Solvency Capital Requirement (SCR)

1.Regarding the sum insured (i.e., SI(peril, r,i) in the formula of 6.5.3.3. EIOPA's advice- 425 -1) 𝐺𝑟𝑜𝑠𝑠𝐿𝑜𝑠𝑠(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖) = 𝑄(𝑝𝑒𝑟𝑖𝑙,𝑟) × 𝑊(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖) × 𝑆𝐼(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖),1.1 Is it correct that the SI include buildings, business interruption and contents?1.2 Is the sum insured (i.e., 𝑆𝐼(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖)) the full amount of SI without taking into account any deductibles or contractual limits? In other words, it is SI before any reductions are applied due to the terms of the policy.1.3 If 1.2 is correct, should the 𝑆𝐼(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖)) in the formula 425 1)consider coinsurance shares? The sum insured should include buildings, BI ad contents.The sum insured should not take into accounts deductibles or limits.The sum insured should correspond to the exposure impacting a specific company portfolio. So yes coinsurance shares needs to be taken into account. 2. Regarding the suggested ex-post adjustment in 6.5.3.3. EIOPA's advice- 425 - 2), which of the following understandings is correct for this additional unit (𝑀𝑎𝑥𝐺𝑟𝑜𝑠𝑠𝐸𝑥𝑝𝑜𝑠𝑢𝑟𝑒(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖))2.1.1 𝑀𝑎𝑥𝐺𝑟𝑜𝑠𝑠𝐸𝑥𝑝𝑜𝑠𝑢𝑟𝑒(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖)= Sum insured taking account of any deductibles and contractual limits based on the conditions in the underlying contracts(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖)2.1.2 𝑀𝑎𝑥𝐺𝑟𝑜𝑠𝑠𝐸𝑥𝑝𝑜𝑠𝑢𝑟𝑒(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖)= 𝑄(𝑝𝑒𝑟𝑖𝑙,𝑟) × 𝑊(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖) × “Sum insured taking account of any deductibles and contractual limits based on the conditions in the underlying contracts(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖)"2.1.3 𝑀𝑎𝑥𝐺𝑟𝑜𝑠𝑠𝐸𝑥𝑝𝑜𝑠𝑢𝑟𝑒(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖)= Sum insured taking account of any deductibles and contractual limits based on the conditions in the underlying contracts, and including risk evaluation from other vendor model that suggest a much lower vulnerability of the underlying portfolio compared to average country-peril level2.1.4 𝑀𝑎𝑥𝐺𝑟𝑜𝑠𝑠𝐸𝑥𝑝𝑜𝑠𝑢𝑟𝑒(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖)= 𝑄(𝑝𝑒𝑟𝑖𝑙,𝑟) × 𝑊(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖) × “Sum insured taking account of any deductibles and contractual limits based on the conditions in the underlying contracts, and including risk evaluation from other vendor model that suggest a much lower vulnerability of the underlying portfolio compared to average country-peril level" This adjustment allows taking into account the specific exposure of undertakings that sell contract with policy conditions different than the average undertaking. In the case where the written policy of the undertaking limits more greatly the sum insured than the average undertaking in case of catastrophic event, the “ex-post adjustment" avoids that the SCR of this specific undertaking becomes unrealistically large. 𝑀𝑎𝑥𝐺𝑟𝑜𝑠𝑠𝐸𝑥𝑝𝑜𝑠𝑢𝑟𝑒(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖) should correspond to the sum insured taking account of any deductibles and contractual limits based on the conditions in the underlying contracts(𝑝𝑒𝑟𝑖𝑙,𝑟,𝑖).​