# Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (Text with EEA relevance) (revoked), Division: Method specification

Extent: E+W+S+N.I.
Status: repealed

(1)For the purpose of paragraphs 4-7, the following notation shall apply:
(a) n denotes the number of financial years for which aggregated annual losses data is available;
(b) Y i denotes the aggregated losses in financial year i ;
(c)μ and ω denote the first and second moment, respectively, of the aggregated annual losses distribution, being equal to the following amounts:
μ=1n∑i=1nYi
and
ω=1n∑i=1nY2i
(d) b 1 denotes the amount of the retention of the recognisable stop loss reinsurance contract referred to in Article 218(2);
(e)where the recognisable stop loss reinsurance contract referred to in Article 218(2) provides compensation only up to a specified limit, b 2 denotes the amount of that limit.
(2)The undertaking-specific specific adjustment factor for non-proportional reinsurance shall be equal to the following:
NP USP = c · NP′ + (1 – c ) · NP
where:
(a) c denotes the credibility factor set out in section G;
(b) NP′ denotes the estimated adjustment factor for non-proportional reinsurance set out in paragraph 5;
(c) NP denotes the adjustment factor for non-proportional reinsurance set out in Article 117(2).
(3)The estimated adjustment factor for non-proportional reinsurance shall be equal to the following:
where the parameters μ 1 , μ 2 , ω 1 and ω 2 are set out in paragraph 6.
(4)The parameters μ 1 , μ 2 , ω 1 and ω 2 shall be equal to the following:
μ1=μ×Nlnb1−θη−η+b1×N−lnb1−θη
μ2=μ×Nlnb2−θη−η+b2×N−lnb2−θη
ω1=ω×Nlnb1−θη−2×η+b21×N−lnb1−θη
ω2=ω×Nlnb2−θη−2×η+b22×N−lnb2−θη
where:
(a) N denotes the cumulative probability function of the normal distribution;
(b) ln denotes the natural logarithm;
(c)the parameters θ and η are equal to the following:
θ=2ln μ−12 ln ω
η=ln ω−2ln μ
(5)Notwithstanding paragraph 5, where non-proportional reinsurance covers homogeneous risk-groups within a segment, the estimated adjustment factor for non-proportional reinsurance shall be equal to the following:
NP′=∑hVprem,h×NP′h∑hVprem,h
where:
(a) V ( prem,h ) denotes the volume measure for premium risk of the homogeneous risk group h determined in accordance with paragraph 3 of Article 116;
(b) NP′ ( h ) denotes the estimated adjustment factor for non-proportional reinsurance of homogeneous risk group h determined in accordance with paragraph 5.

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Source: https://www.legislation.gov.uk/eur/2015/35/annex/XVII/division/F2/division/2 (the official version)
Page: https://openlegislation.uk/eu-regulation-2015-35/annex-XVII/division-F2/division-2
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.