ApplicationApplication

Application

2. This Prudential Standard applies[1] to each:

(a) general insurer (insurer);

(b) authorised NOHC.; and

(c) subsidiary of an insurer or authorised NOHC

that is a parent entity of a Level 2 insurance group.

3. Insurers and authorised NOHCs must comply with this Prudential Standard from 1 December 2011 (effective date).

4. While Prudential Standard GPS 110 Capital Adequacy (GPS 110) sets out the framework for capital adequacy at Level 1 (i.e. on an individual insurer basis), this Prudential Standard sets out the framework for capital adequacy at Level 2 (i.e. on a consolidated insurance group basis). Unless otherwise specified in this Prudential Standard, the following capital standards apply to a Level 2 insurance group as if references to “insurer” in those standards were references to “Level 2 insurance group”:

(a) Prudential Standard GPS 112 Capital Adequacy: Measurement of Capital (GPS 112);

(b) Prudential Standard GPS 113 Capital Adequacy: Internal Model-based Method (GPS 113);

(c) Prudential Standard GPS 114 Capital Adequacy: Investment Risk Capital Charge (GPS 114);

(d) Prudential Standard GPS 115 Capital Adequacy: Insurance Risk Capital Charge (GPS 115); and

(e) Prudential Standard GPS 116 Capital Adequacy: Concentration Risk Capital Charge (GPS 116).

5. In general, Level 2 insurance groups are subject to the same capital adequacy requirements as Level 1 insurers. Where Level 2 insurance groups are subject to additional or alternative prudential requirements, these requirements are specified in this Prudential Standard.

6. Where a requirement is expressed to be imposed on a Level 2 insurance group in this Prudential Standard, the parent entity of the group must ensure that the group meets the requirement.