Document ID: chunk:federal_register_of_legislation:F2023L00729:front:0:p6
Version: federal_register_of_legislation:F2023L00729
Segment Type: other
Provision Reference: 
Character Range: 13918–16566

Charge is the minimum amount of capital required to be held against insurance concentration risks. The Insurance Concentration Risk Charge relates to the risk of an adverse movement in the reporting Level 2 insurance group's capital base due to a single large loss or series of losses.
                                                              This must be determined in accordance with Prudential Standard GPS 116 Capital Adequacy: Insurance Concentration Risk Charge.
Insurance Risk Charge - outstanding claims liabilities (OCL)  The risk charge for outstanding claims risk relates to the risk that the value of net outstanding claims liabilities (OCL) determined in accordance with Prudential Standard GPS 340 Insurance Liability Valuation (GPS 340) will be insufficient to cover associated net claim payments and any associated claim expenses as they fall due.
                                                              This must be determined in accordance with Prudential Standard GPS 115 Insurance Risk Charge (GPS 115).
Insurance Risk Charge - premiums liabilities (PL)             This is the Insurance Risk Charge in respect of premiums liability risk, which relates to the risk that the value of the net PL is greater than the value determined in accordance with GPS 340. It also relates to the risk that material net written premium, as defined in GPS 115, will be insufficient to fund the liabilities arising from that business.
                                                              This must be determined in accordance with GPS 115.

O
Operational Risk Charge  The Operational Risk Charge is the minimum amount of capital required to be held against operational risks. The Operational Risk Charge relates to the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.
                         This must be determined in accordance with Prudential Standard GPS 118 Capital Adequacy: Operational Risk Charge.

P
Prescribed capital amount  The prescribed capital amount must be determined in accordance with Prudential Standard GPS 110 Capital Adequacy.

Specific instructions

Table 1: Adjustments and exclusions

Reporting basis
For a Level 2 insurance group, report the adjustments and exclusions to the prudential standard requirements, as approved by APRA.

Units of measurement
This values in this table must be completed in whole Australian dollars.

                                                    Valid values
   Name                                                                                                                  Description