Question ID: 817
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Article: 35
Status: Final
Date of submission: 08 Dec 2016
Question
Could you kindly provide a definition of risk ? If a company insures a ship fleet issuing a single policy including the list of ships with relevant sum insured, is this one only risk? Is the sum insured to be reported the sum of all the sums insured or it is just the highest of them ?
If a company insures a chemical plant issuing a single policy and covering both property and third party liability, is this one only risk ?
If a company renews treaties on the 1st of July YYYY (inception date 01/07/YYYY) which data conditions have to be reported in March YYYY ? Conditions relevant treaties with inception date 01/07/YYYY-1 or 01/07/YYYY ?
EIOPA answer
In this template the 10 most important risks in terms of reinsured exposure for each line of business should be reported.
A contract that covers both damage and liability have to be split and attributed to the single risk. In case of (ship) fleets it depends on the cover; i.e. ships with similar risk within the fleet could be judged as single risk, comparable to car fleets. If the ships within the fleet are different, e.g. cruise ship and a supertanker, the risk is not the same. Therefore, the contract should be split by its different risks. In case of a fleet, and in addition to the selection of a single risk, the insurance undertaking should also take into account the coverage of a concentration of single risks (e.g. rental agency) if separately covered by the facultative policy conditions.
See also Q&A 11 of Answers to questions on the Fi nal report on the ITS on the templates for the submission of information to the supervisory authorities (CP-14-052) .
In the cases where renewals happen in the middle of the year the regular annual reporting should refer to treaties initiated, in this case on 01/07/yyyy-1, and submission of the templates after inception date (01/07/yyyy in this case) may be required if the reinsurance strategy changes materially as a result of the renovation of the reinsurance contracts. It is the responsibility of the undertaking to perform the materiality assessment. If these changes (reinsurance strategy changes materially or the renovation of the reinsurance contracts are performed later than the reporting date and before next 1 January) occur in July, then the re-submission should be done asap after that date, when adequate. Details should be discussed with each NCA.