Document ID: chunk:federal_register_of_legislation:F2023L00622:body:0:p7
Version: federal_register_of_legislation:F2023L00622
Segment Type: other
Provision Reference: 
Character Range: 19627–24714

2 Capital;

                                                                                                            divided by:

                                                                                                                * prescribed capital amount.
Claims payable                                                                                              This is the amount related to claims due but not yet paid which has been recognised within insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17 Insurance Contracts (AASB 17).

                                                                                                            Life companies must exclude any amount already allowed in adjusted policy liabilities to avoid double counting.

                                                                                                            This item increases liability adjustments.

Common Equity Tier 1 Capital                                                                                This is the highest quality component of capital within the life company as determined under the eligibility criteria as set out in LPS 112, net of all regulatory adjustments.

                                                                                                            Common Equity Tier 1 Capital is calculated as the sum of:

                                                                                                                * adjustments and exclusions to Common Equity Tier 1 Capital;
                                                                                                                * paid-up ordinary shares;
                                                                                                                * mutual equity interests;
                                                                                                                * retained earnings;
                                                                                                                * undistributed current year earnings; and
                                                                                                                * accumulated other comprehensive income and other disclosed reserves

                                                                                                            less:

                                                                                                                * regulatory adjustments to Common Equity Tier 1 Capital.
Common Equity Tier 1 Capital ratio                                                                          Common Equity Tier 1 Capital ratio is calculated as:

                                                                                                                * Common Equity Tier 1 Capital;

                                                                                                            divided by:

                                                                                                                * prescribed capital amount.
Cumulative unrealised gains or losses on hedges offsetting gains or losses in Common Equity Tier 1 capital  This is the cumulative unrealised gains or losses on hedges offsetting the gains or losses of components of Common Equity Tier 1 Capital.

                                                                                                            This includes cumulative unrealised gains or losses on effective cash flow hedges as defined in the Australian Accounting Standards and any fair value gains or losses on derivatives representing effective economic hedges of assets.

D

Deficit in defined benefit superannuation funds  This is the amount of deficit (if any) in defined benefit superannuation funds where the life company is an employer-sponsor.

E

Eligible Tier 2 Capital instruments                          This is the value of capital instruments issued by the fund or life company that meet the eligibility criteria of Tier 2 Capital in LPS 112.

Excess mutual equity interests                               This is the value of any mutual equity interests that are above the limit specified in LPS 112 (that is, the value of any mutual equity interests on issue that are not eligible for inclusion in Common Equity Tier 1 Capital).

                                                             For the purposes of this item, only include proceeds of issues that have been received by the issuer. Any partly paid issue is reported only to the extent that it has been paid-up.

Excess of deferred tax assets over deferred tax liabilities  This is the amount of deferred tax assets (DTA) in excess of deferred tax liabilities (DTL) within the fund or life company as per the requirement of LPS 112.

                                                             This assumes that deferred tax benefits in one fund can be offset by the deferred tax