EIOPA · 2403
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
- Topic
- Solvency Capital Requirement (SCR)
- Submitted
- 2022-03-11
- Answered
- 2022-09-16
Question
Article 189 states that "Type 2 exposures shall consist of all credit exposures which are not covered in the spread risk sub-module and which are not type 1 exposures". Can you confirm that premium that is not due for payment should not be included in the credit risk calculation? For instance: A policy from 01.01.2022 to 31.12.2022 is payed in monthly installments in the beginning of each month. Can you confirm this premium should not be included in the 31.12.2021 Counterparty credit risk calculation?
Answer
Premiums that are not yet due should be included in the Technical Provisions (if they are within the contract boundary) and should not be included in the Counterparty Default Risk sub-module of the SCR.
However, if monthly payments are arranged in order to facilitate a payment schedule for an annual premium that has already fallen due, then those monthly payments should be classified as a policyholder debtor and included within the Counterparty Default Risk sub-module of the SCR.
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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