EIOPA · 3082
Technical Provisions (TPs)
- Regulation
- (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
- Article
- 28
- Topic
- Technical Provisions (TPs)
- Submitted
- 2024-05-01
- Answered
- 2024-08-06
Question
We understand that taxes or levies are included in the best estimate of technical provisions only if they are imposed on the policyholder or arise in the settlement of the policy (hereinafter referred to as transaction-based taxes or levies). Therefore, we believe that if a particular tax or levy is not a transaction-based tax or levy, it should not be included in the best estimate of technical provisions.For example, we consider that levies levied as a percentage of an insurer's operating income are not transaction-based taxes or levies and should not be included in the best estimate of technical provisions.Are these considerations correct?
Answer
Taxes or levies levied as a percentage of an insurer's operating income, which are not charged to policyholders and which are not required to settle the insurance or reinsurance obligations, do not constitute taxation payments as referred to in Article 28(h) of Commission Delegated Regulation 2015/35 and should therefore not be included in the cash flow projection used in the calculation of the best estimate.
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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