Question ID: 2045
Regulation Reference: (EU) No 2009/138 - Solvency II Directive (Insurance and Reinsurance)
Topic: Solvency Capital Requirement (SCR)
Article: NA
Status: Final
Date of submission: 30 Oct 2019
Question
For operational leases, IFRS 16 requires lessees to include right-of-use asset and lease liability in the balance sheet. Could you let us know what are the consequences for SCR calculation and SII balance? Is SII balance sheet changed accordingly? In that case, how do you classify the right-of-use asset? If the underlying item is immovable property, does it affect the Property Risk module?
Background of the question
IFRS 16 - lease accounting and treatment of right-of-use asset and lease liability
EIOPA answer
The rights-of-use asset is categorised as the underlying asset for the SII balance sheet and accordingly for the determination of the capital requirements.