Additional Tier 1 Capital

1. Additional Tier 1 Capital comprises high quality components of capital that satisfy the following essential characteristics:
   1. provide a permanent and unrestricted commitment of funds;
   2. are freely available to absorb losses;
   3. rank behind the claims of policy holders and other more senior creditors in the event of winding up of the issuer; and
   4. provide for fully discretionary capital distributions.
2. Additional Tier 1 Capital consists of:
   1. instruments issued by a private health insurer that are not included in Common Equity Tier 1 Capital and which meet:
      1. the criteria for inclusion in Additional Tier 1 Capital set out in Attachment C to this Prudential Standard; and
      2. the requirements for loss absorbency at the point of non-viability set out in Attachment E to this Prudential Standard; and
   2. regulatory adjustments applied in the calculation of Additional Tier 1 Capital as required under Attachment B to this Prudential Standard.