Insurance (prudential standard) determination No. 6 of 2010 - Prudential Standard GPS 113 - Capital Adequacy: Internal model-based method
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Unless otherwise defined in this Prudential Standard, expressions in bold are defined in Prudential Standard GPS 001 Definitions (GPS 001).
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In the remainder of this Prudential Standard, the term “insurer” is taken to include, in the case of a Level 2 insurance group, both the parent entity that makes the application and the group to which the IMB Method will be applied.[6]
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For the purposes of this Prudential Standard:
(a) Economic capital model (ECM) means the internal capital measurement model developed for an insurer’s own purposes;
(b) Regulatory capital model (RCM) means the particular implementation and application of the ECM that is to be used for the purpose of determining the MCR using the IMB Method;
(c) A business segment is any part of the insurance business for which:
(i) if the segment is covered by the ECM, both the method of modelling underwriting and reserving risk and the outcomes from the modelling are separately identifiable for that segment; and
(ii) if the segment is not covered by the ECM, the means of determining its overall contribution to the MCR, and the amount of that contribution, are separately identifiable.