ANNEX III U.K. FACTOR FOR GEOGRAPHICAL DIVERSIFICATION OF PREMIUM AND RESERVE RISK

1. For all segments set out in Annexes II and XIV, the factor for geographical diversification of a particular segment s referred to in Articles 116 and 147 shall be equal to the following: U.K.

where:

(a)

each of the sums cover all the geographical regions set out in paragraph 8;

(b)

V(prem,r,s) denotes the volume measure for premium risk of the segment s and the region r;

(c)

V(res,r,s) denotes volume measure for reserve risk of the segment s and the region r.

2. For all segments set out in Annexes II and XIV and all geographical regions set out in paragraph 8, the volume measure for premium risk of a particular segment s and a particular region r shall be calculated in the same way as the volume measure for non-life or NSLT health premium risk of the segment s as referred to in Articles 116 and 147, but taking into account only insurance and reinsurance obligations where the underlying risk is situated in the region r. U.K.

3. For all segments set out in Annexes II and XIV and all geographical regions set out in paragraph 8, the volume measure for reserve risk of a particular segment s and a particular region r shall be calculated in the same way as the volume measure for non-life or NSLT health reserve risk of the segment s as referred to in Articles 116 and 147, but taking into account only insurance and reinsurance obligations where the underlying risk is situated in the region r. U.K.

4. For the purpose of the calculations set out in paragraphs 2 and 3, the criteria set out in Article 13(13) of Directive 2009/138/EC in the case of non-life insurance and the criteria set out in Article 13(14) of Directive 2009/138/EC in the case of life insurance shall be applied as if references in those criteria to Member States extended to regions also. U.K.

5. Notwithstanding paragraph 1, the factor for geographical diversification shall be equal to 1 for segments 6, 10, 11 and 12 set out in Annex II and for segment 4 set out in Annex XIV. U.K.

6. Notwithstanding paragraph 1, the factor for geographical diversification for a segment set out in Annex II shall be equal to 1 if insurance and reinsurance undertakings use an undertaking-specific parameter for the standard deviation for non-life premium risk or non-life reserve risk of the segment to calculate the non-life premium and reserve risk sub-module. U.K.

7. Notwithstanding paragraph 1, the factor for geographical diversification for a segment set out in Annex XIV shall be equal to 1 if insurance and reinsurance undertakings use an undertaking-specific parameter for the standard deviation for NSLT health premium risk or NSLT health reserve risk of the segment to calculate the NSLT health premium and reserve risk sub-module. U.K.

8. Regions for the calculation of the factor for geographical diversification U.K.

ANNEX III Table 1: rows 1 - 19

	Region	Territories that the region consists of
1	Northern Europe	Denmark (except Greenland), Estonia, Finland, Guernsey, Iceland, Ireland, Isle of Man, Jersey, Latvia, Lithuania, Norway, Sweden, United Kingdom (except Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Falkland Islands, Gibraltar, Montserrat, Pitcairn Islands, Saint Helena, Turks and Caicos Islands)
2	Western Europe	Austria, Belgium, France (except French Guiana, French Polynesia, Guadeloupe, Martinique, Mayotte, New Caledonia, Réunion, Saint Barthélemy, Saint Martin, Saint Pierre and Miquelon, Wallis and Futuna), Germany, Liechtenstein, Luxembourg, Monaco, Netherlands (except Aruba, Bonaire, Curaçao, Saba, Sint Eustatius, Sint Maarten), Switzerland
3	Eastern Europe	Belarus, Bulgaria, Czech Republic, Hungary, Moldova, Poland, Romania, Russia, Slovakia, Ukraine
4	Southern Europe	Albania, Andorra, Bosnia and Herzegovina, Croatia, Cyprus, the former Yugoslav Republic of Macedonia, Gibraltar, Greece, Italy, Malta, Montenegro, Portugal, San Marino, Serbia, Slovenia, Spain, Vatican City State
5	Central and Western Asia	Armenia, Azerbaijan, Bahrain, Georgia, Iraq, Israel, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Tajikistan, Turkey, Turkmenistan, United Arab Emirates, Uzbekistan, Yemen
6	Eastern Asia	China, Japan, Mongolia, North Korea, South Korea, Taiwan
7	South and South-Eastern Asia	Afghanistan, Bangladesh, Bhutan, Brunei, Burma/Myanmar, Cambodia, India, Indonesia, Iran, Laos, Malaysia, Maldives, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Thailand, East Timor, Vietnam
8	Oceania	American Samoa, Australia, Cook Islands, Fiji, French Polynesia, Guam, Kiribati, Marshall Islands, Micronesia, Nauru, New Caledonia, New Zealand, Niue, Northern Mariana Islands, Palau, Papua New Guinea, Pitcairn Islands, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu, Wallis and Futuna
9	Northern Africa	Algeria, Benin, Burkina Faso, Cameroon, Cape Verde, Central African Republic, Chad, Côte d'Ivoire, Egypt, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Libya, Mali, Mauritania, Morocco, Niger, Nigeria, Saint Helena, Senegal, Sierra Leone, South Sudan, Sudan, Togo, Tunisia
10	Southern Africa	Angola, Botswana, Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Kenya, Lesotho, Madagascar, Malawi, Mauritius, Mayotte, Mozambique, Namibia, Congo, Réunion, Rwanda, São Tomé and Príncipe, Seychelles, Somalia, South Africa, Swaziland, Uganda, Tanzania, Zambia, Zimbabwe
11	Northern America excluding the United States of America	Bermuda, Canada, Greenland, Saint Pierre and Miquelon
12	Caribbean and Central America	Anguilla, Antigua & Barbuda, Aruba, Bahamas, Barbados, Belize, Bonaire, British Virgin Islands, Cayman Islands, Costa Rica, Cuba, Curaçao, Dominica, Dominican Republic, El Salvador, Grenada, Guadeloupe, Guatemala, Haiti, Honduras, Jamaica, Martinique, Mexico, Montserrat, Nicaragua, Panama, Puerto Rico, Saint Barthélemy, Saba, Saint Kitts and Nevis, Saint Lucia, Saint Martin, Saint Vincent and the Grenadines, Sint Eustatius, Sint Maarten, Trinidad and Tobago, Turks and Caicos Islands, US Virgin Islands
13	Eastern South America	Brazil, Falkland Islands, French Guiana, Guyana, Paraguay, Suriname, Uruguay
14	Northern, southern and western South America	Argentina, Bolivia, Chile, Colombia, Ecuador, Peru, Venezuela
15	North-east United States of America	Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont
16	South-east United States of America	Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Puerto Rico, South Carolina, Tennessee, Virginia, West Virginia
17	Mid-west United States of America	Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Wisconsin
18	Western United States of America	Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Texas, Utah, Washington, Wyoming