Subsection 1: General provisions on the valuation of prudential technical provisions

When calculating their prudential technical provisions within the meaning of Article L. 351-2, insurance and reinsurance undertakings segment their commitments into homogeneous risk groups and, at a minimum, by lines of business as defined in Article 55 of Commission Delegated Regulation (EU) No 2015/35 of 10 October 2014.

When calculating claims arising from reinsurance contracts and securitisation vehicles, insurance and reinsurance undertakings shall comply with Articles L. 351-2 and R. 351-2 to R. 351-11. They take into account the time lag between recoveries and direct payments. The result of this calculation is adjusted to take account of probable losses due to counterparty default. This adjustment is based on an assessment of the probability of default by the counterparty…

Insurance and reinsurance undertakings must put in place internal processes and procedures to ensure the appropriateness, completeness and accuracy of the data used in the calculation of their prudential technical provisions referred to in Article L. 351-2. Where, in particular circumstances, as defined in Article 19 of Commission Delegated Regulation (EU) No 2015/35 of 10 October 2014, insurance and reinsurance undertakings do not have sufficient data of appropriate quality to…

Insurance and reinsurance undertakings shall put in place processes and procedures to ensure that their best estimates and the assumptions underlying the calculation of their best estimates are regularly compared with experience. Where this comparison reveals a systematic difference between experience and the company’s best estimate calculations, the company shall make the appropriate adjustments to the actuarial methods used or assumptions made.

At the request of the Autorité de contrôle prudentiel et de résolution, insurance and reinsurance undertakings shall demonstrate the appropriateness of the level of their prudential technical provisions referred to in Article L. 351-2, as well as the applicability and relevance of the methods they apply and the adequacy of the underlying statistical data they use.