Tier 2 Capital

1. Tier 2 Capital includes other components of capital that, to varying degrees, fall short of the quality of Tier 1 Capital but nonetheless contribute to the overall strength of a private health insurer and its capacity to absorb losses.
2. Tier 2 Capital consists of:
   1. instruments issued by the private health insurer that meet:
      1. the criteria for inclusion in Tier 2 Capital set out in Attachment D to this Prudential Standard; and
      2. the requirements for loss absorption at the point of non-viability set out in Attachment E to this Prudential Standard; and
   2. regulatory adjustments applied in the calculation of Tier 2 Capital as required under Attachment B to this Prudential Standard.