The capital requirement for health expense risk shall be equal to the loss in basic own funds of insurance and reinsurance undertakings that would result from the following combination of instantaneous permanent changes:
(a)
an increase of 10 % in the amount of expenses taken into account in the calculation of technical provisions;
(b)
an increase by 1 percentage point to the expense inflation rate (expressed as a percentage) used for the calculation of technical provisions.
With regard to reinsurance obligations, insurance and reinsurance undertakings shall apply those changes to their own expenses and, where relevant, to the expenses of the ceding undertakings.