Question ID: 2134
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Topic: Solvency Capital Requirement (SCR)
Article: 133
Status: Final
Date of submission: 17 Apr 2020
Question
What is the capital requirement for liability risk sub-module pursuant to Article 133 of Commission Delegated Regulation (EU) 2015/35 in the following case:
- The largest liability limit of indemnity provided by the insurance undertaking is set to EUR 1 000 000 for one individual claim.
- In the case of a single event resulting in more than one claim, the insurance terms limit the indemnity to EUR 20 000 000 for the whole event regardless of the number of claims.
- Total annual written premiums are equal to EUR 80 000 000.
The applicable risk factor is 100 %.
EIOPA answer
The answer to this question is provided by the European Commission.
Article 133(2) of Delegated Regulation (EU) 2015/35 provides that the capital requirement for a particular liability risk group shall be the product of the risk factor for that liability risk group (as set out in Annex XI to the Delegated Regulation) and the amount of premiums earned by the undertaking during the following 12 months in relation to obligations in that liability risk group.
Based on the example included in the question, the capital requirement would be 100 % * EUR 80 000 000 = EUR 80 million.
Article 133(3), which provides assumptions underlying the calculation of the loss in basic own funds referred to in Article 133(2), shall be used in particular when taking into account any reinsurance arrangement for the calculation of the net Basic Solvency Capital Requirement.
Disclaimer provided by the European Commission:
The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.