Question ID: 1197
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Article: 35
Status: Final
Date of submission: 13 Jun 2017
Question
Some credit insurance are perceived as life product because of duration of contract >1 year. Credit insurance gives an option of premium refund for single payment contracts in case of early repayment of credit/loan. Could this premium refund be treated as "surrender value"? Because this is an option but it is not called surrender value but premium refund as part of UPR is refunded.
EIOPA answer
In our opinion the contract described raises non-life obligations rather than life obligations. Non-life obligations can also have a duration >1, depending on the contract boundaries of the contract. Hence, the obligations should not be reported in S.12.01. It should rather be reported as non-life obligation and the characteristics of the product, i.e. duration >1 and premium refund possibility need to be taken into consideration when determining the contract boundaries and calculating the premium and claim provision.