Commission Delegated Regulation (EU) 2015/35Show full title

Article 163 Pandemic risk sub-module

1. The capital requirement for the pandemic risk sub-module shall be equal to the loss in basic own funds of insurance and reinsurance undertakings that would result from an instantaneous loss of an amount that, without deduction of the amounts recoverable from reinsurance contracts and special purpose vehicles, is calculated as follows:

where:

(a)

E denotes the income protection pandemic exposure of insurance and reinsurance undertakings;

(b)

the sum includes all countries c;

(c)

N_c denotes the number of insured persons of insurance and reinsurance undertakings which meet all of the following conditions:

(i)

the insured persons are inhabitants of country c,

(ii)

the insured persons are covered by medical expense insurance or reinsurance obligations, other than workers' compensation insurance or reinsurance obligations, that cover medical expenses resulting from an infectious disease;

(d)

M_c denotes the expected average amount payable by insurance or reinsurance undertakings per insured person of country c in case of a pandemic.

2. The income protection pandemic exposure of an insurance or reinsurance undertaking shall be equal to the following:

where:

(a)

the sum includes all insured persons i covered by the income protection insurance or reinsurance obligations other than workers' compensation insurance or reinsurance obligations;

(b)

E_i denotes the value of the benefits payable by the insurance or reinsurance undertaking, for the insured person i in case of a permanent work disability caused by an infectious disease. The value of the benefits shall be the sum insured or where the contract provides for recurring benefit payments the best estimate of the benefit payments assuming that the insured person is permanently disabled and will not recover.

3. For all countries, the expected average amount payable by insurance or reinsurance undertakings per insured person of a particular country c in case of a pandemic shall be equal to the following:

where:

(a)

the sum includes the types of healthcare utilisation h set out in Annex XVI;

(b)

H_h denotes the ratio of insured persons with clinical symptoms utilising healthcare h as set out in Annex XVI;

(c)

CH_(h,c) denotes the best estimate of the amounts payable by insurance and reinsurance undertakings for an insured person in country c in relation to medical expense insurance or reinsurance obligations, other than workers' compensation insurance or reinsurance obligations, for healthcare utilisation h in the event of a pandemic.