Document ID: chunk:federal_register_of_legislation:F2014L01824:body:0:p11
Version: federal_register_of_legislation:F2014L01824
Segment Type: other
Provision Reference: 
Character Range: 26173–28964

and origination channels.

Amounts are automatically derived from corresponding amounts in GRF 116.1 Probable Maximum Loss for LMIs – Standard Loans (GRF 116.1), GRF 116.2 Probable Maximum Loss for LMIs – Non-Standard Loans (GRF 116.2) and GRF 116.3 Probable Maximum Loss for LMIs – Commercial Loans (GRF 116.3).

  1.1             Standard loans

This is automatically calculated as the sum of Items 1.1.1 to 1.1.4.

    1.1.1      ADI - 100 per cent and top cover

This amount is automatically derived from Columns 5 and 9 of Table 1.1 in GRF 116.1.

    1.1.2      ADI - pool cover

This amount is automatically derived from Columns 4 and 7 of Table 1.2 in GRF 116.1.

    1.1.3      Non-APRA regulated - 100 per cent and top cover

This amount is automatically derived from Columns 5 and 9 of Table 2.1 in GRF 116.1.

    1.1.4      Non-APRA regulated - pool cover

This amount is automatically derived from Columns 4 and 7 of Table 2.2 in GRF 116.1.

  1.2             Non-standard loans

This is automatically calculated as the sum of Items 1.2.1 to 1.2.4.

    1.2.1      ADI - 100 per cent and top cover

This amount is automatically derived from Columns 5 and 9 of Table 1.1 in GRF 116.2.

    1.2.2      ADI - pool cover

This amount is automatically derived from Columns 4 and 7 of Table 1.2 in GRF 116.2.

    1.2.3      Non-APRA regulated - 100 per cent and top cover

This amount is automatically derived from Columns 5 and 9 of Table 2.1 in GRF 116.2.

    1.2.4      Non-APRA regulated - pool cover

This amount is automatically derived from Columns 4 and 7 of Table 2.2 in GRF 116.2.

  1.3             Commercial loans

This is automatically calculated as the sum of Items 1.3.1 and 1.3.2.

    1.3.1      ADI

This amount is automatically derived from GRF 116.3.

    1.3.2      Non-APRA regulated

This amount is automatically derived from GRF 116.3.

  1.4             Total

This is automatically calculated as the sum of Items 1.1, 1.2 and 1.3.

(5)              LMI Concentration Risk Charge (LMICRC) calculation

This represents the years for the Prescribed Stress Scenario which is in the form of a three-year economic or property downturn. The PML must be allocated in the proportion of 25 per cent to year one, 50 per cent to year two and 25 per cent to year three of the downturn.

  2.1.          PML

This represents the total PML across all loan types, coverage types and origination channels. Total PML is automatically allocated in the proportions of 25 per cent to year one, 50 per cent to year two and 25 per cent to year three of the Prescribed Stress Scenario.

  2.2.          Adjustment to the PML

For a lenders mortgage insurer (LMI) no longer writing new business (i.e. in run-off), the sum insured is expected to