Solvency capital requirement - market risk: a total must equal the sum of its parts (S.26.01, EIOPA rule BV1104)

The rule in plain words

The headline gives only the template and the kind of check, because the rule is too long to say in a headline. The plain words above say all of it.

EIOPA writes it out as separate checks, one for each table or return it covers. Line4 Check runs two of them (BV1104-1 and BV1104-2), and a failure names the one that failed.

What to do if your return fails it

1. 01Open the tables below and find the cells the rule reads.
2. 02Add up the parts in your return and compare the result with the total.
3. 03If they differ, a part is missing, a value sits in the wrong cell, or the total is out of date.
4. 04EIOPA allows a small rounding difference, worked out from the decimals each value is reported with.
5. 05It runs only when your filing indicators mark S.26.01 as reported.
6. 06This is a warning. It does not stop the return on its own, but your supervisor may ask you to explain it.

The cells it reads

A worked example

The first of its checks, with simple numbers.

Which returns it applies to

Line4 Check runs it on annual solo (ARS), annual group (ARG) and annual branch (ARB) returns on EIOPA taxonomy 2.10.0. EIOPA applies it to annual group (ARG), annual ECB solo (AES), annual ECB branch (AEB), annual solo (ARS) and annual branch (ARB) returns, as a warning.

EIOPA’s own words and formula

In EIOPA’s list of validations, word for word:

The item "qualifying infrastructure corporate equities" reported in S.26.01 - Solvency Capital Requirement - Market risk, should be equal to sum of items "qualifying infrastructure corporate equities, other than strategic and long-term", "strategic participations (qualifying infrastructure corporate equities)", "Long-term equity investments (qualifying infrastructure corporate equities)".

Other rules on Solvency capital requirement - market risk (S.26.01)

Every Solvency II rule on S.26.01

Checks like this one, run at the point of submission, are the first step to real-time supervision. Line4 builds SupTech software for financial regulators that runs checks like these as each return arrives.