Question ID: 2169
Regulation Reference: Other
Topic: Other
Article: 171a
Status: Final
Date of submission: 29 Jul 2020
Question
Criteria for Long-term Equity Investments (Article 171a of the Solvency II Directive) d) Covered liabilities only represent a part of total technical provisions What is the maximum share of obligations that can be covered by the assigned portfolio including the LTE investments?
Background of the question
Criteria for Long-term Equity Investments (Article 171a of the Solvency II Directive)
EIOPA answer
According to the recital 26 of the delegated regulation 2019/981, to avoid regulatory arbitrage, the portfolio of assets and the portfolio of obligations should have similar values, and each of them should not represent more than half of the total size of the balance sheet of the insurance or reinsurance undertaking. Thus, in accordance with the recital, the portfolio of obligations should not exceed 50%.