(39)In some cases, insurance and reinsurance undertakings can significantly reduce their Solvency Capital Requirement by using risk mitigation techniques, including reinsurance, but those risk mitigation techniques do not always result in a significant transfer of risk. In particular, some reinsurance agreements are designed to cover only the extreme scenarios modelled in the standard formula, while offering little or no protection against more moderate but more likely events. Therefore, to ensure that the risk profile of insurance and reinsurance undertakings is more accurately assessed, it should be specified that the reduction in the Solvency Capital Requirement resulting from the use of risk mitigation techniques is to be commensurate with the amount of risks effectively transferred.