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European Insurance and Occupational Pensions Authority

1274

Q&A

Question ID: 1274

Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)

Topic: Solvency Capital Requirement (SCR)

Article: 9

Status: Final

Date of submission: 18 Apr 2017

Question

As Solvency II proposes to use International Accounting Standard 19 (IAS 19) as the basis for the recognition of amounts relating to employee pension schemes on the Solvency II balance sheet, small insurance undertakings struggle to implement these provisions in a way that is feasable in each individual situation. To find a feasible solution in this situation, we consider, by way of derogation from IAS 19 and in particular by respecting the principle of proportionality, to apply Art. 9(4) of Delegated Regulation (EU) 2015/35 for Liechtenstein’s insurance market in this regard. What is your view on this proposal?

EIOPA answer

We understand that these cases are within the scope of Art. 9 (4) of Delegated Regulation 2015/35. If market-consistent valuations are ensured, these undertakings are exempted from using IFRSs. In order to endorse market consistent valuations, we support the use of safeguards, such as annual expert reports regarding the financial soundness and robustness of the pensions obligation.