Question ID: 1037
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Article: 31
Status: Final
Date of submission: 14 Jan 2019
Question
Paragraph 4 states 'Expenses shall be projected on the assumption that the undertaking will write new business in the future'.
Could you please provide information on the application of this paragraph to entities that are closed to new business? For example, should the entity assume that they continue to write new business and therefore they do not need a provision for closed to new business expenses or can the entity only assume that they will write the new business that is in their business plan (which in this case would be zero)?
EIOPA answer
In the case of undertakings closed to new business, the specific situation of the undertaking should be taken into account in the assumptions on future expenses, hence the projection of cash-flows should reflect that there is no underwriting of new business.