This Prudential Standard requires a life company to maintain adequate capital against the operational risks associated with its activities. The Operational Risk Charge is the minimum amount of capital required to be held against operational risks. The Operational Risk Charge relates to the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.

This Reporting Standard sets out the requirements for the provision of information to APRA in relation to calculating a life insurance company’s Operational Risk Charge. It includes associated specific instructions and must be read in conjunction with Reporting Standard LRS 001 Reporting Requirements (LRS 001), including the general instruction guide and Prudential Standard LPS 118 Capital Adequacy: Operational Risk Charge (LPS 118).