Cap. 403 Art. 15Solvency Capital Requirement.

(1) An authorised insurance and reinsurance undertaking shall hold eligible own funds covering the Solvency Capital

Requirement.

(2) The Solvency Capital Requirement shall be calculated either in accordance with the standard formula as set out in Insurance Rules or using a full or partial internal model as approved by the competent authority. The process for the approval of the use of an internal model shall be set out in Insurance Rules.

(3) Where it is inappropriate for an authorised insurance or reinsurance undertaking to calculate the Solvency Capital Requirement in accordance with the standard formula, as set out in the Insurance Rules since the risk profile of the undertaking concerned deviates significantly from the assumptions underlying the standard formula calculation, the competent authority may, by means of a decision stating the reasons, require the undertaking concerned to use an internal model to calculate the Solvency Capital Requirement, or the relevant risk modules thereof.