Regulatory AlertsHPS 112 Capital Adequacy: Measurement of Capital
The Australian Prudential Regulation Authority issued Prudential Standard HPS 112 to establish minimum capital size and composition requirements for all private health insurers and their individual funds. The standard mandates that insurers maintain specific ratios of Common Equity Tier 1, Tier 1, and Tier 2 capital against prescribed amounts and prudential capital requirements. It defines eligible capital instruments, outlines strict eligibility criteria for inclusion in the capital base, and requires regulatory adjustments to ensure loss absorbency and financial resilience.
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