Document ID: chunk:federal_register_of_legislation:F2023L00697:front:0:p10
Version: federal_register_of_legislation:F2023L00697
Segment Type: other
Provision Reference: 
Character Range: 28381–31893

the value of expected reinsurance recoveries receivable by the reporting Level 2 insurance group associated with the central estimate of PL, gross of any provisions for depreciation or impairment. It is determined in accordance with GPS 340.

Net PL - non-reinsurance recoveries (central estimate)                               This is the value of recoveries under arrangements, other than reinsurance arrangements, receivable by the reporting Level 2 insurance group associated with the central estimate of PL, gross of any provisions for depreciation or impairment. It is determined in accordance with GPS 340. Recoveries to be included at this item include (but are not limited to) salvage, subrogation, and input tax credit recoveries.

                                                                                     For each region report the non-reinsurance recoveries associated with the PL, estimated in a manner consistent with the methodology used in the most recent Actuarial Valuation Report prepared by the Group Actuary as defined in Prudential Standard CPS 320 Actuarial and Related Matters.

                                                                                     The estimates of non-reinsurance recoveries expected to be received must be based on the nature of the expected claims and the history of non-reinsurance recoveries compared to claims.

Net PL - stand-alone risk margin                                                     This is the value, as at the relevant date, of the stand-alone risk margin component of the net PL, net of any expected reinsurance and non-reinsurance recoveries, determined in accordance with GPS 340. The stand-alone risk margin refers to the risk margin that would be applied to a class of business where no allowance for diversification with other classes of business has been allowed.

Net PL - total                                                                       This is the total of the central estimate (including claims handling expenses and policy administration expenses) and diversified risk margin for PL, net of any expected reinsurance and non-reinsurance recoveries.

                                                                                     It is calculated as the sum of:

                                                                                         * net PL - central estimate (including CHE and PAE); and
                                                                                         * net PL - diversified risk margin.

Net written premium for material business that incepts in the next reporting period  This is the value of future net written premium income for contracts for which the Level 2 insurance group is already committed that will expose the Level 2 insurance group to material risks in the subsequent relevant period, but are not otherwise recognised within the capital requirements. This premium income is net of: levies that are included in the gross premium and would be payable on the business (in particular fire service levy); reinsurance costs that would arise in respect of the premium income and would be payable under treaty arrangements to protect the business; and commission that would be payable to secure the business once it is written (such as brokerage or reinsurance exchange commission).

                                                                                     Typically this will be for policies for which a written premium is not yet