EIOPA · 2368
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
- 189(3)
- Topic
- Solvency Capital Requirement (SCR)
- Submitted
- 2021-12-06
- Answered
- 2022-11-16
Question
We appreciate that expected inwards premium, salvage and subrogation cashflows that are included within the gross technical provisions (as a negative cashflows) are not subject to the counterparty default risk module. We therefore just wanted to confirm that expected inward commission rebate cashflows from intermediaries that are included within the gross technical provisions (as a negative cashflows) are also not subject to the counterparty default risk module?
Answer
According to Article 189(3) of the Delegated Regulation (EU) 2015/35, type 2 exposures should consist of all credit exposures which are not covered in the spread risk sub-module and which are not type 1 exposures. “Commission rebate" cash flows from intermediaries should be included in the calculation of the capital requirement for counterparty default risk on type 2 exposures in the counterparty default risk submodule of the Standard Formula.
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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