Question ID: 711
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
For cell R0020, C0070 the log guidance states the following:
“It shall be the difference between the basic own funds considering technical provisions without volatility adjustment and without other transitional measures and the maximum between the basic own funds considering technical provisions reported under C0010, C0020 and C0040.”
We believe the objective of the cell R0020, C0070 is to identify the impact of volatility adjustment on basic own funds. In our view, that number can be arrived at by using the following simple formula.
C0070 = C0060 – C0010 – C0030 – C0050
We are also of the view that the above formula can be applied for all cells in column C0070.
Similarly we believe numbers for all cells in column C0090 can be arrived at by applying the following formula.
C0090 = C0080 – C0010 – C0030 – C0050 – C0070
Can EIOPA confirm if they agree with us?
EIOPA answer
EIOPA confirms the interpretation of the formulation of both C0070 and C0090.
Please note that the references to the Maximum (C0070 and C0090 for R0010, R0020, R0030, R0040, R0050, R0060, R0070, R0080, R0090, R0100 and R0110) should not be taken into consideration. A detailed assessment of the different items allowed us to conclude that when it comes to TP, amounts before transitionals are higher than amounts after transitionals, but this is no longer true for other items in the template, like OF, as you stated. OF before transitionals are generally lower than after transitionals, so it should be "min" instead of "max". However, in some cases, like Tier III available OF, the amount after transitionals can be higher (because of new deferred tax assets) or lower (because of the limits in the Directive (1/3 of total OF) which might apply for undertakings breaching the SCR) than the amount before transitionals. We have the same problem with SCR for undertakings applying matching adjustment. SCR after MA can be lower (lower life and spread SCR) or higher (lower diversification effects). Therefore we should not use "max" or "min" in the formulas.
Please see also Q&A to be up-loaded in the next weeks in EIOPA website and de-activations (due to amendment) of BV64 and BV67.