EIOPA · 1211

Other

Regulation
(EU) No 2015/2011 - lists of regional governments & local authorities, exposures to be treated as to central government
Article
109
Topic
Other
Submitted
2017-03-09
Answered
2021-06-11
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Question

Are guarantees given by regional governments and local authorities to be treated as exposures guaranteed by the central government and be assigned a probability of default equal to 0 %?

Background

Art. 109a para. 2 point (a) of Directive 2009/138/EG;Art. 1 of COMMISSION IMPLEMENTING REGULATION (EU) 2015/2011;Recital 42 and Art. 180(2) point (a), Art. 199 para. 8, 10, 11 of Commission Delegated Regulation (EU) 2015/35;point 2.2 (b) sentence 2 of the Final report on public consultation No. 14/057

Answer

The answer below is based on the following assumptions:a. an exposure A is fully, unconditionally and irrevocably guaranteed by a counterparty B listed in the implementing act adopted pursuant to point (a) of Article 109a(2) of Directive 2009/138/ECb. Exposure A is  denominated in the domestic currency of Bc. the guarantee arrangement for exposure A complies with Articles 209 to 215 DAUnder these assumptions the insurance and reinsurance undertaking should assign a probability of default equal to 0%.
View original on European Insurance and Occupational Pensions Authority ↗

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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