Financial Sector (Collection of Data) (reporting standard) determination No. 2 of 2010 - GRS 110.0 (2010) - Minimum Capital Requirement
A general insurer must, at all times, maA general insurer must, at all times, maintain a capital base in excess of its Minimum Capital Requirement as required by Prudential Standard GPS 110 Capital Adequacy.
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Turn the raw legal text into a practical explanation grounded in Financial Sector (Collection of Data) (reporting standard) determination No. 2 of 2010 - GRS 110.0 (2010) - Minimum Capital Requirement.
GRF 110.0 Minimum Capital Requirement reports the summary of the risk charges, Minimum Capital Requirement (MCR), the capital base, net assets in Australia, and compliance with the capital requirements as prescribed in the ‘capital standards’[2].
The individual risk charges and capital base summarised on this form are calculated in other forms. The form will automatically calculate the MCR of the reporting insurer based on the information reported for the individual risk charges. Additionally, information relating to the capital surplus / deficiency and capital ratios will be calculated automatically.
Audit requirements
This form is required to be subject to audit review and testing. The scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.
Information provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act). This means that:
the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);
the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2));
the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3));
the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.
Reporting entity
This form is to be completed by:
Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity); and
Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity).
A general insurer must, at all times, maintain a capital base in excess of its Minimum Capital Requirement as required by Prudential Standard GPS 110 Capital Adequacy.
Subdivision A general insurer must, at all times, ma - Financial Sector (Collection of Data) (reporting standard) determination No. 2 of 2010 - GRS 110.0 (2010) - Minimum Capital Requirement - A general insurer must, at all times, maintain a capital base in excess of its Minimum Capital Requirement as required by Prudential Standard GPS 110 Capital Adequacy. | Zoe
Unit of measurement
The form reports in Australian currency rounded in thousands of dollars (no decimal place). Ratios are expressed to 2 decimal places.
Reporting period
Insurers are required to report the information in the reporting form on a quarterly and annual basis.
The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.
The annual information is to be completed in respect of the financial year of the insurer.
The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.
Reporting lag
This form must be lodged for each of the reporting units within the number of business days after the end of the quarter as set out in Reporting Standard GRS 110.0 Minimum Capital Requirement.
Specific instructions
Category of Insurer
The different categories of insurers are defined in Prudential Standard GPS 001 Definitions. Insurers are required to select the category which best describes their status.
Note: Category C insurers (foreign insurers operating as a foreign branches in Australia) are required to complete the reporting form for branches.
GRF 130.0 Off Balance Sheet Business - Credit Substitutes Provided and Risk Charge
This represents the total capital charge applicable for the credit substitutes provided by the reporting insurer. This amount is calculated in item 14 ‘TOTAL Off balance sheet required risk charge’ in GRF 130.0 Off Balance Sheet Business – Credit Substitutes Provided and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
GRF 130.2 Off Balance Sheet Business - Charges Granted and Risk Charge
This represents the total capital charge applicable for the charges and encumbrances granted by the reporting insurer. This amount is calculated in the item titled ‘Adjusted Required Capital Charge’ in GRF 130.2 Off Balance Sheet Business – Charges Granted and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
Investment Risk Charge calculated from the following forms:
3.1. GRF 140.0 Investments - Direct Interest Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct interest holdings of the reporting insurer. This amount is calculated in item 7 ‘Total Investment Risk Charge’ in GRF 140.0 Investments - Direct Interest Rate Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.2. GRF 140.1 Investments - Direct Equity Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct equity holdings of the reporting insurer. This amount is calculated in item 9 ‘Total investment risk charge’ in GRF 140.1 Investments – Direct Equity Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.3. GRF 140.2 Investments - Direct Property Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct property holdings of the reporting insurer. This figure is calculated in column headed ‘Investment Risk Charge’ for line item titled ‘Total direct property investments’ in GRF 140.2 Investments - Direct Property Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.4. GRF 140.3 Investments - Loans and Advances and Risk Charge
This represents the total investment risk charge applicable for the loans and advances provided by the reporting insurer. This amount is calculated in item 4 ‘Total Investment Risk Charge’ in GRF 140.3 Investments – Loans and Advances and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.5. GRF 140.4 Investments - Indirectly Held by Insurer and Risk Charge
This represents the total investment risk charge applicable for assets that are indirectly held by the reporting insurer. This amount is calculated in item 12 ‘Total Investment Risk Charge’ in GRF 140.4 Investments – Indirectly Held by Insurer and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.6. GRF 300.0 Statement of Financial Position
This represents the total investment risk charge for all applicable assets listed in GRF 300.0 Statement of Financial Position. It excludes assets that are subject to a risk charge under the forms GRF 140.0 – 140.4, GRF 150.0, GRF 301.0 and assets that are deducted from the Capital Base.
This figure is automatically entered by the form and represents the sum of the individual investment risk charges calculated under the column heading ‘Investment Risk Charge’ and is reported for item 13 ‘Total assets’ in GRF 300.0 Statement of Financial Position.
GRF 301 Reinsurance Assets and Risk Charge
This figure represents the sum of the individual investment risk charges calculated under the column heading ‘Investment Risk Charge’ and is reported for item 4 ‘Net reinsurance assets’ in GRF 301.0 Reinsurance Assets and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
GRF 130.3 Off Balance Sheet Business - Credit Support Received (Investment Risk Charge Reduction)
The investment risk charge may be reduced where the insurer holds certain types of collateral against an asset, or where an asset has been guaranteed, as a means of reducing risk. Accordingly this item represents the ‘rebate’ of the investment risk charge on these assets that is calculated in either GRF 140.0 – GRF 140.4 or GRF 300.0 Statement of Financial Position. The rebate represents the difference between the investment risk capital charge applicable to the value of the eligible collateral or guarantee provided to the insurer and the investment risk capital charge applicable to the asset(s) being supported.
This item is calculated in GRF 130.3 Off Balance Sheet Business - Credit Support Received and represents the sum of ‘Adjustment to Investment Capital Charge’ in ‘Part A - Eligible Collateral Provided to Reporting Insurer’ and ‘Part B - Guarantees or Letter of Credit Provided to Reporting Insurer’.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
GRF 150.0 Asset Exposure Concentrations and Risk Charge
This represents the total investment concentration risk charge for exposures listed in GRF 150.0 Asset Exposure Concentrations and Risk Charge. This figure represents the item ‘Net concentration risk charge’ calculated in GRF 150.0 Asset Exposure Concentrations and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
GRF 160.0 Derivatives Activity and Risk Charge
This represents the total investment risk charge for derivative exposures listed in GRF 160.0 Derivatives Activity and Risk Charge. This figure represents the item titled ‘Total Derivatives Activity Risk Charge’ in GRF 160.0 Derivatives Activity and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
GRF 170.0 Concentration Risk Charge
This represents the total concentration risk charge applicable for the reporting insurer. This figure represents the amount disclosed in item ‘Total concentration risk charge’ in GRF 170.0 Concentration Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total insurance risk charge applicable in response to the risk that the true value of the net outstanding claims provision (OCP) of an insurer is greater than the value determined under Prudential Standard GPS 310 Audit and Actuarial Reporting and Valuation (GPS 310). This figure represents the ‘TOTAL’ line item under column 11 headed ‘OCP Insurance risk charge’ in the table titled ‘Part 3: Total’ of GRF 210.0 Outstanding Claims Provision - Insurance Risk Charge. This figure is automatically entered by the form into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total insurance risk charge applicable in response to the risk that the true value of the net premiums liabilities of an insurer is greater than the value determined under GPS 310. This figure represents the ‘TOTAL’ line item under the column 9 headed ‘Premium Liabilities Insurance Risk Charge’ in the table titled ‘Part 3A: GPS 310 Total’ of GRF 210.1 Premium Liabilities - Insurance Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
Total variation in capital charges as approved by APRA
Report the variation in capital charges in this item with a brief description (no more than 200 characters) and the amount of each variation which has been approved by APRA. A reduction in risk charges resulting from variations has to be reported as a negative number, while any increase needs to be reported as a positive number.
Where a loan to a related party is on non-commercial terms, a 100% capital factor must apply. The difference between the investment risk charge on the loan in GRF 140.3 Investments – Loans and Advances and Risk Charge and the risk charge with a 100% capital factor must be recorded at this item.
Where an insurer uses the internal model-based (IMB) method to determine the MCR in accordance with Prudential Standard GPS 113 Capital Adequacy: Internal Model-based Method, the difference between the MCR determined using the prescribed method and the IMB method should be reported here. During the first two years of using the IMB method, an insurer’s MCR calculated using the IMB method should be at least 90 per cent of the MCR determined using the prescribed method.
The total variation is calculated automatically by the form.
Minimum Capital Requirement
This item is calculated automatically by the form.
Where an insurer is a Category D or E insurer (i.e. captive insurer), the minimum capital requirement (MCR) is calculated as follows:
If the sum of the MCR is less than or equal to $2 million, the MCR equals $2 million.
If the sum of the MCR is greater than $2 million, the MCR equals the outcome of the calculation shown below.
Where an insurer is in a category other than a Category D or E insurer, the MCR is calculated as follows:
If the sum of the MCR is less than or equal to $5 million, the MCR equals $5 million.
If the sum of the MCR is greater than $5 million, the MCR equals the outcome of the calculation shown below.
The sum of items 1-4 and 6-11 (as reported in GRF 110.0 Minimum Capital Requirement) less item 5 is calculated as:
Add
Item 1: GRF 130.0 Off Balance Sheet Business - Credit Substitutes Provided and Risk Charge;
Item 2: GRF 130.2 Off Balance Sheet Business - Charges Granted and Risk Charge;
Item 3.1: GRF 140.0 Investments - Direct Interest Rate Holdings and Risk Charge
Item 3.2: GRF 140.1 Investments – Direct Equity Holdings and Risk Charge
Item 3.3: GRF 140.2 Investments - Direct Property Holdings and Risk Charge
Item 3.4: GRF 140.3 Investments – Loans and Advances and Risk Charge
Item 3.5: GRF 140.4 Investments – Indirectly Held by Insurer and Risk Charge
Item 3.6: GRF 300.0 Statement of Financial Position
Item 4: GRF 301.0 Reinsurance Assets and Risk Charge;
Item 6: GRF 150.0 Asset Exposure Concentrations and Risk Charge;
Item 7: GRF 160.0 Derivatives Activity and Risk Charge;
Item 11: Total variation in capital charges as approved by APRA.
Less
Item 5: GRF 130.3 Off Balance Sheet Business - Credit Support Received.
GRF 120.0 Determination of Capital Base
This represents the total eligible capital base of the insurer. This amount is calculated in item 3 titled ‘Total Capital Base’ in GRF 120.0 Determination of Capital Base. This figure is automatically entered by the form into this data field in GRF 110.0 Minimum Capital Requirement.
Capital Surplus (Deficiency)
This figure represents the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’ less the amount calculated for item 12 titled ‘Minimum Capital Requirement’.
This figure will be calculated automatically by the form.
Solvency Coverage
This figure represents the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’ divided by the value of item 12 titled ‘Minimum Capital Requirement’.
This figure will be calculated automatically by the form.
Capital Adequacy Ratio %
This is another way of looking at the solvency coverage and this figure represents the value of item 12 titled ‘Minimum Capital Requirement’ divided by the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’.
This figure will be calculated automatically by the form.
Adjusted Net Assets in Australia
‘Adjusted Net Assets in Australia’ refers to total assets less assets that are excluded as ‘Assets in Australia’ for the purpose of section 28 of the Act.
Item 17.4 Adjusted Net Assets in Australia is determined from the following:
17.1 Net Assets per form GRF 300.0 Statement of Financial Position
The amount reported in item 17.1 ‘Net Assets per form GRF 300.0: Statement of Financial Position’ on GRF 110.0 Minimum Capital Requirement must equal the value of item 25 titled ‘Net Assets’ under the ‘Amount – Inside Australia’ column on GRF 300.0 Statement of Financial Position.
This figure is automatically entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.2 Net insurance liabilities surplus / (deficit) inside Australia after tax effect
Include in this item the value of net outstanding claims liabilities and net AASB 1023 premiums liabilities that are recognised in GRF 300.0 Statement of Financial Position (GRF 300.0), that are in surplus or deficit of the technical provisions required by GPS 310 (i.e. the net outstanding claims provision reported in GRF 210.0 Outstanding Claims Provision – Insurance Risk Charge and the net premiums liabilities reported in GRF 210.1 Premium Liabilities – Insurance Risk Charge). This should be reported for amounts inside Australia only.
This must be calculated as per the following:
Item 16 of GRF 300.0. Outstanding claims liability (inside Australia amount)
Add
Item 17 of GRF 300.0. Unearned premium liability (inside Australia amount)
Less
Item 2.4.1 of GRF 300.0: Total net amountss recoverable on reinsurance contracts reported in item 2.4, that relate to claims recognised in the calculation of the Outstanding Claims Liability (i.e. other than reinsurance recoveries relating to claims that have been paid) (inside Australia amount)
Item 2.2.2.1 of GRF 300.0: Total net amounts recoverable (other than reinsurance recoveries receivable) that are reported in item 2.2.2 and that relate to claims recognised in the calculation of insurance liabilities that have not been paid - relating to Outstanding Claims Liability (OCL) (inside Australia amount
Item 9 of GRF 300.0. ‘Deferred acquisitions costs’ (inside Australia amount)
Item 8 of GRF 300.0. ‘Deferred reinsurance expense’ (inside Australia amount)
The net value of any other items which form the total of AASB 1023 net premiums liabilities (inside Australia amounts only). This would include:
Deferred reinsurance exchange commission;
Unearned commission revenue; and
Deferred levies and charges.
Add
Item 18 of GRF 300.0. Unexpired risk liability (inside Australia amount)
Less the sum of the outstanding claims provisions net of reinsurance and non reinsurance recoveries as reported in GRF 210.0 per the following:
GRF 210.0 Outstanding Claims Provision and Risk Charge – ‘Total OCP net of Reinsurance Recoveries and Non-reinsurance Recoveries) for all classes of business (inside Australia amount only)
Less the sum of the premiums liabilities net of expected reinsurance and non reinsurance recoveries as reported in GRF 210.1 per the following:
GRF 210.1 Premium Liabilities and Risk Charge - ‘Total PL Net of Non RI Recoveries and Expected Reinsurance Recoveries) for all classes of business. (inside Australia amounts only)
Add
Deferred reinsurance expense for future business not yet written
Include in this item the amount of the total deferred reinsurance expense reported at item 8 on GRF 300.0 that relates to business that has not yet been written and is the amount inside Australia. This amount represents the cover that an insurer has under a particular reinsurance contract which is available for future business written up to the end of the reinsurance contract. Amounts must not be included in this item where the underlying reinsurance arrangement does not comply with the threshold levels of reinsurance documentation set out in GPS 112 or the governing law requirements set out in GPS 230.
Less
Tax effect of net OCP and Premiums liabilities in surplus / deficit in excess of the liability valuation required under GPS 310
Any surplus / deficit of technical provisions must be adjusted for the tax effect (i.e. the corporate tax rate multiplied by the net amount).
17.3 Net assets in Australia (before deductions)
This amount is calculated automatically by the form as follows:
Item 17.1 of GRF 110.0: ‘Net Assets per form GRF 300.0 Statement of Financial Position’
Add:
Item 17.2 of GRF 100.0. ‘Net insurance liabilities surplus / (deficit) inside Australia after tax effect’
Less:
Assets specifically excluded from being considered inside Australia by Prudential Standard GPS 120 Assets in Australia.
17.4. Deductions for assets specifically excluded from being considered inside Australia:
17.4.1. Goodwill
This figure represents the value of the following items from GRF 300.0 Statement of Financial Position;
Item 12.1 ‘Goodwill’;
Less:
Item 12.2 ‘Accumulated impairment – Goodwill’;
Plus:
Item 10.5.1.1 ‘The component of the value of investments in listed equity instruments or units in listed trusts, which represents the value of purchased goodwill (and other intangible assets) in relation to the acquisition of controlled entities’; and
Item 10.5.2.1 ‘The component of the value of unlisted equity instruments or units in unlisted trusts, which represents the value of purchased goodwill (and other intangible assets) in relation to the acquisition of controlled entities’.
Plus:
The following item from GRF 140.1 Investments – Direct Equity Holdings and Risk Charge (where it includes amounts inside Australia);
Item 5.1 ‘Total unlisted equities, of which: represents the value of purchased goodwill (and other intangible assets) in relation to the acquisition of controlled entities’
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.2 Other intangible assets
This figure represents the value of the following items from GRF 300.0 Statement of Financial Position;
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.3 Deferred Tax Assets (net of any Deferred Tax Liabilities)
Disclose the value of deferred tax assets (net of any deferred tax liabilities) recognised in GRF 300.0 Statement of Financial Position.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
The amount entered in this field must be either positive or zero, if the result of the netting calculation is a negative, enter zero.
17.4.4 Surplus in defined benefit superannuation fund
Disclose the value of any surplus, net of deferred tax liabilities, in any defined benefit superannuation fund of which the insurer is an employer-sponsor, unless otherwise approved, in writing, by APRA. Any excluded surplus must reverse any associated deferred tax liability from Tier 1 capital.
The amount reported in GRF 110.0 Minimum Capital Requirement must not be greater than the amount reported in item 6.2 ‘Surplus in defined benefit superannuation fund’ of GRF 300.0 Statement of Financial Position.
Deferred Tax Liabilities should not be counted twice in 17.2.3 above and in this item.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.5 Deficit in defined benefit superannuation fund
Report the value of any deficit in a defined benefit superannuation fund of which the insurer is an employer-sponsor and that is not already reflected in Tier 1 capital.
The amount reported in GRF 110.0 Minimum Capital Requirement must only include deficits not already disclosed in item 22.2 ‘Deficit in defined benefit superannuation fund’ of GRF 300.0 Statement of Financial Position).
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.6 Holdings of own Tier 1 capital instruments
Disclose the value of holdings of own Tier 1 capital instruments of the insurer.
17.4.7 Net unrealised fair value gains (losses) from changes in the GI's own credit worthiness
This item only applies to general insurers that have designated their own debt instruments at fair value under the fair value option in AASB 139 Financial Instruments: Recognition and Measurement.
Deduct/(add back) any unrealised fair value gains/(losses) included in Tier 1 capital (before deductions) arising from changes in the reporting general insurer’s own credit worthiness (e.g. reduction in fair value of the general insurer’s outstanding debt due to change in credit rating).
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.8 Net unrealised gains (losses) on effective cash flow hedges
Disclose the value of cumulative fair value gains and losses on effective cash flow hedges reflected in retained earnings or reserves included in Tier 1 capital that do not offset gains or losses on revaluations in reserves included in Tier 1 capital. Deduct the gains on hedges and add back the losses.
17.4.9 Reinsurance assets related to reinsurance contracts that do not meet the reinsurance documentation test
The figure for reinsurance assets relates to reinsurance contracts that do not meet the reinsurance documentation test. This represents the value of item 1.8 plus item 2.4 plus item 3.6 recognised in GRF 301.0 Reinsurance Assets and Risk Charge, to the extent that it is deemed inside Australia. It is possible that the sum of the amounts reported in GRF 301.0 Reinsurance Assets and Risk Charge may not equate to the amount reported in this data field where the asset is deemed not inside Australia.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.10 Reinsurance assets receivable under reinsurance contracts that do not meet governing law requirements
Report all reinsurance assets receivable under each reinsurance contract entered into by the insurer incepting on or after 31 December 2008 that do not meet the requirements of paragraph 31 of Prudential Standard GPS 230 Reinsurance Management.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement. The amount should represent the value of item 1.9 plus item 2.5 plus item 3.7 recognised in GRF 301.0 Reinsurance Assets and Risk Charge, to the extent that it is deemed inside Australia. It is possible that the sum of the amounts reported in GRF 301.0 Reinsurance Assets and Risk Charge may not equate to the amount reported in this data field where the insurer has reinsurance assets that are deemed not inside Australia.
17.4.11 Expected dividends
Report the amount of dividends which are expected, but not declared or paid.
17.4.12 Other deductions
Disclose other deductions as required under GPS 112, such as:
Deficits after adjustments to the revaluation reserve
Disclose deficit after taking into account adjustments in the amount available in the respective revaluation reserves for the following items, to the extent not already accounted for in current year earnings or retained earnings:
Property not held at fair value;
Investments in subsidiaries not held at fair value; or
Investment in associates, including any excess of the share of losses in associates under equity accounting.
Identified impairment of certain assets
Disclose any identified impairment of an asset where the impairment has not already been taken into account in profit or loss or the impairment has been incorporated in fair value changes captured in an asset revaluation reserve included in Upper Tier 2 capital. This will include the value of any deficit in asset revaluation reserves included in Upper Tier 2 capital after taking into account all adjustments.
Holdings of own Upper Tier 2 capital instruments
Disclose the value of own holdings of Upper Tier 2 capital instruments.
Holdings of own Lower Tier 2 capital instruments
Disclose the value of own holdings of Lower Tier 2 capital instruments.
17.4.13 Variation in deduction by other adjustments approved by APRA
Include any additions or reduction in deductions that have been approved by APRA.
17.5 Assets under a fixed or floating charge, mortgage or other security to the extent of the indebtedness secured by such assets.
Such assets are excluded from being considered inside Australia up to the value of the charge/encumbrance. Where the charge over the assets is only given to support the value of insurance liabilities of the insurer, only the excess of the value of the assets charged/encumbered, over the value of the insurance liabilities, is excluded from being considered inside Australia.
This amount represents the total of all items reported in column headed ‘Excess of Charge Assets over Liabilities Supported’ in GRF 130.2 Off Balance Sheet Business - Charges Granted and Risk Charge.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.6 Adjusted Net Assets in Australia
This amount is calculated automatically by the form.