Question ID: 2017
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Topic: Solvency Capital Requirement (SCR)
Article: 134 L12/88
Status: Final
Date of submission: 30 Aug 2019
Question
Credit and Surety business : The capital required for recession risk shall be equal to the loss in basic own funds of insurance and reinsurance undertakings that would result from an instantaneous loss of an amount that, without deduction of the amounts recoverable from reinsurance contracts
EIOPA answer
Within the Commission Delegated Regulation (EU) 2015/35, Article 134 (especially its paragraphs 2 and 4) on the credit and suretyship risk sub-module should be read in conjunction with the overarching Article 83 on the scenario-based calculations, especially its paragraph 4 where the impact of the scenario on the authorised risk mitigation techniques held by the undertaking should be taken into account.
The mention in Article 134 in particular (which can be found in general in many other non-financial liability-related risk modules) of ‘without deduction of the amounts recoverable from reinsurance contracts and special purpose vehicles’ aims at avoiding any double counting effect of the risk mitigation techniques effects already taken into account by virtue of Article 83.