Question ID: 1846
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Topic: Other
Article: 182
Status: Final
Date of submission: 13 Nov 2019
Question
Should ordinary shares (shocked under Type I or Type II Equity Shock, bought commercially e.g. on a stock market or as private equity, not Participations) also be considered in the Concentration Risk module?
EIOPA answer
Within the market risk module, the equity risk sub-module and the concentration risk sub-module capture different types of risks: risk of adverse changes in the level or in the volatility of market values of equities for the former, and risks stemming from a lack of diversification in an assets portfolio or from a large exposure to a single issuer or group of related issuers of securities for the latter.
Therefore the equity risk sub-module does not include the concentration one. Ordinary shares should then also be considered in the concentration risk sub-module.