Document ID: chunk:federal_register_of_legislation:F2023L00694:body:0:p4
Version: federal_register_of_legislation:F2023L00694
Segment Type: other
Provision Reference: 
Character Range: 8544–11602

in Part D of this Prudential Standard;
(p)          the term 'risk-free best estimate liability (RFBEL)' will be used to refer to a liability calculated in accordance with the method specified in Attachment F of Prudential Standard LPS 112 Capital Adequacy: Measurement of Capital (LPS 112);
(q)          the term 'insurance policy receivables' will be used to refer to premiums and other accounts receivable including loans on policies that have been recognised within the net life contract liabilities derived from the insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17 Insurance Contracts (AASB 17);
(r)           the term 'insurance policy payables' will be used to refer to claims and other accounts payable that have been recognised within the net life contract liabilities derived from the insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17;
(s)           for the purposes of the Income Tax Assessment Act 1997, the term 'value of supporting assets' for a category or subcategory of business means the net life contract liabilities less any Australian Policy Owners' Retained Profits and Overseas Policy Owners' Retained Profits allocated to that category or subcategory of business; and
(t)            the terms 'estimates of future cash flows (EFCF)', 'risk adjustment for non-financial risk (RA)' and 'contractual service margin (CSM)' have the meanings given by AASB 17.
8.             This Prudential Standard applies to a valuation of policy liabilities made under section 114 of the Act. It applies to a valuation of liabilities that arise under:
(a)          a life policy, including an investment account contract or investment-linked contract; or
(b)          another policy, including a section 12A or 12B policy.
9.             This Prudential Standard applies for reporting values for gross policy liability, net policy liability and reinsured policy liability in accordance with provisions of the Act. The liability values must exclude Australian policy owners' retained profits and overseas policy owners' retained profits.
10.         For friendly society business and life insurer non-participating business the gross policy liability and reinsured policy liability must be determined in accordance with Part B of this Prudential Standard.
11.         For life insurer participating business the gross policy liability and reinsured policy liability must be determined in accordance with either Part B or Part C of this Prudential Standard.
12.         This Prudential Standard also specifies the method that must be used to calculate the BEL for all policies, regardless of whether they relate to friendly society business, life insurer non-participating business or life insurer participating business. The BEL calculation method forms the basis for deriving RFBEL in LPS 112.
13.         For all business, BEL must be calculated in accordance with the requirements outlined in Part D of this Prudential Standard.

Part A – Policy