This Prudential Standard requires a private health insurer to maintain adequate capital against the asset risks associated with its activities. The ultimate responsibility for the prudent management of capital of a private health insurer rests with its Board of directors. The Asset Risk Charge is the minimum amount of capital required to be held against asset risks. This Prudential Standard sets out the method for calculating the Asset Risk Charge. This charge is one of the components of the Standard Method for calculating the prescribed capital amount for private health insurers and their funds.

This Reporting Standard sets out requirements for the provision of information to APRA relating to a private health insurer’s asset risk charge. It includes associated specific instructions and must be read in conjunction with Prudential Standard HPS 114 Capital Adequacy: Asset Risk Charge (HPS 114).