Document ID: chunk:federal_register_of_legislation:F2024L00884:body:0:p12
Version: federal_register_of_legislation:F2024L00884
Segment Type: other
Provision Reference: 
Character Range: 29231–31868

1 Capital only if:
(a)          the shares issued to the SPV represent ordinary shares of the life company;
(b)          the amount included in Common Equity Tier 1 Capital is matched by an equivalent charge to profit or loss of the life company for expensing the issue of ordinary shares to, or funding the acquisition of ordinary shares, by the vehicle; and
(c)          the ordinary shares issued cannot be converted to payment in another form (e.g. cash).
50.         If the requirements in paragraph 48 and 49 of this Prudential Standard 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 statutory fund
51.         The capital base of a statutory fund is:
(a)          the net assets of the fund; less
(b)          all regulatory adjustments to the net assets of the statutory fund required under Attachment B; plus
(c)          Tier 2 Capital as defined in paragraph 52.
52.         The Tier 2 Capital of a statutory fund consists of:
(a)          instruments that are a liability of that fund and meet the criteria for inclusion in Tier 2 Capital as set out in Attachment D; less
(b)          all holdings by the fund of the life company's own Tier 2 Capital instruments.
53.         A life company must ensure that, at all times[10]:
(a)          the capital base less the Tier 2 Capital in accordance with paragraph 52 of each statutory fund exceeds 80 per cent of the prescribed capital amount of the fund;
(b)          the capital base of each statutory fund exceeds the PCR of the fund;
(c)          120 per cent of the net assets of each statutory fund exceeds 80 per cent of the prescribed capital amount of the fund; and
(d)          the sum of 120 per cent of the net assets and the Tier 2 Capital in accordance with paragraph 52 of each statutory fund exceeds the PCR of the fund.
54.         APRA may, by notice in writing to a life company, set a higher percentage for the capital base, net of Tier 2 Capital, for one or more statutory funds of the life company.

Capital base of a general fund
55.         The capital base of a general fund is:
(a)          the net assets of the fund; less
(b)          all regulatory adjustments to the net assets of the general fund required under Attachment B.
56.         A life company must ensure that, at all times, the capital base of the general fund exceeds the PCR of the fund.
57.         A friendly society must ensure that, at all times, 120 per cent of the net assets of the general