A client of ours (a composite insurer) has raised the point that their actual MCR figure is considered to be the sum of the Notional MCR for non life and life (as per Article 252 in Delegated Acts) which in terms of the S.28.02 QRT is the sum of the R0560/C0140 + R0560/C0150 amounts.

However, our system calculates the S.28.02 C0130 R0400 amount following the LOG guidance - and this refers to the Delegated Acts Article 248 (1) calculation that (to our interpretation) does not consider the notional MCRs but simply sums the linear MCRs for non-life and life (which involves a few additional steps for applying floor/cap etc.):

s.28.02 C0130 R0400 = MAX(_C0130_R0340,_C0130_R0350)

S.28.02 C0130 R0340 = MIN(MAX(_C0130_R0300,_C0130_R0330),_C0130_R0320)

s.28.02 C0130 R0300 = _C0010_R0010+_C0020_R0010+_C0070_R0200+_C0080_R0200

so, ultimately, the R0400 value brings in the linear MCR from C0130 R0300 calculation above, that is sum of 'Linear formula component for non-life insurance and reinsurance obligations' (before applying the SCR floor/cap and then further the Absolute floor of MCR).

In summary, our MCR calculated figure in S.28.02 C0130 R0400 does not involve in any way the notional MCRs amounts in S.28.02 R0560 and we would like EIOPA to confirm that is correct, or not what EIOPA intends.

EIOPA answer

EIOPA confirms that the interpretation applied by the system is correct since it correctly follows the instructions provided in the LOG files. There are in fact two different calculations required regarding the Minimum Capital Requirement: in table S. C0130 and related rows from R0300 to R0400 the calculations don't involve any notional amounts but only the overall MCR calculation; table S. requires instead the split between Life and Non-Life calculations taking into account the notional amounts in accordance with Article 252. Furthermore, it is also important to clarify that the overall Minimum Capital Requirement calculation in table S. does not directly depend on the notional MCRs amounts in table S.