1. The capital requirement for the pandemic risk sub-module shall be equal to the loss in basic own funds of insurance and reinsurance undertakings that would result from an instantaneous loss of an amount that, without deduction of the amounts recoverable from reinsurance contracts and special purpose vehicles, is calculated as follows:
L_{\mathrm{p}} = 0.000075 \cdot \mathrm{E} + 0.4 \cdot \sum_{\mathrm{c}} \mathrm{N}_{\mathrm{c}} \cdot \mathrm{M}_{\mathrm{c}}
where:
Edenotes the income protection pandemic exposure of insurance and reinsurance undertakings;
the sum includes all countriesc;
Ncdenotes the number of insured persons of insurance and reinsurance undertakings which meet all of the following conditions:(i)the insured persons are inhabitants of countryc,(ii)the insured persons are covered by medical expense insurance or reinsurance obligations, other than workers' compensation insurance or reinsurance obligations, that cover medical expenses resulting from an infectious disease;
the insured persons are inhabitants of countryc,
the insured persons are covered by medical expense insurance or reinsurance obligations, other than workers' compensation insurance or reinsurance obligations, that cover medical expenses resulting from an infectious disease;
Mcdenotes the expected average amount payable by insurance or reinsurance undertakings per insured person of countrycin case of a pandemic.
2. The income protection pandemic exposure of an insurance or reinsurance undertaking shall be equal to the following:
E = \sum_{i} E_{i}
where:
the sum includes all insured personsicovered by the income protection insurance or reinsurance obligations other than workers' compensation insurance or reinsurance obligations;
Eidenotes the value of the benefits payable by the insurance or reinsurance undertaking, for the insured personiin case of a permanent work disability caused by an infectious disease. The value of the benefits shall be the sum insured or where the contract provides for recurring benefit payments the best estimate of the benefit payments assuming that the insured person is permanently disabled and will not recover.
3. For all countries, the expected average amount payable by insurance or reinsurance undertakings per insured person of a particular country c in case of a pandemic shall be equal to the following:
M_{\mathrm{c}} = \sum_{\mathrm{h}} \mathrm{H}_{\mathrm{h}} \cdot \mathrm{CH}_{(\mathrm{h},\mathrm{c})}
where:
the sum includes the types of healthcare utilisationhset out in Annex XVI;
Hhdenotes the ratio of insured persons with clinical symptoms utilising healthcarehas set out in Annex XVI;
CH(h,c)denotes the best estimate of the amounts payable by insurance and reinsurance undertakings for an insured person in countrycin relation to medical expense insurance or reinsurance obligations, other than workers' compensation insurance or reinsurance obligations, for healthcare utilisationhin the event of a pandemic.