Instruction Guide

Introduction

This instruction guide is designed to assist in the completion of GRF 140.0 Investments – Direct Interest Rate Holdings and Risk Charge.

Information on this form will be used by APRA to obtain an investment profile of the reporting insurer and to calculate in part the Investment Risk Capital Charge. Specific information in these forms will also be used by the Australian Bureau of Statistics (ABS) for statistical purposes.

For the purposes of completing the respective investment forms, only include investments that are included in the aggregate balance disclosed for the asset item 3 titled ‘Investments (related to GRF 140 series of forms)’ on GRF 300.0 Statement of Financial Position. Do not include in these investment forms asset items reported in any of the other asset categories in GRF 300.0 Statement of Financial Position (e.g. ‘Other investments’). Otherwise the asset items will be subject to two investment risk charges, one in GRF 300.0 Statement of Financial Position and another in the respective investment forms.

Investment risk charge

The investment risk charge applicable for an insurer’s (and reinsurer’s) on-balance sheet Investment/Asset exposures is calculated in accordance with Prudential Standard GPS 114 Capital Adequacy: Investment Risk Capital Charge (GPS 114). The form categorises assets into investment capital factor groupings to calculate the applicable investment risk capital charge for each asset category. The aggregate investment risk charge calculated is included in the calculation of the insurer’s minimum capital requirement.

The fair value of each applicable asset/asset category is required to be disclosed into the appropriate cell for each column titled ‘Fair Value’.

Values in column titled ‘Investment Risk Charge’ are calculated based on the fair value of assets disclosed.