The European Commission (EC) published the Implementing Regulation 2022/732 that lays out the technical information for calculation of technical provisions and basic own funds, for reporting with reference dates from March 31, 2022 to June 29, 2022. Regulation 2022/732 contains rules in accordance with the Solvency II Directive (2009/138/EC) on the taking-up and pursuit of the business of insurance and reinsurance.
Regulation 2022/732 stipulates that insurance and reinsurance undertakings shall use the provided technical information when calculating technical provisions and basic own funds for reporting with reference dates from March 31, 2022 to June 29, 2022. For each relevant currency, the technical information used to calculate the best estimate in accordance with Article 77 of Solvency II Directive, 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:
- Relevant risk-free rate term structures, as set out in Annex I
- Fundamental spreads for the calculation of the matching adjustment, as set out in Annex II
- Volatility adjustments for each relevant national insurance market, as set out in Annex III
Regulation 2022/732 shall enter into force on the day following its publication in the Official Journal of the European Union. It shall apply from March 31, 2022.
Related Link: Regulation 2022/732
Keywords: Europe, EU, Insurance, Reinsurance, Solvency II, Technical Provisions, Reporting, Volatility Adjustment, Matching Adjustment, Own Funds, EC
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
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