Question ID: 2948
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: 132(2)(a)
Status: Rejected
Date of submission: 09 Jan 2024
Question
My inquiry pertains to the definition of the largest fire risk concentration as outlined in Article 132, paragraph 2, point a) of the Delegated Regulation (EU) 2015/35. Point a) specifies that the insurance or reinsurance undertaking must have obligations in lines of business 7 and 19, as delineated in Annex I. These obligations extend to each building, covering damage due to fire or explosion, including as a result of terrorist attacks. In my interpretation, a building can only be deemed part of the largest fire risk concentration if it is covered in the event of terrorist attacks. Therefore, without coverage in the case of a terrorist attack, such building would not qualify for inclusion within the largest fire risk concentration. I would appreciate your confirmation on whether my understanding aligns with the intended interpretation of the regulation.
EIOPA answer
This question has been rejected because the issue it deals with is already explained in Article 132(2) of Commission Delegated Regulation (EU) 2015/35. Your understanding is not correct. In accordance with Article 132(2)(a), any obligation that covers damages due to fire or explosion has to be taken into account in the calculation. In that legal provision, “including” is not a word that means “only for this reason”.