Where Article 88 is complied with and the standard deviation of the loss distribution of type 1 exposures, as determined in accordance with Article 200(4), is lower than or equal to 20 % of the total losses-given default on all type 1 exposures, insurance and reinsurance undertakings may calculate the capital requirement for counterparty default risk referred to in Article 200(1) as follows:
SCR _{def,1} = 5 ·· σ
where σ denotes the standard deviation of the loss distribution of type 1 exposures as determined in accordance with Article 200(4).