Document ID: chunk:federal_register_of_legislation:F2024L01525:body:0:p4
Version: federal_register_of_legislation:F2024L01525
Segment Type: other
Provision Reference: 
Character Range: 9899–12865

entity over which a private health insurer or parent entity of the private health insurer exercises control or significant influence and can include a parent company, a sister company, a subsidiary or any other affiliate.

Capital base of a private health insurer
 1.          The capital base must be assessed for the private health insurer as a whole and for each of its funds.
 2.          The capital base of a private health insurer consists of the following categories:
         1.           Tier 1 Capital, which comprises:
                 1.             Common Equity Tier 1 Capital;
                 2.          Additional Tier 1 Capital;
                 3.        Paid-up mutual equity interests issued by a mutually-owned private health insurer that meet the criteria in paragraph 1 of Attachment F to this Prudential Standard and are above the limit specified in paragraph 4 of Attachment F; and
         2.           Tier 2 Capital.

    that satisfy the criteria in this Prudential Standard.
 1.          A private health insurer must ensure that at all times:[1]
         1.           the Common Equity Tier 1 Capital for the private health insurer exceeds 60 per cent of the prescribed capital amount of the private health insurer;
         2.           the Tier 1 Capital for the private health insurer exceeds 80 per cent of the prescribed capital amount of the private health insurer;
         3.           the capital base for the private health insurer exceeds the Prudential Capital Requirement (PCR) of the private health insurer;
         4.           120 percent of the net assets for the private health insurer exceeds 60 percent of the prescribed capital amount of the private health insurer;
         5.           the sum of 120 percent of the net assets and the Additional Tier 1 Capital for the private health insurer exceeds 80 percent of the prescribed capital amount of the private health insurer; and
         6.            the sum of 120 percent of the net assets, the Additional Tier 1 Capital and the Tier 2 Capital for the private health insurer exceeds the PCR of the private health insurer.
 2.          APRA may require, by notice in writing, a private health insurer to hold a higher percentage of its prescribed capital amount as Common Equity Tier 1 Capital and/or Tier 1 Capital.
 3.          A private health insurer must ensure that any item of capital that the private health insurer 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.
 4.          A private health insurer 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