Regulatory AlertsGPS 117 Capital Adequacy: Asset Concentration Risk Charge
The Australian Prudential Regulation Authority issued Prudential Standard GPS 117 to require general insurers and Level 2 insurance groups to maintain adequate capital against asset concentration risks. The standard establishes the Asset Concentration Risk Charge as a minimum capital component calculated using the Standard Method, with specific limits for reinsurance and non-reinsurance exposures. It also defines methodologies for treating collateral and guarantees as risk mitigants to adjust these capital requirements.
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