Solvency Capital Requirement (SCR)

The answer to this question is provided by the European Commission. Article 133(2) of Delegated Regulation (EU) 2015/35 provides that the capital requirement for a particular liability risk group shall be the product of the risk factor for that liability risk group (as set out in Annex XI to the Delegated Regulation) and the amount of premiums earned by the undertaking during the following 12 months in relation to obligations in that liability risk group. Based on the example included in the question, the capital requirement would be 100 % * EUR 80 000 000 = EUR 80 million. Article 133(3), which provides assumptions underlying the calculation of the loss in basic own funds referred to in Article 133(2), shall be used in particular when taking into account any reinsurance arrangement for the calculation of the net Basic Solvency Capital Requirement. Disclaimer provided by the European Commission: The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.