Question ID: 2444
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: 135 and Annex XII
Status: Final
Date of submission: 30 May 2022
Question
This question relates to Article 135 and Annex XII of Delegated Regulation (EU) 2015/35 and the risk factor of 40% applying to insurance and proportional reinsurance obligations in respect of miscellaneous financial loss insurance.
If an insurance undertaking using the standard formula amends its policy wording (which is a travel insurance policy, falling under the miscellaneus financial loss insurance) such that catastrophe risk events/accumulation of a large number of similar claims are now excluded (i.e. there is no longer an exposure to such events), would this still result in a non-life catastrophe risk capital requirement?
EIOPA answer
The described case would result in a capital requirement for the other non-life catastrophe risk sub-module.
As referred to in Article 135 of Delegated Regulation (EU) 2015/35, the capital requirement depends on the estimate gross premiums but not on the exclusions in the terms and conditions of the policies.
See also Q&A 2292 on the applicability of terms and conditions for the natural catastrophe risk submodule and man-made catastrophe risk submodules.