Hi everyone, please can someone clarify what a “basis” is? I think it’s the set of assumptions (eg prudent) used to calculate the capital, such as for reserves or solvency. I understand Capital Requirements (eg SCR) and what provisions are but am unsure how the basis fits into all this? Is it just the assumptions used to calculate these different capital amounts? Thank you for your replies
Yes that's correct: it's the set of assumptions. If you see the phrase 'the basis on which X is calculated' or similar, it might also encompass the method used. eg 'the solvency capital requirements are calculated on a Value-at-Risk basis'.
