Life Insurance (prudential standard) determination No. 6 of 2012
Specialist reinsurersSpecialist reinsurers
Start here
Get a plain-English read of Specialist reinsurers
Turn the raw legal text into a practical explanation grounded in Life Insurance (prudential standard) determination No. 6 of 2012.
Specialist reinsurers
-
In the case of a specialist reinsurer, the following asset concentration limits apply in respect of retrocessions by that specialist reinsurer to an overseas parent, associated, or subsidiary company which, with APRA’s agreement, has been identified as an appropriate retrocessionaire for the purposes of this paragraph:
(a) where the retrocessionaire has a current counterparty grade of 1, 2 or 3 – 50 per cent of VAF; (b) where the retrocessionaire does not have a current counterparty grade of 1, 2 or 3, but had such a grade at the time the retrocession arrangement was entered into; (i) within the first three months after the downgrade below Grade 3 – 50 per cent of VAF; (ii) within the next nine months – 33 per cent of VAF; (iii) within the second 12 months after the downgrade – 17 per cent of VAF; and (iv) thereafter, the retrocession arrangements do not qualify for the concessional treatment afforded to specialist reinsurers; (c) in all other circumstances, the retrocession arrangements do not qualify for the concessional treatment afforded to specialist reinsurers.
Adjustments and exclusions
30. APRA may, by notice in writing to a life company, adjust or exclude a specific requirement in this Prudential Standard in relation to that life company.
Transition
31. On application by a life company, APRA may grant transitional relief from the obligation for the life company to comply with any requirement in this Prudential Standard. Any relief granted by APRA under this paragraph will have effect until no later than 31 December 2014.