Question ID: 1581
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Topic: Valuation of Assets and Liabilities other than TPs
Article: 9 & 75
Status: Final
Date of submission: 14 May 2018
Question
We would like to ask a question about the SII value of assets that have an accrued interest element.
(1) Bank Deposit
Value of 1000 and associated accrued interest of 5 in statutory accounts. Is our understanding correct that the SII value of this item is 1005?
Would there be any difference in treatment if instead of a "Bank Deposit", the asset is a "Corporate Bond", "Cash at Bank" or a "Deposit with Cedant" that has the associated accrued interest?
EIOPA answer
It is correct that the accrued interest of a financial instrument is included in the SII value of that instrument, if the current market price of that instrument does not reflect the accrued interest. In your example the accrued interest is indeed shown in the SII value as '1005'. Please be advised that the presentation in the QRTs requires that the accrued interest part of the value can be separated from the nominal value.