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European Insurance and Occupational Pensions Authority

3125

Q&A

Question ID: 3125

Regulation Reference: (EU) 2023/894 - ITS with regard to the templates for the submission of information necessary for supervision

Topic: Reporting Templates

Template: S.25.05

Status: Final

Date of submission: 17 Jul 2024

Question

We asked were we should include LAC DT and LAC TP in QRT S25.05. In your reply (3080 - EIOPA) you instructed that LAC DT and LAC TP should be included in C0010 (Solvency Capital Requirement). If we understand Annex II log file correctly, this would only be applicable in case that loss-absorbing capacity of technical provision and/or deferred taxes are embedded in the component calculation. In our case loss-absorbing capacity of technical provision and/or deferred taxes are not embedded in the component calculation. Annex II then suggest that they should be reported as a separate components. For this case it is unclear to us how to report this separate components in QRT S.25.05.01.01 or S.25.05.01.02. S.25.05.02.01 also requires to report The total amount of LAC DT in cell R0310/C0100 and the total amount of LAC TP in cell R0300/C0100, however these rows are not included in the total SCR in R0220/C0100. We therefore ask for additional clarification.

Background of the question

Annex II Log file states All rows for C0010 refer to the amount of the capital charge for each component regardless of the method of calculation (either standard formula or partial internal model), after the adjustments for loss-absorbing capacity of technical provision and/or deferred taxes when they are embedded in the component calculation. For the components Loss absorbing capacity of technical provisions and/or deferred taxes when reported as a separate component it should be the amount of the loss-absorbing capacity (these amounts should be reported as negative values).

EIOPA answer

The purpose of S.25.05.01.01 is to collect data on an aggregate level and show diversification benefits between separate risk modules and it is a subset of template S.26.08.01.01. According to the DPM model, values populated in S.26.08 are automatically reflected in S.25.05 if they exist. S.25.05.01.01 is not supposed to include all parts of the model.

In your case, LAC DT and LAC TP should be reported in S.26.08.01.01 R0050 and R0060 respectively. Also they should be reported in S.25.05.01.02 in R0310 and R0300 respectively. Finally, also S.25.05.01.02 R0220/C0010 should include LAC DT and LAC TP, as it refers to the overall capital requirement.