Glossary

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Term Definition Legal instruments

cost-of-capital rate

01/01/2016

THIS DEFINITION ONLY APPLIES TO THE TECHNICAL PROVISIONS PART

means the rate (above the relevant risk-free interest rate) that must be used in the determination of the cost that a Solvency II undertaking would incur in order to hold an amount of eligible own funds equal to the SCR necessary to support the insurance and reinsurance obligations over their lifetime, as specified in the Solvency II Regulations adopted under Article 86 of the Solvency II Directive.