EIOPA · 2306
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
- 122
- Topic
- Solvency Capital Requirement (SCR)
- Submitted
- 2021-06-17
- Answered
- 2021-08-18
Question
How should the definition of events be considered for EEA regions which applying the requirement so of the EEA Natural Catastrophe Charges? We interpret this that each region is impacted by either a single event (Subsidence, Earthquake) or a double event (Flood, Wind, Hail). As such for companies with exposure across multiple regions the standard formula assumes greater than one event for each peril.
Answer
As you mentioned, for EEA exposures, the COMMISSION DELEGATED REGULATION (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) specify the number of events for each peril/submodule. For example, the earthquake scenario is always a single event regardless of how many countries an undertaking writes business in. The earthquake scenario is calibrated (in theory) to provide a 1-in-200 OEP estimate on a pan-EEA basis.
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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