Question
Could you please explain what does mean the term "nonreducible" in the context of life insurance policy pledged to a lending institution?
Background on the question
Article 212 (2) (g) of CRR2 indicates that a life insurance policies pledged to a lending institution can notably be considered as an eligible credit protection if the surrender value declared by the insurer is non-reducible. The purpose of this question is to understand what the term "non-reducible" means.
Answer
This question has been rejected because it is considered that EBA guidance or clarification is not needed with regard to the issue that it raises. For example, this can be the case where it is considered that the existing regulatory framework is sufficiently clear and unambiguous, or where different practices may be possible but it is not currently necessary to harmonise these further through the Q&A process.The Single Rule Book Q&A tool has been established to provide explanations and non-binding interpretations on questions relating to the practical application or implementation of the provisions of legislative acts referred to in Article 1(2) of the EBA’s founding Regulation, as well as associated delegated and implementing acts, and guidelines and recommendations, adopted under these legislative acts.For further information on the purpose of this tool and on how to submit questions, please see “Additional background and guidance for asking questions”.