Question ID: 2189
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: 155
Status: Final
Date of submission: 08 Sep 2020
Question
We kindly ask you for clarification regarding an issue about the capital requirement for medical expense (disability-mordidity risk) according to article 155 of the delegated regulation. Which scenario (increase/decrease of medical payments) should be selected for the gross solvency capital requirement - the one with the higher gross requirement or (if different) the one corresponding to the higher net solvency capital requirement similar to other parts in the SCR calculation where the latter is used?
Background of the question
In a few different articles there is a special mention of article 206, in that out of multiple Scenario possibilities, you have to use the gross value out of the scenario with the highest net value: art. 142 lapse risk, art. 159 SLT health lapse Risk, art. 165 interest rate Risk, art. 179 spread Risk on credit derivatives. However for article 155, there is no such mention. Therefore we are not sure, if in spirit with the rest of the delegated regulation one has to use the highest gross value or the gross value of the scenario with the highest net value.
EIOPA answer
The scenario producing the higher net solvency capital requirement is to be used.