EIOPA · 1037
1037
- Regulation
- (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
- Article
- 31
- Submitted
- 2019-01-14
- Answered
- 2019-09-12
Question
Paragraph 4 states 'Expenses shall be projected on the assumption that the undertaking will write new business in the future'.
Could you please provide information on the application of this paragraph to entities that are closed to new business? For example, should the entity assume that they continue to write new business and therefore they do not need a provision for closed to new business expenses or can the entity only assume that they will write the new business that is in their business plan (which in this case would be zero)?
Answer
In the case of undertakings closed to new business, the specific situation of the undertaking should be taken into account in the assumptions on future expenses, hence the projection of cash-flows should reflect that there is no underwriting of new business.
This Q&A is published by European Insurance and Occupational Pensions Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.
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