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

This Reporting Standard sets out the requirements for the provision of information to APRA relating to a private health insurer’s Operational Risk Charge. It includes associated specific instructions and must be read in conjunction with Prudential Standard HPS 118 Capital Adequacy: Operational Risk Charge (HPS 118).