In accordance with Article 18 for "normal" primary insurance contracts the handling of existing contracts, it is quite clear that business to be considered in calculating the amount required for taking over those contracts is equal to the one considered in the calculations for premium and reserve risk and own funds. There remains some ambiguity though for some scenarios concerning group insurance or reinsurance contract. 

To understand the core of our question it might be helpful to use an example: Let's assume that per end of year 0 an reinsurance contract covering primary insurance contracts of year 1 has already been written/prolonged. As there's no one-sided right to terminate the contract anymore all expected cashflows from this contract have to be considered in a going-concern approach and thus as existing business both for risk as well as own funds calculation. However, in the case of the decision to sell the portfolio to another reinsurer, the primary insurer would have a one-sided right to terminate the contract immediately. 

In such a case, which business should be considered when calculating the SCR(t) for the reference undertaking?

a) Notwithstanding any contractual regulations considering selling the reinsurance contract to another reinsurance undertaking consider all the business under the going-concern approach; or

b) exclude all policies entering existing contracts in the future where the insured entity has a one-sided right to terminate the contract when another undertaking takes over/wants to take over the contract.

In accordance with Article 38(1)(a) of Commission Delegated Regulation (EU) 2015/35 (DR), the risk margin calculation should be based on the assumption that the liabilities are transferred from the original undertaking to another insurance or reinsurance undertaking (reference undertaking). To ensure that the risk margin only covers the risks that are strictly related to the liabilities transferred, Article 38 DR includes provisions on a hypothetical reference undertaking. For the calculation of the risk margin, the projection of the future SCR of the reference undertaking should be consistent with the assumptions underlying the best estimate of the original undertaking.

Therefore, the assumed transfer to the reference undertaking should not be viewed as a transaction that creates new opportunities for the policies to be discontinued, nor to impact the assumed take-up rates of existing options to do so. In context of the example considered in the question, this implies that for the purposes of the risk margin calculation, it should not be assumed that the reinsurance contract is terminated by the primary insurer.