QIS 5 demonstrates EPIFP in Tier III for Solvency II not “economically consistent”
Montalvo moves closer to the industry’s position on future profits as Tier I capital – but does not agree that all should be included
The fifth quantitative impact study (QIS 5) for Solvency II clearly demonstrates that placing all expected profits included in future premiums (EPIFP) capital in Tier I is "not economically consistent", according to Carlos Montalvo, secretary-general of the European Insurance and Occupational Pensions Authority (Eiopa).
EPIFP occurs when premiums on existing (in-force) business that will be received in the future are booked upfront as capital in insurers' technical provisions. Any premiums
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