As the year end approaches, it is time to review the changes in the taxonomy for EIOPA reporting which apply from Q4, 2020.
This taxonomy defines the data to be reported as well as validation rules which need to be met. Separate taxonomies are published for pension scheme reporting and Solvency II reporting (for insurance companies).
To help users understand the taxonomies, EIOPA publishes Excel files including “Annotated Templates” and “Validations”.
The annotated templates file contains the reports which must be submitted in a user-friendly Excel format (the final reports must be submitted in XBRL format which is difficult to read). Each year EIOPA has made relatively minor modifications to the information to be submitted.
The validations which come with each new taxonomy have included more significant changes, in particular a significant number of new validations with each release. This does not change the information to be reported but imposes more stringent requirements on the quality of the data reported.
So what’s new this year?
For Solvency II there are few changes in the data to be reported, although there are a couple of things to be aware of:
- A link to the Solvency and Financials Conditions Report (SFCR) must be included under basic information. This means that it is important the SFCR is made public by the deadline for reporting.
- The more detailed information on loss absorbing capacity of deferred taxes which was introduced last year on a voluntary basis is now mandatory information. This means that the following additional information is required:
- Deferred tax assets (DTA) and/or liabilities (DTL) after SCR shock is applied
- DTA split between carry forward and deductible temporary differences
- A more detailed split of the loss absorbing capacity of deferred taxes (LAC DT)
The Solvency II validation file has 26 new validations. These cover among other things:
- Items which previously could be left blank that are now mandatory
- Items which should not be reported for certain asset types (e.g. “Issuer code” should not be reported for property)
- Totals for qualifying infrastructure in report S.26.01 should be equal to the sum of the constituents
- Validation of the country code part of the CIC code (i.e. the first two digits)
- More detailed validations of issuer code types
For pension schemes the most significant changes are in relation to two reports:
- The fund look-through report PF.06.03 is mandatory for the first time. An exemption from this was granted in many member states for the 2019 annual reporting exercise
- A new report for derivatives (PF.08.01) is introduced. This is not mandatory but EIOPA recommend its use where such information is collected to standardise the approach among members states
It is also worth noting that the taxonomy version for pension schemes is changed to V.2.5.0 to harmonise with the version used for Solvency II. The previous version was V.2.3.0 meaning that there is no version V.2.4.0 for pension schemes.
Regarding validations there are a total of 62 new validations for pension schemes focusing mainly on the asset list (PF.06.02) and the new derivatives report (PF.08.01).
As always, we recommend testing with the new taxonomy in good time before the reporting deadline. A good first step can be to produce a report using 2019 data with the V.2.5.0 taxonomy to see if any of the new validations return errors.
Make sure you have the data required to fill out any new reports or additional information required. It is a good idea to do this as part of the Q4 reporting exercise to avoid the need to revisit calculations at a later stage.
If you would like any further information or an informal discussion around how to can streamline your EIOPA reporting, get in touch with us today.
Solvency 2 List of validations (updated on 1/12/2020)
Pension Funds Annotated Template workbook
Pension funds List of validations (updated on 1/12/2020)