Question ID: 1271
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Article: 35
Template: S.23.01
Status: Final
Date of submission: 29 Nov 2017
Question
Par 4 states:
Loss-making policies may only be offset against profit-making policies within a homogeneous risk group.
Therefore I am required to calculate EPIFP on the level of HRG. How I shoudl aggregate EPIFP to single number (as requred for example by QRT S.23.01) when for some HRG EPIFP > 0 while for the other EPIFP < 0. Should I disregard negative EPIFP and aggregate positive values only?
EIOPA answer
The calculation of EPIFP should be done on the level of HRG allowing for offsetting positive and negative profits at contract level within the HRG.
The total EPIFP is then determined by summing up all the positive amounts that were derived on the level of the HRG only. Negative amounts at HRG level should be disregarded.