Attachment G — Transitional arrangementsAttachment G — Transitional arrangements

Attachment G – Transitional arrangements

1. The transitional arrangements provide an adjustment to increase the capital base and is phased out over a two-year period. This adjustment will apply to the Common Equity Tier 1 Capital of the private health insurer, and the net assets of each fund.

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), 3(b) and 3(c) by 30 September 2023 using a template that will be provided by APRA.

3. The Transitional Adjustment is:

Transitional Adjustment equals the minimum of A-B times X, and A minus C

Where:

1. A is the accounting net assets reported to APRA as at 30 June 2023 in HRS 602

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

3. C is the capital base 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 increases the capital base calculated in accordance with this Prudential Standard.

Table 1: Schedule for X in the Transitional Adjustment