1996 - European Union

Q&A

Question ID: 1996

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

Topic: Solvency Capital Requirement (SCR)

Article: N/A

Status: Revised

Date of submission: 29 Jul 2019

Question

Please clarify whether the asset (right of use) that is recognised in accordance with IFRS16, as a result of a lease, as well as the relevant liability, will need to be taken into consideration in the calculation of SCR. If yes, please indicate the relevant risk.

Background of the question

As per the answer to question 1809 the companies need to recognise the relevant asset and liability in their SII balance sheet. Therefore we need clarification in relation to the SCR treatment.

EIOPA answer

As per the answer to question 1922, and expanded upon in the answer to question 2172, both the asset and the liability will need to be taken into consideration in the calculation of the SCR. The relevant risks will depend on the inputs used in the valuation of the asset and liability.