1. The capital requirement for flood risk shall be equal to the following:

where:

(a) the sum includes all possible combinations (r,s) of the regions set out in Annex VII;

(b) CorrFL_(r,s) denotes the correlation coefficient for flood risk for region r and region s as set out in Annex VII;

(c) SCR_(flood,r) and SCR_(flood,s) denote the capital requirements for flood risk in region r and s respectively;

(d) SCR_{(flood,other)} denotes the capital requirement for flood risk in regions other than those set out in Annex XIII.

2. For all regions set out in Annex VII, the capital requirement for flood risk in a particular region r shall be the larger of the following capital requirements:

(a) the capital requirement for flood risk in region r according to scenario A as set out in paragraph 3;

(b) the capital requirement for flood risk in region r according to scenario B as set out in paragraph 4.