Question ID: 1445
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Article: 35
Template: S.27.01
Status: Final
Date of submission: 16 Jan 2018
Question
It seems to me that there may be some mistake in the formula for R4420/C1510 in QRT S.27.01.01. In answer number 1182 which was given on June 13th 2017, the formula is stated to be
0.000075 * 'Income protection pandemic exposure' + 0.4 * 'Sum of gross catastrophe risk charge for all countries'
However, I believe that the '0.4' factor may have been misplaced. Should it not be multiplied to 'Catastrophe Risk Charge before risk mitigation' of each country and then R4420/C1510 would be the sum of all the 'Catastrophe Risk Charge before risk mitigation's?
EIOPA answer
The calculation of the pandemic risk sub-module is defined in article 163 of the Delegated Regulation and is defined as:
Lp = 0,000075 * E + 0,4 * Sum Nc * Mc
where:
(a) E denotes the income protection pandemic exposure of insurance and reinsurance undertakings;
(b) the sum includes all countries c;
(c) Nc denotes the number of insured persons of insurance and reinsurance undertakings which meet all of the following conditions:
(i) the insured persons are inhabitants of country c,
(ii) the insured persons are covered by medical expense insurance or reinsurance obligations, other than workers' compensation insurance or reinsurance obligations, that cover medical expenses resulting from an infectious disease;
(d) Mc denotes the expected average amount payable by insurance or reinsurance undertakings per insured
person of country c in case of a pandemic.
In our view, when the stakeholder asked under Q&A 1182 if the formula: 0.000075 * 'Income protection pandemic exposure' + 0.4 * 'Sum of gross catastrophe risk charge for all countries'
was correct we believe his interpretation was correct.
The template however do request the reporting of information by country, including the multiplication of 0,4 * Nc * Mc, per country.