Regulatory Alerts2022-10-17 | NBB_2022_24Added · Updated
Circular on Guidelines Regarding Contract Boundaries
This circular provides guidelines for Belgian insurance and reinsurance undertakings on defining contract boundaries under Solvency II, effective January 1, 2023. It establishes that contract boundaries represent a limit between premiums/obligations included in the contract and those excluded, requiring consistent application of principles regarding unilateral rights, premium risk reflection, and contract decomposition. The document details specific criteria for assessing the perceptible economic effect of financial guarantees and coverage, mandating reevaluation only under extreme economic changes or significant contract term modifications. It also requires immediate reporting to the regulator if such reevaluations significantly impact technical provisions or solvency.