Document ID: chunk:federal_register_of_legislation:F2015L00579:body:0:p9
Version: federal_register_of_legislation:F2015L00579
Segment Type: other
Provision Reference: 
Character Range: 21659–24114

the exposure is category (f) in Section 2, Column (3).

    4.7.      Reinsurance with approved retrocessionaires (grade 1, 2, or 3 at time of agreement)

This is the total amount of assets associated with a retrocession arrangement where the retrocessionaire is currently below APRA counterparty grade 3, but had an APRA counterparty grade 1, 2 or 3 at the time the arrangement was entered into.

This only applies to specialist reinsurers. Amounts reported should sum up all excess retrocession exposures based on the determined asset concentration limits. This is calculated automatically as the sum of the totals in Section 2, Column (6) where the exposure is category (g) in Section 2, Column (3).

    4.8.      Asset not covered by any of the above categories

This is the value of all other assets not falling within the above categories.

This is calculated automatically as the sum of the totals in Section 2, Column (6) where the exposure is category (h) in Section 2, Column (3).

  5.      Adjustments to asset concentration risk charge as approved by APRA

If APRA is of the view that the Standard Method for calculating the asset concentration risk charge component of the prescribed capital amount does not produce an appropriate outcome in respect of a life company, or a life company has used inappropriate judgement or estimation in calculating the asset concentration risk charge, APRA may adjust the asset concentration risk charge calculation for that regulated institution.

Approved adjustments are to be reported separately in the associated table highlighting the description of the adjustment given, transitional status and the amount of adjustment applied. Adjustments that would result in an increase to the asset concentration risk charge should be reported as a positive value. Where the adjustment is a transitional adjustment, the end date for the transitional period is to be clearly included in the description of the item.

This is calculated automatically as the sum of column 3 in the table that follows.

  6.      Asset Concentration Risk Charge

The asset concentration risk charge is the minimum amount of capital required to be held against asset concentration risks. The asset concentration risk charge relates to the risk of a life company's concentration in particular assets resulting in adverse movements in the life company's capital base.

This is calculated automatically as the sum of item 4 and item 5.