Question ID: 414
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Article: 35
Template: S.05.01
Status: Final
Date of submission: 24 Nov 2015
Question
Definition provided in this form's LOG for commissions is similar to the acquisition expenses definition provided in S.05.01.01 - premiums, claims & expenses by line of business LOG.
Should this be reported as acquisition expenses and include other costs like salaries for the underwriters?
EIOPA answer
In S.04.01 “Commissions” are defined as: “Acquisition expenses incurred, including renewal expenses, which can be identified at the level of individual insurance contract and have been incurred because the undertaking has issued that particular contract. These are commission costs, costs of selling, underwriting and initiating an insurance contract that has been issued. It includes movements in deferred acquisition costs“
In S.05.01 “Acquisition expenses” are defined as: “Acquisition expenses include expenses, including renewal expenses, which can be identified at the level of individual insurance contract and have been incurred because the undertaking has issued that particular contract. These are commission costs, costs of selling, underwriting and initiating an insurance contract that has been issued. It includes movements in deferred acquisition costs.”
Both templates are to be reported from an accounting perspective, i.e.: Local GAAP or IFRS if accepted as local GAAP.
Therefore the intention is actually to have the same item reported even if in S.04.01 is called “Commissions” and in S.05.01 is called “Acquisition expenses”.