1.The natural catastrophe risk sub-module shall consist of all of the following sub-modules:
the windstorm risk sub-module;
the earthquake risk sub-module;
the flood risk sub-module;
the hail risk sub-module;
the subsidence risk sub-module.
1a.For the purposes of paragraph 1, the following definitions shall apply:
‘windstorm’ means a meteorological peril involving storm events characterised by high-velocity winds generated by atmospheric disturbances, including extratropical cyclones and tropical cyclones; windstorm includes storm surge, where materially present, and does not include convective storms;
‘earthquake’ means a geophysical peril characterised by a sudden movement of a block of the Earth’s crust along a geological fault and associated ground shaking; earthquake does not include tsunami or fire following the seismic event;
‘flood’ means a hydrological peril involving the temporary inundation of normally dry land by water resulting from the overflow of inland or surface waters, including riverine or fluvial flooding, surface water or pluvial flooding caused by rainfall, or flash floods, whether resulting from fluvial, pluvial, or combined causes; flood does not include storm surge;
‘hail’ means a meteorological peril involving the fall of solid ice stones or pellets and includes severe convective storms, tornadoes and lightning;
‘subsidence’ means a geophysical peril involving the sinking of the ground due to natural or human-induced changes in subsurface conditions, including the shrinkage or swelling of clay soils.
2.The capital requirement for natural catastrophe risk shall be equal to the following:
\mathrm{SCR}_{\mathrm{natCAT}} = \sqrt{\sum_{\mathrm{i}} \mathrm{SCR}_{\mathrm{i}}^2}
where:
the sum includes all possible combinations of the sub-modules i set out in paragraph 1;
SCRi denotes the capital requirement for sub-module i.