Document ID: chunk:federal_register_of_legislation:F2023L00682:body:0:p5
Version: federal_register_of_legislation:F2023L00682
Segment Type: other
Provision Reference: 
Character Range: 11291–14417

ICAAP over the period, relative to the planned outcomes in the previous ICAAP report (including analysis of the regulated institution's actual capital position relative to minimum regulatory capital requirements and capital targets, and actual-versus-planned capital management actions);
       (c)          description of material changes to the ICAAP since the previous ICAAP report;
       (d)          detail and outcomes of stress testing and scenario analysis used in undertaking the ICAAP;
       (e)          a breakdown of capital usage over the planning horizon, as relevant, by material:
           (i) business activity;
           (ii) group members (as applicable);
           (iii) geographic spread of exposures; and
           (iv) risk types;
       (f)           an assessment of anticipated changes in the regulated institution's risk profile or capital management processes over the planning horizon;
       (g)          details of any review of the ICAAP since the previous ICAAP report, including any recommendations for change and how those recommendations have been, or are being, addressed; and
       (h)          references to supporting documentation and analysis, as relevant.
16.         The ICAAP report submitted to APRA by the regulated institution must be accompanied by a declaration approved by the Board and signed by the CEO stating whether:
       (a)          capital management has been undertaken by the regulated institution in accordance with the ICAAP over the period and, if not, a description of, and explanation for, deviations;

       (b)          the regulated institution has assessed the capital targets contained in its ICAAP to be adequate given the size, business mix and complexity of its operations, and specifically for Level 2 insurance groups, given the location of operations of group members and the complexity of the group structure; and

       (c)          the information included in the ICAAP report is accurate in all material respects.

Capital base
17.         In assessing the adequacy of a regulated institution's capital base, attention must be paid not only to the risks it is likely to face, but also to the quality of the support provided by various forms of capital. In assessing the quality of support provided by a particular form of capital, regard must be had to the extent to which it:
(a)          provides a permanent and unrestricted commitment of funds;
(b)          is freely available to absorb losses;
(c)          does not impose any unavoidable servicing charges against earnings; and
(d)          ranks behind the claims of policyholders and creditors in the event of the winding-up of the regulated institution.
18.         Not all forms of capital meet these criteria equally. Due to the need to ensure that the capital base of a regulated institution provides adequate support for its activities, APRA imposes some restrictions on the composition of the capital base. The forms of capital deemed eligible for inclusion in the capital base, and the conditions as to their inclusion, are specified in Prudential Standard GPS 112