Question ID: 509
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Article: 35
Status: Final
Date of submission: 01 Sep 2016
Question
There is a conflict between the template and the log file for disclosure of discounted benefits for accepted reinsurance:
· The template requires total accepted reinsurance benefits to be split between FGB and FDB. The cells that split by LOB for accepted reinsurance are crossed out to indicate not required. The equivalent cells for direct written business are for with-profits participation only.
· The log file instructions specifically describe that the split between FGB and FDB relates to with-profits participation LOB and hence does not relate to total accepted reinsurance.
Hence, it is assumed that there is an error in the template, and that the reinsurance accepted column should be completed on the basis that it relates to with-profits business only (i.e. C0110 instead of C0100). It should be noted however that this interpretation makes no allowance for inclusion of accepted reinsurance for ‘Index-linked and unit-linked insurance’ and ‘Other life insurance’ as the cells for these lines of business are crossed out in the template - hence these rows will not capture all lines of business.
EIOPA answer
According to recital (17) of the Commission Delegated Regulation 2015/35 “The definition of future discretionary benefits should capture the benefits of insurance and reinsurance contracts that are paid in addition to guaranteed benefits and that result from profit participation by the policy holder. It should not capture index-linked or unit-linked benefits.”. For this reason template S.12.01 only allows the reporting of future discretionary benefits for the LoB “Insurance with profit participation” (C0020). In relation to the “Accepted reinsurance” it is required that only C0100 is reported (total accepted reinsurance). However it is considered that the values can only relate to “Insurance with profit participation” in R0250 which is the reason why in the Instructions this LoB is referred to.
However, regarding C0100/R0240 it is correct that the reference to LoB "Insurance with profits" should not be considered and all future guaranteed benefits related to accepted reinsurance, regardless of the LoB should be reported.