MCR Ratio

Overview

This calculator implements the MCR Ratio within the undertaking's capital-adequacy monitoring framework.^[1] The ratio is defined as the measure of the undertaking's eligible basic own funds relative to the Minimum Capital Requirement (MCR).

Input Terms

• Eligible Basic Own Funds (MCR): The amount of Tier 1 and Tier 2 capital available to cover the MCR.^[2][3]
• Minimum Capital Requirement (MCR): The absolute minimum level of capital below which the undertaking's license would be withdrawn.^[1]

Technical Rationale

Article 129 makes the MCR ratio the undertaking's absolute minimum solvency threshold. That threshold is stricter in consequence than an SCR shortfall because it is tied to immediate supervisory intervention and potential license withdrawal.

The MCR ratio is the hard supervisory floor: eligible basic own funds below total MCR indicate a more severe breach than an SCR shortfall.^[1] A ratio below 100% is therefore a mission-critical signal tied to immediate supervisory intervention and potential license withdrawal.

The output supports solvency-ratio summary and MCR reporting views, but it does not determine remediation actions by itself.

Important Notes

• MCR and SCR Distinction: This calculator monitors the minimum capital threshold. A ratio below 100% triggers immediate supervisory intervention and may lead to withdrawal of authorisation. Insurers must also separately demonstrate SCR coverage, which is governed by a distinct calculation and a different set of eligible own funds.
• 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.^[4]
• Reporting: The displayed result is the canonical MCR-coverage indicator for S.23.01.01 own funds and the applicable S.28.01.01 or S.28.02.01 MCR template.^[5][6][7]