Document ID: chunk:federal_register_of_legislation:F2014L01824:body:0:p5
Version: federal_register_of_legislation:F2014L01824
Segment Type: other
Provision Reference: 
Character Range: 11176–13975

within the meaning of section 11 of the Insurance Act;

       Note: In the forms and instructions, a reference to an 'authorised insurer', 'authorised insurance entity' or 'licensed insurer' is a reference to an insurer, and a reference to an 'authorised reinsurance entity' is a reference to an insurer whose business consists only of undertaking liability by way of reinsurance.

       non-APRA-authorised reinsurer means any reinsurer that is not an APRA-authorised reinsurer;

       Principal Executive Officer means the principal executive officer of the insurer, by whatever name called, and whether or not he or she is a member of the governing board of the insurer; and

       reporting period means a period mentioned in subparagraph 6(a) or 6(b) or, if applicable, paragraph 7.

GRF_116_1 Probable Maximum Loss for LMIs - Standard Loans

These instructions must be read in conjunction with the general instruction guide.

Explanatory notes

Standard loan

A standard loan is one which meets the criteria defined in Attachment A of Prudential Standard GPS 116 Capital Adequacy: Insurance Concentration Risk Charge (GPS 116).

100% cover

100% cover provides insurance for 100% of the loan amount.

Top cover

Top cover provides insurance for less than 100% of the loan amount.

Pool cover

A pooled LMI policy, or pool cover, is lenders mortgage insurance underwritten and issued in respect of a pool of loans. For clarity, each loan is not individually insured.

Section 1: ADI

Report in this section information relating to loans approved, advanced and funded by an authorised deposit-taking institution (ADI). An ADI has an in force authority under subsection 9(3) of the Banking Act 1959.

Section 2: Non-APRA regulated

Report in this section information relating to loans approved, advance and funded by entities that are not ADIs.

Instructions for specific items

Sections 1 and 2 - 1.1 and 2.1: 100 per cent and top cover

(1)  LVR greater than (%)

The Loan-to-Valuation Ratio (LVR) is the ratio of the amount of the loan to the value of the secured residential property, as at the date of origination of the loan. Where the mortgage insurance premium is capitalised in the loan amount, the LVR must be calculated including the premium; that is, the loan amount must be increased by the amount of the capitalised premium, irrespective of whether the premium is insured. The inclusion of a First Home Owners Grant in the deposit for a mortgaged property will not otherwise increase the LVR of a loan.

LMIs are required to report the sum insured according to the following categories: LVR of less than 60.01, 60.01 to 70, 70.01 to 80, 80.01 to 85, 85.01 to 90, 90.01 to 95, 95.01 to 100, and greater than 100 per cent. Report the relevant category by