EIOPA · 2113
Solvency Capital Requirement (SCR)
- Regulation
- Other
- Article
- N/A
- Topic
- Solvency Capital Requirement (SCR)
- Submitted
- 2020-03-06
- Answered
- 2021-06-18
Question
For the Standard Formula lapse stress, should we stress the BEL gross of reinsurance or net? If gross, what is the reasoning for doing it?
Answer
Where the reinsurance contract meets the requirements set out in Article 209 to 215 of the Commission Delegated Regulation (EU) 2015/35, the effect of the lapse shocks on the recoverables from reinsurance contracts should be included in the calculation of the capital requirement for lapse risk (i.e. shock net of reinsurance).
Where the above condition is not met, the effects should only be included if the result is a higher capital requirement (i.e. potentially shock gross of reinsurance).
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.
More Q&As on this topic
📋 Track EU financial regulation continuously
Forseti monitors EU financial regulation and delivers personalised alerts anchored to verified official sources.
14-day free trial. No credit card required.