1842

Question

Can EIOPA help clarify which FX rate should be used for converting the absolute floor of the MCR from the Directive (defined in Euros) amount into the reporting currency.
We have seen different implementations across NCAs which relate to interpretation/national implementation of Directive Article 299:"Where this Directive makes reference to the euro, the exchange value in national currencies to be used with effect from 31 December of each year shall be the value which applies on the last day of the preceding October for which exchange values for the euro are available in all Community currencies."
In one NCA case (where the national currency is Euro), the NCA states that the FX rate to be used should not be from the Official Journal (from last day in preceding October) but should be the FX rate used by the entity at the valuation date.
Can EIOPA confirm if the above is correct?
Moreover, for clarity (as these are real cases that we have observed) what should be the approach in the following cases:1) the national currency is not Euro but also the insurer's reporting currency is not in the national currency? eg a UK insurer with USD reporting currency.2) the national currency is not Euro but the insurer's reporting currency is Euro eg UK insurer with EUR reporting currency.

European Insurance and Occupational Pensions Authority · Accepted Answer

EIOPA confirms that the conversion of the euro amounts for the absolute floors of the MCR set out in Article 129 of Directive 2009/138/EC and of the euro amount set out in Article 129(1) of Commission Delegated Regulation (EU) 2015/35 should be carried out in accordance with Article 299 of Directive 2009/138/EC. Please note that Article 299 of Directive 2009/138/EC is only relevant for the conversion of regulatory amounts as stated in the article itself, i.e. it's not relevant for the conversion of the balance sheet and other QRT data to the reporting currency. Thus, on the 2 additional cases:
1.First case: The FX from EUR to USD to be used to determine the absolute floors of the MCR set out in Article 129 of Directive 2009/138/EC and of the euro amount set out in Article 129(1) of Commission Delegated Regulation (EU) 2015/35 should be carried out in accordance with Article 299 of Directive 2009/138/EC, i.e. last day from the preceding October.
2.Second case: Since the relevant currency for the undertaking is EUR and the absolute floors of the MCR set out in Article 129 of Directive 2009/138/EC and the amount set out in Article 129(1) of Commission Delegated Regulation (EU) 2015/35 are also in EUR, the undertaking would have available all the amounts in its relevant currency (EUR), so no conversion is to be done.

1842

Question

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