Document ID: chunk:federal_register_of_legislation:F2023L00639:body:0:p5
Version: federal_register_of_legislation:F2023L00639
Segment Type: other
Provision Reference: 
Character Range: 11542–14951

will be greater than the value determined in accordance with Prudential Standard HPS 340 Insurance Liability Valuation (HPS 340).

                                       This amount is to be determined in accordance with HPS 115 and should correspond to the total calculated in Reporting Standard HRS 115.0 Insurance Risk Charge (HRS 115.0).

F

Future Exposure Risk Charge         This is a derived item and is calculated as the sum of:

                                         * Future Exposure Risk Charge (Health Insurance Business - HIB); and
                                         * Future Exposure Risk Charge (Health-Related Insurance Business - HRIB).

Future Exposure Risk Charge (HIB)   The Future Exposure Risk Charge (HIB) relates to the risk that financial performance of the health insurance business a may be materially worse than expected. The Future Exposure Risk Charge (HIB) quantifies the amount of capital needed should a set of standardised industry stresses occur.
                                    This amount is to be determined in accordance with HPS 115 and should correspond to the total calculated in HRS 115.0.
Future Exposure Risk Charge (HRIB)  The Future Exposure Risk Charge (HRIB) relates to the risk that financial performance of the health-related insurance business a may be materially worse than expected. The Future Exposure Risk Charge (HRIB) quantifies the amount of capital needed should a set of standardised industry stresses occur.
                                    This amount is to be determined in accordance with HPS 115 and should correspond to the total calculated in HRS 115.0.

G

General fund  Has the same meaning as in HPS 001.

H

Health benefits fund  Has the same meaning as in the Private Health Insurance (Prudential Supervision) Act 2015.

I

Insurance Liability Risk Charge  The Insurance Liability Risk Charge is a derived item and is calculated as the sum of:

                                       * Outstanding Claims Liabilities Risk Charge;
                                       * Premiums Liabilities Risk Charge;
                                       * Risk Equalisation Risk Charge; and
                                       * Other Insurance Liabilities Risk Charge.

Insurance Risk Charge            The Insurance Risk Charge is the minimum amount of capital required to be held against insurance risks. The method for determining the Insurance Risk Charge is set out in HPS 115.

                                 For Table 1, this is a derived item and is calculated as the sum of:

                                      * Insurance Liability Risk Charge;
                                      * Future Exposure Risk Charge; and
                                      * Deferred Claims Liability Risk Charge.

O

Outstanding Claims Liabilities Risk Charge  The risk charge for Outstanding Claims Liabilities relates to the risk that the value of total outstanding claims liabilities will be greater than the value determined in accordance with HPS 340.

                                            This amount is to be determined in accordance with HPS 115 and should correspond to the total calculated in HRS 115.0.

Operational Risk Charge                     The Operational Risk Charge is the minimum amount of capital required to be held against operational risks. The Operational Risk Charge relates to