Document ID: chunk:federal_register_of_legislation:F2023L00568:front:0:p9
Version: federal_register_of_legislation:F2023L00568
Segment Type: other
Provision Reference: 
Character Range: 22967–26167

that evidence a residual interest in the assets of an entity after deducting all its liabilities. This includes equity securities lent or sold by the entity under repurchase agreements, where the transaction does not result in the transfer of the rights of ownership of the securities away from the entity to another party. Subordinated debt is a debt security where the claim to repayment ranks lower in priority to other claims.

(Items subject to Asset Risk Charge type)
Equity stress                                            This is the impact on an insurer's capital base of a fall in equity and other asset values and is calculated in accordance with GPS 114.

(Stress scenario type)                                   This stress applies to both listed and unlisted equity assets and to any other assets that are not considered in any of the other asset risk stresses. This stress also includes an increase to equity volatility.
Expected inflation downwards stress                      Expected inflation stress measures the impact on an insurer's capital base of changes to expected Consumer Price Index inflation rates. It also affects nominal interest rates.

(Stress scenario type)                                   This item reports the impact on the capital base of the insurer arising from the application of the downward expected inflation stress and is calculated in accordance with GPS 114.
Expected inflation upwards stress                        Expected inflation stress measures the impact on an insurer's capital base of changes to expected Consumer Price Index inflation rates. It also affects nominal interest rates.

(Stress scenario type)                                   This item reports the impact on the capital base of the insurer arising from the application of the upward expected inflation stress and is calculated in accordance with GPS 114.
Expected reinsurance recoveries                          This is the amount due to an insurer, or to an entity that carries on international business within a Level 2 insurance group, from a reinsurer that arises from the recognition of premiums liabilities referred to in the GI Prudential Standards (including GPS 340). This is distinguished from reinsurance recoverables.

(Items subject to Asset Risk Charge type)

G
GPS 340 net outstanding claims liabilities  This is the value of the net outstanding claims liabilities determined in accordance with GPS 340.

(Items subject to Asset Risk Charge type)
GPS 340 net premium liabilities             This is the value of the net premium liabilities determined in accordance with GPS 340.

(Items subject to Asset Risk Charge type)

I
Impact of diversification                                                   This is calculated as the sum of the risk charge components used in calculating the aggregated risk charge component, less the aggregated risk charge component as set out in GPS 114.
Impact on capital base                                                      This shows the impact on the capital base of each asset risk stress scenario as set out in GPS 114.

                                                                            This item is