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Turn the raw legal text into a practical explanation grounded in Financial Sector (Collection of Data) (reporting standard) determination No. 117 of 2023.

Reporting Standard LRS 115.0

Insurance Risk Charge

General instructions

Reporting tables

Tables described in this reporting form list each of the data fields required to be reported. The data fields are listed sequentially in the column order that they will appear in the reported data set. Constraints on the data that can be reported for each field have also been provided.

Any specific combination of values in the table must not appear on more than one row in that table when reported.

Definitions

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

A

Additional deficiency from prescribed servicing expense stress(Insurance Risk Charge component)	This is the additional deficiency arising (if any) in management fees relative to servicing expenses from the application of the servicing expense stress over and above the expected deficiency as determined in expected deficiency (before prescribed multiplier).
Adjusted policy liabilities (gross of reinsurance)(Insurance Risk Charge component)	This is the total adjusted policy liabilities determined in accordance with Prudential Standard LPS 112 Capital Adequacy: Measurement of Capital (LPS 112), gross of reinsurance.
Adjusted policy liabilities (net of reinsurance)(Insurance Risk Charge component)	This is the total adjusted policy liabilities determined in accordance with LPS 112, net of reinsurance.

E

Expected deficiency (before prescribed multiplier)(Insurance Risk Charge component)	This is the expected deficiency in management fees and the servicing expenses expected to arise over the period of 12 months subsequent to the reporting date.
Expected deficiency (post prescribed multiplier)(Insurance Risk Charge component)	This is the expected deficiency in management fees received relative to the servicing expenses incurred over the next 12-month period, post the application of the prescribed multiplier.
Expected management fees(Insurance Risk Charge component)	This is the total amount of management fees expected to be received by the management fund from benefit funds.The reported expected management fees must allow for the effect of any assumed reduction in management fees assumed under asset and/or insurance stress and should cover the period of 12 months subsequent to the reporting date.

Insurance benefit	This is the type of insurance benefit that a life policy can include. Life companies must report data items by insurance benefit where required. Insurance benefit can either be:non-participating benefits;participating benefits; orfriendly society benefits.Non-participating benefits can either be:non-participating benefits without entitlement to discretionary additions; ornon-participating benefits with entitlement to discretionary additions.
Insurance Risk Charge component	This is a component which forms part of the Insurance Risk Charge calculation.
Insurance Risk Charge - tax benefits(Insurance Risk Charge component)	For a statutory fund or benefit fund of a life company, this is the total tax benefits arising from the increase in adjusted policy liabilities (net of reinsurance) to stressed policy liabilities (net of reinsurance) due to the application of insurance risk stresses.
Insurance Risk Charge - tax benefits (FS)(Insurance Risk Charge component)	For the management fund of a friendly society, this is the tax benefits arising from the inclusion of the servicing expense reserve in liabilities. Admissibility of tax benefits will be assessed in calculating the prescribed capital amount.