B 4789
Suppliment tal-Gazzetta tal-Gvern ta’
 Malta, Nru. 19,509, 10 ta’ Diċembru, 2015
Taqsima B
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––B 4789
L.N. 410 of 2015
INSURANCE BUSINESS ACT
(CAP. 403)
Insurance Business (Supervision of Insurance and Reinsurance 
Undertakings in a Group) Regulations, 2015
IN exercise of the powers conf erred by articles 32A and 64 of
the Insurance Business Act, th e Minister of Finance, after
consultation with the Malta Financ ial Services Authority, has made
the following regulations:-
Preliminary
Citation, scope 
and commencement.1. (1) The title of these regul ations is the Insurance
Business (Supervision of Insurance and Reinsurance Undertakings in
a Group) Regulations, 2015.
(2) The purpose of these regulations is to implement in part
Title III of the Solvency II Directive.
(3) These regulations shall come  into force on the 1st January
2016.
Interpretation. 2. In these regulations, unless the context otherwise requires -
Cap. 403. "the Act" means the Insurance Business Act;
"authorised insurance undertaking" means an undertaking
whose head office is in Malta, which has received authorisation
pursuant to article 7 of the Act to carry on direct general business and,
or long term business, and includes an undertaking authorised to carry
on direct and reinsurance business;
"authorised reinsurance undertaking" means an undertaking
whose head office is in Malta, which has received authorisation
pursuant to article 7 of the Act to carry on business restricted toreinsurance;
"college of supervisors" means a permanent but flexible
structure for the coopera tion, coordination and f acilitation of decision
making concerning the supervision of a group;
"Directive 2002/87/EC" means Di rective 2002/87/EC of the
European Parliament and of the Council of the 16 December 2002 on
the supplementary supervision of credit institutions, insurance
VERŻJONI ELETTRONIKA
B 4790
undertakings and investment firm s in a financial conglomerate and
amending Council Directives 73/239/EEC, 79/267/ EEC, 92/49/EEC,
92/96/EEC, 93/6/EEC and 93/22/EEC , and Directives 98/78/EC and
2000/12/EC of the European Par liament and of the Council, as
amended from time to time;
"European insurance undertaking" means an undertaking having
its head office in a Member State or an EEA State, other than Malta,
pursuing the activity of direct insu rance within the meaning of Article
2 of the Solvency II Directive, wh ich has received authorisation in
accordance with Article 14 of  the Solvency II Directive;
"European regulatory authority" means the supervisory
authority or supervisory authoritie s as defined in Article 13 of the
Solvency II Directive, designate d by a Member State or EEA State,
other than Malta, empowered by law or regulation to supervise
insurance or reinsurance undertakings;
"European reinsurance undertak ing" means an undertaking
having its head office in a Member State or an EEA State, other than
Malta, pursuing business restricted to reinsurance within the meaning
of Article 2 of the Solvency II Directive which has received
authorisation in accordance with  Article 14 of the Solvency II
Directive;
"group" means a group of undertakings that:
(a) consists of a partic ipating undertaking, its
subsidiaries and the entities in which the participating
undertaking or its subsidiaries hold a participation, as well as
undertakings linked to each other by a relationship as set out in
Article 22 of Directive 2013/34/EU of the European Parliamentand of the Council of 26 June 2013 on the annual financial
statements, consolidated financia l statements and related reports
of certain types of  undertakings, amending Directive 2006/43/
EC of the European Parliament and of the Council and repealingCouncil Directives 78/660/EEC and 83/349/EEC; or
(b) is based on the establis hment, contractually or
otherwise, of strong and sust ainable financial relationships
among those undertakings, and th at may include mutual or
mutual-type associations, provided that:
(i) one of those undert akings effectively
exercises, through centralis ed coordination, a dominant
influence over the decisions, including financial decisions,
of the other undertakings that are part of the group; and
VERŻJONI ELETTRONIKA
B 4791
(ii)  the establishment and dissolution of such
relationships for the purposes of  Title III of the Solvency II
Directive are subject to prior approval by the group
supervisor,
where the undertaking exercising the centralised coordination shall beconsidered as the parent undertaking, and the other undertakings shallbe considered as subsidiaries;
"group supervisor" means the supervisory authority responsible
for group supervision in accordance with Article 247 of the Solvency
II Directive;
"insurance holding company" means a parent undertaking,
which is not a mixed financia l holding company and the main
business of which is to acquire and hold participations in subsidiary
undertakings, where those subsidiary  undertakings are exclusively or
mainly authorised insurance unde rtakings, authorised reinsurance
undertakings, European insurance undertakings, Europeanreinsurance undertakings, or third country insurance undertakings or
third country reinsurance undertakings , at least one of such subsidiary
undertakings being an authorised insurance undertaking, anauthorised reinsurance undertaking, a European insuranceundertaking or a European reinsurance undertaking;
"intra-group transaction" mean s any transaction by which an
authorised insurance undertaki ng, an authorised reinsurance
undertaking, a European insura nce undertaking or a European
reinsurance undertaking, relies, either  directly or i ndirectly, on other
undertakings within the same group or on any natural or legal person
linked to the undertakings within the same group by close links, for
the fulfilment of an obligation, whether or not contractual, and
whether or not for payment;
"Malta Solvency II parent" means a parent undertaking with
head office in Malta which is: 
(a) an authorised insurance undertaking or an
authorised reinsurance undertak ing which is a participating
undertaking in at least one au thorised insurance undertaking,
authorised reinsurance undert aking, European insurance
undertaking, European reinsura nce undertaking, third country
insurance undertaking or third country reinsurance undertaking;
(b) an insurance holding company; or
(c) a mixed financial holding company;
VERŻJONI ELETTRONIKA
B 4792
"method 1" means the method of calculating group solvency as
described in regulation 22;
"method 2" means the method of calculating group solvency as
described in regulation 25;
"mixed-activity insurance hol ding company" means a parent
undertaking, other than an aut horised insurance undertaking, an
authorised reinsurance undert aking, a European insurance
undertaking, a European reinsurance undertaking, a third country
insurance undertaking, a third country reinsurance undertaking, an
insurance holding company or a mi xed financial holding company,
which includes at least one au thorised insurance undertaking,
authorised reinsurance undertaking, European insurance undertakingor European reinsurance undertaking among its subsidiary
undertakings;
"mixed financial holding company" means a mixed financial
holding company as defined in Ar ticle 2(15) of Directive 2002/87/
EC;
Cap. 330."overseas regulatory au thority" means an authority in a country
or territory outside Malta, that is  not a Member State or EEA State,
which exercises any regulatory or supervisory function in relation to
financial services corresponding to a function of the competent
authority as defined in the Malta Financial Services Authority Act;
Cap. 368."parent undertaking" has the same  meaning as assigned to it by
article 2 of the Companies Act,  and for the purposes of these
regulations includes any undertaki ng which, in the opinion of the
competent authority, effectively ex ercises a dominant influence over
another undertaking;
"participating undertaking" means an undertaking which is
either a parent undertaking or other undertaking which holds a
participation or an undertaking li nked with another undertaking by a
relationship as set out in Articl e 22 of Directive 2013/34/EU of the
European Parliament and of the Council of 26 June 2013 on the
annual financial statements, consol idated financial statements and
related reports of certain types of undertakings, am ending Directive
2006/43/EC of the European Parl iament and of the Council and
repealing Council Directiv es 78/660/EEC and 83/349/EEC;
"participation" means the owne rship, direct or by way of
control, of 20% or more of th e voting rights or capital of an
undertaking, and for the purposes of these regu lations, includes, the
holding, directly or i ndirectly of voting ri ghts or capital in an
undertaking, over which, in the opini on of the competent authority, a
VERŻJONI ELETTRONIKA
B 4793
significant influence is effectively exercised;
"related undertaking" means eith er a subsidiary or another
undertaking in which a participation is held, or an undertaking linked
with another undertaking by a relations hip as set out in Articles 22(7),
(8), and (9) of Directive 2013/34/EU of the European Parliament and
of the Council of 26 June 2013 on the annual financial statements,
consolidated financial statements an d related reports of certain types
of undertakings, amending Direct ive 2006/43/EC of the European
Parliament and of the Council a nd repealing Council Directives 78/
660/EEC and 83/349/EEC;
"Solvency II Directive" mean s Directive 2009/138/EC of the
European Parliament and of the Council of 25 November 2009 on the
taking-up and pursuit of the busine ss of Insurance and Reinsurance
(Solvency II) (recast), as  amended from time to time, and includes
any delegated acts and any technical standards that have been or may
be issued thereunder;
Cap. 368."subsidiary undertaking" means an undertaking within the
meaning of article 2 of the Companies Act, and for the purposes ofthese regulations, includes, any undertaking over which, in the
opinion of the competent authority, a parent undertak ing effectively
exercises a dominant influence;
"third country" means a country which is not a Member State or
EEA State,
and other words and expressions whic h are also used in the Act shall,
in these regulations, have the same meaning as in the Act. 
(2) The provisions of these regul ations shall be applicable in
addition to the Commission Delegated Regulation (EU) 2015/35 10
October 2014 supplementing Direct ive 2009/138/EC of the European
Parliament and of the Council on the taking-up and pursuit of the
business of Insurance and Reinsurance (Solvency II).
PART I
Group Supervision: Cases of Application, Scope and Levels
Applicability of 
regulations.3. (1) For the purpose of thes e regulations, supervision at
the level of the group shall apply to every authorised insurance
undertaking and authorised reinsuran ce undertaking which is part of a
group.
(2) Where the competent authority is the group supervisor of a
group, or where it is on e of the authorities responsible for the
VERŻJONI ELETTRONIKA
B 4794
supervision of an individual insura nce or reinsurance undertaking in a
group and is not the group supervisor, group supervision shall apply
in the following cases, where:
(a) either:
(i) an authorised insurance undertaking or an
authorised reinsurance undertak ing which is a participating
undertaking in at least one other authorised insurance
undertaking, authorised reinsurance undertaking, Europeaninsurance undertaking Europe an reinsurance undertaking,
third country insurance unde rtaking or third country
reinsurance undertaking, in accordance with regulations 9to 43; or
(ii) a European insurance undertaking or a
European reinsurance undertaking which is a participatingundertaking in at least an aut horised insurance undertaking
or an authorised reinsurance undertaking, in accordancewith regulations 9 to 43; or
(b) an authorised insurance undertaking or an
authorised reinsurance undertak ing, the parent undertaking of
which is an insurance holding company or a mixed financial
holding company which has its head office in Malta or in
another Member State or EEA State, in accordance with
regulations 9 to 43; or
(c) an authorised insurance undertaking or an
authorised reinsurance undertak ing, the parent undertaking of
which is an insurance holding company or a mixed financial
holding company which ha s its head office in  a third country, or
is a third country insurance undertaking or a third countryreinsurance undertaking, in accordance with regulations 44 to47; or
(d) an authorised insurance undertaking or an
authorised reinsurance undertak ing, the parent undertaking of
which is a mixed-activity insurance holding company, in
accordance with regulation 48.
(3) For the avoidance of doubt , the provisions of the Act,
regulations or Insurance Rules i ssued thereunder, concerning the
supervision of an authorised insu rance undertaking or an authorised
reinsurance undertaking taken indivi dually shall continue to apply to
such an undertaking, except where it is otherwise provided under
these regulations.
VERŻJONI ELETTRONIKA
B 4795
Level of 
application with 
regard to mixed financial 
holding 
companies.4. (1) Where a mixed financial holding company is subject
to equivalent provisions under the Solvency II Directive and under
Directive 2002/87/EC, in particul ar in terms of risk-based
supervision, and where the comp etent authority is the group
supervisor of the group, the author ity may, after consulting other
European regulatory authorities concerned, apply only the relevant
provisions of Directive 2002/87/EC to that mixed financial holding
company.
(2) Where a mixed financial holding company is subject to
equivalent provisions under the So lvency II Directive and under
Directive 2013/36/EU of the European Parliame nt and of the Council
of 26 June 2013 on access to the activit y of credit inst itutions and the
prudential supervision of credit ins titutions and investment firms, in
particular in terms of risk-b ased supervision, and where the
competent authority is the group supervisor of the group, the
authority may, in agreement with th e consolidating supervisor in the
banking and investment services sector, apply only the provisions of
the Directive relating to the most significant sector as determined in
accordance with Article 3(2) of Directive 2002/87/EC.
(3) Where the competent author ity is the group supervisor of
the group, it shall inform th e European Banking Authority,
established by Regulation (EU)  No 1093/2010 of the European
Parliament and of the Council of 24 November 2010, and EIOPA, ofthe decisions taken under sub-regulations (1) and (2).
Levels at which 
supervision 
need not be 
exercised in relation to risk 
concentration or 
intra-group transactions, or 
both.5. Where the competent authority is  the group supervisor of a
group, it may, after consultation with other European regulatory
authorities concerned, decide not to  carry out supervision of the risk
concentration, intra-group transactions, or both, as referred to in
regulation 33, only in the following cases:
(a) in the cases referred to in regulation 3(2)(a) and (b),
where the participating insuranc e or reinsurance undertaking or
the insurance holding company or mixed financial holding
company which has its head offi ce in Malta, or in another
Member State or EEA State, is either a related undertaking of,
or is itself a regulated entit y or a mixed financial holding
company which is subject to supplementary supervision in
accordance with Article 5(2) of Directive 2002/87/EC, at the
level of that participating insu rance or reinsurance undertaking
or that insurance holding comp any or mixed financial holding
company;
(b) where the ultimate parent  insurance or reinsurance
undertaking or insurance holding company or mixed financial
VERŻJONI ELETTRONIKA
B 4796
holding company which has its he ad office in Malta, or in
another Member State or EEA State,  as referred to in regulation
7, is a subsidiary undertaking of an undertaking which is subject
to supplementary supervision in accordance with Article 5(2) of
Directive 2002/87/EC, at the leve l of that ultimate parent
undertaking or company.
Scope of group 
supervision.6. (1) Without prejudice to regulation 42 and in so far as
insurance holding companies or mi xed financial holding companies
are concerned, the exercise of gr oup supervision by the competent
authority in accordance with regul ations 3, 4 and 5, shall not imply
that the competent authority is requi red to play a supervisory role in
relation to the third country insu rance undertaking, third country
reinsurance undertaking, the in surance holding company, mixed
financial holding company or th e mixed-activity insurance holding
company, taken individually.
(2) Where the competent authorit y is the group supervisor of a
group, it may decide on a case-by- case basis not to include an
undertaking in the group supervision referred to in regulations 3, 4,
and 5, where:
(a) the undertaking is situated in a third country, where
there are legal impediments to the transfer of the necessary
information, without prejudice to  the provisions of regulation
21;
(b) the undertaking which should be included is of
negligible interest with resp ect to the objectives of group
supervision; or
(c) the inclusion of the undertaking would be
inappropriate or misleading with respect to the objectives of the
group supervision.
(3) Where several undertakings  of the same group, taken
individually, may be excluded pursu ant to sub-regulation (2)(b), such
undertakings shall neve rtheless be included where, collectively, they
are of non-negligible interest.
(4) Where the competent author ity is the group supervisor of
the group and is of th e opinion that an insu rance or reinsurance
undertaking is not to be included in the group supervision, based on
sub-regulation (2)(b) or (c), it shall consult other regulatory
authorities concerned in the superv ision of the group, before taking a
decision in accordance with sub-regulation (2).
(5) Where the competent authority is one of the authorities
VERŻJONI ELETTRONIKA
B 4797
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor,
and the group supervisor has decide d, in accordance with Article 214
of the Solvency II Directive, not to  include that authorised insurance
undertaking or authorised rein surance undertaking in the group
supervision, the competent author ity may require the undertaking
which is at the head of the group to provide any in formation which
may facilitate the competent author ity’s supervision of the excluded
authorised insurance undertaki ng or authorised reinsurance
undertaking.
Ultimate parent 
undertaking at 
Union level.7. Where the participating in surance or reinsurance
undertaking or the insurance holding company or the mixed financial
holding company, referred to in regul ation 3(2)(a) and (b), is itself a
subsidiary undertaking of another authorised insurance undertaking,
authorised reinsurance undertaki ng, European insurance undertaking
or European reinsurance undertaki ng, or of another insurance holding
company or mixed financial hold ing company which has its head
office in Malta, or in another Memb er State or EEA State, regulation
9 to 43 shall apply only at the level of the ultimate pa rent insurance or
reinsurance undertak ing, insurance holdi ng company or mixed
financial holding company which has its head office in Malta, or in
another Member State or EEA State.
Ultimate parent 
undertaking at national level.8. (1) The competent authority may subject the ultimate
Malta Solvency II parent to group supervision, where:
(a) the ultimate parent undertaking at Union level
referred to in regulation 7, has it s head office in a Member State
or EEA State, other than Malta;
(b) the ultimate parent undertaking at Union level
referred to in regulation 7, has not obtained permission in
accordance with Articles 237 or 243 of the Solvency II
Directive, for the ultim ate Malta Solvency II parent, which is its
subsidiary, to be subject to regulations 29 and 30; and
(c) the competent authority is one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group
supervisor.
(2) The competent authority shall:
(a) before taking the decision to exercise supervision in
accordance with sub-regulati on (1), consult both the group
supervisor and the ultimate pa rent undertaking at Union level;
and
VERŻJONI ELETTRONIKA
B 4798
(b) where such a decision ha s been taken, explain its
decision to both the group superv isor and the ultimate parent
undertaking at Union level.
(3) Where the competent authorit y is the group supervisor of a
group and a decision has been taken to subject the ultimate parent
insurance or reinsurance undertak ing, insurance holding company or
mixed financial holding company to group supervision, pursuant to
Article 216(1) of the Solvency II Directive, the competent authority
shall inform the college of supervisors in accordance with article
32B(3)(a) of the Act.
(4) (a) Where the competent authority is one of the
authorities responsible for the supe rvision of an individual insurance
or reinsurance undertaking in a gr oup and is not the group supervisor,
and takes a decision in accordance with regulation 8(1) and (2) or
concludes an agreement in accordance with regu lation 8(11) to (13),
regulations 9 to 43 shall apply mutatis mutandis, subject to paragraph
(b) and to sub-regulations (1)(b), (5) to (10) of this regulation.
(b) The decision or agreement referred to in paragraph
(a) is subject to the decision whic h the competent authority may take,
to restrict group supervision of the ultimate Malta So lvency II parent
to one or more of the following:
(i) Articles 218 to 243 of Title III, Chapter II,
Section 1 of the Solvency II Directive; 
(ii) Articles 244 and 245 of Title III, Chapter II,
Section 2 of the Solvency II Directive;
(iii) Article 246 of Title III, Chapter II, Section 3
of the Solvency II Directive.
(5) Where the competent authority decides to apply Articles
218 to 243 of the Solvency II Directive to the ultimate Malta
Solvency II parent or concludes an agreement in accordance with sub-
regulations (11) to (13), the choi ce of method made in accordance
with Article 220 of the Solvency II  Directive by the group supervisor
in respect of the ultima te parent undertaking at Union level referred to
in Article 215 of the Solvency II Directive, shall be recognised as
determinative and applied by the competent authority.
(6) Where the competent authority decides to apply Articles
218 to 243 of the Solvency II Directive to the ultimate MaltaSolvency II parent or concludes an agreement in accordance with sub-
regulations (11) to (13), the comp etent authority shall recognise as
VERŻJONI ELETTRONIKA
B 4799
determinative and apply any perm ission granted in accordance with
Articles 231 or 233(5) of the Solven cy II Directive,  to the ultimate
parent undertaking at Union level referred to in regulation 7 to
calculate the group Solvency Capi tal Requirement, as well as the
Solvency Capital Requirement of insurance undertakings and
reinsurance undertakings in the group, on the basis of an internal
model.
(7) In the situation referred to in sub-regulation (6), where the
competent authority considers that the risk profile of the ultimate
Malta Solvency II pare nt deviates significantly from the internal
model approved at Union level, a nd as long as that undertaking does
not properly address the concerns of the competent authority, the
competent authority may decide to  impose a capital add-on to the
group Solvency Capital Requirement  of that undertaking resulting
from the application of such mode l or, in exceptional circumstances,
where such capital add-on would no t be appropriate, to require that
undertaking to calculate its group Solvency Capital Requirement on
the basis of the standard formula.
(8) The competent authority shal l explain the decisions taken
in accordance with sub-regulati ons (6) or (7) to both the Malta
Solvency II parent and the group supervisor.
(9) Where the competent authority is the group supervisor of a
group and a decision has been taken pursuant to Article 216(4) of theSolvency II Directive, the comp etent authority shall inform the
college of supervisors in accordance  with article 32B(3)(a) of the Act.
(10) Where the competent author ity decides to apply Articles
218 to 243 of the Solvency II Di rective to the ultimate Malta
Solvency II parent that undertaking shall not be permitted tointroduce, in accordance with regula tions 27 to 32, an application for
permission to subject any of its s ubsidiaries to Articles 238 and 239
of the Solvency II Directive.
(11) Where the competent au thority makes a decision in
accordance with sub-regulation (1), the competent authority may
conclude an agreement with the European regulatory authorities in
other Member States or EEA Stat es where another related ultimate
parent undertaking at na tional level, other than Malta, is present, with
a view to carrying out group supervision at the level of a subgroup
covering Malta and such other Me mber States or EEA States.
(12) Where the competent authority has concluded an
agreement as referred to in sub- regulation (11), group supervision
shall not be carried out at the level of any ulti mate parent undertaking
VERŻJONI ELETTRONIKA
B 4800
referred to Article 216 of the So lvency II Directive, present in
Member States or EEA States, other than the Member States or EEA
States where the subgroup referred  to in sub-regulation (11) is
located.
(13) Where an agreement is conc luded in accordance with sub-
regulation (11), the competent auth ority shall explain the agreement
to the group supervisor and to the ultimate parent undertaking at
Union level.
(14) Where the competent authorit y is the group supervisor of a
group and an agreement to carry out group supervision at subgroup
level in the Member States or  EEA States concerned, has been
concluded pursuant to Article 217 of the Solvency II Directive, the
competent authority shall inform  the college of supervisors in
accordance with articl e 32B(3)(a) of the Act.
PART II
Financial Position
Group 
Solvency: 
general 
provisions.9. (1) Supervision of the group so lvency shall be exercised
in accordance with sub- regulations (2) and (3),  and regulations 34 to
43.
(2) In the case referred to in regulation 3(2)(a)(i), a
participating insurance or reinsu rance undertaking in  a group, shall
ensure that eligible own funds ar e available in the group which are
always at least equal to the gr oup Solvency Capita l Requirement as
calculated in accordance with regulations 12 to 25.
(3) In the case referred to in re gulation 3(2)(b), an authorised
insurance undertaking or an author ised reinsurance undertaking in a
group, shall ensure that eligible ow n funds available in the group are
always at least equal to the gr oup Solvency Capita l Requirement as
calculated in accordance with regulation 26.
(4) An undertaking referred to in  sub-regulations  (2) and (3),
shall have procedures in place to  identify deteriorating financial
conditions within the group and sh all notify the group supervisor,
without delay, when such deterioration occurs.
(5) An undertaking, as referred to in sub-regulations (2) and
(3), shall:
(a) immediately inform the group supervisor, as soon as
such undertaking observes that  the group Solvency Capital
Requirement is no longer complied  with, or where there is the
VERŻJONI ELETTRONIKA
B 4801
risk of non-compliance within  the following three months;
(b) within two months fr om the observation of non-
compliance with the group Solvency Capital Requirement,
submit a realistic recovery plan for approval by the group
supervisor;
(c) take the necessary measures to achieve within six
months from the observation of  non-compliance with the group
Solvency Capital Requirement, which period may be extended
for a further three months by the group supervisor, the re-
establishment of the level of eligible own funds covering the
group Solvency Capital Requirement  or the reduction of the risk
profile to ensure compliance with the group Solvency CapitalRequirement;
(d) submit a progress report to the group supervisor
every three months, setting ou t the measures taken and the
progress made to re-establish the level of own funds covering
the group Solvency Capital Requi rement or to reduce the risk
profile to ensure compliance with the group Solvency CapitalRequirement, in the event of exceptional adverse situations
affecting such undertaking, as declared by EIOPA, and whereappropriate in consu ltation with the European Systematic Risk
Board.
(6) Where the competent authority is the group supervisor of a
group, the authority:
(a) shall require an author ised insurance undertaking or
an authorised reinsurance unde rtaking, a European insurance
undertaking or a European rein surance undertak ing, in a group,
which has informed the competen t authority as soon as it was
observed that the group Solvency Capital Requirement is nolonger complied with, or where there is a risk of non-
compliance in the following thre e months, to take the necessary
measures to achieve, within si x months from the observation of
non-compliance with the Solvency  Capital Requirement, the re-
establishment of the level of eligible own funds covering the
Solvency Capital Requirement or the reduction of it s risk profile
to ensure compliance with the Solvency Capital Requirement;
(b) may, if appropriate extend the period of six months
referred to in paragra ph (a) by three months;
(c) may, in the event of ex ceptional adverse situations
affecting any of the author ised insurance undertaking,
VERŻJONI ELETTRONIKA
B 4802
authorised reinsurance undertaking, European insurance
undertaking or European reinsurance undertaking, in a group,
extend the period set out in para graph (b) by a maximum period
of seven years, taking into account all relevant factors,
including the average duration of the technical provisions;
(d) may, request EIOPA to declare the existence of
exceptional adverse situations, if any, of the authorised
insurance undertaking, authoris ed reinsurance undertaking,
European insurance undertaki ng or European reinsurance
undertaking, in a group, representin g a significant share of the
market or of the affected lines of business are unlikely to meet
one of the requirements set out in paragraph (a);
(e) shall cooperate with EIOPA:
(i) to assess on a regular  basis whether the
conditions referred to in s ub-regulation (7) still apply;
(ii) to declare when an  exceptional adverse
situation has ceased to exist;
(f) shall require any affected  undertaking to submit a
progress report setting out the me asures taken and the progress
made to re-establish the level of  eligible own funds covering the
group Solvency Capital Require ment or to reduce the risk
profile to ensure compliance wi th the group Solvency Capital
Requirement;
(g) shall withdraw the ex tension referred to in
paragraph (c) where that progres s report shows that there was
no significant progress in achieving the re-e stablishment of the
level of eligible ow n funds covering the group Solvency Capital
Requirement or the reduction of  the risk profile to ensure
compliance with the group Solvency Capital Requirementbetween the date of the observation of non-compliance of the
group Solvency Capital Require ment and the date of the
submission of the progress report.
(7) For the purposes of this regulation, "exceptional adverse
situations" exist where the financial situation of an authorised
insurance undertaking, an author ised reinsurance undertaking, a
European insurance undertaking or a European reinsurance
undertaking, repres enting a significant share of  the market or of the
affected lines of business, is seri ously or adversely affected by one or
more of the following conditions:
VERŻJONI ELETTRONIKA
B 4803
(a) a fall in financial mark ets which is unforeseen, sharp
and steep;
(b) a persistent low interest rate environment;
(c) a high-impact catastrophic event.
Frequency of 
calculation.10. (1) The group solvency calcu lations referred to in
regulation 9(2) and (3), shall be car ried out at least annually by the
participating insurance or reinsu rance undertaking referred to in
regulation 9(2), by the insurance holding company or by the mixed
financial holding company referred to in regulation 9(3).
(2) The relevant data for, and the results of, the calculations
referred to in regulati on 9(2) and (3) shall be submitted to the group
supervisor:
(a) by the participating in surance or reinsurance
undertaking referred to in regulation 9(2); or
(b) by the insurance holding company or the mixed
financial holding company referred  to in regulation 9(3), or by
such other undertaking in the gr oup as may be identified by the
group supervisor, after consulting the competent authority, the
European regulatory authorities concerned and the group itself,
where the group is not headed by an authorised insurance
undertaking, an authorised rein surance undertaking, a European
insurance undertaking or a Eur opean reinsurance undertaking.
(3) (a) The authorised insurance undertaking and
authorised reinsurance undertaking re ferred to in regulation 9(2), and
the insurance holding company and mixed financial holding
company, referred to in regula tion 9(3) shall monitor the group
Solvency Capital Requirement on an ongoing basis.
(b) Where the risk profile of the group deviates
significantly from the assumptions  underlying the last reported group
Solvency Capital Requirement , the group Solvency Capital
Requirement shall be recalculated without delay and reported to the
group supervisor. 
Supervision of 
group solvency.11. Where the competent authority is  the group supervisor of a
group, the authority:
(a) shall ensure that the calculations referred to in
Article 218(2) and (3) of the So lvency II Directive are carried
out at least annually, by th e participating insurance or
reinsurance undertaking, by the insurance holding company or
VERŻJONI ELETTRONIKA
B 4804
by the mixed financial holding company;
(b) shall conduct supervisor y reviews in accordance
with Articles 247 to 259 of th e Solvency II Directive, to
determine whether insurance or reinsurance undertakings in the
group are complying with Articles 218(2) and (3) of the
Solvency II Directive;
(c) shall inform the othe r European regulatory
authorities within the college of supervisors, which shall
analyse the situation of the gr oup, as soon as a participating
undertaking in the group informs th e competent aut hority, that it
is no longer in compliance with the Solvency CapitalRequirement, or that there is a risk of non-compliance in the
following three months;
(d) shall, where the group is not  headed by an insurance
undertaking or reinsurance undertaking, consult theundertakings in the group a nd the European regulatory
authorities concerned in the supervision of the group, before
identifying an undertaking othe r than an insurance holding
company or a mixed financial holding company to supplyrelevant data for, and the results , of, the calculati ons referred to
in Articles 218(2) and (3) of the Solvency II Directive;
(e) may, where there is evidence to suggest that the risk
profile of the group has altere d significantly si nce the date on
which the group Solvency Ca pital Requirement was last
reported, require a recalculation of the group Solvency Capital
Requirement.
Choice of 
method.12. (1) The calculation of the solvency at the level of the
group of the authorised insurance undertakings and authorised
reinsurance undertakings referred to  in regulation 3(2)(a), shall be
carried out:
(a) in accordance with the technical principles in
regulations 13 to 26; and
(b) in accordance with method 1, unless the group
supervisor has determined unde r Article 220(2) of the Solvency
II Directive that method 2 or  a combination of method 1 and
method 2 shall be applied.
(2) Where the competent authorit y is the group supervisor of a
group, the authority shall consult the group and the other European
regulatory authorities concerned in the supervision of the group,
before taking a decision in accord ance with sub-regulation (1)(b) on
VERŻJONI ELETTRONIKA
B 4805
requiring the particular group to use method 2 or a combination of
method 1 and method 2, for the calcu lation of the solvency at the
level of the group, where the exclus ive application of  method 1 would
not be appropriate.
(3) Where the competent authorit y is one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor,
the competent authority shall apply the method chosen by the group
supervisor for the ultimate parent insurance or reinsurance
undertaking, insurance holding company or mixed financial holding
company at Union level, in relation to:
(a) group supervision at national level in accordance
with regulation 8(1); and
(b) supervision at sub-group level in accordance with
regulation 8(11). 
Inclusion of 
proportional 
share.13. (1) The calculation of the gr oup solvency shall take into
account the proportional share held by the participating undertaking
in its related undertakings.
(2) Subject to sub-regulation (3), for the purposes of sub-
regulation (1), the proportional shar e shall comprise either of the
following:
(a) where method 1 is used, th e percentages used for the
establishment of the consolidated accounts; or
(b) where method 2 is used, the proportion of the
subscribed capital that is hel d, directly or indirectly, by the
participating undertaking.
(3) Notwithstanding sub-regulati on (2) and regardless of the
method used:
(a) where the related unde rtaking is a subsidiary
undertaking and does not have sufficient eligible own funds to
cover its Solvency Capital Requirement:
(i) the total solvency deficit of the subsidiary
undertaking shall be taken into account; or
(ii) a proportional share of that solvency deficit
shall be taken into account, if the group supervisor so
determines in accordance with  sub-regulations (4) or (5);
VERŻJONI ELETTRONIKA
B 4806
(b) the proportional share sh all be determined by the
group supervisor if su ch a determination is made in accordance
with sub-regulation (6).
(4) Where the competent authority is one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor,
and is of the opinion that  the responsibility of the parent undertaking
owning a share of the capi tal is strictly limited to that share of the
capital, the group supervisor may nevertheless allow for the solvency
deficit of the subsidiary undertak ing to be taken into account on a
proportional basis.
(5) Where the competent authorit y is the group supervisor of a
group, and in the opinion of a Eu ropean regulatory authority
concerned the responsibility of the parent undertaking owning a share
of the capital is strict ly limited to that share of the capital, the
competent authority may nevertheless  allow for the solvency deficit
of the subsidiary undertaking to be taken into account on a
proportional basis.
(6) Where the competent authorit y is the group supervisor of a
group, the authority shall, after c onsulting the European regulatory
authority concerned and the group itself, determine the proportional
share which shall be taken into ac count in the calculation of group
solvency, in any of the following cases:
(a) where there are no capital ties between some of the
undertakings in a group;
(b) where a European regulatory authority has
determined that the holding, directly or indirectly, of voting
rights or capital in an undertaki ng qualifies as a participation
because, in its opinion, a signifi cant influence is effectively
exercised over that undertaking;
(c) where a European regulatory authority has
determined that an undertaki ng is a parent undertaking of
another because, in the opinion of  that regulatory authority, it
effectively exercises a dominan t influence over that other
undertaking.
Elimination of 
double use of 
eligible own funds.14. (1) The own funds eligible for the Solvency Capital
Requirement shall not be taken into account more than once among
the different insurance or reinsura nce undertakings, in  a group, in the
calculation of the group solvency.
(2) For the purposes of sub-re gulation (1), when calculating
VERŻJONI ELETTRONIKA
B 4807
the group solvency and where method 1 and method 2 do not provide
for it, the following am ounts shall be excluded:
(a) the value of any asset of the participating insurance
or reinsurance undertaking, which represents th e financing of
own funds eligible for the Solvency Capital Requirement of one
of its related insurance or reinsurance undertakings;
(b) the value of any asset of a related insurance or
reinsurance undertaking of th e participating insurance or
reinsurance undertaking which represents the financing of own
funds eligible for the Solvency  Capital Requirement of that
participating insurance or  reinsurance undertaking;
(c) the value of any asset of a related insurance or
reinsurance undertaking of th e participating insurance or
reinsurance undertaking, which repr esents the financing of own
funds eligible for the Solvency Capital Requirement of anyother related insurance or re insurance undertaking of that
participating insurance or  reinsurance undertaking.
(3) Without prejudice to sub-regulation (2), the following may
be included in the calculation only in  so far as they are eligible for
covering the Solvency Capital Requi rement of the related undertaking
concerned:
(a) surplus funds falling und er Article 91(2) of the
Solvency II Directive arisi ng in a related insurance or
reinsurance undertaking carrying on long term business, of theparticipating insurance or reinsu rance undertaking for which the
group solvency is calculated;
(b) any subscribed but not paid-up capital of a related
insurance or reinsurance undert aking of the participating
insurance or reinsurance unde rtaking for which the group
solvency is calculated.
(4) Notwithstanding sub-regulati on (3), the following shall in
any event be excluded from the calculation:
(a) subscribed but not paid- up capital which represents
a potential obligation on the part of the participating
undertaking;
(b) subscribed but not pa id-up capital of the
participating insurance or reinsurance undertaking, which
represents a potential obligat ion on the part of a related
VERŻJONI ELETTRONIKA
B 4808
insurance or reinsurance undertaking;
(c) subscribed but not paid -up capital of a related
insurance or reinsurance undertaking which represents a
potential obligation on the part of another related insurance or
reinsurance undertaking of the same participating insurance orreinsurance undertaking.
(5) Where the competent authority considers that certain own
funds eligible for the Solvency Capital Requirement of a relatedinsurance or reinsurance undertaki ng other than those referred to in
sub-regulations (3) and (4), cannot effectively be made available to
cover the Solvency Capital Requi rement of the participating
insurance or reinsurance undertaki ng for which the group solvency is
calculated, those own funds may be  included in the calculation only
in so far as they are eligible for covering the Solvency Capital
Requirement of that  related undertaking.
(6) The sum of the own funds referred to in sub-regulations (3)
to (5), shall not exceed the Solvency Capital Requirement of therelated insurance or reinsurance undertaking.
(7) Any eligible own funds of a related insurance or
reinsurance undertaking of the partic ipating insurance or reinsurance
undertaking for which the group solvency is calculated that are
subject to prior author isation from the competent authority or the
relevant European regulatory author ity in accordance with Article 90
of the Solvency II Directive, shall be included in the calculation only
in so far as they have been duly authorised by the competent authorityor the relevant European regulato ry authority, responsible for the
supervision of that related undertaking.
Elimination of 
intra-group 
creation of capital.15. (1) When calculating group so lvency, no account shall
be taken of any own funds eligible for the Solvency Capital
Requirement arising out of reci procal financing between the
participating insurance or reinsurance undertaking and any of the
following:
(a) a related undertaking;
(b) a participating undertaking;
(c) another related undertaking of any of its
participating undertakings.
(2) When calculating group solvency, no account shall be
taken of any own funds eligible for the Solvency Capital Requirement
of a related insurance or reinsura nce undertaking of the participating
VERŻJONI ELETTRONIKA
B 4809
insurance or reinsurance undertaking for which the group solvency is
calculated where the own funds concerned arise out  of reciprocal
financing with any other related undertaking of that participating
insurance or reinsurance undertaking.
(3) Reciprocal financing shall be deemed to exist at least
where an insurance or reinsurance undertaking, or any of its related
undertakings, holds shares in, or makes loans to, another undertaking
which, directly or indirectly, hol ds own funds eligible for the
Solvency Capital Requirement of the first undertaking.
Valuation. 16. The value of the assets and li abilities shall be assessed in
accordance with Insurance Rules i ssued under article 18D of the Act.
Related 
insurance or reinsurance 
undertakings.17. (1) Where an authorised insurance undertaking or an
authorised reinsurance undertaking has more than one related
insurance or reinsurance undertaki ng, the group solvency calculation
shall be carried out by including each of those related insurance or
reinsurance undertakings.
(2) Where the related insurance or reinsurance undertaking has
its head office in a Member State or EEA State other than that of the
authorised insurance undertaki ng or authorised reinsurance
undertaking for which the group solven cy calculation is carried out,
the calculation is to take into account, in respect of the related
undertaking, of the Solvency Capi tal Requirement and the own funds
eligible to satisfy that requirement as laid down in that other Member
State or EEA State.
Intermediate 
insurance 
holding 
companies.18. (1) When calculating the group solvency of an
authorised insurance undertaking or an authorised reinsurance
undertaking, in a group, which holds a participation in:
(a) a related insurance undertaking;
(b) a related reinsurance undertaking;
(c) a related third-country insurance undertaking; or
(d) a related third-country reinsurance undertaking,
through an insurance holding compa ny or a mixed financial holding
company, the situation of such  an insurance holding company or
mixed financial holding company shall be taken into account.
(2) For the sole purpose of that  calculation, th e intermediate
insurance holding company or intermediate mixed financial holding
company shall be treated as if it were an insurance or reinsurance
VERŻJONI ELETTRONIKA
B 4810
undertaking, subject to the rules laid down in  Articles 100 to 127 of
the Solvency II Directive, in respect of the Solvency Capital
Requirement and were subject to th e same conditions as are laid down
in Articles 87 to 99 of the Solvency II Directive, in respect of own
funds eligible for the Solvency Capital Requirement.
(3) In cases where an intermediate insurance holding company
or intermediate mixed financial holding company holds subordinated
debt or other eligible own funds subject to limitation in accordance
with Article 98 of the Solvency II Directive, they shall be recognisedas eligible own funds up to the amounts calculated by application of
the limits set out in the said Arti cle to the total eligible own funds
outstanding at group level as comp ared to the Solvency Capital
Requirement at group level.
(4) Any eligible own funds of an intermediate insurance
holding company or intermediate mixed financial holding company,which would require prior authoris ation from the competent authority
or the European regulatory author ity concerned, in accordance with
Article 90 of the Solvency II Dir ective if they were held by an
authorised insurance undertaking, an authorised reinsurance
undertaking, a European insura nce undertaking or a European
reinsurance undertaking, may be included in the calculation of the
group solvency only in so far as th ey have been duly authorised by
the group supervisor, or by the comp etent authority where it is the
group supervisor of a group.
Equivalence 
concerning 
related third-country 
insurance and 
re-insurance undertakings.19. (1) When calculating the group solvency of an
authorised insurance undertaking or an authorised reinsurance
undertaking which is a participating undertaking in a third-country
insurance undertaking or third-count ry reinsurance undertaking, in
accordance with method 2, such  third-country insurance or
reinsurance undertaking shall, so lely for the purposes of that
calculation, be treated as a re lated insurance or reinsurance
undertaking.
(2) Notwithstanding sub-regulat ion (1), where the third
country in which that undertaking has its head offi ce is subject to
authorisation and has a solvency re gime at least equivalent to that
specified in Articles 75 to 135 of  the Solvency II Directive, the
competent authority may provide that the calculation in sub-
regulation (1) shall take into account, as regards that undertaking, theSolvency Capital Requirement and th e own funds eligible to satisfy
that requirement as laid down  by the third country concerned.
(3) Where the competent authorit y is the group supervisor of a
group and no delegated act has been adopted in accordance with
VERŻJONI ELETTRONIKA
B 4811
Article 227(4) or (5) of  the Solvency II Dire ctive, the competent
authority shall at the request of th e participating undert aking, or on its
own initiative, make the verificat ion of whether the third country
solvency regime is at least equiva lent to Articles 75 to 135 of the
Solvency II Directive.
(4) Where the competent authority is the group supervisor of a
group, the authority shall:
(a) consult the other Europ ean regulatory authorities
concerned in the supervision of the group before taking a
decision on equivalence under sub-regulation (3), with the
assistance of EIOPA in accord ance with Article 33(2) of
Regulation (EU) No 1094/2010;
(b) take the decision on equi valence in accordance with
the criteria set out in any dele gated acts adopted under Article
227(3) of the Solvency II Directive; and
(c) ensure that its decision in  relation to a third country
is not contradicting any decisi on taken vis-à-vis that third
country previously, except where it is necessary to take into
account significant changes to the supervisory regime laid down
in Articles 75 to 135 of the So lvency II Directive and to the
supervisory regime in the third country.
(5) Where the competent authorit y is one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor,
and disagrees with the decision taken in accordance with sub-
paragraph (2) of Article 227(2) of  the Solvency II Directive, the
competent authority may refer the matter to EIOPA and request its
assistance in accordance with Article 19 of Regulation (EU) No 1094/2010 within three months  after notification of  the decision by the
group supervisor.
Related credit 
institutions, 
investment 
firms and financial 
institutions.20. When calculating the group so lvency of an authorised
insurance undertaking or an authorised reinsurance undertaking,
which is a participating undertaking in a credit institution, investment
firm or financial institution, the participating insurance and
reinsurance undertaking shall:
(a) apply methods 1 or 2 set out  in Annex I to Directive
2002/87/EC mutatis mutandis , provided that, method 1 set out
in that Annex shall be applie d only where the group supervisor
or where the competent authority is the group supervisor of a
group, the competent authority, as  applicable, is satisfied as to
VERŻJONI ELETTRONIKA
B 4812
the level of integrated mana gement and internal control
regarding the undertakings wh ich would be included in the
scope of consolidation, and provided alwa ys that the method
chosen shall be applied in a consistent manner over time; or
(b) deduct any participation as  referred to in paragraph
(a) from the own funds eligible  for the group solvency of the
participating undertaking, where the group supervisor or the
competent authority as group superv isor so decides, either at the
request of the participating undertaking or on its own initiative.
Non-availability 
of the necessary 
information.21. Where the information necessa ry for calculating the group
solvency of an authorised insurance undertaking or an authorised
reinsurance undertaking, in a group, concerning a related undertaking
with its head office in a Member State or EEA State, or in a thirdcountry, is not available to the comp etent authority, where it is the
group supervisor of a group:
(a) the book value of that related undertaking in the
participating insurance or reinsurance undertaking shall bededucted from the own funds eligible for the group solvency;
and
(b) the unrealised gain s connected with such
participation shall not be recogni sed as own funds eligible for
the group solvency.
Method 1 
(Default Method): 
Accounting 
consolidation-based method.22. (1) The calculation of the group solvency of the
participating insurance or reinsu rance undertaking, sh all be carried
out on the basis of the consolidated accounts.
(2) The group solvency of th e participating insurance or
reinsurance undertaking is the difference between the following:
(a) the own funds eligible to cover the Solvency Capital
Requirement, calculated on the basis of consolidated data; and
(b) the Solvency Capital Re quirement at group level
calculated on the basis of consolidated data.
(3) The rules laid down in Articles 87 to 127 of the Solvency
II Directive shall appl y for the calculation of the own funds eligible
for the Solvency Capital Requirement and of the Solvency Capital
Requirement at group level based on consolidated data.
(4) The Solvency Capital Requi rement at group level based on
consolidated data ("consolid ated group Solvency Capital
Requirement") shall be calculated on the basis of either the standard
VERŻJONI ELETTRONIKA
B 4813
formula or an approved internal model, in a manner consistent with
the general principles contained in Articles 87 to 97, 100 to 102 and
112 to 127 of the Solvency II Directive.
(5) The consolidated group Solvency Capital Requirement
shall have as a minimum the sum of the following:
(a) the Minimum Capi tal Requirement as referred to in
Article 129 of the Solvency II Di rective, of the participating
insurance or reinsurance undertaking; and
(b) the proportional share of the Minimum Capital
Requirement of the related insurance and reinsurance
undertakings.
(6) That minimum shall be c overed by eligible basic own
funds as determined in Article 98( 4) of the Solvency II Directive.
(7) For the purposes of determin ing whether such eligible own
funds qualify to cover the minimum consolidated group Solvency
Capital Requirement, the principles  set out in Articles 221 to 229 of
the Solvency II Directive shall apply mutatis mutandis . Article 139(1)
and (2) of the Solvency II Directive shall also apply mutatis
mutandis .
Group internal 
model.23. (1) An application for perm ission to calculate the
consolidated group Solvency Capita l Requirement, as well as the
Solvency Capital Requirement of an authorised insurance
undertaking, an authorised rein surance undertaking, a European
insurance undertaking or a Europe an reinsurance undertaking, in a
group, on the basis of an internal  model, submitted by such an
undertaking and its rela ted undertakings, or jointly by the related
undertakings of an insurance holdi ng company, shall be submitted to
the group supervisor or to the comp etent authority where is the group
supervisor of a group, as applicable.
(2) Where the competent authority is the group supervisor of a
group, upon receipt of an application as referred to in sub-regulation
(1), it shall inform the other memb ers of the college of supervisors
and forward the complete application to them, without delay.
(3) Where the competent authorit y is one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor:
(a) it shall cooperate with other European regulatory
authorities concerned, to decide whether or not to grant the
permission referred to in sub-re gulation (1) and to  determine the
VERŻJONI ELETTRONIKA
B 4814
terms and conditions, if any, to which such permission is
subject;
(b) it shall do everything with in its power to reach a
joint decision on the application wi thin six months from the date
of receipt of the complete a pplication by the group supervisor;
and
(c) it may, within the six-month period referred to in
paragraph (b) or before a joint- decision has been reached, refer
the matter to EIOPA in accordance with Article 19 of
Regulation (EU) No 1094/2010, a nd the decision of the group
supervisor which is taken in conformity with EIOPA’s decision,
shall be recognised as determinat ive and shall be applied by the
competent authority.
(4) If in accordance with Arti cles 41(2) and (3) and Articles
44(1) and (3) of Regulation (EU) No 1094/2010, the decision
proposed by the panel is rejected, the group supervisor shall take a
final decision and that d ecision shall be recognised as determinative
and applied by the competent authority.
(5) Where the competent authorit y is the group supervisor of a
group:
(a) if within the six-month pe riod referred to in Article
231(3) of the Solvency II Directive or before a joint-decision
has been reached, any of the Eu ropean regulatory authorities
concerned has referred the matter to EIOPA in accordance with
Article 19 of Regulation (E U) No 1094/2010, the competent
authority shall defer its deci sion and await any decision that
EIOPA may take in accordance with Article 19(3) of thatRegulation, and shall take its decision in conformity with
EIOPA’s decision. That decision shall be recognised as
determinative and applied by the European regulatory
authorities concerned; and
(b) if in accordance with Articles 41(2) and (3) and
Articles 44(1) and (3) of Regulation (EU) No 1094/2010, the
decision proposed by the panel is rejected, the competent
authority shall take a final de cision, and that decision shall be
recognised as determinative a nd shall be applied by the
European regulatory authorities concerned.
(6) Where the competent authorit y is the group supervisor of a
group, the authority shall:
VERŻJONI ELETTRONIKA
B 4815
(a) where the competent au thority and the European
regulatory authorities concerned have reached a joint decision,
provide the applicant referred to  in sub-regulation (1) with a
document setting out the full reasons; and
(b) in the absence of the a doption of a joint decision
within six months from the rece ipt of the complete application
sent by it, make its own deci sion on the application, taking into
account any views and reservat ions of the other European
regulatory authorities concerne d expressed during that six-
month period and shall provide th e applicant referred to in sub-
regulation (1) and the other Eu ropean regulatory authorities
concerned, with a document se tting out its fully reasoned
decision which shall be recognise d as determinative and shall be
applied by the European regul atory authorities concerned.
(7) Where the competent authorit y is one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor, in
the absence of the adoption of a jo int decision within six months from
the date of receipt of the comp lete application by the group, the
decision of the group supervisor  on the application, shall be
recognised as determinative.
(8) Where the competent authorit y is one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor,
and it considers that the risk prof ile of an authorised insurance
undertaking or an authorised reinsurance undertaking deviates
significantly from the assumpti ons underlying the internal model
approved at group level, and th at undertaking has not properly
addressed the concerns of the co mpetent authority, the competent
authority may:
(a) in accordance with Article 37 of the Solvency II
Directive, impose a capital a dd-on to the Solvency Capital
Requirement of that insurance or reinsurance undertaking
resulting from the applicati on of such internal model;
(b) in exceptional circumstances, where such capital
add-on imposed under paragraph (a ) would not be appropriate,
require the undertaking concerne d to calculate its Solvency
Capital Requirement on the basi s of the standard formula
referred to in Articles 87 to 97 of the Solvency II Directive; or
(c) where the competent authority has exercised its
discretion under paragraph (b), to require an authorised
VERŻJONI ELETTRONIKA
B 4816
insurance undertaking or an aut horised reinsurance undertaking
to calculate its Solvency Capita l Requirement on the basis of the
standard formula, impose a ca pital add-on to the Solvency
Capital Requirement in accordance  with Article 37(1)(a) and (c)
of the Solvency II Directive.
(9) The competent authority shall explain any decision
referred to in sub-regulation (8 ) to the authorised insurance
undertaking or authoris ed reinsurance undertaking concerned and the
other members of the college of supervisors.
Group capital 
add-on.24. (1) Where the competent authority is the group
supervisor of a group, the authority shall, in determining whether the
consolidated group Solvency Ca pital Requirement appropriately
reflects the risk profile of the gr oup, pay attention to any case where
the circumstances referred to in  Article 37(1)(a) to (d) of the
Solvency II Directive may arise at group level, in particular where:
(a) a specific risk existing at group level would not be
sufficiently covered by the st andard formula or the internal
model used, because it is difficult to quantify;
(b) a capital add-on to the Solvency Capital
Requirement of the related insurance or reinsurance
undertakings is imposed by the Eu ropean regulatory authorities
concerned, in accordance with Ar ticle 37 and Article 231(7) of
the Solvency II Directive.
(2) Where the competent authorit y is the group supervisor of a
group, the authority may, where the risk profile of the group is not
adequately reflected, impose a ca pital add-on to the consolidated
group Solvency Capital Requirement.
(3) Article 37(1) to (5) of the Solvency II Directive, together
with the delegated acts and implem enting technical standards taken in
accordance with Arti cle 37(6), (7) and (8) of the Solvency II
Directive, shall apply mutatis mutandis .
Method 2 
(Alternative Method): 
Deduction and 
aggregation method.25. (1) The group solvency of th e participating insurance or
reinsurance undertaking shall be  the difference between the
following:
(a) the aggregated group eligible own funds, as
provided for in sub-regulation (2);
(b) the value in that pa rticipating insurance or
reinsurance undertaking of the re lated insurance or reinsurance
undertakings and the aggregat ed group Solvency Capital
VERŻJONI ELETTRONIKA
B 4817
Requirement, as provided for in sub-regulation (3).
(2) The aggregated group elig ible own funds are the sum of
the following:
(a) the own funds eligible for the Solvency Capital
Requirement of the participat ing insurance or reinsurance
undertaking;
(b) the proportional share of the participating insurance
or reinsurance undertaking in the own funds eligible for the
Solvency Capital Requirement of the related insurance or
reinsurance undertakings.
(3) The aggregated group Solvency Capital Requirement is the
sum of the following:
(a) the Solvency Capita l Requirement of the
participating insurance or  reinsurance undertaking;
(b) the proportional share of the Solvency Capital
Requirement of the related insurance or reinsurance
undertakings.
(4) Where, in a group, the participation in the related
insurance or reinsurance undertakings consists, wholly or in part, ofan indirect ownership, the value in the participating insurance or
reinsurance undertaking of the re lated insurance or reinsurance
undertakings shall incorporate the va lue of such indirect ownership,
taking into account the re levant successive inte rests, and the items
referred to in sub-regulations (2)( b) and (3)(b) shall include the
corresponding proportional shares, respectively, of the own fundseligible for the Solvency Capital Requirement of the related insuranceor reinsurance undertakings and of the Solvency Capital Requirement
of the related insurance or reinsurance undertakings.
(5) Any application for permission to calculate the Solvency
Capital Requirement of authorised  insurance undertakings, authorised
reinsurance undertakings, European insurance undertakings or
European reinsurance undertakings in the group, on the basis of an
internal model, submitted by the in surance or reinsurance undertaking
concerned and its related undertaki ngs, or jointly by the related
undertakings of an insurance hold ing company or mixed financial
holding company, shall be submitted to the group supervisor, or
where the competent authority is the group supervisor  of a group, the
competent authority, as applicable , and in such a case the provisions
of regulation 23 shall apply mutatis mutandis .
VERŻJONI ELETTRONIKA
B 4818
(6) Where the competent authority is one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor:
(a) in determining whether the aggregated group
Solvency Capital Requirement, as  set out in sub-regulation (3),
appropriately reflects the risk pr ofile of the group, it shall pay
particular attention to any spec ific risks existing at group level
which would not be sufficien tly covered, because they are
difficult to quantify;
(b) it may impose a capital add-on to the aggregated
group Solvency Capital Requireme nt, where the risk profile of
the group deviates significantly from the assumptions
underlying the aggregated group Solvency Capital
Requirement.
(7) Article 37(1) to (5) of the Solvency II Directive, together
with the delegated acts and implem enting technical standards taken in
accordance with Arti cle 37(6), (7) and (8) of the Solvency II
Directive, shall apply mutatis mutandis .
Group solvency 
of an insurance 
holding company or a 
mixed financial 
holding company.26. (1) Where the competent authority is the group
supervisor of a group, th e authority shall, where authorised insurance
undertakings, authorised rein surance undertakings, European
insurance undertakings or Europ ean reinsurance undertakings are
subsidiaries of an insurance holding company or of a mixed financial
holding company, ensure that the ca lculation of the solvency of the
group is carried out at the level of the insurance holding company or
the mixed financial holding comp any applying Article 220(2) to
Article 233 of the So lvency II Directive.
(2) For the purpose of that ca lculation, the insurance holding
company or mixed financial holding company shall be treated as if it
were an insurance or reinsurance unde rtaking  subject to the rules laid
down in Articles 100 to 127 of the Solvency II Directive as regards
the Solvency Capital Requirement and subject to the same conditions
as laid down in Article 87 to 99 of the Solvency II Directive as
regards the own funds eligible for the Solvency Capital Requirement.
Subsidiaries of 
an insurance or reinsurance 
undertaking: 
conditions.27. (1) Where the competent authority is one of the
authorities responsible for the supe rvision of an individual insurance
or reinsurance undertaking in a gr oup and is not the group supervisor,
and an authorised insurance undertak ing or an authorised reinsurance
undertaking is the subs idiary undertaking of an  authorised insurance
undertaking, an authorised re insurance undertaking, a European
insurance undertaking or a Eur opean reinsurance undertaking,
VERŻJONI ELETTRONIKA
B 4819
Articles 238 and 239 of the Solvency  II Directive shal l apply, where
all of the following co nditions are satisfied:
(a) the subsidiary undertaki ng, in relation to which the
group supervisor, has not made  a decision under Article 214(2)
of the Solvency II Directive is included in the gr oup supervision
carried out by the group supervisor  at the level of the parent
undertaking in accordance with Articles 212 to 266 of the
Solvency II Directive;
(b) the risk-management proc esses and internal control
mechanisms of the parent unde rtaking cover the subsidiary
undertaking and the parent undertaking satisfies the competent
authority regarding the prudent management of the subsidiary;
(c) the parent undertaking has received the agreement
referred to in Article 246(4) of the Solvency II Directive;
(d) the parent undertaking has received the agreement
referred to in Article 256(2) of the Solvency II Directive;
(e) an application for perm ission to be subject to
Articles 238 and 239 of the So lvency II Directive has been
submitted by the parent undertak ing and a favourable decision
has been made on such applic ation in accordance with the
procedure set out in Article 237 of the Solvency II Directive.
(2) Where the competent authority is the group supervisor of a
group, and an authorised insuranc e undertaking or  an authorised
reinsurance undertaking, a Europ ean insurance undertaking or a
European reinsurance undertaking is the subsidiary undertaking of anauthorised insurance undertaki ng, an authorised reinsurance
undertaking, a European insura nce undertaking or a European
reinsurance undertaking, Articles  238 and 239 of the Solvency II
Directive shall apply, where all of the following conditions are
satisfied:
(a) the subsidiary undertaki ng, in relation to which the
competent authority has not made a decisi on under Article
214(2) of the Solvency II Dir ective, is included in the group
supervision carried out by the gr oup supervisor at the level of
the parent undertaking in accordance with these regulations;
(b) the risk-management proc esses and internal control
mechanisms of the parent unde rtaking cover the subsidiary
undertaking and the parent unde rtaking satisfies the other
responsible authorities in the group regarding the prudent
VERŻJONI ELETTRONIKA
B 4820
management of the subsidiary;
(c) the parent undertaking ha s received the agreement
referred to in Article 246(4) of the Solvency II Directive;
(d) the parent undertaking has received the agreement
referred to in Article 256(2) of the Solvency II Directive;
(e) an application for perm ission to be subject to
Articles 238 and 239 of the Solv ency II Directive has been
submitted by the parent undertaking and a favourable decision
has been made on such applic ation in accordance with the
procedure set out in Article 237 of the Solvency II Directive.
Subsidiaries of 
an insurance or 
reinsurance 
undertaking: decision on the 
application.28. (1) Where the competent authority is one of the
authorities responsible for the supe rvision of an individual insurance
or reinsurance undertaking in a gr oup and is not the group supervisor,
and where the subsidiary undertaki ng is an authorised insurance
undertaking or an aut horised reinsurance undert aking, an application
for permission to subject that subs idiary undertaking to the rules laid
down in Articles 238 and 239 of the Solvency II Directive, shall be
submitted to the competent author ity by its parent  undertaking. The
competent authority shall, without delay, inform the other members of
the college of supervisors and forward the complete application tothem.
(2) For the purposes of sub- regulation (1), the competent
authority shall work together with other European regulatory
authorities concerned, within the college of supervisors, in full
cooperation, to decide whether or not to grant the permission sought
and to determine the other terms and conditions, if any, to which suchpermission should be subjected.
(3) A joint decision by all the Eu ropean regulatory authorities,
including the competent authority, wi thin the college of supervisors,
shall be made within three months from the date of  receipt of the
complete application.
(4) If, within the three-month pe riod or before a joint decision
has been reached, any of the regulat ory authorities concerned referred
to in sub-regulation (3), referred the matter to EIOPA in accordance
with Article 19 of Regulation (E U) No 1094/2010, the decision of the
group supervisor, taken in conform ity with EIOPA’s decision, shall be
recognised as determinative and sh all be applied by such authorities.
(5) If, in accordance with Arti cles 41(2) and (3) and Articles
44(1) and (3) of Regulation (EU) No 1094/2010, the decisionproposed by the panel is rejecte d, the final decision taken by the
VERŻJONI ELETTRONIKA
B 4821
group supervisor shall be recognised as determinative and shall be
applied by all the regulato ry authorities concerned.
(6) Where the competent author ity is the group supervisor of
the group: 
(a) if within the three-month period or before a joint
decision has been reached, as re ferred to in Ar ticle 273 of the
Solvency II Directive, any of the European regulatoryauthorities concerne d has referred the matter to EIOPA in
accordance with Article 19 of  Regulation (EU) No 1094/2010,
the competent authority shall de fer its decision and await any
decision that EIOPA may take in accordance with Article 19(3)
of that Regulation, and shall take  its decision in conformity with
EIOPA's decision. That deci sion shall be recognised as
determinative and shall be applied by the European regulatory
authorities concerned; and
(b) if, in accordance with Articles 41(2) and (3) and
Articles 44(1) and (3) of Regulation (EU) No 1094/2010, the
decision proposed by the panel is rejected, the competent
authority shall take a final d ecision and that decision shall be
recognised as determinative and shall be applied by the
European regulatory au thorities concerned.
(7) Where the competent authorit y is one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor:
(a) if a joint decision referred  to in sub-regulation (3)
has been reached, it shall provide  the applicant referred to in
sub-regulation (1), with the deci sion stating the full reasons, and
such joint decision shall be re cognised as determinative and
shall be applied by the regul atory authorities concerned;
(b) in the absence of a join t decision in accordance with
sub-regulation (3), th e decision of the group supervisor with
regard to the appli cation shall be recogni sed as determinative
and applied by all the regula tory authorities concerned.
(8) Where the competent authority is the group supervisor of a
group:
(a) in the absence of a joint decision of the European
regulatory authorities concerned within the three-month period
set out in Article 237(2) of the Solvency II Directive, the
competent authority shall take its own decision with regard to
VERŻJONI ELETTRONIKA
B 4822
the application referred to in Article 237(1) of the Solvency II
Directive;
(b) during the three-month period referred to in
paragraph (a), the competent au thority shall duly consider any
views and reservations of the European regulatory authority
concerned which author ised the subsidiary undertaking and any
reservations of the other Europe an regulatory authorities within
the college of supervisors.
(9) A decision taken in accord ance with sub-regulation (8),
shall state the full reasons and sh all contain an explanation of any
significant deviation from the rese rvations of the other European
regulatory authorities concerned, and shall provide the applicant and
the other European regulatory authorities concerned with a copy of
the decision taken by the competent authority, which decision shall be
recognised as determinative and shall be applied by the European
regulatory authorities concerned.
Subsidiaries of 
an insurance or 
reinsurance 
undertaking: determination of 
the Solvency 
Capital requirement.29. (1) Where the subsidiary unde rtaking is an authorised
insurance undertaking or an authorised reinsurance undertaking,
without prejudice to regulation 23, the Solvency Capital Requirement
of the subsidiary shall be calc ulated in accordance with sub-
regulations (2) and (4) to (7).
(2) Where the Solvency Capital Requirement of the subsidiary
undertaking is calculate d on the basis of an internal model approved
at group level in acco rdance with regulation 23  and the competent
authority considers that the risk profile of th e subsidiary undertaking,
deviates significantly from this internal model, and as long as that
undertaking does not properly addre ss the concerns of the competent
authority, the competent authority may, in the cases referred to inArticle 37 of the Solvency II Directive: 
(a) propose to set a capita l add-on to the Solvency
Capital Requirement of that subsidiary undertaking resultingfrom the application of such model; or
(b) in exceptional circumstances where such capital
add-on would not be appropriate, to require that undertaking tocalculate its Solvency Capital Requirement on the basis of the
standard formula.
(3) Where the Solvency Capital Requirement of the subsidiary
undertaking is calculate d on the basis of the st andard formula and the
competent authority considers that the risk profile of the subsidiaryundertaking, deviates significantly  from the assumptions underlying
VERŻJONI ELETTRONIKA
B 4823
the standard formula, and as long as that undertaking does not
properly address the concerns of  the competent authority, the
competent authority may, in exce ptional circumstances, propose that
the undertaking replace a subset of  the parameters used in the
standard formula calculation by parameters specific to that
undertaking when calculating the l ong-term business of insurance,
general business of insurance and health underwriting risk modules,
as set out in Article 110 of the Solv ency II Directive, or in the cases
referred to in Article 37 of the Solven cy II Directive, to set a capital
add-on to the Solvency Capital Requirement of that subsidiary
undertaking.
(4) In the cases referred to in  sub-regulations (2) and (3):
(a) the competent authorit y shall discuss its proposal
within the college of superv isors and communicate the grounds
for such proposals to both the subsidiary undertaking and the
college of supervisors; and
(b) the college of supervisor s shall do everything within
its power to reach an agre ement on the proposal of the
competent authority or on othe r possible meas ures and the
agreement reached shall be re cognised as determinative and
shall be applied by the competen t authority and by the European
regulatory authorities concerned.
(5) Where the competent authority and the group supervisor
disagree, any one of them may, within one month from the proposal
of the competent authority and before an agreement has been reached
within the college of supervisors in accordance with sub-regulation
(4), refer the matter to EIOPA and request its assistance in accordance
with Article 19 of Regulation (EU) No 1094/2010.
(6) In the circumstances referred to in sub-regulation (5):
(a) the competent authority shall defer its decision and
await any decision that EIOPA may take in accordance with
Article 19 of that Regulation;
(b) the competent authority shall take its decision in
conformity with EIOPA’s deci sion and shall state the full
reasons on which it is based; and
(c) the decision taken by the competent authority shall
be submitted to the subsidiary undertaking and to the college of
supervisors.
VERŻJONI ELETTRONIKA
B 4824
(7) In the cases referred to in  Article 238(2) and (3) of the
Solvency II Directive, where the competent authority is the group
supervisor of a group, and where the competent authority and the
European regulatory authority ha ving authorised the subsidiary
undertaking disagree, the competent authority may, within one month
from the proposal and before an agreement has been reached within
the college of supervisors in accord ance with Article 238(4) of the
Solvency II Directive, refer the matter to EIOPA and request its
assistance in accordance with Article 19 of Regulation (EU) No 1094/
2010.
Subsidiaries of 
an insurance or 
reinsurance 
undertaking: non- compliance 
with the 
Solvency Capital 
Requirement 
and Minimum Capital 
Requirement.30. (1) Where the subsidiary unde rtaking is an authorised
insurance undertaking or an aut horised reinsurance undertaking, in
the event of non-compliance with the Solvency Capital Requirement
and without prejudice to article 16 of the Act, the competent authorityshall, without delay, forward to  the college of supervisors the
recovery plan submitted by the subsidiary undertaking, in order toachieve, within six months from  the observation of non-compliance
with the Solvency Capital Requireme nt, the re-establishment of the
level of eligible own funds or the re duction of its risk  profile to ensure
compliance with the Solvency Capital Requirement.
(2) The college of supervisors shall do everything within its
power to reach an agreement on the proposal of the competentauthority in accordance with sub-regulation (1), regarding theapproval of the recovery plan within four months from the date on
which non-compliance with the Solvency Capital Requirement was
first observed.
(3) In the absence of an agre ement in accordance with sub-
regulation (2), the competent authority shall decide whether therecovery plan should be approve d, taking due account of the views
and reservations of the other Eur opean regulatory authorities within
the college of supervisors.
(4) Where the subsidiary undertaking is an authorised
insurance undertaking or an author ised reinsurance undertaking and
the competent authority identifies , in accordance with Article 136 of
the Solvency II Directive, de teriorating financial conditions:
(a) it shall notify the coll ege of supervisors without
delay of the proposed measures to be taken, provided that, inemergency situations , the measures to be taken shall be
discussed within the co llege of supervisors;
(b) the college of supervis ors shall do everything within
its power to reach an  agreement on the propos ed measures to be
VERŻJONI ELETTRONIKA
B 4825
taken within one month of notification; and
(c) in the absence of such agreement referred to in
paragraph (b), the competent aut hority shall decide whether the
proposed measures shall be appr oved, taking due account of the
views and reservations of th e other European regulatory
authorities within the college of supervisors.
(5) In the event of non-complia nce with the Minimum Capital
Requirement by a subsidiary undert aking, which is an authorised
insurance or reinsurance undertaki ng and without prejudice to article
18 of the Act, the competent authority shall:
(a) without delay, forward to the college of supervisors
the short-term finance scheme s ubmitted to it by the subsidiary
undertaking, in order to achieve, within three months from the
date on which non-compliance with the Minimum Capital
Requirement was first observed, the re-establishment of the
level of eligible own funds covering the Minimum Capital
Requirement or the reduction of  its risk profile to ensure
compliance with the Minimum Capital Requirement; and
(b) shall also inform the college of supervisors of any
measures taken to enforce the Minimum Capital Requirement at
the level of the subsidiary.
(6) The competent authority as one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor, or
the group supervisor, as applicable , may refer the matter to EIOPA
and request its assistance in accord ance with Article 19 of Regulation
(EU) No 1094/2010 where they disa gree regarding either of the
following:
(a) on the approval of the re covery plan, including any
extension of the recovery period, within the four-month periodreferred to in sub-regulation (2); or
(b) on the approval of the pr oposed measures, within the
one-month period referred to in sub-regulation (4)(b).
(7) Where the competent authority is the group supervisor of a
group, the authority may refer the matter to EIOPA, where the
competent authority and the Europ ean regulatory authority disagree
regarding either of the following:
(a) on the approval of the re covery plan, including any
VERŻJONI ELETTRONIKA
B 4826
extension of the recovery peri od, within the four-month period
referred to in sub-regulation (2); or
(b) on the approval of the proposed measures, within the
one-month period referred to in sub-regulation (4)(b).
(8) The matter shall not be referred to EIOPA:
(a) after the end of the four-month or the one-month
period respectively referred to  in sub-regulation (6) and (7);
(b) after an agreement has been reached within the
college of supervisors in accordance with sub-regulations (2) or
(4)(b); and
(c) in the case of emergency si tuations as referred to in
sub-regulation 4(a).
(9) Where the subsidiary undertaking is an authorised
insurance undertaking or an author ised reinsurance undertaking the
competent authority shall:
(a) defer its decision and awai t any decision that EIOPA
may take in accordance with Ar ticle 19(3) of Regulation (EU)
No 1094/2010;
(b) take its final decision in  conformity with EIOPA’s
decision, and state the full r easons on which that decision is
based, which decision shall be re cognised as dete rminative and
shall be applied by the Eur opean regulatory authorities
concerned; and
(c) submit the decision referr ed to in paragraph (b) to
the subsidiary undertaking and to the college of supervisors.
(10) Where the competent authorit y is the group supervisor of a
group, in the circumstances referred to in Article 239 of the Solvency
II Directive, when the European regulatory authority having
authorised the subsidiary undertaking and the competent authoritydisagree, any one of th em may refer the matter  to EIOPA and request
its assistance in accordance with  Article 19 of Regulation (EU) No
1094/2010, regarding either  of the following:
(a) on the approval of the re covery plan, including any
extension of the recovery peri od, within the four-month period
referred to in Article 239 (1) of the Solvency II Directive; or
(b) on the approval of the proposed measures, within the
VERŻJONI ELETTRONIKA
B 4827
one-month period referred to in Article 239 (2) of the Solvency
II Directive.
(11) The matter shall not be referred to EIOPA:
(a) after the end of the four-month or the one-month
period respectively referred to  in sub-regulation (10)(a);
(b) after an agreement has been reached within the
college of supervisors in accorda nce with Articl e 239(1) and (2)
of the Solvency II Directive; and
(c) in the case of emergency si tuations as referred to in
Article 239 (2) of the Solvency II Directive.
Subsidiaries of 
an insurance or 
reinsurance 
undertaking: end of 
derogations for 
a subsidiary.31. (1) Regulations 29 and 30 shall no longer be applicable
where:
(a) the condition referred to in Article 236(a) of the
Solvency II Directive is  no longer complied with;
(b) the condition referred to in Article 236(b) of the
Solvency II Directiv e  is no longer compli ed with and the group
does not restore compliance with this condition in an
appropriate period of time; or
(c) the conditions referred to  in Article 236(c) and (d) of
the Solvency II Directive ar e no longer complied with.
(2) In the case referred to in sub-regulation (1)(a), where the
competent authority is the group supervisor of a group, and it decides,
after consulting the college of supervisors, to no longer include the
subsidiary undertaking in the group su pervision it carries out, it shall
immediately inform the European regulatory authorit y concerned and
the parent undertaking.
(3) For the purposes of Article  236(b), (c) and (d) of the
Solvency II Directive, the parent undertaking shall:
(a) be responsible for ensuri ng that the conditions are
complied with on an ongoing basis;
(b) in the event of non-compliance, it shall inform,
without delay, the competent au thority, where the authority is
the group supervisor of a group, and the European regulatoryauthority of the subsidiary  undertaking concerned; and
(c) present a plan to rest ore compliance within an
VERŻJONI ELETTRONIKA
B 4828
appropriate period of time to th e competent authority, where the
authority is the group supervisor of a group, and to the European
regulatory authority of the subsidiary undertaking concerned.
(4) Without prejudice to sub -regulation (3), where the
competent authority is the group s upervisor of a group, the authority
shall:
(a) verify at least annually, on its own initiative, that the
conditions referred to in re gulation 27(2)(b), (c) and (d)
continue to be complied with; and
(b) also perform such verifi cation upon request from the
European regulatory authority c oncerned, where the latter has
significant concerns related to the ongoing compliance with
those conditions.
(5) Where the verification perf ormed identifies weaknesses,
and where the competent authority is the group supervisor of a group,
the authority shall require the pare nt undertaking to present a plan to
restore compliance within an appropriate period of time.
(6) Where the competent authorit y is the group supervisor of a
group, and after consulting the colleg e of supervisors, the authority
determines that the plan referred to in sub-regulations (3)(b) or (5), is
insufficient or subsequently that it is not being implemented within
the agreed period of time, the comp etent authority sh all conclude that
the conditions referred to in regulation 27(2) are no longer beingcomplied with and it shall im mediately inform the European
regulatory authority concerned.
(7) Where the parent undertaking submits a ne w application
and obtains a favourable decision in  accordance with the procedure
set out in regulation 27, the provisi ons of regulations 29 and 30 shall
apply again.
Subsidiaries of 
an insurance 
holding company and 
mixed financial 
holding company.32. Articles 236 to 242 of the Solven cy II Directive shall apply
mutatis mutandis  to an authorised insurance undertaking, an
authorised reinsurance undertak ings, a European insurance
undertaking or a Eur opean reinsurance undertaking, which is a
subsidiary undertaking of an insurance holdi ng company or a mixed
financial holding company.
Supervision of 
risk 
concentration and supervision 
of intra-group 
transactions.33. (1) Supervision of the risk concentration at group level
and supervision of intra-group transactions shall be exercised in
accordance with sub-regulations  (2) and (3), regulation 34 and
Articles 247 to 259 of the Solvency II Directive.
VERŻJONI ELETTRONIKA
B 4829
(2) Subject to sub-regulation (4), an authorised insurance
undertaking, an authorised reinsu rance undertaking, an insurance
holding company and a mixed financial holding company, shall
report, on a regular basis, and at least annuall y to the group
supervisor:
 (a) any significant risk concen tration at the level of the
group, unless regulation 5(b) applies;
(b) all significant intra-group transactions by authorised
insurance undertakings, authoris ed reinsurance undertakings,
European insurance undertakings  and European reinsurance
undertakings, within a group,  including those performed with anatural person with cl ose links to an unde rtaking in the group,
unless regulation 5(b) applies; in addition, where an intra-group
transaction is very significant, it shall be reported as soon as
practicable.
(3) The risk concentrations  and intra-group transactions
referred to in sub-regulation (2), shall be subject to supervisoryreview by the group supervisor.
(4) The necessary information referred to in sub-regulation
(2)(a) and (b) shall be subm itted to the group supervisor:
(a) by the authorised insurance undertaking or
authorised reinsurance undertaking which is at the head of the
group; or
(b) where the group is not headed by an authorised
insurance undertaking or an auth orised reinsurance undertaking,
by the insurance holding company, or by the mixed financialholding company, or by the authorised insurance undertaking,
authorised reinsurance undert aking, European insurance
undertaking or European reinsu rance undertaking in the group,
as may be identified by the gr oup supervisor, after consulting
the competent authority, the other European regulatory
authorities concerned and the group.
(5) Where the competent authority is the group supervisor of a
group, the authority shall:
(a) carry out a supervisory review of the risk
concentrations and intra-group transactions;
(b) identify, taking into account the specific group and
risk management structure of the group, the type of risks and
VERŻJONI ELETTRONIKA
B 4830
intra-group transactions whic h insurance and reinsurance
undertakings, in the group, shall report to the competent
authority in all circumstances;
(c) impose appropriate thre sholds based on solvency
capital requirements, technical provisions, or both, in order toidentify which significant risk concentrations and significantintra-group transactions  shall be reported;
(d) where the group is not headed by an insurance or
reinsurance undertaking, identify the insurance holding
company, mixed financial ho lding company, authorised
insurance undertaking, authoris ed reinsurance undertaking,
European insurance undertaki ng or European reinsurance
undertaking, in a group, responsible for submitting the
information required under Articl es 244(2) and 245(2) of the
Solvency II Directive;
(e) review the risk concentrations of a group and intra-
group transactions at group level, and in particular monitor the
possible risk of contagion within  the group, the risk of a conflict
of interests and the level or volume of risks.
(6) The competent authority sh all consult the group and the
other European regulatory authorities concerned in the supervision of
the group whilst carrying out the activities referred to in sub-
regulation (5)(b) to (d).
(7) Where the competent authority is one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor,
and the competent aut hority is consulted by the group supervisor in
relation to the supervision of risk concentration at gr oup level or the
reporting of intra-group transactions , the competent authority shall,
when giving its opinion about the t ype of risks to be reported, take
into account the specific group and risk management structure of the
group.
Supervision of 
the system of 
governance.34. (1) The requirements set out in Articles 40 to 49 of the
Solvency II Directive shall apply mutatis mutandis , at the level of the
group.
(2) Without prejudice to s ub-regulation (1), the risk
management and internal contro l systems and reporting procedures
shall be implemented consistently in all the undertakings included in
the scope of group supervision pursuant to regulation 3(2)(a) and (b)
so that those systems and reporti ng procedures can be controlled at
VERŻJONI ELETTRONIKA
B 4831
the level of the group.
(3) Without prejudice to sub-regul ation (1), the group internal
control mechanisms shall include at least the following:
 (a) adequate mechanisms as  regards group solvency to
identify and measure all material risks incurred and to
appropriately relate eligible own funds to risks;
(b) sound reporting and accounting procedures to
monitor and manage the intra- group transactions and the risk
concentration.
(4) The systems and reporting proc edures referred to in sub-
regulations (1) to (3) shall be su bject to supervisory review by the
group supervisor or in accordan ce with the rules laid down in
regulations 35 to 43.
(5) A participating insurance undertaking or reinsurance
undertaking, or the insurance holding company or the mixed financial
holding company, shall undertake at the level of the group the
assessment required by Article 45 of the Solvency II Directive. The
own-risk and solvency assessment  conducted at gr oup level shall be
subject to supervisory review by the group supervisor in accordance
with regulations 35 to 43.
(6) Where the calculation of the solvency at the level of the
group is carried out in accordance wi th method 1, as referred to in
regulation 22, the participating insu rance or reinsurance undertaking,
or the insurance holding company or the mixed financial holding
company, shall provide to the group supervisor a properunderstanding of the difference be tween the sum of the Solvency
Capital Requirements of all the re lated insurance or reinsurance
undertakings of the group and the group consolidated SolvencyCapital Requirement.
(7) The participating insurance or reinsurance undertaking, the
insurance holding company or the mixed financial holding company,
may, subject to the agreement of the group supervisor, undertake anyassessments required pursuant to Article 45 of the Solvency II
Directive at the level of the group and at the level of any subsidiary
undertaking in the group at the sa me time, and may produce a single
document covering all the assessments.
(8) Where the group exercises the option provided in sub-
regulation (7), it shall submit the document to all the European
regulatory authorities concerned at the same time, an d the exercise of
VERŻJONI ELETTRONIKA
B 4832
that option shall not exempt the subsidiaries concerned from the
obligation to ensure that the re quirements of Article 45 of the
Solvency II Directive are met.
(9) Where the competent authorit y is the group supervisor of a
group, the authority shall:
(a) review the risk management and internal control
systems and reporting procedur es implemented by the group in
accordance with Article 246(1)  and (2) of the Solvency II
Directive;
(b) review the own-risk and solvency assessment
conducted at group level by the group; and
(c) consult the members of th e college of supervisors
and duly take into account thei r views and reservations before
granting an agreement to a request from a participating
insurance or reinsurance undertaking, insurance holding
company or mixed financial hol ding company to undertake its
own-risk and solvency assessment in accordance with Article 45
of the Solvency II Directive, at  the level of the group and at the
level of any subsidiary in th e group at the same time, and
produce a single document covering all such assessments.
PART III
Measures to facilitate group supervision
Group 
supervisor.35. (1) The group supervisor designated from among the
competent authority and the European regulatory authorities
concerned, shall be responsible for coordination and exercise of
group supervision.
(2) Where the competent authority is the supervisor of all the
insurance undertakings and reinsura nce undertakings in a group, the
competent authority shall be th e group supervisor of the group.
(3) In all other cases and subj ect to Article 247(3) of the
Solvency II Directive:
(a) where the group is he aded by an authorised
insurance undertaking or an aut horised reinsurance undertaking,
the competent authority shall be  the group supervisor of the
group;
(b) where the group is not headed by an insurance or
reinsurance undertaking, the comp etent authority is the group
VERŻJONI ELETTRONIKA
B 4833
supervisor of a group in any of the following circumstances:
(i) where an insurance undertaking or
reinsurance undertaking has an insurance holding company
or a mixed financial holding co mpany as a parent, and the
competent authority has authorised that insuranceundertaking or reinsurance undertaking;
(ii) where the group c ontains two or more
insurance undertakings or re insurance undertakings which
have their head offices in Me mber States or EEA States,
and such undertakings have the same insurance holdingcompany or mixed financial holding company as a parent,
and one of such undertakings has been authorised by the
competent authority, and the insurance holding companyor mixed financial holding co mpany has its head office in
Malta;
(iii) where the group is headed by two or more
insurance holding companies or mixed financial holding
companies which have their head offices in different
Member States or EEA States , and there is an insurance
undertaking or reinsurance undertaking in the group in
each of those Member States  or EEA States, and the
competent authority has au thorised the insurance
undertaking or reinsurance undertaking with  the largestbalance sheet total;
(iv) where two or more insurance undertakings or
reinsurance undertakings which have their head offices in
Member States or EEA States, have the same insurance
holding company or mixed fi nancial holding company as
their parent, and none of those undertakings has been
authorised in the Member State or EEA State in which theinsurance holding company or  mixed financial holding
company has its head office, and the competent authority
has authorised the insurance undertaking or reinsurance
undertaking with the largest balance sheet total; or
(v) where the group is a group without a parent
undertaking, or in any circumstan ces not referred to in sub-
paragraphs (i) to (iv), and the competent authority has
authorised the insurance undertaking or reinsurance
undertaking with the largest balance sheet total.
(4) Where another European regulatory authority has been
designated as the group supervisor in accordance with Article 247 of
VERŻJONI ELETTRONIKA
B 4834
the Solvency II Directive, the comp etent authority shall recognise that
supervisory authority as the group supervisor of the group.
Exceptions to 
the rule for deciding the 
group 
supervisor.36. (1) Notwithstanding regulation 35:
(a) the competent authority is the group supervisor of a
group, if all the supervisory aut horities concerned take a joint
decision that the competent authority shall be the group
supervisor; and
(b) the competent authority must recognise a joint
decision taken by all the supervis ory authorities concerned that
a supervisory authority other than  the competent authority shall
be the group supervisor of a group.
(2) The competent authority may request the other supervisory
authorities concerned to consider whether:
(a) the criteria specified in Article 247(2) of the
Solvency II Directive are appropriate for determining which
supervisory authority shall be the group supervisor; and
(b) a supervisory authority other than the supervisory
authority satisfying those criteria  shall be the group supervisor.
(3) The competent authority may make a request referred to in
sub-regulation (2) not more than once a year.
(4) Where the supervisory authorities responsible for the
supervision of an insurance or reinsurance undertaking are
considering, at the request of the competent authority or of another
supervisory authority, wh ether the criteria are appropriate or whether
a particular supervisory authority shall be the group supervisor:
(a) the competent authority shall do everything in its
power to reach a joint decision on the request within a period of
three months commencing on the date of the request;
(b) the competent authorit y shall permit the group
concerned to give its opinion on the request;
(c) the competent authority may refer the matter to
EIOPA, in accordance with Article 19 of Regulation (EU) No
1094/2010, within a period of th ree months co mmencing with
the date of the request;
(d) where the matter is referred to EIOPA, the
competent authority shall take a joint decision in accordance
VERŻJONI ELETTRONIKA
B 4835
with any decision taken by EIOP A, and where the competent
authority is designated as gr oup supervisor of a group, the
competent authority shall submit  the joint decision to the group
and to the college of supervisors stating the full reasons;
(e) where the matter is not referred to EIOPA or EIOPA
takes no such decision on such  a referral, the competent
authority may take a joint d ecision with the other European
regulatory authorities that:
(i) the criteria referred to  in Article 247(2) of the
Solvency II Directive ar e inappropriate, taking into
account the structure of the group and the relative
importance of the activities of authorised insurance
undertakings, authorised reinsurance undertakings,
European insurance undertakings, and Europeanreinsurance undertakings, in the different countries; and
(ii) a supervisory authority, other than the
supervisory authority satisfying  the criteria, shall be the
group supervisor; and
(f) where the joint decision designates the competent
authority as the group supervis or of a group, the competent
authority shall submit the joint decision to the group and to the
college of supervisors stating the full reasons.
(5) In the absence of a joint decision referred to in sub-
regulation (4), the task of the gr oup supervisor sha ll be exercised by
the supervisory authority identified  in accordance with Article 247(2)
of the Solvency II Directive.
Rights and 
duties of the group supervisor and 
the other 
supervisors (College of 
supervisors).37. (1) Where the competent authority is the group
supervisor of a group, the authority sh all, in order to facilitate the
exercise of the group supervisio n tasks, carry out the functions
referred to in article 32B(3) of the Act.
(2) In order to facilitate the exercise of the tasks referred to in
sub-regulation (1), the competent au thority shall establish and chair a
college of supervisors comprising:
(a) the competent authority;
(b) the supervisory authoritie s of the Member States or
EEA States in which the head  office of every subsidiary
undertaking in the group is situated; and
(c) EIOPA.
VERŻJONI ELETTRONIKA
B 4836
(3)  The competent authority as group supervisor:
(a) shall permit the European regulatory authorities of
significant branches and related undertakin gs to participate in
the college of supervisors, provi ded that their participation is
limited to achieving an efficient exchange of information;
(b) shall ensure that the processes for cooperation,
exchange of information a nd consultation between the
competent authority and the other European regulatory
authorities that are me mbers of the college of supervisors, are
effectively applied in accordance with Articles 212 to 266 of theSolvency II Directive, with  a view to promoting the
convergence of their respect ive decisions and activities;
(c) may agree with the ot her European regulatory
authorities concerned that some  activities of the college of
supervisors be carried out by a reduced number of European
regulatory authorities where th e effective functioning of the
college of supervisors requires it;
(d) shall, without prejudice  to any measure adopted
pursuant to the Solvency II Di rective, conclude coordination
arrangements with the other Eur opean regulatory authorities for
the establishment and functioning of the college of supervisors.
 (4) The coordination arrangements referred to in sub-
regulation (3)(d):
(a) shall specify the procedures for:
(i) the decision-making process among the
supervisory authorities co ncerned in accordance with
Articles 231, 232 and 247 of the Solvency II Directive;
(ii) consultation under Arti cles 218(5) and 248(4)
of the Solvency II Directive; and 
(b) may, in addition, set out procedures for:
(i) consultation among the supervisory
authorities concerned, in particular as referred to inArticles 213 to 217, 219 to 221, 227, 244 to 246, 250, 256,
260 and 262 of the Solvency II Directive;
(ii) cooperation with other supervisory
authorities.
VERŻJONI ELETTRONIKA
B 4837
(5) Without prejudice to the rights and duties allocated by the
Solvency II Directive, the coor dination arrangements may entrust
additional tasks to:
(a) the competent authority:
(i) where it is the group supervisor of a group; or
(ii) where it is one of the authoritie s responsible
for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group
supervisor; or
(b) EIOPA,
and, in each case, where this woul d result in the more efficient
supervision of the group and would not impair the supervisory
activities of the members of the co llege of supervisors in respect of
their individual responsibilities.
(6) Where diverging views concerning the coordination
arrangements arise:
(a) any member of the college of supervisors may refer
the matter to EIOPA and request its assistance in accordancewith Article 19 of Regulation (EU) No 1094/2010; and
(b) where the competent authority is the group
supervisor of a group , the authority shall:
 (i) where it has receiv ed advice from EIOPA,
after consulting the Europ ean regulatory authorities
concerned, duly consider a ny advice produced by EIOPA
within two months of the receipt thereof, before taking its
final decision;
(ii) take its final deci sion in conformity with
EIOPA’s decision;
(iii) ensure that the decisi on states the full reasons
and contains an explanation of any significant deviation
from any advice given by EIOPA;
(iv) transmit that decision to the European
regulatory authorities concerned.
(7) The competent authority as  group supervisor, shall send
EIOPA any information on the functioning of the college of
VERŻJONI ELETTRONIKA
B 4838
supervisors and any difficulties encountered that are relevant for
EIOPA’s reviews of the operati onal functioning of  colleges of
supervisors.
Cooperation 
with authorities 
responsible for credit 
institutions and 
investment firms.38. (1) Where an authorised insurance undertaking, an
authorised reinsurance undert aking, a European insurance
undertaking or a Europe an reinsurance undertaking and either a credit
institution as define d in Directive 2013/36/ EU of the European
Parliament and of the Council of 26 June 2013 on access to the
activity of credit institutions a nd the prudential supervision of credit
institutions and investment  firms, or an investment firm as defined in
Directive 2004/39/EC, or both, are dir ectly or indirectly related or
have a common participating undert aking, the competent authority or
the European regulatory authoritie s concerned and the authorities
responsible for the supervision of those credit institutions or
investment firms shall cooperate closely.
(2) Without prejudice to their respective responsibilities, those
authorities referred to in sub-regul ation (1) shall provide one another
with any information likely to simpli fy their task, in particular as set
out in Title III of the Solvency II Directive.
Access to 
information.39. (1) The competent authority shall have access to any
information relevant for the purpose of that supervision regardless of
the nature of the undertaking concerne d and Article 35(1) to (5) of the
Solvency II Directive shall apply mutatis mutandis .
(2) Where the competent authority has requested the
information from all the European regulatory authorities in the group,
and none of them has provided such information to the competent
authority, within a reasonable period of time, the authority may
address the undertakings in the gr oup directly to obtain the necessary
information.
(3) Where the competent authorit y is the group supervisor of a
group, the authority may:
(a) limit regular supervisory reporting with a frequency
shorter than one year at th e level of the group where all
authorised insurance undertakings, authorised reinsuranceundertakings, European insurance undertakings and European
reinsurance undertak ings within the gr oup, benefit from the
limitation in accordance with Ar ticle 35(6) of the Solvency II
Directive taking into account th e nature, scale and complexity
of the risks inherent in the business of the group;
(b) exempt from reporting on an item-by-item basis at
the level of the group where all authorised insurance
VERŻJONI ELETTRONIKA
B 4839
undertakings, authorised reinsurance undertakings, European
insurance undertakings and European reinsurance undertakings
within the group, bene fit from the exempti on in accordance with
Article 35(7) of the Solvency II Directive, taking into account
the nature, scale and complexity of the risks inherent in the
business of the group and the objective of financial stability.
Group solvency 
and financial 
condition report.40. (1) A participating insurance and reinsurance
undertaking, insurance holding co mpany and a mixed financial
holding company shall disclose publicly, on an annual basis, a report
on the solvency and financial condi tion at the level of the group, and
Articles 51, 53, 54 and 55 of the So lvency II Direct ive shall apply
mutatis mutandis.
(2) A participating insurance or reinsurance undertaking, an
insurance holding company or a mixed financial holding company
referred to in sub-regulation (1) may,  subject to the agreement of the
group supervisor, provide a single re port on its solvency and financial
condition which shall comprise the following:
(a) the information at the level of the group to be
disclosed in accordance with sub-regulation (1); and
(b) the information for any of the subsidiaries within the
group, which information must be  individually identifiable and
must be disclosed in accordanc e with Articles 51, 53, 54 and 55
of the Solvency II Directive.
(3) Before an agreement is granted by the group supervisor in
accordance with sub-regulation (2),  the competent authority, when
consulted by the group supervisor, may submit its views or make
reservations.
(4) Where a subsidiary undertakin g is an authorised insurance
undertaking or authorised re insurance undertaking, and such
undertaking fails to include in formation which the competent
authority requires comparable undertakings to provide, and where theomission is material, the competent authority shall have the power to
require the subsidiary undertaki ng concerned to disclose the
necessary additional information.
(5) Where the competent authority is the group supervisor of a
group and the authority has received  a request from a participating
insurance and reinsurance undertaking, an insurance holdingcompany or a mixed financial holding company, for such undertaking
or company to be able to provide  a single solvency and financial
condition report, the competent auth ority shall consult and duly take
VERŻJONI ELETTRONIKA
B 4840
into account any views and reservations of the other members of the
college of supervisors, befo re agreeing to the request.
Public 
disclosure of group structure.41. An insurance and reinsurance undertaking, an insurance
holding company and a mixed financial holding company shall
disclose publicly, at the level of  the group, on an annual basis, the
legal structure and the governan ce and organisational structure,
including a description of all subsid iary undertakings, material related
undertakings and significant branches belonging to the group.
Administrative, management or supervisory 
body of 
insurance holding 
companies and 
mixed financial holding 
companies.42. The competent authority shall require that all persons who
effectively run the insurance holding company or the mixed financial
holding company whose head office is in Malta, are fit and proper to
perform their duties and Article 18I(2)(a) of the Act shall apply
mutatis mutandis .
Enforcement 
measures.43. (1) Where authorised insurance undertakings,
authorised reinsurance undert akings, European insurance
undertakings and European rein surance undertaki ngs in a group, do
not comply with the requirements provided for in Articles 218 to 246
of the Solvency II Directive, or where the requirements are met but
solvency may nevertheless be je opardised or where the intra-group
transactions or the risk concentra tions are a threat to the financial
position of such undertakings, meas ures necessary to rectify the
situation as soon as possible shall be adopted:
(a) where the competent authority is the group
supervisor of a group, by:
(i) the competent authority with respect to:
(aa) insurance holding companies and
mixed financial holding companies; and
(bb) authorised insura nce undertakings and
authorised reinsurance undertakings;
(ii) the European regulatory authorities with
respect to European insura nce undertakings and European
reinsurance undertakings;
(b) where the competent au thority is one of the
authorities responsible for the supervision of an individual
insurance or reinsurance undertaking in a group and is not thegroup supervisor, by:
(i) the group supervisor with respect to insurance
VERŻJONI ELETTRONIKA
B 4841
holding companies and mixed financial holding
companies; and
(ii) the competent authority, with respect to
authorised insurance undertakings and authorisedreinsurance undertakings.
(2) Where in the case referred to in sub-regulation (1)(a)(i),
the competent authority is not one of the supervisory authorities of
the Member State in which the insurance holding company or mixed
financial holding company has its head office, the competent
authority shall inform the European regulatory authorities concerned
of its findings with a view to en abling them to take the necessary
measures.
(3) In the case referred to in  sub-regulation (1)(a)(ii), the
competent authority shall inform th e European regulatory authorities
concerned of its findings with a view to enab ling them to take the
necessary measures.
(4) Without prejudice to re gulation 49, the competent
authority shall determine the m easures which may be taken with
respect to insurance holding comp anies and mixed financial holding
companies, whose head office is in Malta.
(5) Where the competent authority is the group supervisor of a
group, or where the competent author ity is one of the authorities
responsible for the supervision of an individual insurance or
reinsurance undertaking in a group and is not the group supervisor,
the competent authority shall, wh ere appropriate, coordinate any
measures it may take, with the European regulatory authorities
concerned or with the group supervisor, as applicable.
PART IV
Third countries
Parent 
undertakings 
outside the Union: 
verification of 
equivalence.44. (1) In the case referred to in regulation 3(2)(c), the
competent authority shall verify whether an authorised insurance
undertaking and authorised rein surance undertaking, the parent
undertaking of which has its head of fice in a third country is subject
to supervision, by an overseas regulatory authority which isequivalent to that set out in Articles 212 to 266 of the Solvency II
Directive, on the supervision at th e level of the group of insurance
and reinsurance undertaki ngs referred to in Ar ticle 213(a) and (b) of
the Solvency II Directive.
(2) Where no delegated act has been adopted in accordance
VERŻJONI ELETTRONIKA
B 4842
with Articles 260(2), (3) and (5) of the Solvency II Directive, the
verification referred to in sub-regu lation (1), shall be carried out by
the competent authority, which woul d be the group supervisor if the
criteria set out in Arti cle 247(2) of the Solven cy II Directive were to
apply (the "acting group supervisor "), at the request of the parent
undertaking or of an y of the authorised insurance undertakings,
authorised reinsurance undert akings, European insurance
undertakings or Eur opean reinsurance undertakings, or on its own
initiative.
(3) Where the competent authority, is the acting group
supervisor, the authority:
(a) shall, with the assistan ce of EIOPA, consult the
supervisory authorities concer ned before taking a decision on
equivalence;
(b) shall, where applicab le, take a decision on
equivalence in accordance with the criteria set out in any
delegated act adopted by the European Commission pursuant to
Article 260(2) of the Solvency II Directive;
(c) shall not take any decision in relation to a third
country that is in opposition to any previous decision taken vis-
à-vis that third country, except wher e it is necessary to take into
account significant changes to th e supervisory regime laid down
in Title I of the Solvency II Directive and to the supervisory
regime in the third country; and
(d) shall notify its decisi on to the supervisory
authorities concerned.
(4) Where the competent authority is not the acting group
supervisor and disagr ees with the decision on equivalence taken by
the acting group supervisor in accordance with the third sub-
paragraph of Article 260 of  the Solvency II Direct ive, it may refer the
matter to EIOPA and request its a ssistance in accordance with Article
19 of Regulation (EU) No 1094/ 2010, within three months after
notification of that decision by the acting group supervisor.
(5) Where a delegated act dete rmining that the prudential
regime of a third country is tem porarily equivalent, is adopted in
accordance with Article 260(5) of  the Solvency II Directive, the
competent authority shall apply regulation 45, unless there is an
authorised insurance undertaking, an authorised reinsurance
undertaking, a European insura nce undertaking, or a European
reinsurance undertaking, in the group, which has a balance sheet total
VERŻJONI ELETTRONIKA
B 4843
that exceeds the balance sheet tota l of the parent undertaking situated
in a third country. In that case, th e task of the group supervisor shall
be exercised by the acting group supervisor.
Parent 
undertakings 
outside the Community: 
equivalence.45. (1) In the event of equivalent  supervision referred to in
Article 260 of the Solvency II Directive, the competent authority shall
rely on the equivalent group supe rvision exercised by the overseas
regulatory authorities, in acco rdance with sub-regulation (2).
(2) Articles 247 to 258 of the Solv ency II Directive shall apply
mutatis mutandis  in relation to the coope ration with the overseas
regulatory authorities.
Parent 
undertakings 
registered in a 
third country: absence of 
equivalence.46. (1) Where regulation 3(2)(c) applies, in the absence of
equivalent supervision referred to  in Article 260 of the Solvency II
Directive, or where the compet ent authority as the acting group
supervisor does not apply Article 261 of the Solvency II Directive in
the event of temporary equivalenc e in accordance with Article 260(7)
of the Solvency II Directive, th e competent authority shall apply
either of the following to aut horised insurance undertakings and
authorised reinsurance undertakings:
(a) Articles 218 to 235, and Arti cles 244 to 258 of the
Solvency II Directive, mutatis mutandis ; or
(b) any other method which:
(i) ensures appropriate  supervision of the
insurance and reinsurance undertakings in a group;
(ii) allows the objectives of the group supervision
as defined in Title III of the Solvency II Directive to be
achieved.
(2) The general principles and methods set out in Articles 218
to 258 of the Solvency II Directiv e shall apply at the level of the
insurance holding company, mixed financial holding company, third-
country insurance undertaking or  third-country reinsurance
undertaking.
(3) For the sole purpose of the group solvency calculation, the
parent undertaking shall be treated as if it were an insurance orreinsurance undertaking subject to the same conditions as laid down
in Articles 87 to 99 of the Solvency  II Directive as regards the own
funds eligible for the Solvency Ca pital Requirement, and to either of
the following:
(a) a Solvency Capital Requirement determined in
VERŻJONI ELETTRONIKA
B 4844
accordance with the principles of  Article 226 of the Solvency II
Directive where the parent undert aking is an insurance holding
company or mixed financial holding company; or
(b) a Solvency Capital Requirement determined in
accordance with the principles of  Article 227 of the Solvency II
Directive, where the parent undertaking is a third-country
insurance undertaking or a third-country reinsurance
undertaking.
(4) The reference in sub-regula tion (1)(b) to any other method,
may include:
(a) requiring the establishment of an insurance holding
company which has its head of fice in a Member State or EEA
State, or a mixed financial holding company which has its head
office in a Member State or EEA State; and
(b) applying Articles 212 to  266 of the Solvency II
Directive to the insurance and reinsurance undertakings in thegroup headed by that insuran ce holding company or mixed
financial holding company.
(5) Before applying any othe r method under sub-regulation
(1)(b), the competent authority shall:
(a) where it is the group supervisor, consult the other
supervisory authorities concerne d in the supervision of the
group;
(b) where it is one of the au thorities responsible for the
supervision of an individual insurance or reinsuranceundertaking in a group and is not the group supervisor, agree the
method with the group supervisor.
(6) Where the competent authorit y is the group supervisor, and
where the competent authority a pplies any other method under sub-
regulation (1)(b), it shall notify the Europ ean Commission and the
other supervisory authorities concerned.
Parent 
undertakings outside the 
Community: 
levels.47. (1) Subject to sub-regulati on (2), where the parent
undertaking referred to in regulat ion 3(2)(c) is it self a subsidiary
undertaking of:
(a) an insurance holding company which has its head
office in a third country;
(b) a mixed financial holdi ng company which has its
VERŻJONI ELETTRONIKA
B 4845
head office in a third country;
(c) a third-country in surance undertaking; or
(d) a third-country reinsurance undertaking,
the verification provided for in re gulation 44 shall apply only at the
level of the ultimate parent unde rtaking which is a third-country
insurance holding company, a thir d-country mixed financial holding
company, a third-country insuranc e undertaking or  a third-country
reinsurance undertaking.
(2) The competent authority, as the acting group supervisor,
may, however, in the absence of equi valent supervision referred to in
Article 260 of the Solvency II Dire ctive, carry out a new verification
at a lower level where a parent undert aking of an authorised insurance
undertaking or an authorised rein surance undertaking exists, whether
at the level of a third-country insurance holding company, a third
country mixed financial holding comp any, a third-country insurance
undertaking or a third-count ry reinsurance undertaking.
(3) In such a case referred to in sub-regulation (2), where the
competent authority is the acting group supervisor in accordance with
regulation 44(2), it shall explain its decision to the group.
(4) Article 262 of the Solvency II Directive shall apply mutatis
mutandis .
PART V
Mixed-activity insura nce holding companies
Mixed-activity 
insurance holding companies: 
Intra-group 
transactions.48. (1) In the case referred to in regulation 3(2)(d), where
the parent undertaking of one or more insurance undertakings or
reinsurance undertakings is a mixed-activity in surance holding
company and the competent authority supervises one or more of the
insurance undertakings or reinsura nce undertakings in the group, the
competent authority shall exercise general supervision over
transactions between:
(a) the mixed-activity holdi ng company and its related
undertakings; and
(b) the authorised insuran ce undertakings or authorised
reinsurance undertakings supervis ed by the competent authority.
(2) Articles 245, 249 to 255 and 258 of the Solvency II
Directive shall apply mutatis mutandis .
VERŻJONI ELETTRONIKA
B 4790
_________________________________________________________________________________________________________________________
Ippubblikat mid-Dipartiment tal-Informazzjoni (doi.gov.mt) — Valletta — Published by the Department of Information (doi.gov.mt) — Valletta
Mitbugħ fl-Istamperija tal-Gvern fuq karta riċiklata — Printed at the Government Printing Press on recycled paper
Prezz/Price
€2.61
B 4846
PART VI
General provisions
Penalties. 49. (1) Any insurance holding company and mixed
financial holding company, or any person effectively managing those
companies, who contravenes a ny of the provisions of these
regulations, applicable to them, shall be liable to an administrative
penalty which may not be greater than a financial penalty of one
hundred and fifty thousand euro (€150,000) in respect of each
infringement or failure to comply, as the case may be, and, where
such infringement or failure to comply continues, a further penalty
not exceeding one hundred and sixteen euro (€116) for each day
during which the infringement or failure to comply continues:
Provided further that a pe nalty imposed under this
regulation, whether in the form of a fixed amount, a daily penalty, or
both, may, in no case, exceed one hundred and fifty thousand euro
(€150,000).
(2) The competent authority shal l cooperate closely with the
European regulatory authorities concerned, to ensure that the
sanctions or measures referred to in Article 258(3) of the Solvency II
Directive are effective, in particul ar where the central administration
or main establishment of an insurance holding company or mixed
financial holding company is not located in Malta.
Insurance Rules. 50. (1) For the better carrying out of these regulations, the
competent authority may, from time to time, issue Insurance Rules.
(2) Such Insurance Rules may contain such incidental,
supplementary and consequential provisions as appear to thecompetent authority to be expedient for the purposes of these
regulations.
Revocation of 
the Insurance Business 
(Supplementary 
Supervision of Insurance and 
Reinsurance 
Undertakings in an Insurance 
Group) 
Regulations, 2007, and 
saving.
L.N. 287 of 2007.51. (1) The Insurance Business (Supplementary
Supervision of Insurance and Reinsurance Undertakings in an
Insurance Group) Regulations, 2007, hereinafter referred to as "therevoked regulations", are hereby revoked.
(2) Nothing in these regulations  shall be deemed to affect
anything done, or omitte d to be done under th e revoked regulations,
prior to the coming into force of these regulations.
VERŻJONI ELETTRONIKA