Document ID: chunk:federal_register_of_legislation:F2024L01525:body:0:p12
Version: federal_register_of_legislation:F2024L01525
Segment Type: other
Provision Reference: 
Character Range: 32024–34904

and 48 are not satisfied, the relevant capital instruments must be treated as holdings of own capital instruments and deducted from Common Equity Tier 1 Capital, Additional Tier 1 Capital and Tier 2 Capital as appropriate.

Capital base of a health benefits fund
 1.          The capital base of a health benefits fund is:
         1.           the net assets of the health benefits fund; plus/(less)
         2.           technical provisions in surplus/(deficit) of those required by HPS 340;[7] less
         3.           all regulatory adjustments to the net assets of the health benefits fund required under Attachment B; plus
         4.           Tier 2 Capital as defined in paragraph 51.
 2.          The Tier 2 Capital of a health benefits fund consists of:
         1.           instruments that are a liability of that health benefits fund and meet the criteria for inclusion in Tier 2 Capital as set out in Attachment D; less
         2.           all holdings by the health benefits fund of the private health insurer's own Tier 2 Capital instruments.
 3.          A private health insurer must ensure that, at all times:
         1.           the capital base less the Tier 2 Capital in accordance with paragraph 51 of each health benefits fund exceeds 80 per cent of the prescribed capital amount of the health benefits fund;
         2.           the capital base of each health benefits fund exceeds the PCR of the fund;
         3.           120 percent of the net assets of each health benefits fund exceeds 80 percent of the prescribed capital amount of the fund; and
         4.           the sum of 120 percent of the net assets and the Tier 2 Capital in accordance with paragraph 51 of each health benefits fund exceeds the PCR of the fund.
 4.          APRA may, by notice in writing to a private health insurer, set a higher percentage for the capital base, net of Tier 2 Capital, for one or more health benefits funds of the private health insurer.

Capital base of a general fund
 1.          The capital base of a general fund is:
         1.           the net assets of the general fund; plus/(less)
         2.           technical provisions in surplus/(deficit) of those required by HPS 340[8]; less
         3.           all regulatory adjustments to the net assets of the general fund required under Attachment B to this Prudential Standard.
 2.          A private health insurer must ensure that, at all times, the capital base of the general fund exceeds the PCR of the fund.
 3.          A private health insurer must ensure that, at all times, 120 percent of the net assets of the general fund exceeds the PCR of the fund.

Transition
 1.          Capital instruments issued before 1 July 2025 that complied with APRA's prudential capital requirements in force at the time of issue may be eligible for the transitional arrangements. APRA will