EIOPA · 2291
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
- ARTICLE 116 Annex II
- Topic
- Solvency Capital Requirement (SCR)
- Submitted
- 2021-05-17
- Answered
- 2021-05-17
Question
Following our review of Annex II and Article 116 we have following two questions on the calculation of the Geographical Diversification factor: 1) When estimating the Geographical Diversification Factor for the Gross Premium & Reserve risk charge, please confirm if this factor should be estimated based on the Gross premium and reserve inputs or if the Gross Diversification Factor should = Net Diversification Factor? 2) Should the premium volume used for estimating the Geographical Diversification be the maximum premium based on the LOB and the region or should the premium volume be the maximum premium based on the LOB?
Answer
1) For the estimation of the Geographical Diversification factor, the net diversification factor should be used.2) The premium volume used for estimating the geographical diversification should be the maximum premium based on the LoB and the region.
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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