EIOPA · 3459
Technical Provisions (TPs), 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
- 88
- Topic
- Technical Provisions (TPs), Solvency Capital Requirement (SCR)
- Submitted
- 2025-11-13
- Answered
- 2026-01-12
Question
An insurance undertaking has a single policyholder in a third country. The undertaking has no other insured risks in this country. The contract in question thus represents an isolated, single risk in this geographical area. The calculation of catastrophe risk according to the standard formula, as set out in reporting template S.27.01, appears disproportionate and not risk-adequate for a single risk. Question: 1. Is there an obligation to calculate a catastrophe risk position according to S.27.01 for an immaterial singular risk in a new geographical market? 2. If a calculation is not mandatory: Based on what criteria or quantitative thresholds should an undertaking decide when to apply the catastrophe risk module for a specific country?
Answer
The SCR must cover all quantifiable risks (Article 101(3) of the Solvency II Directive). To alleviate operational burden, Solvency II allows for a simplified calculation of the SCR in some situations (see Article 88 of Delegated Regulation (EU) 2015/35).The relevant article for the simplified calculation of the natural catastrophe risk is Article 90b, which depends on the above-mentioned Article 88.
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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