Question ID: 1232
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Article: 204
Status: Final
Date of submission: 12 Mar 2018
Question
Could you please help me with the explanation on how to treat non-life premiums earned for the 12 months prior to the last 12 monts in case of the business transfer?
The situation was, that Baltic branch of Polish company was establishing as a separate company with the headquarter in Lithuania (belonging to the same Group as a Polish company). For this purpose, an empty company was established in Vilnius, Lithuania and portfolio was transferred to it from Polish company starting from 2016.01.01. According to the business transfer agreement, business is transferred on a going concern in a way of universal secession, meaning newly established company from the transfer moment is taking over all assets, obligations, risks related to the business, employees, contracts, premises, know-how, client database, IT systems etc.
EIOPA answer
The premiums referred to in Article 204(3) of the Delegated Regulation should be the premiums earned by the insurance or reinsurance undertaking for which the capital requirement for operational risk is calculated. These premiums may differ from the premiums earned on the portfolio of insurance and reinsurance contracts currently held by the undertaking, for example because of a past portfolio transfers. No adjustments to the premiums earned by the insurance or reinsurance undertaking for portfolio transfers should be made.