CEIOPS' Advice for Level 2 Implementing ... - EIOPA - Europa

More documents

Recommendations

Info

3. Member States shall ensure that the requirements laid down in this Directive are applied in a manner which is proportionate to the nature, complexity and scale of the risks inherent in the business of an insurance or reinsurance undertaking. 4. The Commission shall ensure that implementing measures take into account the principle of proportionality, thus ensuring the proportionate application of this Directive, in particular to small insurance undertakings.” 2.2.5. General requirements on the valuation of technical provisions – also applicable to the use of simplified approaches - are set out in Articles 76 to 82. For the purposes of this paper, background relevant to this paper is provided in particular by Articles 75, 76(2) and 81: Article 76 – General provisions “[…] 2. The value of technical provisions shall correspond to the current amount insurance and reinsurance undertakings would have to pay if they were to transfer their insurance and reinsurance obligations immediately to another insurance or reinsurance undertaking. 3. The calculation of technical provisions shall make use of and be consistent with information provided by the financial markets and generally available data on underwriting risks (market consistency). 4. Technical provisions shall be calculated in a prudent, reliable and objective manner. […]” Article 77(2) – Calculation of the technical provisions “The best estimate shall correspond to the probability-weighted average of future cash-flows, taking account of the time value of money (expected present value of future cash-flows), using the relevant risk-free interest rate term structure. The calculation of the best estimate shall be based upon up-to-date and credible information and realistic assumptions and be performed using adequate, applicable and relevant actuarial and statistical methods. The cash-flow projection used in the calculation of the best estimate shall take account of all the cash in- and out-flows required to settle the insurance and reinsurance obligations over the lifetime thereof. The best estimate shall be calculated gross, without deduction of the amounts recoverable from reinsurance contracts and special purpose vehicles. Those amounts shall be calculated separately, in accordance with Article 81.” Article 82 – Data quality and application of approximations, including caseby-case approaches, for technical provisions 6/112 © CEIOPS 2010
“[…]Where, in specific circumstances, insurance and reinsurance undertakings have insufficient data of appropriate quality to apply a reliable actuarial method to a set or subset of their insurance and reinsurance obligations, or amounts recoverable from reinsurance contracts and special purpose vehicles, appropriate approximations, including case-by-case approaches, may be used in the calculation of the best estimate.” Article 86 - Implementing measures The Commission shall adopt implementing measures laying down the following: (f) the standards to be met with respect to ensuring the appropriateness, completeness and accuracy of the data used in the calculation of technical provisions, and the specific circumstances in which it would be appropriate to use approximations, including case-by-case approaches, to calculate the best estimate;” 7/112 © CEIOPS 2010
Page 1 and 2: CEIOPS e.V. - Westhafenplatz 1 - 60
Page 3 and 4: 1. Introduction 1.1. In its letter
Page 5: 2.2.2. The following recitals provi
Page 9 and 10: 3.6 It is noted that in the recital
Page 11 and 12: have in place internal processes an
Page 13 and 14: not be appropriate to reduce this v
Page 15 and 16: 3.36 Hence where an (re)insurance u
Page 17 and 18: Scale 3.46 Assigning a scale introd
Page 19 and 20: “scale” that will apply in all
Page 21 and 22: circumstances of its omission or mi
Page 23 and 24: 3.81 Under these circumstances, it
Page 25 and 26: • the level of certainty i.e. the
Page 27 and 28: 3.105 All in all, at least the foll
Page 29 and 30: the chosen valuation method. If it
Page 31 and 32: development, so that it is likely t
Page 33 and 34: • As part of supervisory guidance
Page 35 and 36: case the threshold is not exceeded.
Page 37 and 38: if the threshold is not exceeded th
Page 39 and 40: principles. In following paragraphs
Page 41 and 42: sign ( x) = −1 if x < 0 . 3.179 E
Page 43 and 44: 3.193 The time value of the investm
Page 45 and 46: distribution to policyholders as th
Page 47 and 48: • assume independency between ass
Page 49 and 50: company or new line of business, al
Page 51 and 52: easonable be supposed proportional
Page 53 and 54: incurred when the method is applied
Page 55 and 56: 3.261 The general rule for calculat
Page 57 and 58:
• the loss absorbing capacity of
Page 59 and 60:
3.285 As a consequence of this, the
Page 61 and 62:
SCR for the individual lines of bus
Page 63 and 64:
• the loss absorbing capacity of
Page 65 and 66:
OPRU,lob,>0 = an approximation of t
Page 67 and 68:
Life insurance 3.323 With respect t
Page 69 and 70:
3.330 With respect to health insura
Page 71 and 72:
eing applicable for life insurance
Page 73 and 74:
3.351 The structure of the health u
Page 75 and 76:
∆rn = the absolute decrease of th
Page 77 and 78:
the methods to be used for projecti
Page 79 and 80:
CEIOPS’s draft advice on the valu
Page 81 and 82:
3.392 In this context, the technica
Page 83 and 84:
clearly the present difficulties of
Page 85 and 86:
• Even if the undertaking’s rei
Page 87 and 88:
information regarding the RBNS-clai
Page 89 and 90:
CEIOPS’ Advice Simplifications re
Page 91 and 92:
3.5. Quarterly calculations 3.444 A
Page 93 and 94:
e to use the simplified calculation
Page 95 and 96:
Annex A. Example to illustrate the
Page 97 and 98:
Annex B. Some technical aspects reg
Page 99 and 100:
is accurate because the payment of
Page 101 and 102:
C.6. The individual elements sketch
Page 103 and 104:
UMRU,lob,≥0 = max{∑ ≤ t Durmo
Page 105 and 106:
E.5. The considered proxies based o
Page 107 and 108:
E.14. The following criteria should
Page 109 and 110:
“The gross-to-net proxy was used
Page 111 and 112:
where Durmod denotes the modified d
show all

CEIOPS' Advice for Level 2 Implementing ... - EIOPA - Europa

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?