Document ID: chunk:federal_register_of_legislation:F2024L01525:body:0:p19
Version: federal_register_of_legislation:F2024L01525
Segment Type: other
Provision Reference: 
Character Range: 51147–54150

surplus in its capital base. This surplus will no longer be required to be deducted from Common Equity Tier 1 Capital.
 2.          A private health insurer must deduct any deficit in a defined benefit superannuation fund of which a private health insurer is an employer-sponsor and that is not already reflected in Common Equity Tier 1 Capital.

Reinsurance assets
 1.          A private health insurer must deduct all reinsurance assets[17] (if positive) reported in relation to each reinsurance arrangement that, subject to a six month grace period from risk inception, does not comprise an executed and legally binding contract.

Investments in subsidiaries, joint ventures and associates
 1.          A private health insurer must make a deduction for investments in subsidiaries, joint ventures and associates that are subject to regulatory capital requirements. The amount of the deduction is the lesser of the private health insurer's share of the regulatory capital requirements[18] and the value of the investment that is recorded on the private health insurer's balance sheet after adjustment for any intangible component in accordance with paragraphs 16 and 18 of this Attachment. This deduction must be applied after any deduction for intangibles in the investment in accordance with paragraphs 16 and 18 of this Attachment.
 2.          For the purposes of the deduction in paragraph 22 of this Attachment, the regulatory capital requirement of the investment is:
         1.           the prescribed capital amount if the investment is in a private health insurer as defined under the Act; or
         2.           the equivalent amount to the prescribed capital amount if the investment is an entity carrying on private health insurance business in a foreign jurisdiction; or
         3.           a comparable regulatory capital requirement as agreed with APRA.[19]
 3.          If the investment subject to the deduction in paragraph 22 of this Attachment is a non-operating holding company (NOHC), the private health insurer must 'look-through' the investment to the value and regulatory capital requirements of the entity/entities owned by the NOHC.

Assets under a fixed or floating charge
 1.          A private health insurer must deduct all assets of the private health insurer that are under a fixed or floating charge,[20] mortgage or other security to the extent of the indebtedness secured on those assets. This deduction may be reduced by the amount of any liability for the charge that is recognised on the private health insurer's balance sheet.

Fair value adjustments
 1.          A private health insurer may measure its non-financial assets, short-term receivables, and intercompany receivables and payables using the requirements in the Australian Accounting Standards rather than fair value.
 2.          A private health insurer must deduct the difference between fair value and the reported value of each asset. This deduction can be a negative amount (that is, an