Capital adequacy maximum default loss amCapital adequacy maximum default loss amount

Capital adequacy maximum default loss amount

31. Capital adequacy maximum default loss amount of a health benefits fund means, on the relevant day, a prudent estimate of the maximum default loss of a health benefits fund, calculated in accordance with the following:
(a) the capital adequacy maximum default loss amount must be at least as large as the maximum default loss; and
(b) the capital adequacy maximum default loss amount must be less than the maximum default loss plus 10% × (value of assets in the fund – prudent liabilities amount).
32. Maximum default loss means the largest uncompensated loss of the health benefits fund arising from any loss, other than losses arising from assets held with an Australian Government counterparty or deposits held with an authorised deposit-taking institution, in relation to:
(a) any asset or any group of related assets of the health benefits fund; and
(b) any individual counterparty or group of related counterparties.

Where:

Uncompensated loss means the likely net loss after insurance, derivative, recoveries, and compensation.