Document ID: chunk:federal_register_of_legislation:F2023L00672:body:0:p23
Version: federal_register_of_legislation:F2023L00672
Segment Type: other
Provision Reference: 
Character Range: 59919–62744

losses that may lead to an aggregation of multiple per-risk or per-policy losses arising from a common dependent source, the potential for multiple classes of insurance and/or portfolios to be impacted from this common dependent source and whether the upper limit of reinsurance cover purchased is sufficiently high to cover the OA PML.
[17]  'Premiums liability' is determined in accordance with GPS 340.
[18]  For the purposes of this paragraph, 'potential reinsurance recoverables' include reinsurance assets receivable from the Commonwealth Government in respect of:
       (a)            a high cost claim indemnity as defined under the Medical Indemnity Act 2002 (Medical Indemnity Act); and
       (b)           amounts payable under the High Cost Claims Protocol as defined under the Medical Indemnity Act.
[19]  The attachment point in this calculation may allow for any portion of paid and outstanding claims and premiums liabilities that contribute to the retained losses. APRA may require the insurer to modify the adjustment made in accordance with this paragraph.
[20]  For example, reducing the PML amount by any aggregate deductible, applying a maximum cover limit or other partial cover factors, if applicable.
[21]  Outstanding claims liability and premiums liability provisions in excess of a 75 per cent level of sufficiency must not be recognised.
[22]  The Actuarial Valuation Report or Financial Condition Report that are required to be completed by the Appointed Actuary in accordance with CPS 320.
[23]  This might include, for example, allowing for reversing accruals for experience bonus or other financial adjustments.
[24]  APRA will review the allowable reinsurance calculation as set out in the ReMS when making this determination.
[25]  Top cover % is the percentage of the loan amount covered by the lenders mortgage insurance.
[26]  Top cover % is the percentage of the loan amount covered by the lenders mortgage insurance.

[27]  A Level 2 insurance group that includes a lenders mortgage insurer must calculate (d). The definition of lenders mortgage insurer in GPS 001 includes a reinsurer that writes lenders mortgage insurance. Therefore, a Level 2 insurance group with a reinsurer that provides reinsurance on lenders mortgage insurance must calculate (d).
[28]  Australia must be treated as a single region for the purposes of this sub-paragraph.
[29]  This includes the determination of reinsurance for lenders mortgage insurance in Attachment A.
[30]  For avoidance of doubt, this paragraph excludes intra-group reinsurance arrangements as these are consolidated in accordance with paragraph 3 of this Attachment.
[31]  For the purposes of this requirement, reinsurance from the Australian Reinsurance Pool Corporation can be treated as having a contractually agreed reinstatement.