EIOPA · 2325

Solvency Capital Requirement (SCR)

Name: Solvency Capital Requirement (SCR): EIOPA Q&A — EU Financial Regulatory Q&A
Creator: European Insurance and Occupational Pensions Authority
License: https://creativecommons.org/licenses/by/4.0/

Regulation: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Article: Article 189
Topic: Solvency Capital Requirement (SCR)
Submitted: 2021-08-11
Answered: 2021-12-03

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Question

A non-life guarantee fund owes a fixed amount of money to an insurance undertaking for services the insurer provided. Hence the non-life guarantee fund poses a counterparty default risk to the insurance undertaking in question. Shall the exposure to the guarantee fund be treated as a “Type 1” or “Type 2” exposure to determine the correct solvency requirement of the receivables?

Answer

The exposure should be covered in the calculation of the capital requirement for counterparty default risk on type 2 exposures.

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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.