Document ID: chunk:federal_register_of_legislation:F2023L00608:front:0:p7
Version: federal_register_of_legislation:F2023L00608
Segment Type: other
Provision Reference: 
Character Range: 16840–22111

of the central estimate component of PL, CHE and PAE, gross of any recoveries, determined in accordance with GPS 340.

                                                     It is calculated as the sum of:

                                                         * gross PL - central estimate (excluding CHE and PAE);
                                                         * expected future reinsurance costs for current and future reinsurance arrangements needed to cover PL;
                                                         * commissions;
                                                         * claims handling expenses; and
                                                         * policy administration expenses

                                                     less:

                                                          *     reinsurance commissions.

Gross PL – diversified risk margin                   This is the value, as at the relevant date, of the diversified risk margin component of PL, gross of any recoveries, determined in accordance with GPS 340. The diversified risk margin refers to the risk margin that has been applied to the class of business after allowance for diversification across the whole insurance portfolio.

Gross PL - total (including CHE and PAE)             This is the total of the central estimate and diversified risk margin for PL, including claims handling expenses and policy administration expenses, gross of any recoveries, determined in accordance with GPS 340

                                                     It is calculated as the sum of:

                                                          *     gross PL - central estimate (including CHE and PAE); and
                                                          *     Gross PL – diversified risk margin

N

Net PL - central estimate (excluding CHE and PAE)                                    This is the value, as at the relevant date, of the central estimate component of PL, excluding:

                                                                                         * CHE;
                                                                                         * PAE; and
                                                                                         * commissions and reinsurance exchange commissions,

                                                                                     net of any expected reinsurance and non-reinsurance recoveries, determined in accordance with GPS 340.

                                                                                     This is calculated as the sum of:

                                                                                         * gross PL - central estimate (excluding CHE and PAE);
                                                                                         * expected future reinsurance costs for current and future reinsurance arrangements needed to cover PL; and
                                                                                         * commissions;

                                                                                     less the sum of:

                                                                                         * reinsurance commissions;
                                                                                         * net PL - non-reinsurance recoveries (central estimate); and
                                                                                         * net PL - expected reinsurance recoveries (central estimate).

Net PL - central estimate (including CHE and PAE)                                    This is the value, as at the relevant date, of the central estimate component of PL, including:

                                                                                         * CHE; and
                                                                                         * PAE,

                                                                                     net of any expected reinsurance and non-reinsurance recoveries, determined in accordance with GPS 340.

                                                                                     This is calculated as the sum of:

                                                                                         * net PL - central estimate (excluding CHE and PAE);
                                                                                         * claims handling expenses; and
                                                                                         * policy administration expenses.

Net PL - diversified risk margin                                                     This is the value, as at the relevant date, of the diversified risk margin component of the net PL, net of any expected reinsurance and non-reinsurance recoveries, determined in accordance with GPS 340.  The diversified risk margin refers to the risk margin that has been applied to the class of business after allowance for diversification across the whole insurance portfolio.

Net PL - expected reinsurance recoveries (central estimate)                          This