Question ID: 1285
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Article: 35
Template: S.29.03
Status: Final
Date of submission: 09 Aug 2018
Question
We are seeking clarification on how/where to present movements in Technical Provisions as a Whole and Unitised Fund Values in order to ensure consistency between QRTs S.29.03.01 and S.29.04.01 as specified in the EIOPA validations.
The Variation Analysis QRT S.29.03.01 and S.29.04.01 analyse the changes in excess of Assets over Liabilities due to Technical Provisions. Both of these QRTs explain the variation in Technical Provision broken down into its various components. Our approach is that all unitised funds on pure unit-linked business are considered Technical Provision as a Whole and hence the change in the Technical Provision as a Whole reflects a change in the value of the Unit Fund. No other elements contribute to Technical Provision as a Whole.
Our interpretation of rows R0050 and R0060 in S.29.04.01 is therefore as follows:
• R0050 will show all variation in the unit fund and,
• R0060 will be zero
This will ensure that the Variation in Technical Provisions as a result of the variation in Technical Provision as a Whole (i.e. the unit fund) is only shown once. This will allow the Total (R0070) to reflect the net position of the above rows.
Do you agree with this presentation?
Similarly, our view is that S.29.03.01 R0300/C0090 should show the ‘Variation in investments in Unit-Linked’ which, in line with our methodology, would reflect the Variation in Technical Provision as a Whole.
The challenge to this approach arises when considering consistency between the two QRTs. It has been suggested to us that S.29.03.01 R0300/C0090 should equal the sum of S.29.04.01 R0060 across all lines of business. This would however result in the movement of Technical Provisions as a Whole not being reflected in S.29.03.01. Can you advise on how/where we should bring through movements in TP as a whole to ensure consistency between the two templates?
Note the above only refers to the Underwriting Year Approach as Accident Year is not applicable to our business.
EIOPA answer
Regarding the treatment of index-linked and unit-linked business, regardless of how TP are calculated, please see EIOPA Explanatory notes on reporting templates Variation Analysis templates ( EIOPA consults on increased proportionality of supervisory reporting and public disclosure).
Regarding the contracts valued as TP calculated as a whole (in the case you describe, your unit-linked business) the main table in S.29.03 (from R0010 to R0290) reflects only amounts related to best estimate, i.e. it does not include the risk margin, technical provisions calculated as a whole nor the transitional measure on Technical Provisions. However, in R0360 the amount refers to technical provisions (i.e. including best estimate, risk margin, technical provisions calculated as a whole and the transitional measure on Technical Provisions).
In this case R0360 would be the only one where the index-linked and unit-linked business technical provisions which is calculated as TP as a whole would be reported. Please note that in any case the technical flows related to index-linked and unit-linked business should be reported in S.29.01.R0310 to R0350.
In S.29.04.R0060 and R0130, as stated above, the net impact of the amount of the assets held by index-linked and unit-linked business and of Technical provisions – index-linked and unit-linked (calculated as best estimate and risk margin or calculate as a whole), including the technical flows, should be reported split by periods for information (same value as in S.29.03.R0300).