EIOPA · 2198
Solvency Capital Requirement (SCR)
- Regulation
- (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
- Article
- 34
- Topic
- Solvency Capital Requirement (SCR)
- Submitted
- 2020-09-28
- Answered
- 2021-06-28
Question
With regards to the Long-Term Equity qualification, is there a materiality threshold under which it could be tolerated to sell positions? Would the sale of a non significant position considered as LTE have any undesired impact on the eligiblitity of other LTE investments held in the portfolio of assets, given the fact that this position in particular represents 0,1% of the total LTE positions, and that its contribution to the average holding period of the portfolio is not significant? The average holding period of the LTE portfolio would remain unchanged at 3,5 years (with the intention not to sell until an average holding period of 5 years).
Answer
According to Article 171a (e) of the Commission Delegated Regulation (EU) 2015/35, if the average holding period of the sub-set is lower than 5 years (that is the case described), the undertaking cannot sell any equity investments within the sub-set until the average holding period exceeds 5 years, even if the average holding period of the portfolio remain unchanged.
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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