Valuation of Assets and Liabilities other than TPs

We would like to ask for your position on the possibility of applying the principle of proportionality/materiality in relation to Article 16 of Commission Delegated Regulation (EU) 2015/35. According to Article 16 paragraph 1of Commission Delegated Regulation (EU) 2015/35: „Insurance and reinsurance undertakings shall not value financial assets or financial liabilities at cost or amortized cost.” At the same time according to Article 9 paragraph 4 of Commission Delegated Regulation (EU) 2015/35 „By way of derogation from paragraphs 1 and 2, and in particular by respecting the principle of proportionality laid down in paragraphs 3 and 4 of Article 29 of Directive 2009/138/EC, insurance and reinsurance undertakings may recognise and value an asset or a liability based on the valuation method it uses for preparing its annual or consolidated financial statements provided that: (a) the valuation method is consistent with Article 75 of Directive 2009/138/EC; (b) the valuation method is proportionate with respect to the nature, scale and complexity of the risks inherent in the business of the undertaking; (c) the undertaking does not value that asset or liability using international accounting standards adopted by the Commission in accordance with Regulation (EC) No 1606/2002 in its financial statements; (d) valuing assets and liabilities using international accounting standards would impose costs on the undertaking that would be disproportionate with respect to the total administrative expenses.” Considering the above, we would like to obtain information whether, taking into account the principle of proportionality/ materiality (in particular when applying the simplification referred to in Article 9(4) of the Commission Delegated Regulation (EU) 2015/35) it is possible to use for solvency purposes amortized cost as of the method of valuation of assets/liabilities (other than technical provisions) or whether the provisions of Article 16 (1) of Commission Delegated Regulation (EU) 2015/35 absolutely excluded the possibility of using such a method. In particular, we consider the appropriateness of using such a method in the case of the valuation of short-term bank deposits, when the impact of this method on the valuation would be negligible (an alternative to the amortized cost method could be, for example, straight-line valuation due to insignificant differences).