Hi The SCR for operational risk is described to be a % that is applied to the earned premiums and the technical provisions. What relationship is being captured in this risk capital calculation? Is it the same % applied to both premiums and liabilities please? Any clarity on this concept would be much appreciated. Thank you!
The Core Reading says that it is 'based on' %s of earned premiums and TPs, not that it 'equals' that. The actual calculation is a bit more complex than just being a straight % calculation, but you wouldn't be expected to know those details for the SA2 exam beyond what is stated in the Core Reading. [If you need more info for purposes beyond SA2, then would suggest that you look at the relevant regulation publications. I think that this would be in Commission Delegated Regulation (EU) 2015/35 ]
