Prudential Regulation Authority Rulebook

16B.1

For the purposes of 16B to 16G, basic SCR shall mean the basic SCR as supplemented or amended for the purposes of applying the relevant integration techniques in 16B to 16G.

16B.2

Where a firm applies integration techniques 1 to 5, its SCR must be the sum of the following items:

1. (1) the basic SCR as set out in 16C to 16G;
2. (2) the capital requirement for operational risk as laid down in Solvency Capital Requirement – Standard Formula 5, where that risk is not within the scope of the partial internal model, and generated by the partial internal model, where that risk is within the scope of the partial internal model;
3. (3) the adjustment for the loss-absorbing capacity of technical provisions and deferred taxes, as laid down in 16B.3, where that adjustment is not within the scope of the partial internal model, and generated by the partial internal model, where that adjustment is within the scope of the partial internal model.

16B.3

Where the adjustment for the loss-absorbing capacity of technical provisions and deferred taxes is not within the scope of the partial internal model, the firm must calculate it as laid down in Solvency Capital Requirement - Standard Formula 6.1(3), 6.3 and 6.4, but with the following changes:

1. (1) the basic SCR referred to in Solvency Capital Requirement - Standard Formula 6.3(1) and (2) and 6.4(1) is calculated in accordance with 16C to 16G;
2. (2) Solvency Capital Requirement - Standard Formula 6.3(2)(a) to (d) apply only to calculations with the standard formula;
3. (3) for the purposes of Solvency Capital Requirement - Standard Formula 6.3(2) the capital requirements used in the calculation of the basic SCR that are generated by the partial internal model must take into account the risk-mitigating effect provided by future discretionary benefits of contracts of insurance;
4. (4) the capital requirement for operational risk referred to in Solvency Capital Requirement - Standard Formula 6.4(1)(c) is calculated in accordance with 16B.2(2).