Question ID: 1595
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Article: 35
Template: S.04.01
Status: Final
Date of submission: 08 Aug 2018
Question
An undertaking based in X country (parent undertaking) writes business via FSP in Y country with the following two setups:
• The contract is closed / underwritten in X country but the risk is based in Y country and the conditions for FSP which depend mainly on the location of the risk are met. The policyholder is based in X country.
• The contract is signed by in Y country policyholder in Y country, sent to X country and then closed by a signature of an undertakings officer in X country. The risk is based in Y country and the conditions for FSP which depend mainly on the location of the risk are met in this case as well.
Should these cases be reported in S.04.01? And how should the term "underwritten" be understood in this context, i.e. location of risk or location of the closure of contract?
EIOPA answer
Business underwritten by X should be interpreted as "business carried out by X"/"business performed by X".
According to Article 13(8) of the SII Directive 'home Member State' means any of the following:
(a) for non-life insurance, the Member State in which the head office of the insurance undertaking covering the risk is situated;
(b) for life insurance, the Member State in which the head office of the insurance undertaking covering the commitment is situated; or
(c) for reinsurance, the Member State in which the head office of the reinsurance undertaking is situated;
Article 13 (9) of SII directive defines that "host Member State' means the Member State, other than the home Member State, in which an insurance or a reinsurance undertaking has a branch or provides services; for life and non-life insurance, the Member State of the provisions of services means, respectively, the Member State of the commitment or the Member State in which the risk is situated, where that commitment or risk is covered by an insurance undertaking or a branch situated in another Member State."
Therefore, the reported country should be:
◦the country in which the risk is situated (defined in article 13(13) of Directive) – in case of non-life insurance policy
◦country of the commitment (defined in article 13(14) of Directive) - in case of life insurance policy.
In the examples provided (both cases deal with non-life insurance policies) it should be:
◦Example 1:
◾The business should be reported as a freedom to provide services by using the template S.04.01 because the risk is situated in country = Y (under the assumption that "risk is based" is the same as "risk is situated" in the meaning of Directive).
◦ Example 2:
◾The business should be reported as a freedom to provide services by using the template S.04.01 because the risk is situated in country = Y (under the assumption that "risk is based" is the same as "risk is situated" in the meaning of Directive).
In case of a life insurance policy then it will be:
Example 1:◾country = X (if the habitual residence of the policy holder is X) then it is not freedom to provide services
Example 2:
◾country = Y (if the habitual residence of the policy holder is Y). It should be reported as a FOS business by using the template S.04.01.