Question ID: 1081
Regulation Reference: Guidelines on loss-absorbing capacity of technical provisions and deferred taxes
Article: 205
Status: Final
Date of submission: 21 Jun 2018
Question
When using Orientation 2, I need to calculate the SCR gross for each risk submodule. In order to do so, I need to add the difference between FDB under the central scenario and FDB under a stressed scenario to my net SCR. If the FDB under the stressed scenario is higher I will obtain a negative value for my difference: this leads to SCR gross < SCR net.
Is it correct to obtain such result where gross higher than net? Do I need to cap the gross SCR to the net?
What is your position on this matter?
EIOPA answer
In principle there could be cases where the capital requirement for a module or sub-module in the calculation of the net Basic Solvency Capital Requirement is higher than in the calculation of the as Basic Solvency Capital Requirement.
This does not depend on whether the mentioned simplification in Guideline 2 of the EIOPA Guidelines on loss-absorbing capacity of technical provisions and deferred taxes is used or not.