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Financial Sector (Collection of Data) (reporting standard) determination No. 113 of 2023
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| APRA-approved adjustment amount | If APRA is of the view that the Standard Method for calculating the APRA-approved adjustment type does not produce an appropriate outcome in respect of a life company fund, or if a life company fund has used inappropriate judgement or estimation in calculating the APRA-approved adjustment type, APRA may adjust the APRA-approved adjustment type calculation for that life company fund. |
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| APRA-approved adjustment type | This means the type of APRA-approved adjustment. Possible types are:Prescribed Capital Amount;Asset Risk Charge;Insurance Risk Charge;Asset Concentration Risk Charge;Operational Risk Charge; andCombined Stress Scenario Adjustment. |
| Asset Concentration Risk Charge | The Asset Concentration Risk Charge is the minimum amount of capital required to be held against asset concentration risks. The Asset Concentration Risk Charge relates to the risk resulting from investment concentrations in individual assets or large exposures to individual counterparties or groups of related counterparties resulting in adverse movements in the fund’s capital base. |
| Asset Risk Charge | The Asset Risk Charge is the minimum amount of capital required to be held against asset risks. The Asset Risk Charge relates to the risk of adverse movements in the value of the fund’s capital base due to credit or market risks.This is calculated in accordance with Prudential Standard LPS 114 Capital Adequacy: Asset Risk Charge. |