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Health NSLT Lapse Risk Grouping Simplification

Calculate the Simplified Discontinued Policies instantly.

%

Adverse Group Policies

1,000

÷

Grouped Policies

2,500

=

Adverse Group Share

40.0%

Adverse Group Policies

1,000

×

Discontinuance Rate

40.0%

=

Simplified Discontinued Policies

400

Health NSLT Lapse Grouping Shock Impact

Shock charge
Retained value
ModuleShockPre-shockPost-shockCharge
Adverse Group Policies-40%1 000600400
1Step 1

Adverse Group Share

Adverse Group Share=Policies in Adverse Discontinuance GroupsGrouped Policy Count\textit{Adverse Group Share} = \frac{\textit{Policies in Adverse Discontinuance Groups}}{\textit{Grouped Policy Count}}
2Step 2

Simplified Discontinued Policies

Simplified Discontinued Policies=Policies in Adverse Discontinuance Groups×Discontinuance Rate\textit{Simplified Discontinued Policies} = \textit{Policies in Adverse Discontinuance Groups} \times \textit{Discontinuance Rate}

Understand the Health NSLT Lapse Risk Grouping Simplification

Overview

This calculator implements the grouped-policy simplification for Health NSLT Lapse Risk within the Solvency II standard formula.[1] It identifies the simplified discontinued-policy count from grouped policy data; the resulting capital impact remains a valuation-model assessment.

Input Terms

  • Grouped Policy Count: Policies in the grouped NSLT health lapse simplification population.[1]
  • Adverse Group Policy Count: Policies in the group for which discontinuance is adverse and should be included in the 40% discontinuance event.[1]

Technical Rationale

Article 96a permits the capital requirement for discontinuance of insurance policies in the NSLT health lapse risk sub-module to be calculated on policy groups where the grouping conditions are met.[1] The policy-group approach is a proportionality measure: it reduces policy-level operational burden only where grouping does not hide material lapse sensitivity.

This page therefore produces the simplified discontinued-policy count and leaves the balance-sheet loss to the undertaking's valuation model. That boundary keeps the simplification from being mistaken for a full basic-own-funds stress.

Important Notes

  • Grouping condition: The grouped calculation depends on the Article 96a grouping approach and should not be used where the group masks material policy-level lapse sensitivity.[1]
  • Discontinuance type: Article 150(3) still requires the valuation model to use the discontinuance type that most negatively affects basic own funds on a per-policy basis. Grouping should not hide material differences between cancellation, non-renewal, lapse for non-payment, partial cancellation, cover reduction, suspension, restriction, paid-up treatment, non-forfeiture provisions, other discontinuity options, or not exercising continuity options where those rights exist.
  • Model boundary: The output is a simplified count of discontinued policies. The prepared Health NSLT lapse capital requirement is still produced by the undertaking's valuation model.

Sources

  1. Delegated Regulation (EU) 2015/35 - Art. 96a (Simplified calculation for discontinuance of insurance policies in the NSLT health 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.