EIOPA · 2292
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
- Articles 120 to 125 and 128 to 134
- Topic
- Solvency Capital Requirement (SCR)
- Submitted
- 2021-05-17
- Answered
- 2023-04-21
Question
1. Please confirm if limits can be applied when estimating Gross Non-EEA Natural Catastrophe Charges? If yes, please highlight relevant article that permits this.
2. For Fire, Marine, Aviation, Credit Default, Credit Recession and Motor Vehicle MMCAT charges, can you please confirm if the gross inputs can be adjusted to reflect Policy Terms and Conditions? If yes, please highlight relevant article that permits this.
Background
Based on a review of the underlying assumptions of the SCR document, it suggests t&c cannot be allowed for when estimating Marine, Aviation, Credit Default, Credit Recession and Motor Vehicle MMCAT charges.
Answer
1) The capital requirements of the natural catastrophe sub module are set out in Articles 120 to 125 of the Delegated Regulation (EU) 2015/35. The capital requirement for windstorm, earthquake, flood and hail risk submodule depends on the regions.
For all regions set out in Annex XIII (which includes EEA regions and non-EEA regions), the calculations reflect the terms and conditions as specified in those Articles.
For other regions, the calculation does not reflect the terms and conditions.
2) The capital requirements of the man-made catastrophe risk sub module are set out in Article 128 to 134 of the Delegated Regulation (EU) 2015/35.
The capital requirement for motor vehicle liability risk sub-module reflects the policy limit, but no other terms and conditions.
The capital requirements for marine risk sub-module, aviation risk sub module and fire risk sub module reflect the sum insured, but no other terms and conditions.
The capital requirement for the risk of a large credit default reflects the exposure, but no other terms and conditions.
The capital requirement for recession risk does not reflect the terms and conditions.
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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