(1) An insurance undertaking or reinsurance undertaking shall calculate its Basic Solvency Capital Requirement in accordance with this Regulation.

(2) The non-life underwriting risk module -

(a) shall reflect the risk arising from non-life insurance obligations, in relation to the perils covered and the processes used in the conduct of business,

(b) shall take account of the uncertainty in the results of the undertaking related to its existing insurance or reinsurance obligations as well as to the new business the undertaking expects to write over the following 12 months, and

(c) shall be calculated, in accordance with Part 2 of Schedule 3, as a combination of the capital requirements for at least the following sub modules:

(i) the risk of loss, or of adverse change in the value of insurance liabilities, resulting from fluctuations in the timing, frequency and severity of insured events, and in the timing and amount of claim settlements (non-life premium and reserve risk);

(ii) the risk of loss, or of adverse change in the value of insurance liabilities, resulting from significant uncertainty of pricing and provisioning assumptions related to extreme or exceptional events (non-life catastrophe risk).

(3) The life underwriting risk module -