1. Retail loans secured by mortgages on residential property (mortgage loans) shall be treated as type 2 exposures under the counterparty default risk provided the requirements in paragraphs 2 to 13 are met.
2. The exposure shall be either to a natural person or persons or to a small or medium sized enterprise.
3. The exposure shall be one of a significant number of exposures with similar characteristics such that the risks associated with such lending are substantially reduced.
4. The total amount owed to the insurance or reinsurance undertaking and, where relevant, to all related undertakings within the meaning of Article 212(1)(b) and (2) of Directive 2009/138/EC, including any exposure in default, by the counterparty or other connected third party, shall not, to the knowledge of the insurance or reinsurance undertaking, exceed EUR 1 million. The insurance or reinsurance undertaking shall take reasonable steps to acquire this knowledge.
5. The residential property is or will be occu
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