Question ID: 932
Regulation Reference: (EU) No 2015/2452 - procedures, formats and templates of the solvency and financial condition report
Article: 24, 25, 26, 35
Template: S.05.01
Status: Final
Date of submission: 03 Feb 2017
Question
What should be reported in R0410 - R0500 in nonlife part of report S.05.01 and in R1710 - R1800 in life part of report S.05.01.
Our undertanding of this item was in connection to Article 24 and Article 25 of Directive 91/674/EEC following: the change in technical provision other than Provision for unearned premiums, Life assurance provision, Claims outstanding, Provisions for bonuses and rebates and Technical provisions for life-assurance policies where the investment
risk is borne by the policyholders. Other technical provisions according Article 26 shall comprise, inter alia, the provision for unexpired risks, i.
e. the amount set aside in addition to unearned premiums in respect of
risks to be borne by the insurance undertaking after the end of the
financial year ... .
Our finding is that this item for some insurance undertakings comprise change in IFRS insurance liabilities not included in Premiums earned and Claims incured. In non-life insurance the item includes provision for bonuses and rebates and in life insurance whole life assurance provision and Unit-linked provision.
What description of other technical provision is correct?
EIOPA answer
Template S.05.01 shall be reported from an accounting perspective, i.e.: Local GAAP or IFRS if accepted as local GAAP but using SII lines of business. Therefore, by default follows the structure of the Directive 91/674/EEC.
Under this Directive the structure of the profit and loss account includes the following (only relevant items identified):
- Earned premiums (which includes the variation of provision for unearned premiums)
- Claims incurred (which included the variation of provision for claims)
- Changes in other technical provisions (which includes the variation of the other technical provisions not shown elsewhere). In the Life technical account this item explicitly includes the life assurance provision (mathematical reserve) and it should also include the technical provisions for Index Linked and Unit Linked technical.