Question ID: 908
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Article: 35
Template: S.05.01
Status: Final
Date of submission: 07 Mar 2017
Question
We note that the S.05.01 log states 'This template shall be reported from an accounting perspective, i.e.: Local GAAP or IFRS if accepted as local GAAP but using SII lines of business. Undertakings shall use the recognition and valuation basis as for the published financial statements, no new recognition or re-valuation is required'.
On the Society's Financial statements (under FRS 102), amounts received in respect of Unit-linked investment contracts are accounted for using deposit accounting, under which amounts collected are credited directly to the balance sheet as an adjustment to the liability to the policyholder.
Premiums and claims on Unit linked contracts are not recognised for the financial statements on the Statement of Comprehensive Income.
Should we therefore report the premiums and claims on Unit linked business on the S.05.01 or should this be left blank to match the total amount of premiums and claims as reported in the Society's financial statements (Statement of Comprehensive Income)?
EIOPA answer
When the instructions of the template refer to "insurance contracts" it should be considered as insurance contracts under Solvency II, i.e. all insurance contracts issued by the undertakings.
This means that regardless of the use of IFRS, if accepted as local GAAP, or local GAAP under which some contracts may be classified as investment contracts, the premiums, claims, and expenses requested in templates S.04.01, S.05.01 and S.05.02 should consider all insurance business.
As this might not be clear from the instructions of the templates, undertakings might have implemented it differently, applying accounting standards that recognise some insurance contracts as investment contracts, and therefore currently not include these amounts in the referred templates.
EIOPA will put forward a corresponding amendment in the next revision of the ITS. In the meantime, undertakings can choose to comply with this interpretation in time for the Solvency II submission. Where they are unable to do so, ad-hoc reporting for supervisory purposes can be requested by NSAs where information is required for supervisory purposes.