Risk Equalisation Risk ChargeRisk Equalisation Risk Charge

Risk Equalisation Risk Charge

1. The Risk Equalisation Risk Charge relates to the risk that the value of risk equalisation transfers are less favourable than the value determined in accordance with HPS 340.
2. The risk equalisation risk charge is calculated as:

4 percent times unbilled calculated deficit

Where:

Unbilled calculated deficit means total amount that would have been payable by the insurer should each SEU been entitled to the average amount as defined in rule 11(1)(e) of the Private Health Insurance (Risk Equalisation Policy) Rules 2015 or its replacement, and under the following conditions:

1. over the period up to the reporting date;
2. where the risk equalisation levy has accrued but has not yet been paid; and
3. where an invoice, notice or receipt from APRA has not yet been received by the private health insurer, for that period.