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European Insurance and Occupational Pensions Authority

71

Q&A

Question ID: 71

Regulation Reference: Guidelines on submission of information to NCAs (Preparatory phase)

Article: 35

Template: S.26.03

Status: Final

Date of submission: 13 May 2014

Question

Regarding the quantitative reporting template S.26.03 for the preparatory phase I would appreciate a confirmation on the following issue.

The EIOPA Final Report on Public Consultation No. 13/010 On the Proposal for Guidelines on Submission of Information to National Competent Authorities the Solvency Capital Requirement for Life underwriting risk has to be reported for the major material RFF and the remaining part.

The question regards the meaning of remaining part and I would like to express my question through a numeric example as follows.

The example undertaking has the following structure:
RFF 1: this is the major material RFF.
RFF 2: this a material RFF but it is NOT the major material RFF.
RFF 3: this is a non-material RFF.
Non-RFF part: part of the undertaking that is not a RFF.

Here are the SCR for Life underwriting risk for the above mentioned components of the undertaking:

SCR life RFF 1 = 100
SCR life RFF 2 = 70
SCR life RFF 3 = 10
SCR life non-RFF part = 500

What amount of SCR life has to be reported for the "remaining part"?

a) 500 (only SCR for non-RFF part).
b) 580=500+10+70 (SCR for non-RFF part + SCR for RFF 3 + SCR for RFF 2)
c) 510=500+10 (SCR for non-RFF part + SCR for RFF 3)

 

EIOPA answer

The remaining part corresponds to the non-RFF business and the non-material RFF. For the preparatory phase only the most material RFF have to be reported by RFF, however the other material RFF should not be included in the remaining part. In the example given the correct answer could have been the answer c), however there is no need to calculated a dedicated SCR for the non-material RFF which have to be integrated in the remaining part for SCR calculation.