Question ID: 1361
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Article: 18
Status: Final
Date of submission: 03 Sep 2018
Question
As it stands, article 18-5 of the Delegated acts is subject to different interpretations, because of the somewhat awkward structure of its long sentence.
The following reordering of some elements of the sentence would greatly improve the understanding. Could you confirm it should be read according to the following :
Obligations that do not relate to premiums which have already been paid and where all of the following requirements are met:
(a) the contract does not provide compensation for a specified uncertain event that adversely affects the insured person
(b) the contract does not include a financial guarantee of benefits,
do not belong to an insurance or reinsurance contract, unless the undertaking can compel the policyholder to pay the future premium.
For the purpose of points (a) and (b), insurance and reinsurance undertakings shall not take into account coverage of events and guarantees that have no discernible effect on the economics of the contract.
EIOPA answer
Article 18 paragraph 5 of the Commission Delegated Regulation (EU) 2015/35 should be read as follows:
Obligations that do not relate to premiums which have already been paid do not belong to an insurance or reinsurance contract if all of the following requirements are met:
(a) the contract does not provide compensation for a specified uncertain event that adversely affects the insured person; and
(b) the contract does not include a financial guarantee of benefits; and
(c) the undertaking cannot compel the policyholder to pay the future premium.
For the purpose of points (a) and (b), insurance and reinsurance undertakings shall not take into account coverage of events and guarantees that have no discernible effect on the economics of the contract.