Article 102 Simplified calculation of the capital requirement for SLT health lapse risk

1. Where Article 88 is complied with, insurance and reinsurance undertakings may calculate the capital requirement for the risk of a permanent increase in lapse rates referred to in Article 159(1)(a) as follows:

Lapse_up = 0,5 • l_up • n_up • S_up

where:

(a) l_up denotes the higher of the average lapse rate of the policies with positive surrender strains and 83 %;

(b) n_up denotes the average period in years over which the policies with a positive surrender strains run off;

(c) S_up denotes the sum of positive surrender strains.

2. Where Article 88 is complied with, insurance and reinsurance undertakings may calculate the capital requirement for the risk of a permanent decrease in lapse rates referred to in 159(1)(b) as follows:

Lapse_down = 0,5 • l_down • n_down • S_down

where:

(a) l_down denotes the average lapse rate of the policies with negative surrender strains;

(b) n_down denotes the average period in years over which the policies with a negative surrender strains runs off;

(c) S

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