EIOPA · 385
385
- Regulation
- Guidelines on loss-absorbing capacity of technical provisions and deferred taxes
- Article
- 206
- Submitted
- 2015-09-04
- Answered
- 2019-10-16
Question
The article mentions how to compute the net capital at sub-module level, but don't go forward to the final formula of "Adj TP". In reference to the generic formula in article 206 of Delegated Acts, can we do the following simplification (since FDB have already capped the adjustment) : Adj TP = - max (BSCR - nBSCR; 0) ?
Answer
The formula to calculate “Adj TP” is provided in Article 206(1) of Delegated Regulation 2015/35, which is as follows:AdjTP = -max (min (BSCR – nBSCR;FDB) ;0).The formula indicates that the Loss Absorbency Capacity of TP needs to be calculated with taking into account the final additional cap of FDB at group level. In this sense the simplification proposed is not correct.
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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