EIOPA · 2045

Solvency Capital Requirement (SCR)

Name: Solvency Capital Requirement (SCR): EIOPA Q&A — EU Financial Regulatory Q&A
Creator: European Insurance and Occupational Pensions Authority
License: https://creativecommons.org/licenses/by/4.0/

Regulation: (EU) No 2009/138 - Solvency II Directive (Insurance and Reinsurance)
Article: NA
Topic: Solvency Capital Requirement (SCR)
Submitted: 2019-10-30
Answered: 2020-09-11

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Question

For operational leases, IFRS 16 requires lessees to include right-of-use asset and lease liability in the balance sheet. Could you let us know what are the consequences for SCR calculation and SII balance? Is SII balance sheet changed accordingly? In that case, how do you classify the right-of-use asset? If the underlying item is immovable property, does it affect the Property Risk module?

Background

IFRS 16 - lease accounting and treatment of right-of-use asset and lease liability

Answer

The rights-of-use asset is categorised as the underlying asset for the SII balance sheet and accordingly for the determination of the capital requirements.

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