Health SLT Revision Risk

Overview

This calculator implements the gross capital requirement for Health SLT Revision Risk within the Solvency II standard formula.^[1] The Health Revision Risk requirement is defined as the economic capital necessary to cover the loss in basic own funds resulting from an adverse, permanent increase in the level of annuity benefits.^[2]

Input Terms

• Annuity Benefits (Health SLT): The total amount of annually payable benefits for health-related annuities.^[1]
• Specified Revision Factor: The 3% regulatory shock used to proxy the 1-in-200 year revision scenario.

Technical Rationale

The Health SLT Revision Risk sub-module is calibrated to a 99.5% confidence level over a one-year horizon. It captures the sensitivity of the undertaking’s basic own funds to an upward revision in benefit amounts for health annuities, such as those arising from court rulings or medical-inflation-driven statutory adjustments.^[1]

The calculation uses a scenario-based approach, revaluing technical provisions under a prescribed 3% increase in annuity benefit amounts. This ensures the undertaking holds enough capital to absorb the higher long-term liability costs following a legal or regulatory shift in health benefits. The final result represents the gross health revision component before diversification in Health SLT Underwriting Risk.

Important Notes

• Stress-ledger evidence gate: Stressed basic own funds must be backed by a full balance-sheet revaluation flag and model-run evidence flag. The capital result remains the visible loss in basic own funds, while the governance-breach output flags unsupported stress inputs for review. Use `underwriting-stressed-bof-loss-bridge` when the valuation delta needs to be inspected as its own atomistic calculator.
• Gross vs. Net SCR: This calculator determines the standalone Health SLT Revision Risk SCR on the visible stressed basis. Even where the page already reflects direct own-funds or tax effects, Solvency II risk is only finalized as a net impact on Basic Own Funds after diversification in the higher Health Risk aggregation chain, then within BSCR, and after the top-level LAC TP and LAC DT adjustments.
• Regulatory deviation: Material deviation from standard-formula assumptions at this layer may support a capital add-on or a move toward an internal model where justified.^[3]
• Reporting: The displayed result is intended to support the corresponding standard-formula component feeding the S.25.01.01 standard-formula reporting view.^[4]