Question ID: 3005
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Topic: Technical Provisions (TPs)
Article: 116(3)(b) of DR 2015/35
Status: Rejected
Date of submission: 16 Feb 2024
Question
We appreciate that Q&A 1848 states that plast should not be zero. However, we want to confirm if the plast inputs should be a full 12 months of earned premium or if plast should be consistent with the level of unexpired premium (i.e. if at the valuation date there are bound policies with the equivalent of two months of premium to be earned in the following12 months, then plast should be consistent and include two months of premium based on the prior year rates.)? In this scenario where the unexpired premium is small relative to a full year of premium, including a full year of premium exposure within the Plast input would not reflect the economic risk associated with the unexpired premium
Background of the question
How to calculate the risk margin. Clarification on the plast inputs to be used when calculating the SCR(t).
EIOPA answer
This question has been rejected because P(last, s) is already clearly defined in Article 116(3)(b) of the Commission Delegated Regulation as being a full 12 months of earned premiums: “P(last,s) denotes the premiums earned by the insurance or reinsurance undertaking in the segment s during the last 12 months”.