Document ID: chunk:federal_register_of_legislation:F2024L01053:front:0:p12
Version: federal_register_of_legislation:F2024L01053
Segment Type: other
Provision Reference: 
Character Range: 31133–34157

prudential standards, three categories of expense are defined: acquisition expenses, maintenance expenses and investment management expenses.
    [LI] expense driver means a quantifiable measure in relation to which the relevant expenses of a life company are expected to vary.
    [LI] experience profit means the profit arising in a period from the difference between actual experience during that period and expected experience on the basis of best estimate assumptions at the beginning of the period.
    [ADI] extended licensed entity (ELE) is comprised of an ADI and each subsidiary of that ADI as specified in any approval granted by APRA in accordance with Prudential Standard APS 222 Associations with Related Entities.
    [ADI] external credit assessment institution (ECAI) means an entity that assigns credit ratings designed to measure the creditworthiness of a counterparty or certain types of debt obligations of a counterparty.
    [GI, LI, PHI] fair value has the same meaning as it does in the Australian Accounting Standards and refers to the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.
    [GI, LI, PHI] Financial Condition Report (FCR) is as defined in Prudential Standard CPS 320 Actuarial and Related Matters.
    [ADI] financial institution includes any institution engaged substantively in one or more of the following activities – banking; leasing; issuing credit cards; portfolio management (including asset management and funds management); management of securitisation schemes; equity and/or debt securities, futures and commodity trading and broking; custodial and safekeeping services; insurance (both general and life) and similar activities that are ancillary to the conduct of these activities. A financial institution includes any authorised NOHC or overseas equivalent.
    [LI] financial instrument element means the activities and associated cash flows of a life investment contract that relate directly to the establishment of a financial asset or financial liability.
    [PHI] financial interdependency, in relation to a group of related counterparties, means a circumstance in which the financial soundness of one counterparty in the group may affect the financial soundness of another counterparty in the group.
    [LI] financial risk refers to the risk of a possible future change in one or more specified economic variables – a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, a credit rating or credit index or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract.
    [GI] financial year, in relation to a Level 2 insurance group, means the financial year (within the meaning of the Corporations Act) of the parent entity of the Level 2 insurance group.
    [ADI] FIRB refers to Foundation IRB, as defined in Prudential Standard APS 113