Document ID: chunk:federal_register_of_legislation:F2023L00699:body:0:p10
Version: federal_register_of_legislation:F2023L00699
Segment Type: other
Provision Reference: 
Character Range: 25383–28487

group should be consistent with that for an insurer under this Prudential Standard subject to identified consolidated adjustments such as intra-group transactions and diversification. In the case of a Level 2 insurance group with only Australian business, the valuation of group insurance liabilities must be based on the valuation of each insurer in the group and must be compiled as follows:
(a)          the sum of the insurance liabilities for each insurer in the group; plus or minus
(b)          consolidation adjustments for intra-group transactions (which are likely to be eliminations); plus or minus
(c)          consolidation adjustments for diversification benefits in risk margins (if any); plus or minus
(d)          any other adjustments the Group Actuary considers necessary to comply with this Prudential Standard.
4.             On the application of the parent entity of a Level 2 insurance group, APRA may determine in writing that the Group Actuary of the Level 2 insurance group can apply the method set out in paragraphs 5 to 8 of this Attachment in relation to its Australian business. APRA may specify that the determination is subject to conditions.

International business
5.             In the case of a Level 2 insurance group with international business, the Group Actuary must also determine appropriate values in respect of outstanding claims and premiums liabilities for the international controlled entities before applying the steps described in paragraph 3 of this Attachment.
6.             The consolidated accounts of the group prepared in accordance with Australian Accounting Standards will include consolidated insurance assets and liabilities (and corresponding reinsurance assets and liabilities).
7.             In respect of international business, the Group Actuary may adopt derived valuations for outstanding claims liabilities and premiums liabilities based on accounting records for the group subject to:
(a)          assessment by the Group Actuary that the derived valuations are appropriate and exceed (are more conservative than) the requirements of this Prudential Standard; and
(b)          making any other adjustments required as a consequence of this assessment.
    The requirements specified in paragraphs 7(a) and 7(b) will not apply to international consolidated entities which APRA deems to be immaterial. The parent entity of a Level 2 insurance group will need to consult with APRA prior to excluding any international consolidated entities from the requirements in paragraphs 7(a) and 7(b). Consolidation adjustments referred to in paragraph 3 of this Attachment may also be required.
8.             The business segments used should not combine Australian and international businesses in the same segments for the purposes of determining the outstanding claims liabilities and premiums liabilities of a Level 2 insurance group because the Australian business already has outstanding claims liability and premiums liability estimates from its AVR that is used as a component of the group results.
9.             The determination of the