Capital add-on for a group undertaking

(1) Where an insurance undertaking calculates its Solvency Capital Requirement on the basis of an internal model approved at group level, and, in the view of the supervisory authority, the risk profile of that undertaking deviates materially from the assumptions underlying that internal model, the supervisory authority may, under section 301, set a capital add-on to the Solvency Capital Requirement determined using the internal model. The capital add-on is lifted as soon as the affected insurance undertaking has addressed the supervisory authority's concerns.
(2) Where a capital add-on under subsection (1) is exceptionally not appropriate, the supervisory authority may require the undertaking concerned to calculate its Solvency Capital Requirement using the standard formula. Under the conditions named in section 301(1), point 1 or 3, the supervisory authority may additionally set a capital add-on to the Solvency Capital Requirement determined using the standard formula. The supervisory authority gives reasons for every decision taken under subsection (1) and the first and second sentences, both to the insurance undertaking and to the other members of the college of supervisors.