Question ID: 571
Regulation Reference: Guidelines on reporting and public disclosure
Article: 26, 34, 35
Template: S.05.01
Status: Final
Date of submission: 27 May 2016
Question
The definition for "Changes in other technical provisions" is unclear in the log file for the QRT S.05.01. It refers to the directive 91/674/EEC but this directive does not provide a definition for "Changes in other technical provisions".
The article 26 provides a definition for "Other technical provisions" and the unrelated article 34 (II.6) refers to the "Change in other technical provisions not shown under other headings" but does not provide a definition as such.
As the QRT S.05.01 discloses P&L positions, our interpretation is that the intention would be to disclose the "Change in other technical provisions not shown under other headings" referred to in the article 34 (II.6) rather than the change in "Other technical provisions" defined in the article 26.
Could you please confirm that our interpretation of the "Changes in other technical provisions" in the QRT S.05.01 is correct?
EIOPA answer
EIOPA clarifies that the purpose of the template is not to replicate the accounting P&L but to use the definitions from accounting Directive.
Template S.05.01 shall be reported from an accounting perspective, i.e.: Local GAAP or IFRS if accepted as local GAAP but using SII lines of business. Therefore, by default follows (does not replicate) the structure of the Directive 91/674/EEC.
Under this Directive the structure of the profit and loss account as defined in article 34 includes the following (only relevant items identified):
o Earned premiums (which includes the variation of provision for unearned premiums)
o Claims incurred (which included the variation of provision for claims)
o Changes in other technical provisions (which includes the variation of the other technical provisions not shown elsewhere). For example, in the Life technical account this item explicitly includes the life assurance provision (mathematical reserve) and it should also include the technical provisions for Index Linked and Unit Linked technical.
As the template does not aim to give a full picture of the technical nor non-technical account, the items that according to the Directive are not included in “Changes in other technical provisions” should not be reported, in particular changes in the equalization provisions or Changes in bonus and rebates technical provisions. It should also be noted that the bonus and rebates incurred during the year should also not be reported as expenses.