Instruction Guide

Introduction

This form collects information on:

• a summary of the risk charges;
• the Minimum Capital Requirement (MCR);
• the capital base; and
• whether the Level 2 insurance group complies with the capital requirements as prescribed in Prudential Standard GPS 111 Capital Adequacy: Level 2 Insurance Groups (GPS 111).

Most of the individual risk charges and capital base summarised on this form (with the exception of Derivatives Activities. Concentration Risk and APRA-approved variations of capital charges) are calculated in other forms. The form will automatically calculate the MCR of the Level 2 insurance group based on the information reported for each risk charge. Additionally, information relating to the capital surplus/deficiency and capital ratios will be automatically calculated by the form.

Audit requirements

The annual return of GRF 110.0_G Minimum Capital Requirement (Level 2 Insurance Group) (GRF 110.0_G) required under paragraphs 3 and 5(c) of Reporting Standard GRS 110.0_G Minimum Capital Requirement (Level 2 Insurance Group) (GRS 110.0_G) must be subject to a limited assurance[1] review by the Group Auditor (see Prudential Standard GPS 311 Audit and Actuarial Reporting and Valuation: Level 2 Insurance Groups (GPS 311)).

The Group Auditor must prepare a review report on the basis of a limited assurance engagement in accordance with the requirements of GPS 311. Assurance in the review report will be provided in the form of negative assurance. To express negative assurance in the review report, the auditor will use limited procedures to obtain sufficient appropriate evidence. Enquiries of the Level 2 insurance group’s staff and analytical procedures will be the primary tools used to obtain evidence. These procedures will not provide all the evidence that would be required in an audit.

The scope and nature of audit testing required is outlined in the Standard on Assurance Engagement ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information issued by the Auditing and Assurance Standards Board.

Reporting entities

GRF 110.0_G is to be completed by the parent entity of a Level 2 insurance group as defined under Prudential Standard GPS 001 Definitions (GPS 001).

Consolidation at Level 2 should cover the Level 2 insurance group as defined under GPS 001.

Unit of measurement

This form is to be presented in Australian dollars (AUD), rounded to thousands of dollars, with no decimal place. Ratios are expressed to two decimal places.

Amounts denominated in foreign currency are to be converted to AUD in accordance with Australian accounting standards.