CTHIn ForceLegislation
Health Insurance (prudential standard) determination No. 2 of 2024
Responsibility for capital managementResponsibility for capital management
Start here
Get a plain-English read of Responsibility for capital management
Turn the raw legal text into a practical explanation grounded in Health Insurance (prudential standard) determination No. 2 of 2024.
Responsibility for capital management
- Capital is the cornerstone of a private health insurer’s financial strength. It supports a private health insurer’s operations by providing a buffer to absorb unanticipated losses from its activities and, in the event of such losses, enables the private health insurer to continue to meet its insurance obligations.
- As a consequence of the key role played by capital in the financial strength of a private health insurer, the Board of a private health insurer must ensure that:
- the private health insurer as a whole; and
- each fund
has capital that is adequate for the scale, nature and complexity of its business and its risk profile, such that it is able to meet its obligations under a wide range of circumstances.