EC published the Implementing Regulation 2021/178 that lays down technical information for the calculation of technical provisions and basic own funds. This technical information is relevant for reporting with reference dates from December 31, 2020 to March 31, 2021, in accordance with the Solvency II Directive. The regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.
For each relevant currency, the technical information used to calculate the best estimate in accordance with Article 77 of Solvency II Directive (2009/138/EC), the matching adjustment in accordance with Article 77c of that Directive, and the volatility adjustment in accordance with Article 77d of that Directive shall be the following, respectively:
- The relevant risk-free rate term structures, as set out in Annex I
- The fundamental spreads for calculation of the matching adjustment, as set out in Annex II
- The volatility adjustments for each relevant national insurance market, as set out in Annex III
EIOPA had, on January 07, 2021, provided EC with the technical information for the end of December 2020 market data. Given the need for the immediate availability of the technical information, it is important that Regulation 2021/178 enters into force as a matter of urgency. For prudential reasons, it is necessary that insurance and reinsurance undertakings use the same technical information for calculating technical provisions and basic own funds, irrespective of the date on which they report to their competent authorities. Regulation 2021/178 should, therefore, apply from the first reporting reference date (that is, December 31, 2020) to which this regulation applies.
Effective Date: February 17, 2021
Keywords: Europe, EU, Insurance, Solvency II, Reporting, Basic Own Funds, Volatility Adjustment, Matching Adjustment, Technical Provisions, Regulation 2021/178, EC
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