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Notes to the consolidated fnancial statements (continued)

for the year ended 30 June 2011

6. General Insurance – Specifc disclosures (continued)

6.8 General Insurance – Minimum capital requirement (MCR)

All general insurance entities that conduct insurance businesses in Australia are authorised by APRA and are subject to a minimum capital requirement (MCR). The MCR is the minimum level of capital that the regulator deems must be held to meet policyowner obligations. Licensed general insurance entities within the Suncorp Group use the standardised framework for calculating the MCR in accordance with the relevant prudential standards. In compliance with these standards, general insurers hold regulatory capital in excess of their MCR.

The regulatory capital position of the General Insurance business area at the end of the fnancial year was:

GENERAL INSURANCE

2011 2010 $m $m

Tier 1 capital

Share capital 2,509 2,894 Reserves (2) 10 Retained profts 899 900 Insurance liabilities in excess of liability valuation 737 606 Less: Tax effect of excess insurance liabilities (221) (182) 3,922 4,228 Less:

Goodwill and other intangible assets (1,182) (1,188) Other Tier 1 deductions (51) (36) Total deductions from Tier 1 capital (1,233) (1,224)

Total Tier 1 capital 2,689 3,004

Tier 2 capital

Subordinated notes 769 778

Total Tier 2 capital 769 778 APRA capital base 3,458 3,782 Total minimum capital requirement (MCR) 2,110 1,996 MCR coverage ratio (times) 1.64 1.89