Insurance (prudential standard) determination No. 2 of 2010 Amendments to Prudential Standard GPS 116 Capital Adequacy Concentration Risk Capital Charge (Cth)

Insurance (prudential standard) determination No. 2 of 2010

Amendments to Prudential Standard GPS 116 Capital Adequacy: Concentration Risk Capital Charge

Insurance Act 1973

I, John Roy Trowbridge, a Member of APRA and delegate of APRA, under subsection 32(4) of the Insurance Act 1973 (the Act), AMEND Prudential Standard GPS 116 Capital Adequacy: Concentration Risk Capital Charge made on 10 March 2010 by Insurance (prudential standard) No.1 of 2010 in the manner set out in the Schedule.

This determination takes effect on the date of registration on the Federal Register of Legislative Instruments (FRLI).

Dated   21 May 2010

[Signed]

John Trowbridge

Member

Interpretation

In this instrument:

APRA means the Australian Prudential Regulation Authority.

general insurer has the meaning given in section 11 of the Act.

Schedule          

Amendments to Prudential Standard GPS 116 Capital Adequacy: Concentration Risk Capital Charge

a.   Paragraph 24 – delete ‘GPS 110’ after the word ‘previous’ and substitute with ‘GPS 116’.

b.   Paragraph 24 – delete the existing table and in its place insert the following table:

Column 1: Provision of Prudential Standard GPS 116 Capital Adequacy: Concentration Risk Capital Charge made on 23 June 2008	Column 2: Provision of this Prudential Standard
Paragraph 22: allow or require adjustments to calculation of an insurer’s MER	Paragraph 22
Attachment A, Paragraph 21: determine a formula for calculating PML in relation to certain exposures.	Attachment A, Paragraph 29
Attachment A, Paragraph 22: approve methodology for downward adjustment of an LMI’s PML.	Attachment A, Paragraph 31
Attachment A, Paragraph 26: direct classification of loan as non-standard loan.	Attachment A, Paragraph 30
Attachment A, Paragraph 28: direct reclassification of loan as commercial loan.	Attachment A, Paragraph 30