Question ID: 1701
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Article: 35
Template: S.23.01
Status: Final
Date of submission: 12 Jul 2019
Question
Our question is if an insurer should report foreseeable dividends in quarters 2 and 3. Example: An entity expects to pay x EUR to its mother entity in 2018 and already books that amount in Q4/2017 as foreseeable dividend on S.23.01. The same amount is reported in Annual 2017 and in Q1/2018.
Then, the dividend is payed for example in June 2018. Does this entity have to consider foreseeable dividends in Q2 and Q3/2018 already for 2019? If this is the case, should it consider them as aggregate amount or accumulate the dividends?
EIOPA answer
Following Solvency II principles of economic valuation EIOPA recommends that as soon as a dividend is foreseeable it is considered in full in that quarterly reporting. This option is in line with the Guidelines on classification of own funds (EIOPA-BoS-14/168) whose Guideline 2 states that undertakings should consider a dividend or distribution to be foreseeable at the latest when it is declared or approved by the AMSB, or the other persons who effectively run the undertaking, regardless of any requirement for approval at the annual general meeting.
A dividend is foreseeable when the payment becomes likely considering the dividend payment history of the company, the business development throughout the year, the reference date of the assessment and, where appropriate, other relevant circumstances.