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Non-Life Lapse Risk

AdvancedRequires external valuation

Calculate the Future Contracts After Stress, 1 - Future Contract Decrease Rate, and Discontinued Policy Count instantly.

%
%

Exposed Policy Count

10,000

×

Discontinuance Rate

40.0%

=

Discontinued Policies

4,000

Future Contracts in TP

2,500

×

1 - Future Contract Decrease Rate

60.0%

=

Future Contracts After Stress

1,500

Non-Life Lapse Shock Impact

Shock charge
Retained value
ModuleShockPre-shockPost-shockCharge
Exposed Policies-40%10 0006 0004 000
Future Contracts-40%2 5001 5001 000
1Step 1

Discontinued Policies

Discontinued Policies=Policies Where Discontinuance Increases TP×Discontinuance Rate\mathrm{Discontinued\ Policies}=\mathrm{Policies\ Where\ Discontinuance\ Increases\ TP}\times\mathrm{Discontinuance\ Rate}
2Step 2

Future Contracts After Stress

Future Contracts After Stress=Future Contracts×(1−Future Contract Decrease Rate)\mathrm{Future\ Contracts\ After\ Stress}=\mathrm{Future\ Contracts}\times(1-\mathrm{Future\ Contract\ Decrease\ Rate})

Understand the Non-Life Lapse Risk

Overview

This calculator specifies the Article 118 Non-Life Lapse Risk stress.[1] It does not calculate the resulting loss in basic own funds. That capital impact depends on the undertaking's technical-provisions and balance-sheet valuation model.

Input Terms

  • Policies Where Discontinuance Increases TP: The policies for which discontinuance would increase technical provisions without the risk margin.[1]
  • Future Contracts in Technical Provisions: Future insurance or reinsurance contracts included in technical provisions through covered future business.[1]
  • Discontinuance Rate: Fixed at 40% under Article 118.[1]

Technical Rationale

The page specifies the Article 118 scenario: discontinuance of 40% of relevant policies and a 40% decrease in relevant future contracts used in technical provisions. The representative discontinued-policy count and future-contract count keep the prescribed scenario visible before the external valuation-model impact is prepared.

The page stops at the stress definition because Article 118 capital depends on the valuation-model loss from applying the discontinuance scenario to technical provisions and basic own funds.

Important Notes

  • Model boundary: The calculator is a stress-specification page. It intentionally does not rebuild technical provisions, basic own funds, tax, reinsurance, or loss-absorbing-capacity effects.
  • Simplification: The Article 90a grouping simplification remains a separate support calculation.

Sources

  1. Delegated Regulation (EU) 2015/35 - Art. 118 (Non-life lapse risk sub-module) - EIOPA

Default values are illustrative sample inputs for navigation, training, and QA. Replace them with controlled data before using the result in capital analysis, governance, or reporting decisions.