Document ID: chunk:federal_register_of_legislation:F2023L00695:body:0:p2
Version: federal_register_of_legislation:F2023L00695
Segment Type: other
Provision Reference: 
Character Range: 2934–6230

Standard. The valuation must then be used for the purpose of:
(a)          calculating the private health insurer's prescribed capital amount in accordance with the capital standards; and
(b)          completing the private health insurer's yearly statutory accounts in accordance with reporting standards made under the FSCODA.
7.             A private health insurer must determine a value for its outstanding claims liabilities, its premiums liabilities, risk equalisation transfers, other insurance liabilities, and its deferred claims liability for the purpose of this Prudential Standard.
8.             Outstanding claims liabilities relate to all claims incurred prior to the reporting date, whether or not they have been reported to the private health insurer. A private health insurer must determine the outstanding claims liabilities on a prospective basis for health insurance business and health-related insurance business. Outstanding claims liabilities are calculated as the sum of:
(a)          claims component;
(b)         claims handling expenses;
(c)          risk equalisation component; and
(d)          the component relating to claims which have been settled but not yet paid at the reporting date
    Less the sum of:
(e)          reinsurance recoverables[1]; and
(f)           non-reinsurance recoveries.
9.             Premiums liabilities relate to all future claim payments arising from future events post the valuation date that will be insured under the private health insurer's existing policies that have not yet expired including unclosed business. Premiums liabilities should exclude risks from policy renewals after the valuation date and allow for expected premium refunds. In respect of premiums liabilities for which reinsurance has not yet been purchased, allowance must be made for this reinsurance in the premiums liabilities valuation (refer to Attachment A of this Prudential Standard for further details on the assumptions relating to this reinsurance). Premiums liabilities are to be determined on a prospective basis for health insurance business and health-related insurance business. Premiums liabilities are calculated as the sum of:
(a)          claims component;
(b)          claims handling expenses;
(c)          policy administration expenses; and
(d)          risk equalisation component
    Less the sum of:
(e)          expected reinsurance recoveries[2]; and
(f)           non-reinsurance recoveries.
10.         Risk equalisation transfers are payments to be made or receivables expected from the Risk Equalisation Special Account as at the reporting date. These are amounts that have been accrued but not yet paid/received as at the reporting date arising from risk equalisation on paid claims. Risk Equalisation Special Account has the same meaning as in the Act.
11.         Other insurance liabilities are insurance liabilities which are uncertain in value, but not included within outstanding claims liabilities, premiums liabilities, risk equalisation transfers or deferred claims liability as defined by this Prudential Standard. This includes (but is not limited to) loyalty bonuses.
12.         The deferred claims liability is an insurance liability related to the suspension of non-urgent or non-essential elective surgery or