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Changes in the parameters of MCR floor

On 19th October the MCR floor will be adjusted to reflect inflation. It is especially important to take that into account if your reporting is based on a year-end different from 31st December or if you are reporting to the PRA (Bank of England).

Iva Velinova
October 18, 2022

From 1st of October, the new MCR floors, specified in the Notice regarding the adaptation in line with inflation of the amounts laid down in the Directive  2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (2021/C 423/12) are entering in force.  

From a practical perspective, all submissions with valuation date before 1of October, including the reporting of Q3 for companies with regular year end on 3of December, will still use the old MCR floor. All submissions with valuation date on or after 19October 2022 need to use the new MCR floor.  

For companies with regular year end, that means that the first reporting in which the new MCR floor will be taken in effect in the calculations, will be for the reporting of Q4, that need to be submitted on 4of February 2023.

 

What does this mean for you?

For all companies with regular year end reporting: In the middle of November we will provide you with an updated taxonomy version for taxonomy 2.7, in which the parameters for MCR floor will also be adjusted. No specific actions on your side are needed.

For all companies with non-regular year end, which must submit e a reporting with a valuation date between 19th October and 31st December 2022 and use the SCR calculation of Solvency II Service: We will provide updated version of the 2.6 taxonomy with adjusted MCR floor parameters. Please contact us to arrange the update.

For all companies with entities reporting to the Prudential Regulation Authority (PRA) of the Bank of England: We will provide an updated version of the 2.6 taxonomy with adjusted MCR parameters as well. This is because in announcement CP11/21 and PS29/21 the Bank of England has requested taxonomy 2.6 to be used for further reporting. Please contact us to arrange the update.