Question ID: 1480
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Article: 192, 61, 42
Status: Final
Date of submission: 03 Aug 2018
Question
We would have a question related to the term Recoverables in Article 192 of the Delegated Regulation. We were wondering whether you know who can help us out on this matter or whether you can provide some clarification.
Article 192 indicates that the “recoverables” term in the formula for the loss given default for SCRdef, “denotes the best estimate of amounts recoverable from the reinsurance arrangement (…)”. We understand that it corresponds to the amounts recoverable from reinsurance contracts and special purpose vehicles gross of counterparty default adjustment ( according to Article 61). However, the reference to best estimate in the definition could indicate amounts recoverable net of the counterparty default adjustment as defined in Article 42.
Could EIOPA provide clarification?
EIOPA answer
The term Recoverables referred to in Art. 192 (2) of Delegated Regulation (EU) 2015/35 should be the best estimate of amounts recoverable from the reinsurance arrangement or insurance securitisation and the corresponding debtors taking into account the counterparty default adjustment referred to in Art. 81 of Directive 2009/138/EC and Art. 42 of Delegated Regulation (EU) 2015/35.