EIOPA · 2352

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: 168
Topic: Solvency Capital Requirement (SCR)
Submitted: 2021-11-02
Answered: 2022-06-24

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Question

As the equity risk sub-module Type 2 equities shall comprise all assets other than those covered in the interest rate risk sub-module, the property risk sub-module or the spread risk sub-module - the question is whether fixed assets of insurance company should also be part of this "equities".

Background

Logic dictates that fixed assets (used for your own purposes - valued at fair value) should not be subject to 49% stress. Their variability is lower - possibly closer to zero. Besides the organization that is extensively using cloud computing (SaaS, IaaS, PaaS) is in better capital situation (lower SCR) that the organisation having servers on premise.

Answer

Fixed assets of an insurance company, unless they fall within the scope of a different sub-module (for example property) should be included in the calculation of the capital requirement for type 2 equities as set out in Article 168 (3) of the Delegated Regulation.

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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.