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European Insurance and Occupational Pensions Authority

1700

Q&A

Question ID: 1700

Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)

Article: 330

Status: Final

Date of submission: 19 Dec 2018

Question

The explanations of Art. 330 regarding the fungibility of own funds instruments leave some questions open in our view. Are there any concrete examples of fungible instruments or a detailed catalog of criteria for possible types of instruments?

EIOPA answer

The assessment of application of Article 330 of Delegated Regulation (DR) includes both: (i) transferability of assets within the group; and (ii) fungibility, which refers to the ability of, own funds to absorb wherever they arise in the group.  
There is not a separate catalogue of own funds in the Solvency II framework highlighting an exhaustive list of types of financial instruments that can absorb losses.  In addition to Article 330 to 334 of the DR, the characteristics set out in Article 93 of the Solvency II Directive and features set out in Articles 69 to 78 of the Delegated Regulation, as well as guideline 13 on EIOPA’s GLS on Group Solvency would be helpful when assessing own funds. You can also refer to the answer provided to Q&A 438 (published in 2017) which can be helpful as a reference on this subject.
Finally, we wish to emphasise the importance of engaging with your relevant National Competent Authority and discuss any doubts on the availability and transferability of own funds.