Article 142(6) of Commission Delegated Regulation (EU) 2015/35 defines capital requirement for mass-lapse such as: The capital requirement for mass lapse risk shall be equal to the loss in basic own funds of insurance and reinsurance undertakings that would result from a combination of the following instantaneous events: a) the discontinuance of 70 % of the insurance policies falling within the scope of operations referred to with Article 2(3)(b)(iii) and (iv) of Directive 2009/138/EC, for which discontinuance would result in an increase of technical provisions without the risk margin and where one of the following conditions are met: (…) b) the discontinuance of 40 % of the insurance policies other than those falling within point (a) for which discontinuance would result in an increase of technical provisions without the risk margin; c) where reinsurance contracts cover insurance or reinsurance contracts that will be written in the future, the decrease of 40 % of the number of those future insurance or reinsurance contracts used in the calculation of technical provisions. (…) When considering a 1-year time horizon, what should be the right application of the three scenarios above? Option 1: The lapse rate for the whole year should be equal to the stress, e.g., for the scenario under letter b) lapses for the next 12 months would be 40%. Option 2: The instantaneous event occurs the first day of the period. Therefore, the lapse rate for the whole year should be equal to the stress plus the best estimate lapse assumptions to the remaining portfolio. For example, for the scenario under letter b) lapses for the next 12 months would be 40% + lapses according to best estimate assumptions for the remaining business.