67.3. Capital

The management boards of the Group’s insurance companies monitor capital requirements and are directly supervised by local regulatory authorities. They are obliged by the Polish Financial Supervision Authority to maintain excess own funds over the capital requirement (SCR) in accordance with the Solvency II regime.

This requirement is intended to ensure that the Group’s insurance companies are able to meet their obligations over the next 12 months at a confidence level of 99.5%.

A breach of this requirement – the Solvency Capital Requirement – would result in supervisory intervention and corrective action to restore the required level of capital. The PFSA’s approach to measuring capital adequacy is primarily based on monitoring solvency ratios and other data reported by insurance companies as part of their cyclical reporting.

The Group’s insurance companies comply with all regulatory requirements imposed by external authorities, including capital requirements.