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

This Reporting Standard sets out requirements for the provision of information to APRA relating to a private health insurer’s insurance risk charge. It includes associated specific instructions and must be read in conjunction with Prudential Standard HPS 115 Capital Adequacy: Insurance Risk Charge (HPS 115) and Prudential Standard HPS 340 Insurance Liability Valuation (HPS 340).