain APRA's approval before the terms of an instrument are altered in a way that may affect its eligibility as a component of the capital base.

Common Equity Tier 1 Capital
 1.          Common Equity Tier 1 Capital comprises the highest quality components of capital that fully satisfy all of the