Q&A

Question

1.    S.30.02 Field C0330, external rating. If a counterpart has more than one external rating, which one has to be chosen ? Is the undertaking free in the choice ?
2.    S.30.02 Field C0350, credit quality step. Has this field to be filled only by undertaking using the standard formula ? Which table is to be used to provide this value ?
3.    S.30.01 Facultative covers – Basic: “If reinsurance strategy changes materially after that date or if the renovation of the reinsurance contracts are performed later than the reporting date and before next 1 January, the information on this template shall be re-submitted when adequate.” Could it  be possible to explain better “when adequate” ?
4.    S.30.03 Field C0200 Retention or priority (%)
Which is the value to put in the field in case of a variable quota share, in which the retention varies based on predetermined criteria ?

5.    S.30.03 Field C0230 Maximum cover per risk or event
If a cover works per risk and per event with different limits, which one has to be reported ? Have 2 different sections (2 rows in the reporting file) to be defined ?

6.    S.30.04 Field C0120 Type of collateral (if applicable)
If the collateral is cash, which value has to be indicate ? Point “1” or point “2” (both are cash).
7.    If a counterpart has not an external rating but it is provided of a parental guarantee, can it be assigned the same rating of the parent company ?
8.    S.30.02 Field C0310 Type of reinsurer
If a reinsurer is both a direct composite insurer, but also an internal reinsurer, which value has to be assigned:  3 or 5 ?
9.    S.30.01 Field C0130 Sum insured. If the sum insured is unlimited, can we write “-1” ?

10.    In a previous question we asked: “ In respect of QRT S.30.03 and S.30.04: after the first picture sent in April, has the Company to send possible variations during the year ? For example is it required to send a new picture relevant to possible changes in the first six months ? Which kind of changes are significant ? If changes have to be reported, which information have to be issued ? In respect of facultative cessions (QRT S.30.01 and S.30.02) only the first picture has to be sent ?”
Answer was: ”The templates only have to be up-dated if material changes have occurred since last submission. In this case if reinsurance strategy changes materially or if the renovation of the reinsurance contracts is important. If for example, after the beginning of the year the ceding exposure changes significantly due to treaties/contracts not being renewed, the information would have to be up-dated. In case of an up-date the full template have to be submitted and the reference date should be the date for which the information relates to”
This means that in case of material changes the undertaking has to submit again the QRT irrespective of the date in the year when material changes occurred ? I mean that there is not a specific date (for example half year) when the undertaking has to report material changes ? And the specific procedural aspects have to be seen with the National Supervisory Authority  ?
    
11. S.30.03 C0250 Number of reinstatements : if there is an unlimited number of free reinstatements, “-1” has to be used ?

EIOPA answer

1. S.30.02 Field C0330, external rating. If a counterpart has more than one external rating, which one has to be chosen ? Is the undertaking free in the choice ?
The undertaking should use the external rating used to assess the counterparty default risk.
2. S.30.02 Field C0350, credit quality step. Has this field to be filled only by undertaking using the standard formula ? Which table is to be used to provide this value ?
Credit quality step is to be used by undertaking using the standard formula and by undertaking using internal models to the extent that the internal ratings are used in their internal modelling (if not, they are comparable to SF users and should report C0350). The table to use is the one as published in Commission Implementing Regulation (EU) 2016/1799 of 7 October 2016 laying down implementing technical standards with regard to the mapping of credit assessments of external credit assessment institutions for credit risk in accordance with Articles 136(1) and 136(3) of Regulation (EU) No 575/2013 of the European Parliament and of the Council (Text with EEA relevance) (http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2016.27...)
3. S.30.01 Facultative covers – Basic: “If reinsurance strategy changes materially after that date or if the renovation of the reinsurance contracts are performed later than the reporting date and before next 1 January, the information on this template shall be re-submitted when adequate.” Could it be possible to explain better “when adequate” ?
It is the responsibility of the undertaking to perform the materiality assessment. If these changes (reinsurance strategy changes materially or the renovation of the reinsurance contracts are performed later than the reporting date and before next 1 January) occur in June, then the re-submission should be done asap after that date. Details should be discussed with each NCA. (See Q&A 778)
4. S.30.03 Field C0200 Retention or priority (%)
Which is the value to put in the field in case of a variable quota share, in which the retention varies based on predetermined criteria ?
In this case please report the expected retention and provide further explanations in the RSR.
5. S.30.03 Field C0230 Maximum cover per risk or event
If a cover works per risk and per event with different limits, which one has to be reported ? Have 2 different sections (2 rows in the reporting file) to be defined ?
Yes, in this case two different rows should be reported to allow proper reporting of reinsurance characteristics.
6. S.30.04 Field C0120 Type of collateral (if applicable)
If the collateral is cash, which value has to be indicate ? Point “1” or point “2” (both are cash).
It depends if it is in a trust (“2) or withheld (“2”).
7. If a counterpart has not an external rating but it is provided of a parental guarantee, can it be assigned the same rating of the parent company ?
No, it should be reported as not rated. (Q&A 778)
8. S.30.02 Field C0310 Type of reinsurer
If a reinsurer is both a direct composite insurer, but also an internal reinsurer, which value has to be assigned: 3 or 5 ?
Option 5 should only be used if the reinsurance undertaking primary focus is to take risk from other insurance undertakings within the group. In this case it depends on the materiality of the business of the undertaking as a direct composite insurer and as an internal reinsurer.
9. S.30.01 Field C0130 Sum insured. If the sum insured is unlimited, can we write “-1” ?
Undertaking should provide an estimation. Please note that the risks to be reported are the ones with the highest reinsured exposure so an estimation needs to be calculated. (See Q&A 499)
10. In a previous question we asked: “ In respect of QRT S.30.03 and S.30.04: after the first picture sent in April, has the Company to send possible variations during the year ? For example is it required to send a new picture relevant to possible changes in the first six months ? Which kind of changes are significant ? If changes have to be reported, which information have to be issued ? In respect of facultative cessions (QRT S.30.01 and S.30.02) only the first picture has to be sent ?”
Answer was: ”The templates only have to be up-dated if material changes have occurred since last submission. In this case if reinsurance strategy changes materially or if the renovation of the reinsurance contracts is important. If for example, after the beginning of the year the ceding exposure changes significantly due to treaties/contracts not being renewed, the information would have to be up-dated. In case of an up-date the full template have to be submitted and the reference date should be the date for which the information relates to”
This means that in case of material changes the undertaking has to submit again the QRT irrespective of the date in the year when material changes occurred ? I mean that there is not a specific date (for example half year) when the undertaking has to report material changes ? And the specific procedural aspects have to be seen with the National Supervisory Authority ?
See answer to Q.3 above
11. S.30.03 C0250 Number of reinstatements : if there is an unlimited number of free reinstatements, “-1” has to be used ?
In case of unlimited reinstatement please leave C0250 empty and explain in C0260 (See Q&A 1016).