European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2007
Statutory Instruments
Source: Statutory Instruments

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paragraphs: (1) These Regulations may be cited as the European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2007.
(2) These Regulations come into operation on 1 June 2007.
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paragraphs: In these Regulations, “Principal Regulations” means the European Communities (Non-Life Insurance) Framework Regulations 1994 ( S.I. No. 359 of 1994 ).
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paragraphs: Article 2 of the Principal Regulations is amended
(a) by inserting in sub-article (1) the following definition after the definition of “the Court”;
(b) by inserting in sub-article (1) the following definitions after the definition of “the Regulations of 1991”:
“‘reinsurance’ and ‘reinsurance business’ have the same meanings as in the Reinsurance Directive;
‘Reinsurance Directive’ means Directive 2005/68/EC of the European Parliament and of the Council of 16 November 2005 on reinsurance;
‘Reinsurance Regulations’ means the European Communities (Reinsurance) Regulations 2006 ( S.I. No. 380 of 2006 );
‘reinsurance undertaking’ means a reinsurance undertaking authorised or taken to have been authorised by the Bank under the European Communities (Reinsurance) Regulations 2006 or by a competent authority of another Member State of the European Communities under a law of that State corresponding to those Regulations;”;
(c) by substituting in the definition of “the Second Directive” in sub-article (1), “Directive 88/357/EEC;” for “Directive 88/357/EEC.”;
(d) by inserting in sub-article (1) the following definitions after the definition of “the Second Directive”:
“ ‘special purpose reinsurance vehicle’ has the same meaning as in the Reinsurance Regulations;
‘third country insurance undertaking’ means an undertaking that would require authorisation as an insurance undertaking if it had its registered office in a Member State;
‘third country reinsurance undertaking’ means an undertaking that would require authorisation as a reinsurance undertaking if it had its registered office in a Member State.”.
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paragraphs: Article 13 of the Principal Regulations is amended:
(a) by inserting the following sub-articles after sub-article (4):
“(4A) As soon as practicable after the commencement of Regulation 4 of the European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2007, the Bank shall prescribe the conditions under which reinsurance cessions entered into with third country reinsurance undertakings may be deducted from the technical reserves.
(4B) For the purpose of sub-article (4A)
“ ‘reinsurance cession’ has the same meaning as in the Reinsurance Regulations.”;
(b) by substituting the following sub-articles for sub-article (5):
“(5) Each insurance undertaking shall cover its technical reserves and equalisation reserves by equivalent assets valued in accordance with the rules set out in Annex III to these Regulations. The matching rules set out in Annex IV to these Regulations apply to those assets.
(5A) Sub-article (5) also applies to the equalisation reserves referred to in Article 14(8)(a) of the Regulations of 1976.”.
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paragraphs: Article 16A of the Principal Regulations (as inserted by Regulation 4 of the European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2004 ( S.I. No 728 of 2004 )) is amended by substituting the following sub-article for sub-article (6):
“(6) The Bank may reduce the reduction, based on reinsurance, to the required solvency margin as determined in respect of the undertaking in accordance with this Part if
(a) the nature or quality of the undertaking’s reinsurance contracts has changed significantly since the end of its last financial year, or
(b) no risk, or only a limited risk transfer, arises under the undertaking’s reinsurance contracts.”.
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paragraphs: Article 20 of the Principal Regulations (as substituted by Regulation 5 of the European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2004 ( S.I. No. 728 of 2004 )) is amended
(a) in the heading to the Article, by substituting “Part 3” for “Part 4”;
(b) in sub-article (1), by substituting the following definition for the definition of “prescribed entity”:
“‘prescribed entity’ means any of the following:
(a) an insurance undertaking, a reinsurance undertaking, a credit institution or an investment firm authorised by a competent authority of another Member State;
(b) the parent undertaking of such an undertaking, institution or firm;
(c) a person (whether natural or legal) that controls such an undertaking, institution or firm;”.
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paragraphs: Part A of Annex II of the Principal Regulations (as substituted by Regulation 6 of the European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2004 ( S.I. No. 728 of 2004 )) is amended
(a) by substituting the following sub-subparagraph for paragraph 2(3)(b):
“(b) reserves (including both statutory reserves and free reserves) not corresponding to underwriting liabilities or classified as equalisation reserves;”;
(b) by substituting the following sub-subparagraph for paragraph 5(2)(a):
“(a) participations that the insurance undertaking holds in
(i) an insurance undertaking, or
(ii) a reinsurance undertaking, or
(iii) a third country insurance undertaking, or
(iv) a third country reinsurance undertaking, or
(v) an insurance holding company, or
(vi) a credit institution, or
(vii) a financial institution, or
(viii) an investment firm;”;
(c) by substituting the following subparagraph for paragraph 5(6):
“(6) In this paragraph
‘credit institution’ means a credit institution within the meaning of Article 4(1) of the Credit Institutions Directive;
‘financial institution’ means a financial institution within the meaning of Article 4(5) of the Credit Institutions Directive;
‘insurance holding company’ has the same meaning as in Regulation 3(1) of the European Communities (Insurance and Reinsurance Groups Supplementary Supervision) Regulations 2007 (S.I. No. [ ] of 2007);
‘investment firm’ means an investment firm within the meaning of Article 4(1) of Directive 2004/39/EC 1 ;
‘participation’ has the same meaning as in Article 1(f) of Directive 98/78/EC 2 .”;
(d) by inserting the following subparagraph after paragraph 7(3):
“(4) When applying subparagraph (2) of this paragraph, amounts recoverable from special purpose reinsurance vehicles may be deducted as reinsurance, but only with the prior approval of the Bank. The Bank may decline to give approval if the undertaking fails to provide supporting evidence to the Bank’s satisfaction.”;
(e) by inserting the following sub-paragraph after paragraph 8(3):
“(4) When applying subparagraph (1) of this paragraph, amounts recoverable from a special purpose reinsurance vehicle may be deducted as reinsurance, but only with the prior approval of the Bank. The Bank may decline to give approval if the undertaking fails to provide supporting evidence to the Bank’s satisfaction.”.
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paragraphs: Annex II to the Principal Regulations is amended by inserting the following Part after Part C:
“PART D GUARANTEE FUND FOR INSURANCE UNDERTAKINGS CONDUCTING REINSURANCE BUSINESS
Insurance undertakings to which this Part applies
1. This Part applies to an authorised insurance undertaking that is established in the State and carries on reinsurance business, but only if
(a) the total reinsurance premiums that it collects in a year exceed 10 per cent of its total income from premiums collected by it during that year, or
(b) the total reinsurance premiums that it collects in a year exceed €50,000,000, or
(c) the technical reserve resulting from its reinsurance acceptances exceed 10 per cent of its total technical reserves as at the end of a year.
Insurance undertakings to which this Part applies to establish minimum guarantee fund