Document ID: chunk:federal_register_of_legislation:F2023L00682:body:0:p12
Version: federal_register_of_legislation:F2023L00682
Segment Type: other
Provision Reference: 
Character Range: 30872–34807

this Prudential Standard are met.
    7.             A run-off plan must include the matters listed in paragraph 8 of this Attachment.

Matters to be included in a run-off plan
    8.             For the purposes of paragraph 7 of this Attachment, the following matters must be included in a run-off plan, where relevant:
Matters to be addressed in a run-off plan (to be prepared by run-off insurer)                                                                                                                                                                        Areas to be reviewed and assessed by Appointed Actuary[12]
    (a)          Business overview, including details of significant changes to the run-off insurer's liability portfolio, assets, capital position or operating environment                                                                         Significant issues or material anomalies
    (b)          Details of the run-off insurer's recent experience, including the profitability for the most recent year                                                                                                                            Significant variations between actual and expected experience, and the adequacy of past estimates
    (c)          Assessment of the run-off insurer's expected future claims run-off experience on a rolling three-year basis                                                                                                                         Appropriateness of the insurer's expected future claims run-off assessment
    (d)          Details of the run-off insurer's asset and liability management processes, including the insurer's investment and liquidity strategies                                                                                              Appropriateness of the insurer's asset and liability management processes, and investment and liquidity strategies, in light of the expected future claims run-off
    (e)          Details of the run-off insurer's current and projected future capital adequacy and a discussion of the insurer's approach to capital management                                                                                     Appropriateness and reasonableness of the assumptions used for the capital projections and for scenario/stress-testing
    (f)           Assessment of the suitability and adequacy of reinsurance arrangements, including recoverability of reinsurance, documentation of reinsurance arrangements and the existence and impact of any limited risk transfer arrangements  Appropriateness of the insurer's reinsurance arrangements in light of the expected future claims run-off
    (g)          Details of the run-off insurer's risk management framework                                                                                                                                                                          Suitability and adequacy of the risk management framework

[1]  A run-off insurer is not required to have in place an Internal Capital Adequacy Assessment Process if it meets the requirements set out in Attachment A of this Prudential Standard. The requirements in Attachment A also replace the business plan requirements set out in Prudential Standard CPS 220 Risk Management.
    [2]  For the purposes of this paragraph, the Board of a Category C insurer refers to the senior officer outside Australia and Agent in Australia (as defined in section 118 of the Act).

[3]  However, this does not apply to Category C insurers: refer to paragraphs 36 to 39.
[4]  An asset will not be counted as an asset in Australia for the purpose of this paragraph if Prudential Standard GPS 120 Assets in Australia excludes it from being an asset in Australia for the purpose of paragraph 28(a) of the Act, or it is not otherwise an asset in Australia within the meaning of paragraph 28(a) of the Act.
[5]