Q&A

Question

Regarding the quantitative reporting template S.12.01 for the preparatory phase I would appreciate a confirmation on the following issues:

1) In the Additional Information section, BE has to be reported by material country (cells JA1 to JA14). In terms of determining which countries are included in the materiality threshold, should we consider countries representing up to 90% for each line of business or 90% of total BE?
In the following example:
Country 1 - LoB 1, BE = 60
Country 1 - LoB 2, BE = 0
Country 2 - LoB 1, BE = 30
Country 2 - LoB 2, BE = 45
Country 3 - LoB 1, BE = 3
Country 3 - LoB 2, BE = 42
Country 4 - LoB 1, BE = 6
Country 4 - LoB 2, BE = 8
Other countries - LoB 1, BE = 1
Other countries - LoB 2, BE = 5
Which countries should be reported in cells JA1-JA14? Is it approach a or b correct?
a) Calculating the materiality threshold in termos of total LoBs, 90% of BE is reached with Country 1 , Country 2 and Country 3 (representing exactly 90%).
b) Calculating the materiality threshold by LoB:
- In terms of LoB 1: Country 1 and Country 2.
- In terms of LoB 2: Country 2, 3 and 4.
Conclusion: countries 1, 2, 3 and 4 would be in the materiality threshold under this approach.
Besides, if this is the correct approach, should we report BE for country 3, LoB 1? Country 3 is material in terms of LoB 2 but not in terms of LoB 1.

2) If an undertaking´s only business is accepted reinsurance then cells under Additional Information-Gross BE for different countries (cells J1-JF14) do not have to be reported. Could you confirm this approach?

3) When calculating the materiality threshold, should we take into account only direct business or also accepted reinsurace? 

Regarding the quantitative reporting template S.17.01 for the preparatory phase I would appreciate a confirmation on the following issues:
I have the same questions as for quantitative reporting template S.12.01 (explained above).

EIOPA answer

Question 1) 
Information reported by country shall at least represent 90% of the Technical Provisions as a whole and Gross Best Estimate of any line of business.
If a specific country has to be reported for a particular line of business to comply with the threshold then that country shall be reported for all lines of business.

Question 2)
In fact we have a different situation in Life and Non-Life templates. 

The Non-Life templates do not require the reporting of the information on accepted reinsurance by country while the Life templates require both direct business and accepted reinsurance. 
The option taken in Non-Life is mainly due to the different criteria that would have to be used between the direct business and the reinsurance business so the decision, after previous consultations, was to ask only for direct business. 

The thresholds need to consider the accepted reinsurance in case of Life and only direct business in case of Non-life.