Document ID: chunk:federal_register_of_legislation:F2023L00710:front:0:p5
Version: federal_register_of_legislation:F2023L00710
Segment Type: other
Provision Reference: 
Character Range: 11152–14702

provided.

Definitions

Terms in bold italics are defined in this Definitions section of these instructions.

A
APRA-approved adjustment amount  This is the amount relating to APRA approved adjustments to specific requirements of the prudential standards for a reporting insurer.
APRA-approved adjustment type    This means the type of APRA-approved adjustment. Possible types relate to the:

                                      * prescribed capital amount;
                                      * Asset Risk Charge;
                                      * Insurance Risk Charge - outstanding claims liabilities;
                                      * Insurance Risk Charge - premiums liabilities;
                                      * Insurance Concentration Risk Charge;
                                      * Asset Concentration Risk Charge; and
                                      * Operational Risk Charge.
Asset Concentration Risk Charge  The Asset Concentration Risk Charge is the minimum amount of capital required to be held against asset concentration risks. The Asset Concentration Risk Charge relates to the risk resulting from investment concentrations in individual assets or large exposures to individual counterparties or groups of related counterparties resulting in adverse movements in the reporting insurer's capital base.
                                 This must be determined in accordance with Prudential Standard GPS 117 Capital Adequacy: Asset Concentration Risk Charge.
Asset Risk Charge                The Asset Risk Charge is the minimum amount of capital required to be held against asset risks. The Asset Risk Charge relates to the risk of adverse movements in the value of a reporting insurer's capital base due to credit or market risks.

                                 This must be determined in accordance with Prudential Standard GPS 114 Capital Adequacy: Asset Risk Charge.

I
Insurance Concentration Risk Charge                           The Insurance Concentration Risk 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 insurer'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 Capital Adequacy: 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