Division Definitions - Financial Sector (Collection of Data) (reporting standard) determination No. 102 of 2023 - Definitions

Definitions

Terms highlighted in bold italics indicate that the definition is provided in these instructions.

Accumulated other comprehensive income and other disclosed reserves	This is the sum of all other comprehensive income and disclosed reserves and is calculated as the sum of:unrealised gains or losses recognised on balance sheet;reserves from equity-settled share-based payments;foreign currency translation reserve;general reserve;cumulative unrealised gains or losses on hedges offsetting gains or losses in Common Equity Tier 1 Capital; andother gains and losses in accumulated comprehensive income and other disclosed reserves.
Additional Tier 1 Capital	This is the value of instruments issued by the private health insurer that meet the criteria for inclusion in Additional Tier 1 Capital in accordance with Prudential Standard HPS 112 Capital Adequacy: Measurement of Capital (HPS 112), and which are not included in Common Equity Tier 1 Capital. This is net of regulatory adjustments specified in HPS 112.This is calculated as the sum of:Additional Tier 1 Capital instruments;adjustments and exclusions to Additional Tier 1 Capital;transitional Additional Tier 1 Capital; andexcess mutual equity interests.less:holdings of own Additional Tier 1 Capital instruments; andadjustments to Additional Tier 1 Capital due to shortfall in Tier 2 capital.
Additional Tier 1 Capital instruments	This is the value of capital instruments issued by the private health insurer that meet the eligibility criteria for Additional Tier 1 Capital but not the criteria for the higher quality capital, i.e. Common Equity Tier 1 Capital.
Adjustments and exclusions to Additional Tier 1 Capital	This is the value of adjustments applied to Additional Tier 1 Capital that is specific to the application of the requirements in HPS 112.
Adjustments and exclusions to Common Equity Tier 1 Capital	This is the value of adjustments applied to the Common Equity Tier 1 Capital that are specific to the application of the requirements in HPS 112.
Adjustments and exclusions to Tier 2 Capital	This is the value of adjustments applied to the Tier 2 Capital that are specific to the application of the requirements in HPS 112.
Adjustments to Additional Tier 1 Capital due to shortfall in Tier 2 Capital	This is the value of any deductions (refer to HPS 112) from Additional Tier 1 Capital due to a shortfall in Tier 2 Capital to absorb required deductions from this category of capital.
Adjustments to Common Equity Tier 1 Capital due to shortfall in Additional Tier 1 Capital	This is the value, as at the relevant date, of any deductions (refer to HPS 112) from Common Equity Tier 1 Capital due to a shortfall in Additional Tier 1 Capital to absorb required deductions from this category of capital.Where the value of Tier 2 Capital as defined in HPS 112 is insufficient to cover the value of deductions required to be made from this category of capital, the shortfall must first be deducted from Additional Tier 1 Capital and, if Additional Tier 1 Capital is insufficient to cover the value of deductions required, the remaining value must be deducted from Common Equity Tier 1 Capital.
Adjustments to net assets of the fund due to shortfall in Tier 2 Capital	This is the value, as at the relevant date, of any deductions (refer to HPS 112) from the net assets of the fund due to a shortfall in Tier 2 Capital to absorb the required deductions from this category of capital.
Amounts payable on reinsurance contracts held	This is the value of amounts payable on reinsurance contracts held. This includes reinsurance premiums that are due to be paid, all unpaid instalment reinsurance premiums, reinsurer’s portion of recoveries, and commissions due to reinsurers. This also includes deposits withheld from reinsurers.For reinsurance contracts held, if there is a legal right of set-off within the underlying reinsurance contracts, report the amount after set-off against other amounts receivable from the reinsurer under that reinsurance contract. If the amount is a net receivable position from the reinsurer, report the amount under amounts receivable on reinsurance contracts held. If there is not a legal right of set-off, report the amount payable without set-off. Also refer to the definition of amounts receivable on reinsurance contracts held.Amounts payable on reinsurance contracts held is netted against reinsurance contract assets or added to reinsurance contract liabilities under AASB 17.This must exclude any amount already allowed in insurance liabilities determined under HPS 340 to avoid double counting.
Amounts receivable on reinsurance contracts held	This is the value of amounts receivable on reinsurance contracts held. This includes reinsurance recoverables on paid claims.For reinsurance contracts held, if there is a legal right of set-off within the underlying reinsurance contracts, report the amount after set-off against other amounts payable to the reinsurer under that reinsurance contract. If the amount is a net payable position to the reinsurer, report the amount under amounts payable on reinsurance contracts held. If there is not a legal right of set-off, report the receivable amount without set-off. Also refer to the definition of amounts payable on reinsurance contracts held.Amounts receivable on reinsurance contracts held is netted against reinsurance contract liabilities or added to reinsurance contract assets under AASB 17.This must exclude any amount already allowed insurance liabilities determined under Prudential Standard HPS 340 Insurance Liability Valuation (HPS 340) to avoid double counting.
Assets under a fixed or floating charge	This is the value of assets of the private health insurer that are under a fixed or floating charge, mortgage or other security to the extent of the indebtedness secured on those assets. This deduction may be reduced by the value of any liability for the charge that is recognised on the private health insurer’s balance sheet.Where the security exclusively supports a private health insurer’s insurance liabilities (valued in accordance with HPS 340), the deduction only applies to the amount by which the fair value of the charged assets exceeds the private health insurer’s supported insurance liabilities.

Capital base	The capital base represents the value of capital eligible for the purpose of meeting the Prudential Capital Requirement at the health benefits fund or general fund level or for the private health insurer as set out in Prudential Standard HPS 110 Capital Adequacy.For each health benefits fund or general fund, capital base is calculated as the sum of:net assets of the fund;net surplus / (deficit) relating to insurance liabilities;regulatory adjustments to net assets for accounts receivables;other adjustments to net assets as approved by APRA;Tier 2 Capital; andtransitional adjustments to net assets of the fund.Less:regulatory adjustments to net assets for accounts payables; andregulatory adjustments to net assets.For the private health insurer, capital base is calculated as the sum of:Tier 1 Capital; andTier 2 Capital.
Capital base (net of Tier 2 Capital) ratio	Capital base (net of Tier 2 Capital) ratio for the health benefits fund or general fund is calculated as:capital base less Tier 2 Capital;divided by:prescribed capital amount.
Cash flow hedge reserves relating to hedging of items not recorded at fair value	This is the value of cash flow hedge reserves that relate to the hedging items that are not recorded at fair value on the balance sheet (including projected cash flows).
Claims payable	This is the value of claims payable, which reflects claims due but not paid.For inwards reinsurance business, where there is a legal right of set-off within the underlying reinsurance contract, report under this item if the amount after set-off results in a net payable position to the cedant. If there is not a legal right of set-off, report the amount payable without set-off. Also refer to the definition of premiums receivable.Claims payable is netted against insurance contract assets or added to insurance contract liabilities under AASB 17.This must exclude any amount already allowed in insurance liabilities determined under HPS 340 to avoid double counting.
Common Equity Tier 1 Capital	This is the highest quality component of capital held by the private health insurer as determined under the eligibility characteristics set out in HPS 112, net of all regulatory adjustments.Common Equity Tier 1 Capital is calculated as the sum of:paid-up ordinary shares;mutual equity interests;retained earnings;undistributed current year earnings;accumulated other comprehensive income and other disclosed reserves;net surplus / (deficit) relating to insurance liabilities;regulatory adjustments to Common Equity Tier 1 Capital for accounts receivables; andadjustments and exclusions to Common Equity Tier 1 Capitalless:regulatory adjustments to Common Equity Tier 1 Capital for accounts payables; andregulatory adjustments to Common Equity Tier 1 Capital.

Deficit in defined benefit superannuation fund	This is the value of deficit (if any) in a defined benefit superannuation fund where the private health insurer is an employer-sponsor.

Eligible Tier 2 Capital instruments	This is the value of capital instruments issued by the private health insurer that meet the eligibility criteria for Tier 2 Capital in HPS 112.
Eligible Tier 2 Capital instruments issued by the fund	This is the value of capital instruments issued by the health benefits fund or general fund that meet the eligibility criteria for Tier 2 Capital in HPS 112.
Excess mutual equity interests	This is the value of any mutual equity interests that are above the limit specified in HPS 112 (that is, the value of any mutual equity interests on issue that are not eligible for inclusion in Common Equity Tier 1 Capital).For the purposes of this item, only include proceeds of issues that have been received by the issuer. Any partly paid issue is reported only to the extent that it has been paid-up.
Excess of deferred tax assets over deferred tax liabilities	This is the value of deferred tax assets in excess of deferred tax liabilities within the health benefits fund or general fund or private health insurer as per the requirements of HPS 112.The netting of deferred tax assets and deferred tax liabilities must include any tax effects that would result from the accounts receivables and accounts payables adjustments and the technical provisions in surplus / (deficit) of HPS 340 liabilities.

Fair value adjustments	A private health insurer must deduct the difference between fair value and the reported value of each asset as per the requirements of HPS 112.
Fair value gains and losses from changes in own creditworthiness	This is the net unrealised gains (or losses) from changes in the fair values of the liabilities of the health benefits fund or general fund or private health insurer that arise due to changes in creditworthiness of the private health insurer.
Foreign currency translation reserve	This is the value of the reserve relating to exchange rate differences arising on translation of assets and liabilities to the presentation currency in accordance with Australian Accounting Standards.

General fund	General fund has the same meaning as in HPS 001.
General reserve	General reserves are created from the appropriation of profits by the private health insurer after the payment of all dividends and tax.
Goodwill	This is the value of goodwill, as per HPS 112, net of adjustments to profit or loss reflecting changes arising from any impairment. This item also includes the goodwill attributable to certain categories of subsidiaries, associates and joint ventures of the private health insurer as per HPS 112.

Health benefits fund	Health benefits fund has the same meaning as in the Act.
Holdings of own Additional Tier 1 Capital instruments	This is the total effective own holdings of Additional Tier 1 Capital instruments issued by the private health insurer unless exempted by APRA or eliminated under Australian Accounting Standards.
Holdings of own Common Equity Tier 1 Capital instruments	This is the total effective holdings of own Tier 1 Capital instruments issued by the private health insurer, unless exempted by APRA or eliminated under Australian Accounting Standards. This item must also include:capital instruments the private health insurer could be contractually obliged to purchase; andunused portion of the limits agreed with APRA as per HPS 112.
Holdings of own Tier 1 capital instruments	This is the total effective holdings of own Tier 1 Capital instruments that were issued by the private health insurer. This includes Common Equity Tier 1 capital and Additional Tier 1 capital instruments held by the health benefits fund or general fund unless exempted by APRA or eliminated under Australian Accounting Standards.
Holdings of own Tier 2 Capital instruments	For each health benefits fund or general fund, this is the effective holdings of own eligible Tier 2 Capital instruments issued by the fund unless exempted by APRA of eliminated under Australian Accounting Standards.For the private health insurer, this is the total effective holdings of own eligible Tier 2 Capital instruments that were issued by the private health insurer unless exempted by APRA or eliminated under Australian Accounting Standards.

Insurance liabilities surplus / (deficit)	This is the total technical provisions in surplus (positive value) or deficit (negative value) to the outstanding claims liabilities, premiums liabilities, risk equalisation liability, other insurance liabilities and deferred claims liabilities determined under HPS 340. Technical provisions refer to the insurance and reinsurance contract liabilities under Australian Accounting Standards.

Mutual equity interests	This is the value of all mutual equity interests on issue up to a maximum limit of 25 percent of the private health insurer’s total Common Equity Tier 1 Capital before applying regulatory adjustments.For the purposes of this item, only include proceeds of issues that have been received by the issuer. Any partly paid issue is reported only to the extent that it has been paid-up.

Net assets (less equity components classified as Additional Tier 1 Capital)	This is net assets of the private health insurer as reported in the balance sheet after deducting for any equity components classified as Additional Tier 1 Capital.
Net assets of the fund	This is the net assets of the fund as reported in the balance sheet.
Net assets plus Additional Tier 1 Capital ratio	For the private health insurer, net assets plus Additional Tier 1 Capital ratio is calculated as the sum of:Additional Tier 1 Capital; andnet assets (less equity components classified as Additional Tier 1 Capital) multiplied by 1.2divided by:prescribed capital amount.
Net assets ratio	For each health benefits fund or general fund, net assets ratio is calculated as:net assets of the fund multiplied by 1.2divided by:prescribed capital amount.For the private health insurer, net assets ratio is calculated as:net assets (less equity components classified as Additional Tier 1 Capital) multiplied by 1.2divided by:prescribed capital amount.
Net surplus / (deficit) relating to insurance liabilities	This is the total technical provisions in surplus or deficit of those required by HPS 340. Technical provisions refer to the accounting insurance and reinsurance liabilities and assets.For each health benefits fund or general fund, it is a derived item, calculated as the sum of:insurance liabilities surplus / (deficit); andcost of reinsurance for future business not yet written;less:tax effect of insurance liabilities surplus / (deficit).For the private health insurer, it is to be reported as the net surplus / (deficit) relating to insurance liabilities across all health benefits funds and general funds of the private health insurer.
Non-reinsurance recoveries receivable	This is the value of non-reinsurance recoveries on paid claims.Non-reinsurance recoveries receivable is netted against insurance contract liabilities or added to insurance contract assets under AASB 17.This must exclude any amount already allowed in insurance liabilities determined under HPS 340 to avoid double counting

Other accounts payable on insurance contracts issued	Other accounts payable on insurance contracts issued amount reflects other accounts due but not paid, which is netted against insurance and reinsurance contract assets or added to insurance and reinsurance contract liabilities under AASB 17. This may include (but is not limited to) levies, taxes, rebates, fees and commissions.
Other accounts receivable on insurance contracts issued	Other accounts receivable on insurance contracts issued reflects any other amounts due but not received relating to insurance contracts. This may include (but is not limited to) levies, taxes, rebates, fees and commissions.Other accounts receivable on insurance contracts issued is netted against insurance contract liabilities or added to insurance contract assets under AASB 17.This must exclude any amount already allowed in insurance liabilities determined under HPS 340 to avoid double counting.
Other adjustments to net assets as approved by APRA	This is the value of adjustments applied to the net assets of the fund that are specific to the application of the requirements in HPS 112.
Other Common Equity Tier 1 Capital adjustments	This is the value of deductions from Common Equity Tier 1 Capital that the private health insurer must make as required under any prudential standards other than HPS 112.
Other gains and losses in accumulated comprehensive income and other disclosed reserves	This is the value of any other gains and losses in accumulated comprehensive income and other disclosed reserves that may be specified in writing by APRA as per HPS 112.
Other intangible assets	This is the value of intangible assets, other than goodwill, as per HPS 112, net of adjustments to profit or loss reflecting changes arising from any impairment and amortisation. The values reported must be net of any associated deferred tax liability that would be extinguished if the assets involved become impaired or derecognised under Australian Accounting Standards.This item also includes the intangible assets attributable to certain categories of subsidiaries, associates and joint ventures of the private health insurer as per HPS 112.
Other net asset adjustments	This is the value of deductions from the net assets that the health benefits fund or general fund must make as required under any prudential standards other than HPS 112.

Paid-up ordinary shares	This represents paid-up ordinary shares issued by the private health insurer that meet the criteria for classification as ordinary shares for regulatory purposes in accordance with HPS 112.
Premiums receivable	Premiums receivable amount reflects premiums due to be received, unpaid premiums available for collection, and premiums not yet available for collection.Premiums should be gross of reinsurance and commissions, before profit share rebates, and inclusive of stamp duty, policy fees, loadings and discounts.Premiums receivable is netted against insurance contract liabilities or added to insurance contact assets under AASB 17.Premiums receivable must be reduced by the amount that is likely to become uncollectable in the future.
Prescribed capital amount	Prescribed capital amount is defined in HPS 110.
Prescribed capital amount coverage	Prescribed capital amount coverage is calculated as:capital base;divided by:prescribed capital amount.
Prescribed capital amount coverage (net assets)	For each health benefits fund or general fund, prescribed capital amount coverage (net assets) is calculated as the sum of:net assets of the fund multiplied by 1.2; andTier 2 Capitaldivided by:prescribed capital amount.For the private health insurer, prescribed capital amount coverage (net assets) is calculated as the sum of:Additional Tier 1 Capital;Tier 2 Capital; andnet assets (less equity components classified as Additional Tier 1 Capital) multiplied by 1.2divided by:prescribed capital amount.

Regulatory adjustments to Common Equity Tier 1 Capital	This is the total of all regulatory adjustments applied to Common Equity Tier 1 Capital specified in HPS 112.Regulatory adjustments to Common Equity Tier 1 Capital is calculated as the sum of:holdings of own Common Equity Tier 1 Capital instruments;cash flow hedge reserves relating to hedging of items not recorded at fair value;excess of deferred tax assets over deferred tax liabilities;fair value gains and losses from changes in own creditworthiness;goodwill;other intangible assets;surplus in defined benefit superannuation fund;deficit in defined benefit superannuation fund;reinsurance assets not subjected to an executed and legally binding contract;regulatory capital requirement of investments in subsidiaries, JVs and associates;assets under a fixed or floating charge;regulatory adjustments to Common Equity Tier 1 Capital for receivables/payables;fair value adjustments;adjustments to Common Equity Tier 1 Capital due to shortfall in Additional Tier 1 Capital; andother Common Equity Tier 1 Capital adjustments.
Regulatory adjustments to Common Equity Tier 1 Capital for accounts payables	This item represents the aggregate regulatory adjustments for accounts payables made across all health benefits or general funds.
Regulatory adjustments to Common Equity Tier 1 Capital for accounts receivables	This item represents the aggregate regulatory adjustments for accounts receivables made across all health benefits or general funds.
Regulatory adjustments to net assets	This is the total of all regulatory adjustments applied to net assets specified in HPS 112.It is calculated as the sum of:holdings of own Common Equity Tier 1 Capital instruments;cash flow hedge reserves relating to hedging of items not recorded at fair value;excess of deferred tax assets over deferred tax liabilities;fair value gains and losses from changes in own creditworthiness;goodwill;other intangible assets;surplus in defined benefit superannuation fund;deficit in defined benefit superannuation fund;reinsurance assets not subjected to an executed and legally binding contract;regulatory capital requirement of investments in subsidiaries, JVs and associates;assets under a fixed or floating charge;fair value adjustments;adjustments to net assets of the fund due to shortfall in Tier 2 Capital; andother net asset adjustments.
Regulatory adjustments to net assets for accounts payables	This is the value of any adjustments to be deducted from net assets relating to accounts payables, net of tax effects. It is calculated as the sum of:claims payable;amounts payable on reinsurance contracts held; andother accounts payable on insurance contracts issuedless:reversal of tax impact of payables.
Regulatory adjustments to net assets for accounts receivables

Surplus in defined benefit superannuation fund

This is the value of surplus (if any) in defined benefit superannuation funds where the private health insurer is an employer-sponsor, net of any associated deferred tax liabilities that would be extinguished if the assets involved become impaired or derecognised under Australian Accounting Standards.Representations may be made to APRA to include the surplus in the capital base provided the criteria are met as per HPS 112.

Tax effect of insurance liabilities surplus / (deficit)	This is the tax effect of the technical provisions in surplus (positive value) or deficit (negative value) of those required under HPS 340.Full tax benefits and liabilities must be assumed for the purposes of reporting this item but they must be included when assessing the adjustment for excess of deferred tax assets over deferred tax liabilities.
Tier 1 Capital	Tier 1 Capital is calculated as the sum of:Common Equity Tier 1 Capital; andAdditional Tier 1 Capital.
Tier 1 Capital ratio	Tier 1 Capital ratio is calculated as:Tier 1 Capital;divided by:prescribed capital amount.
Tier 2 Capital	This is the total value of capital instruments that meet the eligibility criteria for Tier 2 Capital but not the criteria for the higher quality capital, net of all regulatory adjustments.It is calculated as the sum of:eligible Tier 2 Capital instruments issued by the fund;adjustments and exclusions to Tier 2 Capital; andtransitional Tier 2 Capitalless:holdings of own Tier 2 Capital instruments.
Transitional Additional Tier 1 Capital	This is the value of capital instruments that have been temporarily recognised and approved as Additional Tier 1 Capital for transition purposes.
Transitional adjustments to net assets of the fund	This is the value of the transitional adjustment to net assets of the fund applicable to insurers electing to participate in the transitional arrangements referenced in HPS 112.This adjustment is distinct from transitional Common Equity Tier 1 Capital as it applies to individual health benefits or general funds of the private health insurer only.
Transitional Common Equity Tier 1 Capital	This is the value of capital instruments that have been temporarily recognised and approved as Common Equity Tier 1 Capital for transition purposes.This includes the transitional adjustment to Common Equity Tier 1 Capital for the private health insurer applicable to insurers electing to participate in the transitional arrangements referenced in HPS 112.
Transitional Tier 2 Capital	This is the value of capital instruments that have been temporarily recognised and approved as Tier 2 Capital for transition purposes.

Undistributed current year earnings	The undistributed current year earnings reported should account for (where applicable) negative goodwill, expected tax expenses, and dividends when declared. The declared dividends reported may be reduced by the expected proceeds, as agreed in writing by APRA, of a Dividend Reinvestment Plan to the extent that dividends are used to purchase new ordinary shares issued by the private health insurer.
Unrealised gains or losses recognised on balance sheet	This is the total value of unrealised gains or losses that have been recognised on the balance sheet.

Undistributed current year earnings

The undistributed current year earnings reported should account for (where applicable) negative goodwill, expected tax expenses, and dividends when declared. The declared dividends reported may be reduced by the expected proceeds, as agreed in writing by APRA, of a Dividend Reinvestment Plan to the extent that dividends are used to purchase new ordinary shares issued by the private health insurer.

Unrealised gains or losses recognised on balance sheet

This is the total value of unrealised gains or losses that have been recognised on the balance sheet.

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