Attachment A — Transitional ArrangementsAttachment A — Transitional Arrangements

Attachment A – Transitional Arrangements

1. The transitional arrangements provide an adjustment to reduce the prescribed capital amount that is phased out over a two-year period.

2. For the transitional requirements to be effective a private health insurer must notify APRA by 30 June 2023 and provide the data described in paragraphs 3(a) and 3(b) by 30 September 2023 using a template that will be provided by APRA.

3. The Transitional Adjustment is:

Transitional Adjustment equals the negative minimum of open bracket open bracket b minus a close bracket times X, and C minus A close bracket

Where:

1. A is the capital adequacy requirement calculated under paragraph 9 of the version of Prudential Standard HPS 110 as determined on 26 June 2015 less balance sheet liabilities, as at 30 June 2023

2. B is the prescribed capital amount calculated under this standard as at 30 June 2023

3. C is the prescribed capital amount calculated at the most recent reporting date under this standard (prior to the transitional adjustment being applied)

4. X is a percentage which reduces over time, as set out in Table 1

5. The Transitional Adjustment only applies where it reduces the prescribed capital amount calculated in accordance with this Prudential Standard.

Table 1: Schedule for X in the Transitional Adjustment