Marine risk sub-module

1. The capital requirement for marine risk shall be equal to the following:

SCR marine= sqrt (SCR^2 (tanker) + SCR^2 (platform))

where:

(a) SCR tanker is the capital requirement for the risk of a tanker collision;

(b) SCR platform is the capital requirement for the risk of a platform explosion.

2. The capital requirement for the risk of a tanker collision shall be equal to the loss in basic own funds of insurance and reinsurance undertakings that would result from an instantaneous loss of an amount that, without deduction of the amounts recoverable from reinsurance contracts and special purpose vehicles, is equal to the following:

L tanker= max t (SI (hull,t) + SI (liab,t) + SI (pollution,t))

where:

(a) the maximum relates to all oil and gas tankers insured by the insurance or reinsurance undertaking in respect of tanker collision in lines of business 6, 18 and 27 set out in Annex I; 

(b) SI (hull,t) is the sum insured by the insurance or reinsurance undertaking for marine hull insurance and reinsurance in relation to tanker t;

(c) SI (liab,t) is the sum insured by the insurance or reinsurance undertaking for marine liability insurance and reinsurance in relation to tanker t;

(d) SI (pollution,t) is the sum insured by the insurance or reinsurance undertaking for oil pollution insurance and reinsurance in relation to tanker t.

3. The capital requirement for the risk of a platform explosion shall be equal to the loss in basic own funds of insurance and reinsurance undertakings that would result from an instantaneous loss of an amount that, without deduction of the amounts recoverable from reinsurance contracts and special purpose vehicles, is equal to the following:

L platform= max p (SI p) 

where:

(a) the maximum relates to all oil and gas offshore platforms insured by the insurance or reinsurance undertaking in respect of platform explosion in lines of business 6, 18 and 27 set out in Annex I;

(b) SI p is the accumulated sum insured by the insurance or reinsurance undertaking for the following insurance and reinsurance obligations in relation to platform p:

(i) obligations to compensate for property damage;

(ii) obligations to compensate for the expenses for the removal of wreckage;

(iii) obligations to compensate for loss of production income;

(iv) obligations to compensate for the expenses for capping of the well or making the well secure;

(v) liability insurance and reinsurance obligations.