Regulatory AlertsPrudential Standard LPS 112 Capital Adequacy: Measurement of Capital
The Australian Prudential Regulation Authority issued Prudential Standard LPS 112 to establish minimum requirements for the size and composition of the capital base for all life insurers, including friendly societies. The standard mandates that life companies ensure their capital instruments meet specific eligibility criteria for Common Equity Tier 1, Additional Tier 1, and Tier 2 categories while applying necessary regulatory adjustments. It further requires boards to maintain capital levels exceeding prescribed thresholds and prohibits the inclusion of instruments with features that hinder loss absorption or recapitalization.
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