Life underwriting risk module

(1) The life underwriting risk module reflects the risk arising from life insurance obligations, in relation to the risks covered and the processes used in conducting the business.
(2) The life underwriting risk module is calculated in accordance with Annex 3 as a combination of the capital requirements for at least the risk of loss, or of adverse change in the value, of insurance liabilities, resulting from: 1. changes in the level, trend, or volatility of mortality rates, where an increase in the mortality rate leads to an increase in the value of insurance liabilities (mortality risk), 2. changes in the level, trend, or volatility of mortality rates, where a decrease in the mortality rate leads to an increase in the value of insurance liabilities (longevity risk), 3. changes in the level, trend, or volatility of disability, sickness, and morbidity rates (disability, morbidity risk), 4. changes in the level, trend, or volatility of the expenses incurred in servicing insurance contracts (life expense risk), 5. changes in the level, trend, or volatility of the revision rates applied to annuities, due to changes in the legal environment or in the health condition of the insured person (revision risk), 6. changes in the level or volatility of the rates of policy lapses, terminations, renewals, and surrenders (lapse risk), and 7. significant uncertainty in pricing and provisioning assumptions related to extreme or exceptional events (life catastrophe risk).