EIOPA finalises revision of guidelines on contract boundaries and the valuation of technical provisions
EIOPA has published two reports on the revision of the EIOPA Guidelines on contract boundaries and Guidelines on the valuation of technical provisions. Since 2019, EIOPA noticed divergent practices in the valuation of technical provisions and therefore felt the need to analyse and improve the consistency of the calculation method. To achieve this, a two step approach is taken:
- In the first step, amendments to the Solvency II framework were proposed to the European Commission during the 2020 review of Solvency II (December 2020).
- In step 2, EIOPA revised its guidelines on the valuation of technical provisions. Topics considered during the revision include the modelling of biometric factors, the apportionment of expenses, changes in expenses, assumptions used to calculate expected profits in future premiums and the unbundling of contracts.
The new and amended guidelines will become effective as of January 1st, 2023.