Document ID: chunk:federal_register_of_legislation:F2023L00608:front:0:p6
Version: federal_register_of_legislation:F2023L00608
Segment Type: other
Provision Reference: 
Character Range: 14043–17231

required to determine the most appropriate category (i.e. category A, B or C) in GPS 115 that this business falls within. The choice must be based on the underlying risk characteristics of the business being written.  The amounts reported in the Other direct - category A, Other direct - category B or Other direct - category C line items are to follow this basis.

                          For reinsurance business, the classes of business in GPS 115 are to be aggregated by the category and reinsurance type.

Commissions               This item is the present value of commissions expenses associated with the GPS 340 PL.

                          This excludes any acquisition commission expenses that are not reported as part of the GPS 340 PL. This also excludes reinsurance commissions.

D

Direct business  Report direct business written directly by the reporting insurer in accordance with the direct classes of business in GPS 001.

E

Expected future reinsurance costs for current and future reinsurance arrangements needed to cover PL   This is the value of expected future cost of any reinsurance arrangements required to fully cover the exposure period for premiums liabilities. This may include an additional cost for existing reinsurance contracts where the expense is yet to be recognised under Australian Accounting Standards as well as an additional reinsurance purchase cost for any part of the premiums liabilities not covered by current reinsurance arrangements calculated in accordance with GPS 340.

                                                                                                       For avoidance of doubt, the reported figure is to be gross of any recoveries, and should not include any CHE, policy administration expenses (PAE) or risk margin.

G

Gross PL - central estimate (excluding CHE and PAE)  This is the value, as at the relevant date, of the central estimate component of PL, excluding CHE and excluding PAE, gross of any recoveries, determined in accordance with GPS 340. Amounts relating to expected future reinsurance costs for current and future reinsurance arrangements needed to cover PL, commissions and reinsurance commissions are also to be excluded and reported separately.

                                                     The central estimate will be measured as the present value of the future expected payments, i.e. discounted for future investment income, determined in accordance with GPS 340. The central estimate is intended to reflect the mean value in the range of possible values for the outcome (that is, the mean of the distribution of probabilistic outcomes), and so does not include any risk margin.

Gross PL - central estimate (including CHE and PAE)  This is the value, as at the relevant date, of the central estimate component of PL, CHE and PAE, gross of any recoveries, determined in accordance with GPS 340.

                                                     It is calculated as the sum of:

                                                         * gross PL - central estimate (excluding CHE and PAE);
                                                         * expected future