1. 1. For pool exposures of type B which the undertaking considers as separate single name exposures in accordance with Article 190(2), where members are each liable up to the full amount of the obligation covered by the pooling arrangement, the loss-given-default shall be calculated as follows:
\mathrm{LGD} = \max \left( \left( (1 - \mathrm{RR}_{\mathrm{C}}) \cdot \left( \frac{\mathrm{P}_{\mathrm{U}}}{(1 - \mathrm{P}_{\mathrm{C}})} \cdot \mathrm{BE}_{\mathrm{C}} + \Delta \mathrm{RM}_{\mathrm{C}} \right) - \mathrm{F} \cdot \mathrm{Collateral} \right) ; 0 \right)
where:
(c)RRC is equal to:
((a))(a) P_{U} denotesPUdenotes the undertaking's share of the risk according to the terms of the pooling arrangement;
((b))(b) P_{C} denotesPCdenotes the counterparty member's share of the risk according to the terms of the pooling arrangement;
((c))(i) 10RRCis equal to:(i)10 % if 60 % or more of the assets of the counterparty member are subject to collateral arrangements;arrangements;(ii)50 % otherwise;
((i))(f) Collateral10 denotes% if 60 % or more of the risk-adjusted valueassets of collateral held by the counterparty member ofare thesubject poolingto arrangement;collateral arrangements;
((ii))(ii) 50 % otherwise;
((d))(d) BE_{C} denotesBECdenotes the best estimate of the liability ceded to the counterparty member by the undertaking, net of any amounts reinsured with counterparties external to the pooling arrangement;
((e))(e) ΔRM_{C} denotesΔRMCdenotes the counterparty member's contribution to the risk-mitigating effect of the pooling arrangement on the underwriting risk of the undertaking;
((f))(g) F denotesCollateraldenotes the factorrisk-adjusted to take into account the economic effectvalue of the collateral held by the counterparty member,member calculatedof inthe accordancepooling with Article 197.arrangement;
((g))Fdenotes the factor to take into account the economic effect of the collateral held by the counterparty member, calculated in accordance with Article 197.
2. 2. For pool exposures of type B which the undertaking considers as separate single name exposures in accordance with Article 190(2), where members are each only liable up to their respective portion of the obligation covered by the pooling arrangement, the loss-given-default shall be calculated as follows:
\mathrm{LGD} = \max (((1 - \mathrm{RR}_{\mathrm{C}}) \cdot (\mathrm{P}_{\mathrm{C}} \cdot \mathrm{BE}_{\mathrm{U}} + \Delta\mathrm{RM}_{\mathrm{C}}) - \mathrm{F} \cdot \mathrm{Collateral}) ; 0)
where:
(b)RRC is equal to:
((a))(a) P_{C} denotesPCdenotes the counterparty member's share of the risk according to the terms of the pooling arrangement;
((b))(i) 10RRCis equal to:(i)10 % if 60 % or more of the assets of the counterparty member are subject to collateral arrangements;arrangements;(ii)50 % otherwise;
((i))(e) Collateral10 denotes% if 60 % or more of the risk-adjusted valueassets of collateral held by the counterparty member ofare thesubject poolingto arrangement;collateral arrangements;
((ii))(ii) 50 % otherwise;
((c))(c) BE_{U} denotesBEUdenotes the best estimate of the liability ceded to the pooling arrangement by the undertaking, net of any amounts reinsured with counterparties external to the pooling arrangement;
((d))(d) ΔRM_{C} denotesΔRMCdenotes the counterparty member's contribution to the risk-mitigating effect of the pooling arrangement on the underwriting risk of the undertaking;
((e))(f) F denotesCollateraldenotes the factorrisk-adjusted to take into account the economic effectvalue of the collateral held by the counterparty member,member calculatedof inthe accordancepooling with Article 197.arrangement;
((f))Fdenotes the factor to take into account the economic effect of the collateral held by the counterparty member, calculated in accordance with Article 197.