Question ID: 166
Regulation Reference: Guidelines on submission of information to NCAs (Preparatory phase)
Article: 35
Status: Final
Date of submission: 14 Jul 2015
Question
It is not exactly clear what should be reported in cell A6 (Surplus funds) or cell A12 (Reconciliation Reserve). Should the IFRS Retained earning be included in the Surplus funds (referring to L1 text recital 50 & 51) or in the Reconcilation Reserve (as under the IFRS delivery)?
EIOPA answer
In cell A6 (R0070) “Surplus funds” the undertaking needs to report the specific funds (accumulated profits) related to life insurance products in relation to which the policyholders and beneficiaries contribute to the risk capital of the company in exchange for all or part of the return on its contribution (recital 50 of the Solvency II directive) and that comply with article 91 of the Solvency II Directive, in so far as authorised under national law. The amounts that comply with this article should not be considered as part of the Reconciliation reserve (see also article 69 of the Delegated Regulation).
The IFRS retaining earnings (the percentage of net earnings not paid out as dividends, but retained by the company) are part of the Reconciliation Reserve and not included in the surplus fund.