Regulatory Alerts2022-12-23
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Solvency II: Pillar 1 - Standard formula
The Solvency II standard formula determines capital requirements for insurers by aggregating outcomes from risk modules, including market, life underwriting, health underwriting, and non-life underwriting. These module outcomes are combined using correlations to account for simultaneous risk occurrences and diversification effects. A factor-based approach is additionally applied to calculate operational risk, which is then added to the aggregated capital requirement.
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