Solvency Capital Requirement (SCR)

As per Guidelines on look-through approach by EIOPA, https://www.eiopa.europa.eu/document/download/7082c224-1092-4ed4-ba53-7…. It describes that Undertakings should apply the look-through approach to money market funds. When look through is not available, we follow the regulation to regard them as equity and provide Equity shock. However, MMFs usually only holds short term duration and high-quality deposit, CP, CD and corporate bonds. The risk driven from interest rate and credit spread are almost less then 5%. By the MMF nature, it is too punitive when Lookthrough approach to real underlying/target underlying/last reported underlying is operationally impossible. We are asked by clients to advise is there any thing could be done in the middles to: 1. Still capture the appropriate risk from MMF 2. not too unrealistic conservative 3. Avoid regulatory arbitrage that insurers prefer to always use this middle-compromised approach to bypass lookthrough approach