Document ID: chunk:federal_register_of_legislation:F2023L00624:front:0:p11
Version: federal_register_of_legislation:F2023L00624
Segment Type: other
Provision Reference: 
Character Range: 32426–35879

for group risk business for the statutory fund. This reflects the proportion of group risk business risks that is being ceded offshore.

Offshore reinsurance premium ratio for individual risk business  This is the ratio of notional offshore reinsurance premium for individual risk business relating to a particular reinsurance arrangement to total gross premium expense for individual risk business for the total statutory fund. This reflects the proportion of individual risk business risks that is being ceded offshore.

On-balance sheet / off-balance sheet                             This is to identify whether an exposure is on balance sheet or off balance sheet. Possible values are:

                                                                     * on-balance sheet; and
                                                                     * off-balance sheet.

P

Period after downgrade below grade 3  Where the reinsurer had a counterparty grade of 1, 2 or 3 at the time the the reinsurance arrangement was entered into but a current counterparty grade below grade 3, this is the length of period post downgrade below grade 3. This relates to reinsurance arrangements with a registered life company, an APRA approved affiliated entity or an appropriate retrocessionaire where LPS 117 specifies a phased reduction in the asset concentration limit in the event of the reinsurance counterparty being downgraded below grade 3.

                                      The categories of period can be:

                                          * 0 to 3 months;
                                          * more than 3 months to 12 months;
                                          * more than 12 months to 24 months; and
                                          * more than 24 months.

R

Reinsurance arrangement description  This is brief description of the reinsurance arrangement which provides additional information to help APRA to better understand the risks covered under the offshore reinsurance arrangement.

S

Stressed value of reinsurance asset under combination-stress method  LPS 117 specifies that if a reinsurance asset would increase in value when one or more of the equity, property, credit spreads, currency or default stresses specified in Prudential Standard LPS 114 Capital Adequacy Asset Risk Charge (LPS 114) are applied to the fund's other assets, the stressed value of the reinsurance asset must be determined as the greater of an amount determined in accordance with the insurance-stress method and an amount determined in accordance with the combination-stress method.

                                                                     The stressed value of a reinsurance asset under the combination-stress method is calculated in accordance with paragraph 19 of LPS 117.

                                                                     This value should be reported at this item for any reinsurance assets that increase in value when the equity, property, credit spreads, currency or default stresses are applied.

Stressed value of reinsurance asset under insurance-stress method    For reinsurance exposures, this is the amount by which the stressed policy liabilities of the fund (as determined under Prudential Standard LPS 115 Capital Adequacy: Insurance Risk Charge) would increase, if the stressed policy liabilities were determined gross of that particular reinsurance exposure.

V