Non-Life Reinsurance Premium Eligibility | Actuably

Gross Premium Basis Before Reinsurance

€

Total Reinsurance Premiums

€

Excluded Reinsurance Premiums for Non-Insurance Events

€

Excluded Reinsurance Premiums for Settled Claims

€

Excluded Reinsurance Premiums for Non-Compliant Contracts

€

Contractually Binding Treaty Evidence Available (0/1)

Recognised Risk Transfer Evidence Available (0/1)

Recoverables / Collection Right Enforceable (0/1)

Net Premium Basis for Article 116

€42 000 010

1Step 1

Article 116(5) Documentation Controls Met

\textit{Article 116(5) Documentation Controls Met} = \min(\textit{Contractually Binding Treaty Evidence Available (0/1)}, \textit{Recognised Risk Transfer Evidence Available (0/1)}, \textit{Recoverables / Collection Right Enforceable (0/1)})

\textit{Article 116(5) Documentation Controls Met} = \min(\textit{Contractually Binding Treaty Evidence Available (0/1)}, \textit{Recognised Risk Transfer Evidence Available (0/1)}, \textit{Recoverables / Collection Right Enforceable (0/1)})

\begin{aligned}\textit{Article 116(5) Documentation Controls Met} &= \min(\textit{Contractually Binding Treaty Evidence Available (0/1)}, \textit{Recognised Risk Transfer Evidence Available (0/1)}, \textit{Recoverables / Collection Right Enforceable (0/1)})\end{aligned}

2Step 2

Total Excluded Reinsurance Premiums

\textit{Total Excluded Reinsurance Premiums} = \textit{Excluded Reinsurance Premiums for Non-Insurance Events} + \textit{Excluded Reinsurance Premiums for Settled Claims} + \textit{Excluded Reinsurance Premiums for Non-Compliant Contracts}

\textit{Total Excluded Reinsurance Premiums} = \textit{Excluded Reinsurance Premiums for Non-Insurance Events} + \textit{Excluded Reinsurance Premiums for Settled Claims} + \textit{Excluded Reinsurance Premiums for Non-Compliant Contracts}

\begin{aligned}\textit{Total Excluded Reinsurance Premiums} &= \textit{Excluded Reinsurance Premiums for Non-Insurance Events} + \textit{Excluded Reinsurance Premiums for Settled Claims} \\ &\quad + \textit{Excluded Reinsurance Premiums for Non-Compliant Contracts}\end{aligned}

3Step 3

Admissible Reinsurance Premiums

\textit{Admissible Reinsurance Premiums} = \textit{Article 116(5) Documentation Controls Met} \times \max(0, \textit{Total Reinsurance Premiums} - \textit{Total Excluded Reinsurance Premiums})

4Step 4

Non-Deductible Reinsurance Premiums

\textit{Non-Deductible Reinsurance Premiums} = \operatorname{non\_deductible\_reinsurance\_premiums}\left(\textit{Total Reinsurance Premiums}, \textit{Admissible Reinsurance Premiums}\right)

5Step 5

Net Premium Basis for Article 116

\textit{Net Premium Basis for Article 116} = \operatorname{net\_premiums\_after\_reinsurance}\left(\textit{Gross Premium Basis Before Reinsurance}, \textit{Admissible Reinsurance Premiums}\right)

Understand the Non-Life Reinsurance Premium Eligibility

Overview

This calculator implements the Non-Life Reinsurance Premium Eligibility check within the undertaking's risk-mitigation framework.^[1] The eligibility-check is defined as the technical driver responsible for ensuring that the undertaking's reinsurance premiums and recoveries meet the regulatory criteria for capital-relief.

Input Terms

Reinsurance Premium: The amount paid to the reinsurer for the risk-transfer.^[2]
Risk Transfer Ratio: The quantification of the economic-risk transferred to the reinsurer relative to the premium-paid.
Counterparty Credit Step (CQS): The credit quality of the reinsurer.^[3]

Technical Rationale

The Non-Life Reinsurance Premium Eligibility check is a fundamental component of the undertaking’s technical provision and SCR calculation. It ensures the undertaking’s capital-relief derived from reinsurance is correctly quantified and that the undertaking is not using non-effective risk-mitigation.

The calculation performs a set of logical-comparison tests on the reinsurance-contract terms to identify whether the "transfer of risk" is significant. Any reinsurance that does not meet these criteria is excluded from the Counterparty Default Risk and Premium Risk modules. This ensures the undertaking’s solvency position is not artificially inflated by non-eligible mitigation. The results feed the Technical Provisions (Net) and S.30.01 reporting views.

Important Notes

Basis Risk: The eligibility-check must account for any potential "basis risk" where the reinsurance coverage does not perfectly match the underlying insurance obligations.
Regulatory deviation: Material deviation from standard-formula assumptions at this layer may support a capital add-on or a move toward an internal model where justified.^[4]
Reporting: The displayed result is intended to support the corresponding standard-formula component feeding the S.25.01 standard-formula reporting view.^[5]

Sources