Question ID: 880
Regulation Reference: Guidelines on reporting for financial stability purposes
Article: 35
Status: Final
Date of submission: 14 Dec 2016
Question
XYZ has one long-term group business: Profit sharing for Group Business takes place once a year after year end. Allocation to the policyholder is driven by the legal quote and it is based on the profit of the whole year for the contracts that are in force at year end. Therefore exact data for profit sharing is only available in February of the next year.
An entity reports forecast figures for the profit allocation before year end. It is suggested to use these forecast instead of the actual allocation of the current year which would corresponds to the portfolio of the foregoing year?
EIOPA answer
When actual figures for profit sharing are not available, forecasts are acceptable as part of the best effort principle.