EIOPA · 701
701
- Regulation
- (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
- Article
- 35
- Submitted
- 2016-09-14
- Answered
- 2019-09-19
Question
I have a follow-up question to the one below.
Regarding UL assets where the investment risk is FULLY borne by policyholders – what EIOPA expects me to fill in cells Assets/Liabilities after the shock (shock being e.g. 25% decrease in the value of assets):imagine that SII value of UL assets = 100 and corresponding TP = 100 (therefore if the value of assets decrease, value of liabilities decrease by the same amount)a) A after stress = 100, L after stress = 100orb) A after stress = 75, L after stress = 75
Answer
In unit linked we do expect to see the values of the assets and liabilities reported before and after shock and we do expect that the impact in assets is balanced with the shock in liabilities leading to none or reduced capital charge.
In your example the values before shock would be 100 and after shock would be 75.
Please note that under solvency II there might not be a complete match due to valuation of expenses or any embedded guarantee.
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.
📋 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.