Document ID: chunk:federal_register_of_legislation:F2023L00733:reg:7:p6
Version: federal_register_of_legislation:F2023L00733
Segment Type: reg
Provision Reference: reg 7 (pt 6/7)
Character Range: 39446–42307

be in a position to monitor the operations of the related entity to the same extent as the operations of the private health insurer itself. Systems for monitoring and maintaining control over the related entity must be included within the internal and external audit programs of the private health insurer;
(d)          the private health insurer must be able to furnish stand-alone accounting records for the related entity, and provide APRA with full and unfettered access to this information at any time (including during on-site visits);
(e)          where the related entity holds or invests in assets on behalf of the private health insurer, the related entity must have no material third party liabilities, other than exempt tax liabilities and employee entitlements;
(f)           where the related entity borrows on behalf of the private health insurer, all funds must be on-lent directly to the private health insurer; and
(g)          the related entity must not conduct any business that the private health insurer would otherwise be prevented from conducting under the Act.

[1]  The effective exposure of an insurer's assets and liabilities must also include the regulatory adjustments to Common Equity Tier 1 Capital to allow for the effects of accounts receivable and accounts payable outlined in Attachment B, paragraph 7 of Prudential Standard HPS 112 Capital Adequacy: Measurement of Capital, but gross of any tax effects.
[2]  For the purpose of calculating the result of the stress tests other than the default stress, a private health insurer must use the net insurance liabilities calculated in accordance with Prudential Standard HPS 340 Insurance Liability Valuation (HPS 340) instead of the equivalent statutory account values.
[3]  For this purpose, an investment entity is an entity where the sole purpose of the entity is investment activities.
[4]  For this purpose, a trust or entity may be geared through borrowings or through the use of derivatives.
[5] In the increase scenario, the Australian dollar values of foreign currency assets and liabilities will fall by 20 per cent. In the decrease scenario, the Australian dollar values of foreign currency assets and liabilities will increase by 33.3 per cent.
[6]  and other non-securitised assets including covered bonds issued by an ADI.
[7]  For a claims-made policy, the reference to "event" is to the date a claim notification was made. Novated contracts are regarded as incepting at the time specified in the contract they replaced, except where a later time is specified in the novation deed.
[8]  For the avoidance of doubt, the default factors specified in Table 4 apply to the amount of relevant reinsurance recoverables that exceeds the amount of available collateral, guarantee or letter of credit.
[9]  Any dispute between the private health insurer and reinsurer in