Question ID: 2580
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: Article 31; Annex XVII
Status: Final
Date of submission: 13 Feb 2023
Question
We kindly request clarification on the following points on Annex XVII of Commission Delegated Regulation (EU) 2015/35 (DR) in relation to method-specific data requirements and method specifications for undertaking-specific parameters of the standard formula:
1) Section B, paragraph 1(a) states: "the payments made and the best estimates of the provision for claims outstanding in segment s after the first development year of the accident year of those claims (aggregated losses)". Do those aggregated losses refer to the payments plus the best estimate of the provision for year of occurrence seen at the end of year zero of evolution?
2) Section B, paragraph 2(f) states: “the aggregated losses include the expenses incurred in servicing the insurance and reinsurance obligations". Does the statement refer to the claims management expenses referred to in paragraph 1 point (c) of Article 31 DR or to all the expenses referred to in paragraph 1, points (a) to (d) of that Article?
EIOPA answer
1) The aggregated losses referred to in Annex XVII B.(1)(a) DR for a given year t should be equal to the claims paid during year t plus the best estimate of the claims outstanding at the year end of the first development year of the accident year t.
2) The statement refers to all the expenses listed in Article 31(1), points (a) to (d) of DR.
The aggregated losses referred to in Annex XVII B.(2)(f) DR are defined in Annex XVII B.(1)(a) DR as the payments made and the best estimates of the provision for claims outstanding in segment s after the first development year of the accident year of those claims. Article 31(1) DR lists the expenses that should be taken into account in cash-flow projections used to calculate best estimates.