Question ID: 2859
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: 121
Status: Final
Date of submission: 07 Nov 2023
Question
We have a query regarding the treatment of gadget insurance (e.g. mobile phone insurance) that is classified and reserved under “Line of Business 7 – Fire and other damage to property insurance".
Our query concerns the application of the non-life catastrophe risk sub-module in the standard formula, and more specifically the natural catastrophe risk sub-module(s).
Should the natural catastrophe stress apply only to immoveable property (i.e. buildings) or is it to be applied to all forms of property including gadgets such as mobile phones, mobility scooters, bikes, etc.?
As an example, a gadget insurance policy typically wouldn't specifically cover windstorm exposures. However, a windstorm could potentially cause damage to the policyholder's mobile phone in certain circumstances.
EIOPA answer
In accordance with Article 121 DR, the sum insured (SI(property,r,i)) referred to in paragraph 7 should include all obligations from line of business 7 that, according to the terms and conditions of the insurance policy, cover windstorm risk. There is no difference in treatment of moveable and immoveable property.