1. The value of technical provisions shall be equal to the sum of a best estimate and a risk margin as set out in paragraphs 2 and 3.
2. The best estimate shall correspond to the probability-weighted average of future cash-flows, taking account of the time value of money (expected present value of future cash-flows), using the relevant risk-free interest rate term structure.
The calculation of the best estimate shall be based upon up-to-date and credible information and realistic assumptions and be performed using adequate, applicable and relevant actuarial and statistical methods.
The cash-flow projection used in the calculation of the best estimate shall take account of all the cash inand out-flows required to settle the insurance and reinsurance obligations over the lifetime thereof.
The best estimate shall be calculated gross, without deduction of the amounts recoverable…