Federal Register of Legislation
Insurance (prudential standard) determination No. 8 of 2019
Prudential Standard GPS 120 Assets in Australia
Insurance Act 1973
I, Pat Brennan, delegate of APRA:
(a) under subsection 32(4) of the Insurance Act 1973 (the Act) REVOKE Insurance (prudential standard) determination No. 9 of 2012, including Prudential Standard GPS 120 Assets in Australia made under that Determination; and
(b) under subsection 32(1) of the Act DETERMINE Prudential Standard GPS 120 Assets in Australia, in the form set out in the Schedule, which applies to all general insurers.
This instrument takes effect on 1 July 2019.
Dated: 17 April 2019
[Signed]
Pat Brennan
Executive General Manager Policy and Advice Division
Interpretation
In this Determination:
APRA means the Australian Prudential Regulation Authority.
general insurer has the meaning given in section 11 of the Act.
Schedule
Prudential Standard GPS 120 Assets in Australia comprises the 14 pages commencing on the following page.
Prudential Standard GPS 120
Assets in Australia
Objective and key requirements of this Prudential Standard This Prudential Standard specifies certain assets that are excluded from being treated as 'assets in Australia' by a general insurer for the purposes of section 28 of the Insurance Act 1973. Section 28 requires all general insurers to maintain assets in Australia (excluding goodwill and other amounts excluded by this Prudential Standard) of a value that equals or exceeds the total amount of the general insurer's liabilities in Australia (other than its pre-authorisation liabilities). This requirement is designed to ensure that the total value of assets held within the jurisdictional reach of APRA and the Australian courts is sufficient to meet a general insurer's liabilities in Australia for the purposes of subsection 116(3) of the Insurance Act 1973. Prudential Standard GPS 110 Capital Adequacy also requires that a Category C insurer operating in Australia as a branch maintains assets in Australia that exceed its liabilities in Australia by an amount that is greater than its Prudential Capital Requirement.
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