Document ID: chunk:federal_register_of_legislation:F2023L00317:body:0:p8
Version: federal_register_of_legislation:F2023L00317
Segment Type: other
Provision Reference: 
Character Range: 20183–23003

2.2. Bill acceptance / discount facilities

This relates to another form of liquidity/funding. The funding is provided to the life company by a facility that discounts bills (e.g. bank accepted bills). Principal and interest (discount) owing on the bill is repaid or 'rolled over' by the life company on maturity of the bill.

   2.3. Letter of credit facilities

This is an irrevocable and unconditional undertaking covering a life company to repay principal and interest on a loan in the event of default by the life company.

   2.4. Overdrafts

These are accounts that may be overdrawn up to limits agreed to with an ADI.

   2.5. Other liquidity support facilities

This relates to all other off-balance sheet liquidity support facilities contracted for the life company's use that are not included in the categories above.

It is calculated automatically as item 2.6 less the sum of items 2.1.1, 2.1.2, 2.1.3, 2.2, 2.3 and 2.4.

   2.6. Total off-balance sheet liquidity support facilities

This is the total of liquidity support facilities contracted to the life company to supplement its liquidity requirements.

2.6.1. Parent entity

This is the total value of off-balance sheet liquidity support facilities that are with the parent entity of the life company.

2.6.2. Controlled entities

This is the total value of off-balance sheet liquidity support facilities that are with a controlled entity of the life company.

 2.6.3. Associates / joint ventures

This is the total value of off-balance sheet liquidity support facilities where the counterparty is an associate or joint venture.

2.6.4. Other related entities

This is the total value of off-balance sheet liquidity support facilities that are with a related entity of the life company and has not been included in 2,6.1. to 2.6.3 above.

   3(1).        Purpose of Charge / Encumbrance

The purposes are set out in sections 38 and 40 of the Life Insurance Act 1995.

The appropriate description should be selected from the drop-down box.

   3(2).        Type of Charge / Encumbrance

The following is not an exhaustive list but is provided as an example:

Fixed charge - A fixed charge is generally given in relation to a specific asset or assets and it will generally limit the ability or right of the life company to deal with those assets.

Floating charge - A floating charge may be given over specific assets or all assets of the life company and may generally only crystallise and become a fixed charge on the occurrence of a specific event that is agreed between the parties (i.e. default on payment, or not maintaining specified interest coverage ratios).

   3(3).        Principal Value of the charge

This refers to the principal or face value or amount of the charge or encumbrance given over assets of the life