EIOPA · 2908
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
- 197(7)
- Topic
- Solvency Capital Requirement (SCR)
- Submitted
- 2023-11-28
- Answered
- 2023-12-21
Question
Where the reinsurance arrangement is with an insurance or reinsurance undertaking or a third country insurance or reinsurance undertaking and 60 % or more of that counterparty's assets are subject to collateral arrangements, following amendment 2019/981, should the LGD formula reference F''' rather than F' as was referenced prior to amendment 2019/981 (ie. F' is a typographical error and should say F''')?
Answer
This question has been rejected because the issue it deals with is already addressed in Article 197(7) of Commission Delegated Regulation (EU) 2015/35:
“7. Where, in case of insolvency of the counterparty, the determination of the insurance or reinsurance undertaking's proportional share of the counterparty's insolvency estate in excess of the collateral does not take into account that the undertaking receives the collateral, the factors F, F', F'' and F''' referred to in Article 192(2) to (3c) shall all be 100 %. In all other cases these factors shall be 50 %, 18 % 16 % and 90 % respectively.”
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.
Similar Q&As
More Q&As on this topic
📋 Track EU financial regulation continuously
Forseti monitors EU financial regulation and delivers personalised alerts anchored to verified official sources.
14-day free trial. No credit card required.