The European Insurance and Occupational Pensions Authority (EIOPA) has published its annual report on the use of capital add-ons by national competent authorities under Solvency II. Capital add-ons are used by authorities to ensure that capital reflects the risk profile of an insurance undertaking or group. Add-ons are set following supervisory review by the relevant national competent authority.
The setting of capital add-ons follows the requirements set out in Article 37 (solo undertakings) and Article 232 (groups) of the Solvency II Directive (Directive 2009/138/EC) and Chapter X of the Solvency II Delegated Regulation.
In 2020 seven authorities set capital add-ons to nine solo undertakings, six non-life and three life undertakings. For groups, no capital add-ons were set during 2020.
EIOPA will continue to monitor the use of capital add-ons over the coming year as required by the Solvency II Directive.