Close menu

Application provision

1.1 Unless otherwise stated, this Part applies to:

  1. (1) a UK Solvency II firm; and
  2. (2) in accordance with Insurance General Application 3, the Society, as modified by 8.

5.1

01/01/2016

A firm’s capital requirement for operational risk must:

  1. (1) reflect its operational risks to the extent that they are not already reflected in the risk modules used to calculate its basic SCR; and
  2. (2) be calibrated in accordance with Solvency Capital Requirement – General Provisions 3.3 to 3.4.

Additional Notes


[Note: Art. 107(1) of the Solvency II Directive]

5.2

01/01/2016

With respect to linked long-term contracts of insurance, the calculation of the capital requirement for operational risk must take into account the amount of annual expenses incurred in respect of those insurance obligations.

Additional Notes


[Note: Art. 107(2) of the Solvency II Directive]

5.3

01/01/2016

With respect to insurance business operations other than those referred to in 5.2, the capital requirement for operational risk must:

  1. (1) take into account the volume of those operations, in terms of earned premiums and technical provisions which are held in respect of that insurance business; and
  2. (2) not exceed 30% of the basic SCR relating to those operations.

Additional Notes


[Note: Art. 107(3) of the Solvency II Directive]