Solvency Capital Requirement (SCR)

Can EIOPA please confirm the treatment for the following scenario (as we see different approaches being used and both could be argued to be in line with the Delegated Acts) where a negative reserve measure is present for a particular (but not all) regions for a segment. Please consider an example where, for the same segment, there are 3 Annex III(8) regions with the following best estimate of the provisions for claims outstanding for the segment, after deduction of the amounts recoverable from reinsurance contracts and special purpose vehicles, provided that the reinsurance contracts or special purpose vehicles comply with Articles 209, 210, 211 and 213: Region 1: 1000 Region 2: 1200 Region 3: -500 For simplicity, assume the premium reserve for each of these regions is 700 for this same segment. For calculating the DIVs for the segment the calculation, we believe, should set the reserve volume measure for region 3 to be 0 (applying the last sentence in DA Art 116(6) in conjunction with Annex III(3)) and as such should be: (1000+700)^2+(1200+700)^2+(0+700)^2/((1000+700)+(1200+700)+(0+700))^2 However, for calculating the segment level reserve volume measure, the calculation should use the true value of -500 (as the minimum floor of 0 is applied to the overall volume measure, not any contributing amount) and as such should be: 1000+1200-500