Corrigendum : Amended Proposal for a Directive of the European Parliament and of the Council on the taking-up and pursuit of the business of insurance and reinsurance (Solvency II) (recast)
Date: 2008-02-26
Institutions: European Commission
Subjects: freedom to provide services, insurance company, insurance law, life assurance, right of establishment

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 26.2.2008 
COM(2008) 119 final 

2007/0143 (COD) 

Amended Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the taking-up and pursuit of the business of Insurance and Reinsurance 

(SOLVENCY II) 

(recast) 

(presented by the Commission pursuant to Article 250 (2) of the EC Treaty) 

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EXPLANATORY MEMORANDUM 

1. 

GENERAL COMMENTS 

On 10 July 2007, the Commission adopted Proposal COM (2007)361 (Solvency II Directive 
Proposal).  This  proposal  consists  of  a  recast  of  13  existing  Directives  in  the  insurance  and 
reinsurance sector and new solvency provisions (so-called Solvency II).  

In  the  meantime,  Directive  2007/44/EC  of  the  European  Parliament  and  of  the  Council  of 
5 September  2007  amending  Council  Directive  92/49/EEC  and  Directives  2002/83/EC, 
2004/39/EC, 2005/68/EC and 2006/48/EC as regards procedural rules and evaluation criteria 
for the prudential assessment of acquisitions and increase of holdings in the financial sector1 
has been published in the Official Journal and has entered into force on 21 September 2007, 
i.e.  after  the  date  on  which  the  recast  proposal  was  submitted  to  the  legislative  authority. 
Directive  2007/44/EC  introduced  changes  in  some  Articles  of  Directives  92/49/EEC, 
2002/83/EC and 2005/68/EC. As a consequence, clear discrepancies exist between the texts of 
Directives 92/49/EEC, 2002/83/EC and 2005/68/EC and the corresponding parts of the recast 
part of the Solvency II Directive Proposal. 

Furthermore, in December 2007, a political agreement was reached in Council and European 
Parliament  on  the  so-called  Rome  I  Regulation  which  deals  with  the  law  applicable  on 
contractual obligations. This affects the provisions on applicable law and conditions of direct 
insurance contracts in the recast part of the Solvency II Directive Proposal.  

In  view  of  the  above  the  Commission  decided  to  adopt  an  amended  proposal  to  the 
Solvency II Directive Proposal adopted in July 2007.  

2. 

a) 

LEGISLATIVE APPROACH AND LEGAL BASIS 

Legislative approach 

The following 14 Directives in the area of life and non-life insurance, reinsurance, insurance 
groups and winding up were recast into a single text at the occasion of the new Solvency II 
amendments to be made: 

•  Council  Directive  64/225/EEC  of  25  February  1964  on  the  abolition  of  restrictions  on 
freedom  of  establishment  and  freedom  to  provide  services  in  respect  of  reinsurance  and 
retrocession2; 

•  First  Council  Directive  73/239/EEC  of  24  July  1973  on  the  coordination  of  laws, 
regulations  and  administrative  provisions  relating  to  the  taking  up  and  pursuit  of  the 
business of direct insurance other than life assurance3;  

•  Council  Directive  73/240/EEC  of  24  July  1973  abolishing  restrictions  on  freedom  of 

establishment in the business of direct insurance other than life assurance4;  

•  Council  Directive  76/580/EEC  of  29  June  1976  amending  Directive  73/239/EEC  on  the 
coordination  of  laws,  regulations  and  administrative  provisions  relating  to  the  taking  up 
and pursuit of the business of direct insurance other than life assurance5;  

1 OJ L 247, 21.9.2007, p. 1. 
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OJ 56, 4.4.1964, p. 878. Directive as amended by the Act of Accession 1972. 
OJ  L 228,  16.8.1973,  p. 3.  Directive  as  last  amended  by  Directive  2005/68/EC  of  the  European 
Parliament and of the Council (OJ L 323, 9.12.2005, p. 1). 
OJ L 228, 16.8.1973, p. 20. 
OJ L 189, 13.7.1976, p. 13. 

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•  Council  Directive  78/473/EEC  of  30  May  1978  on  the  coordination  of  laws,  regulations 

and administrative provisions relating to Community co-insurance6;  

•  Council  Directive  84/641/EEC  of  10  December  1984  amending,  particularly  as  regards 
tourist assistance, the First Directive 73/239/EEC on the coordination of laws, regulations 
and administrative provisions relating to the taking-up and pursuit of the business of direct 
insurance other than life assurance7; 

•  Council  Directive  87/344/EEC  of  22  June  1987  on  the  coordination  of  laws,  regulations 

and administrative provisions relating to legal expenses insurance8; 

•  Second  Council  Directive  88/357/EEC  of  22  June  1988  on  the  coordination  of  laws, 
regulations  and  administrative  provisions  relating  to  direct  insurance  other  than  life 
assurance  and  laying  down  provisions  to  facilitate  the  effective  exercise  of  freedom  to 
provide services and amending Directive 73/239/EEC9;  

•  Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and 
administrative provisions relating to direct insurance other than life assurance (third non-
life insurance Directive)10;  

•  Directive 98/78/EC of the European Parliament and of the Council of 27 October 1998 on 

the supplementary supervision of insurance undertakings in an insurance group11;  

•  Directive 2001/17/EC of the European Parliament and of the Council of 19 March 2001 on 

the reorganisation and winding-up of insurance undertakings12; 

•  Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 

concerning life assurance13; 

•  Directive  2005/68/EC  of  the  European  Parliament  and  of  the  Council  of  16 November 

2005 on reinsurance14; 

•  Directive 2007/44/EC of the European Parliament and of the Council of 5 September 2007 
amending  Council  Directive  92/49/EEC  and  Directives  2002/83/EC,  2004/39/EC, 
2005/68/EC  and  2006/48/EC  as  regards  procedural  rules  and  evaluation  criteria  for  the 
prudential assessment of acquisitions and increase of holdings in the financial sector15. 

As a complete rewrite of the existing Directives would have gone beyond a recast, the recast 
follows the structure of the existing (re)insurance Directives. The new Solvency II provisions 
are therefore introduced in different Chapters and Titles of the draft Directive and are shown 
in grey character. No substantive changes have been made to the existing Directives that have 

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OJ L 151, 7.6.1978, p. 25. 
OJ L 339, 27.12.1984, p. 21. 
OJ L 185, 4.7.1987, p. 77. 
OJ  L  172,  4.7.1988,  p.  1.  Directive  as  last  amended  by  Directive  2005/14/EC  of  the  European 
Parliament and of the Council (OJ L 149, 11.6.2005, p. 14). 
OJ L 228, 11.8.1992, p. 1. Directive as last amended by Directive 2007/44/EC (OJ L 247, 21.9.2007, p. 
1). 
OJ L 330, 5.12.1998, p. 1. Directive as last amended by Directive 2005/68/EC (OJ L 323, 9.12.2005, p. 
1). 
OJ L 110, 20.4.2001, p. 28. 
OJ L 345, 19.12.2002, p. 1. Directive as last amended by Directive 2007/44/EC (OJ L 247, 21.9.2007, 
p. 1). 
323, 9.12.2005, p. 1. Directive as amended by Directive 2007/44/EC (OJ L 247, 21.9.2007, p. 1).. 
OJ L 247, 21.9.2007, p. 1. 

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been recast except for those changes that are necessary in order to introduce a new solvency 
regime. 

The proposal applies the ‘re-casting technique’ (Inter-institutional Agreement 2002/C 77/01) 
which  enables  substantive  amendments  to  existing  legislation  without  a  self-standing 
amending  directive.  The  recast  reduces  complexity  and  makes  the  EU  legislation  more 
accessible and comprehensible. Amendments of a non-substantive nature have been made to a 
large  number  of  provisions  of  the  existing  Directives  in  order  to  improve  the  drafting  and 
readability. Articles or parts of Articles which have become obsolete have been deleted. All 
changes are clearly marked in the text.  

The  new  solvency  provisions  are  principles  based  and  follow  the  4  level  structure  of  the 
Lamfalussy financial services architecture. The  principles  will  be  further developed through 
implementing  measures.  The  new  Lamfalussy  architecture  will  enable  the  new  solvency 
regime  to  keep  pace  with  future  market  and  technological  developments  as  well  as 
international developments in accounting and (re)insurance regulation.  

b) 

Legal Basis  

The proposal is based on Articles 47(2) and 55 of the Treaty, which is the legal basis to adopt 
Community measures aimed at achieving an internal market in financial services. The chosen 
instrument  is  a  Directive  as  this  is  the  most  appropriate  legal  instrument  to  achieve  the 
objectives. The proposed new provisions do not go beyond what it is necessary to achieve the 
objectives pursued. 

3. 

SCOPE OF APPLICATION 

The  scope  of  application  of  the  present  Directives  has  not  been  changed.  The  proposal 
therefore applies to all life and non-life insurance undertakings and reinsurance undertakings. 
However, the present exclusion of small mutual undertakings has been extended to all small 
insurance undertakings defined in Article 4, regardless of their legal form. The Directive does 
not apply to pension funds covered by Directive 2003/41/EC of the European Parliament and 
of  the  Council  of  3  June  200316  on  the  activities  and  supervision  of  institutions  for 
occupational retirement provision. A review of this Directive will take place in 2008. At that 
time, the Commission will examine whether and how suitable solvency requirements can or 
should  be  developed  for  pension  funds.  Similarly  the  Directive  does  not  change  the  regime 
applicable  to  financial  conglomerates.  However,  if  any  issues  are  identified  they  will  be 
addressed in the course of the review of the Financial Conglomerates Directive (2002/87/EC) 
which will take place in 2008. 

4. 

COMMENTS ON THE ARTICLES 

The comments only relate to those Articles which are new or which have changed as a result 
of the introduction of the new solvency rules as well as those relating to changes introduced 
by the amended proposal as compared to the Solvency II Directive Proposal adopted 10 July 
2007. 

SOLVENCY II 

1. 

Qualitative Requirements and supervision 

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OJ L 235, 23.9.2003, p. 10. 

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The  qualitative  requirements  and  rules  on  supervision  applicable 
to  (re)insurance 
undertakings  ("Pillar  II"  of  the  Solvency  II  framework)  are  laid  down  in  2  sections, 
Supervisory Authorities and General Rules and System of Governance. 

Supervisory Authorities and General Rules - Articles 27 to 38 

Main objective of supervision – Article 27 

The  main  objective  of  (re)insurance  regulation  and  supervision  is  adequate  policyholder 
protection. Other objectives such as financial stability and fair and stable markets should also 
be taken into account but should not undermine that main objective. 

General principles of supervision – Article 28 

Supervision shall be based on a prospective and risk-oriented approach. Solvency II therefore 
adopts an economic risk-based approach which allows for a system that reflects the true risk 
profile of (re)insurance undertakings. That system should rely on sound economic principles 
and make optimal use of the information provided by financial markets.  

Particular care has been taken to ensure that the new solvency regime is not too burdensome 
for  small  and  medium-sized  (re)insurance  undertakings.  Importance  is  therefore  attached  to 
the principle of proportionality, which applies to all requirements of this Directive but which 
is particularly relevant for the application of the quantitative and qualitative requirements of 
the  solvency  regime  and  the  rules  on  supervision.  It  will  be  further  specified  in  the 
implementing measures. 

Transparency and accountability – Article 30 

Transparency and accountability contributes to the legitimacy and integrity of the supervisory 
authorities and the credibility of the system of supervision. This Article therefore lays down 
that supervisory authorities shall conduct their tasks in a transparent and accountable manner. 
Disclosures  foster  transparency  and  allow  a  meaningful  comparison  of  the  approaches 
adopted  by  Member  States.  An  important  aspect  of  transparency  and  accountability  is  to 
provide for transparent procedures regarding the appointment and dismissal of the members 
of the board or managing body of the supervisory authorities. 

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Supervisory powers – Article 34 

In  order  to  ensure  the  efficiency  of  supervision,  the  supervisory  authorities  must  be  fully 
empowered  to  carry  out  their  tasks.  Article  34  therefore  sets  out  that  Member  States  must 
ensure  that  supervisory  authorities  have  the  power  to  take  any  measure  necessary  to  ensure 
that undertakings comply with the regulatory requirements set by this Directive as well as to 
prevent  and  remedy  any  irregularities.  In  this  context,  it  is  particularly  important  that 
supervisory powers are also available with regard to outsourced and sub-outsourced activities. 
All supervisory powers shall be applied in a timely and proportionate manner.  

In order to ensure effective supervision, it is essential that supervision is carried out both on-
site  and  off-site;  supervisory  authorities  are  therefore  given  the  power  to  conduct  on-sight 
inspections at the premises of an insurer or reinsurer. 

Supervisory Review Process – Article 36 

A  failure  to  comply  with  the  qualitative  and  quantitative  requirements  may  have  severe 
consequences  for the financial  soundness of  an insurer or reinsurer. The supervisory review 
therefore  aims  to  identify  institutions  with  financial,  organisational  or  other  features 
susceptible to producing a higher risk profile.  

Under the Supervisory Review Process (SRP), the supervisory authorities review and evaluate 
the  strategies,  processes  and  reporting  procedures  established  by  insurers  and  reinsurers  to 
comply  with  this  Directive  as  well  as  the  risks  the  undertaking  faces  or  may  face  and  its 
ability to assess those risks. The review also comprises an assessment of the adequacy of the 
undertakings' methods and practices to identify possible events or future changes in economic 
conditions that could have unfavourable effects on its overall financial standing. In order to 
ensure  the  efficiency  of  the  SRP,  it  is  important  that  supervisory  authorities  are  given  the 
power  to  remedy  the  weaknesses  and  deficiencies  identified  in  the  supervisory  review 
including a follow-up process of their findings. 

It  is  moreover  essential  that  supervisory  authorities  have  appropriate  monitoring  tools  that 
enable deteriorating financial conditions to be identified and remedied. The results of the SRP 
are  very  useful  for  the  supervisory  authorities  in  prioritising  future  work,  to  ensure  an 
appropriate degree of consistency in supervisory approaches between supervisory authorities 
and to provide feedback to the undertaking. 

Capital add-ons – Article 37 

the  solvency  capital  requirement.  Supervisory  authorities  may 

The starting point for the adequacy of the quantitative requirements in the (re)insurance sector 
is 
therefore  require 
(re)insurance undertakings only under strictly defined exceptional circumstances to have more 
capital following the Supervisory Review Process. Even though the standard formula aims at 
capturing the risk profile of most (re)insurance undertakings in the Community, there may be 
some cases where the standardised approach might not entirely reflect the very specific risk 
profile of an undertaking.  

In  case  of  material  deficiencies  in  the  full  or  partial  internal  model  (see  below  point  4.)  or 
material  governance  failures  it  is  essential  that  the  supervisory  authorities  ensure  that  the 
undertaking concerned makes all efforts to remedy the deficiencies that led to the imposition 
of  the  capital  add-on  for  the  sake  of  policyholder  protection.  The  supervisory  authority  is 
obliged  to  examine  the  undertaking's  progress  in  addressing  its  deficiencies  at  least  once  a 
year.  Only  in  case  the  deviation  of  such  an  undertaking's  risk  profile  is  material  and  the 
development  of  a  partial  or  full  internal  model  is  inefficient,  the  capital  add-on  may  have  a 
permanent character.  

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The  more  harmonised  and  economic  approach  adopted  for  the  (re)insurance  sector  as 
compared to the Capital Requirements Directive duly justifies the more harmonised approach 
of capital increases.  

Responsibility of the administrative or management body – Article 40 

(Re)insurance  undertakings will be required to meet principles rather than rules, which puts 
more responsibility on management than is presently the case.  

The Directive states clearly that the administrative or management body of the (re)insurance 
undertaking  has  the  ultimate  responsibility  for  the  undertaking's  compliance  with  this 
Directive. 

System of Governance - Articles 41 to 49 

Governance system and general requirements - Article 41 

Consistency  of  governance  requirements  across  the  banking,  securities  and  (re)insurance 
sectors is essential to ensure cross-sectoral consistency. The governance requirements set out 
in this Directive aim at achieving this objective. 

Robust  governance  requirements  are  a  pre-requisite  for  an  efficient  solvency  system.  Some 
risks  may  only  be  addressed  through  governance  requirements  rather  than  by  setting 
quantitative  requirements.  A  robust  governance  system  is  hence  of  key  importance  for  the 
adequate  management  of  the  insurer  and  critical  to  the  effectiveness  of  the  supervisory 
system.  

The  governance  system  includes  compliance  with  the  requirements  on  fit  and  proper,  risk 
management,  the  own  risk  and  solvency  assessment,  internal  control,  internal  audit,  the 
actuarial  function  and  outsourcing.  The  implementing  measures  on  the  governance 
requirements will specify the proportionality principle. 

The  identification  of  governance  functions  in  the  Directive  should  help  undertakings  in 
deciding how to implement the governance system. A function is an administrative capacity 
to undertake particular tasks. The identification of a particular function does not prevent the 
undertaking  from  freely  deciding  how  to  organise  this  function  in  practice  unless  this  is 
otherwise specified in this Directive. This should not lead to unduly burdensome requirements 
because account should be taken of the nature, scale and complexity of the operations of the 
undertaking.  The  governance  functions  can  therefore  be  staffed  by  own  staff  or  can  rely  on 
advice  from  outside  experts  or  can  be  outsourced  to  experts  within  the  limits  set  by  this 
Directive. Furthermore, in smaller and less complex undertakings, more than one function can 
be carried out by one person or organisational unit.  

In order to make the governance system work well, undertakings are required to have written 
policies in place which clearly set out how they deal with internal control, internal audit, risk 
management  and,  where  relevant,  with  outsourcing.  It  is  essential  that  the  administrative  or 
management body is actively involved in the governance system. The written policies should 
therefore  be  approved  by  the  administrative  or  management  body  and  be  revised  at  least 
annually or before any significant change is implemented in the system. The amendment of 
the policies prior to the system change is essential because the undertaking would otherwise 
already  be  in  non-compliance  with  its  internal  strategies  and  processes.  It  is  the  role  of  the 
supervisory authority in the SRP to review and evaluate the governance system. 

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Own Risk and Solvency Assessment (ORSA) – Article 44 

As  part  of  their  risk  management  system,  all  (re)insurance  undertakings  should  have,  as  an 
integral part  of  their business strategy, a regular practice of assessing their overall solvency 
needs with a view to their specific risk profile.  

The ORSA has a twofold nature. It is an internal assessment process within the undertaking 
and is as such embedded in the strategic decisions of the undertaking. It is also a supervisory 
tool for the supervisory authorities, which must be informed about the results of the own risk 
and solvency assessment of the undertaking. 

The  ORSA  does  not  require  an  undertaking  to  develop  or  apply  a  full  or  partial  internal 
model. However, if the undertaking already uses an approved full or partial internal model for 
the calculation of the SCR, the output of the model should be used in the ORSA. The ORSA 
does  not  create  a  third  solvency  capital  requirement.  The  ORSA  should  not  be  overly 
burdensome  on  small  or  less  complex  undertakings.  The  supervisory  authority  reviews  the 
own  risk  and  solvency  assessment  as  part  of  the  supervisory  review  process  of  the 
undertaking.  The  results  of  each  ORSA  conducted  shall  be  reported  to  the  supervisory 
authority as part of the information to be provided for supervisory purposes under Article 35. 

Outsourcing – Articles 38 and 48  

As  outsourcing  is  becoming  more  and  more  relevant,  it  is  important  to  adopt  a  more 
consistent  approach  in  this  area.  In  order  to  ensure  effective  supervision  of  outsourced 
activities, it is essential that the supervisory authorities of the outsourcing undertaking have a 
right to access all relevant data held by the outsourcing service provider as well as the right to 
conduct  on-site  inspections  of  the  outsourced  activity  at  the  premises  of  the  outsourcing 
service provider, regardless of whether the latter is a regulated or unregulated entity. In case 
the  activity  is  outsourced  to  a  service  provider  in  a  third  country,  it  is  necessary  that  the 
supervisory authority of the outsourcing undertaking has the right to access all relevant data 
held  by  the  outsourcing  service  provider  regardless  of  whether  the  latter  is  a  regulated  or 
unregulated entity. Outsourcing also comprises sub-outsourcing. 

One way of achieving this, especially if the service provider is an unregulated entity, is paying 
particular attention to the contract between the outsourcing undertaking and the outsourcing 
service provider. Supervisory authorities must be informed in an adequate and timely manner 
prior to the outsourcing of important activities or to any subsequent material changes therein.  

The requirements laid down in this Directive take into account the work of the Joint Forum 
and are consistent with the current rules and practices in the banking sector and the Markets in 
Financial Instruments Directive (2004/39/EC) and its application to credit institutions.  

2. 

Supervisory reporting and public disclosure  

Supervisory  reporting  and  public  disclosure  constitute  "Pillar  III"  of  the  Solvency  II 
framework. 

Information to be provided for supervisory purposes - Article 35 

The  proposal  essentially  maintains  the  current  philosophy  of  the  acquis,  imposing  on 
undertakings a general requirement to submit any information necessary for the purposes of 
supervision.  However,  in  line  with  the  Lamfalussy  approach,  the  proposal  introduces  a 
number  of  key  principles  with  which  supervisory  reporting  must  comply  and  allows  the 
adoption of implementing measures with a view to ensuring convergence as appropriate. 

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Public Disclosure - Articles 50 to 55 

The  proposal  requires  undertakings  to  disclose  annually  a  report  covering  essential  and 
concise  information  on  their  solvency  and  financial  condition.  An  exception  is  possible  for 
individual  capital  add-ons  for  a  transitional  period.  Undertakings  are  required  to  update  the 
information disclosed where appropriate (specific provisions address cases of non compliance 
with Minimum Capital Requirement or Ssolcency Capital Requirement), and they are allowed 
to disclose additional information on a voluntary basis. Undertakings are required to have a 
policy  on  public  disclosure,  and  must  obtain  approval  from  their  administrative  or 
management body on the solvency and financial condition report before publication. Finally, 
the  proposal  allows  the  adoption  of  implementing  measures  with  a  view  to  ensuring 
convergence as appropriate. 

3. 

Promotion of supervisory convergence – Article 70 

The  Financial  Service  Committee  identified  the  fostering  of  convergence  of  supervisory 
practices  as  one  of  the  major  challenges  in  the  years  to  come.  Even  though  a  common 
regulatory framework is the basis a true level playing field can only be achieved through more 
consistent  and  common  decision-making  and  enforcement  practices  among  supervisors. 
Supervisory convergence includes in particular common and uniform day-to-day application 
of Community legislation and enhancing day-to-day consistent supervision and enforcement 
of the Single Market. Peer reviews and mediation mechanisms can play an important role in 
the fostering of supervisory convergence.  

CEIOPS has a particular role in contributing to the consistent application of this Directive and 
to the convergence of supervisory practices throughout the Community. This Article therefore 
sets out that Member States must take the necessary measures to ensure that the supervisory 
authorities actively engage themselves in the activities of CEIOPS. 

4. 

Quantitative requirements  

The  quantitative  requirements  applicable  to  (re)insurance  undertakings  ("Pillar  I"  of  the 
Solvency  II  framework)  are  laid  down  in  six  sections:  valuation  of  assets  and  liabilities, 
technical  provisions,  own  funds,  Solvency  Capital  Requirement,  Minimum  Capital 
Requirement,  and  investments.  The  Pillar  I  requirements  are  based  on  an  economic  total 
balance  sheet  approach.  This  approach  relies  on  an  appraisal  of  the  whole  balance-sheet  of 
insurance and reinsurance undertakings, on an integrated basis, where assets and liabilities are 
valued consistently. Such an approach implies that the amount of available financial resources 
of insurance and reinsurance undertakings should cover its overall financial requirements, i.e. 
the  sum  of  un-subordinated  liabilities  and  capital  requirements.  As  a  consequence  of  this 
approach,  eligible  own  funds  (see  below)  must  be  higher  than  the  Solvency  Capital 
Requirement. 

Valuation of assets and liabilities – Article 74 

Article 74 introduces valuation standards for all assets and liabilities, based upon the current 
IFRS definition of fair value. Implementing measures will be developed setting out how the 
fair  value  of  specific  balance-sheet  items  should  be  calculated,  in  order  to  ensure  that  these 
items are valued consistently across all Member States. With respect to liabilities, valuation 
standards  do  not  take  account  of  own  credit  standing,  whilst  with  respect  to  assets,  these 
standards take account of current credit and liquidity characteristics. 

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Technical provisions – Articles 75 to 85 

Technical  provisions  need  to  be  established  in  order  for  the  undertaking  to  fulfil  its 
(re)insurance  obligations  towards  policyholders  and  beneficiaries.  Their  calculation  will  be 
based on the general provisions set out in Article 75:  

– 

– 

In  particular,  the  calculation  of  technical  provisions  will  be  based  on  their  current 
exit  value.  The  current  exit  value  reflects  the  amount  an  insurance  or  reinsurance 
undertaking would expect to have to pay today if it transferred its contractual rights 
and  obligations  immediately  to  another  undertaking.  The  use  of  current  exit  value 
should  not  be  intended  to  imply  that  an  (re)insurance  undertaking  could,  would  or 
should actually transfer those obligations.  

The  calculation of technical provisions  must  be  market-consistent  and undertaking-
specific information will only be used in the calculation of technical provisions in so 
far  as  that  information  enables  (re)insurance  undertakings  to  better  capture  the 
characteristics of the underlying insurance portfolio.  

Articles 76 to 79 and 81 to 85 describe the calculation of technical provisions. They will be 
calculated  as  the  sum  of  a  best  estimate  and  a  risk  margin,  except  in  the  case  of  hedgeable 
risks arising from (re)insurance obligations (see below): 

– 

– 

The  best  estimate  corresponds  to  the  expected  present  value  of  future  cash  flows, 
taking into account all the cash in and out flows (adjusted for inflation), required to 
settle the (re)insurance obligations over their lifetime, including all expenses, future 
discretionary  bonuses,  embedded  financial  guarantees  and  contractual  options.  The 
calculation of the best estimate is to be based on sound actuarial techniques and good 
quality data and regularly checked against actual experience. 

The  risk  margin  ensures  that  the  overall  value  of  the  technical  provisions  is 
equivalent  to  the  amount  (re)insurance  undertakings  would  expect  to  have  to  pay 
today  if  it  transferred  its  contractual  rights  and  obligations  immediately  to  another 
undertaking;  or  alternatively,  the  additional  cost,  above  the  best  estimate,  of 
providing  capital  to  support  the  (re)insurance  obligations  over  the  lifetime  of  the 
portfolio. 

With respect to hedgeable risks – i.e. a risk that can be effectively neutralised by buying or 
selling  financial  instruments  –  the  value  of  technical  provisions  is  calculated  directly,  as  a 
whole, and derived using the values of those financial instruments (see Article 76(4)). 

With respect to non-hedgeable risks, the risk margin is calculated using the so-called cost-of-
capital method (see Article 76(5)). In this case, the cost-of-capital rate used is the same for all 
undertakings (e.g. fixed percentage) and corresponds to the spread above the risk-free interest 
rate that a BBB-rated (re)insurance undertaking would be charged to raise eligible own funds.  

Own funds –Articles 86 to 99 

Own  funds  correspond  to  a  (re)insurance  undertakings'  available  financial  resources  which 
can  serve  as  a  buffer  against  risks  and  absorb  financial  losses,  where  necessary.  The 
determination of the amounts of own funds eligible to cover the two capital requirements is 
based  on  a  three-step  process.  Each  step  corresponds  to  a  subsection:  determination  of  own 
funds, classification of own funds, eligibility of own funds. 

In a first step, the amounts of available own funds must be identified. Own funds are the sum 
of: 

– 

items on the balance-sheet, or "basic own fund items" (see Article 87); 

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– 

items not on the balance-sheet, or "ancillary own fund items" (see Article 88). 

Basic  own  funds  comprise  the  economic  capital  (i.e.  the  excess  of  assets  over  liabilities, 
valued  in  accordance  with  Sections  1  and  2)  and  subordinated  liabilities  (as  those  liabilities 
can serve as capital, for instance in the case of winding-up).  

Ancillary  own  funds  comprise  commitments  that  undertakings  can  call  upon  in  order  to 
increase  their  financial  resources,  such  as  members'  calls  and  letters  of  credit.  As  those 
ancillary own funds do not fall under the valuation standards provided for in Sections 1 and 2, 
the determination of their amounts is subject to prior supervisory approval. 

In  a  second  step,  as  own  fund  items  possess  different  qualities  and  provide  for  different 
levels  of  absorption  of  losses,  those  own  fund  items  will  be  classified  into  three  tiers, 
depending  on  their  nature  and  the  extent  to  which  they  meet  five  key  criteria  (i.e. 
subordination, loss-absorbency, permanence, perpetuality and absence of servicing costs), as 
set out in Article 93. 

The classification of own funds into tiers relies on qualitative criteria to be further specified 
through  implementing  measures  (see  Article  97);  however,  in  order  to  facilitate  that 
classification,  a  list  of  pre-classified  items  will  also  be  laid  down  in  those  implementing 
measures. 

Quality 

High 

Medium 

Low 

Nature 

On the balance-sheet  
(basic own funds) 

Off the balance-sheet  
(ancillary own funds) 

Tier 1 

Tier 2 

Tier 3 

Tier 2 

Tier 3 

− 

In a third step, as Tier 2 and Tier 3 items do not provide for full absorption of any losses in 
all circumstances, it seems necessary  to limit their  recognition  for  supervisory purposes. As 
set out in Article 98, two sets of limits apply to available own funds, in order to determine the 
amounts eligible for supervisory purposes: 

– 

– 

With  respect  to  the  Solvency  Capital  Requirement,  the  proportion  of  Tier  1  in  the 
eligible own funds should reach at least 1/3, and the proportion of Tier 3 should be 
no higher than 1/3. 

With respect to the Minimum Capital Requirement, ancillary own fund items are not 
eligible, and the proportion of eligible Tier 2 items should be limited to ½. 

Solvency Capital Requirement – Articles 100 to 125 

Section  4  on  the  Solvency  Capital  Requirement  is  divided  in  three  parts:  the  general 
presentation of that capital requirement, the Solvency Capital Requirement standard formula, 
and the use of internal models for solvency purposes. 

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General provisions for the Solvency Capital Requirement, using the standard formula or an 
internal model 

The  Solvency  Capital  Requirement  corresponds  to  the  economic  capital  a  (re)insurance 
undertaking  needs  to  hold  in  order  to  limit  the  probability  of  ruin  to  0.5%,  i.e.  ruin  would 
occur once every 200 years (see Article 101). The Solvency Capital Requirement is calculated 
using  Value-at-Risk techniques, either in  accordance with the standard formula, or using an 
internal model: all potential losses, including adverse revaluation of assets and liabilities, over 
the next 12 months are to be assessed. The Solvency Capital Requirement reflects the true risk 
profile of the undertaking, taking account of all quantifiable risks, as well as the net impact of 
risk mitigation techniques. 

The  Solvency  Capital  Requirement  is  to  be  calculated  at  least  once  a  year,  monitored  on  a 
continuous  basis,  and  recalculated  as  soon  as  the  risk  profile  of  the  undertaking  deviates 
significantly; the Solvency Capital Requirement is to be covered by an equivalent amount of 
eligible own funds (see Article 100). 

Solvency Capital Requirement standard formula 

Articles  103  to  109  describe  the  objectives,  architecture  and  overall  calibration  of  the 
Solvency Capital Requirement standard formula. The "modular" architecture, based on linear 
aggregation techniques, is further specified in Annex IV of the Directive. The risks captured 
in the various  modules and sub-modules of the  standard formula  are  defined in Articles 13, 
104 and 105. The detailed specifications of those modules and sub-modules will be adopted 
through implementing measures, as they are likely to evolve over time. 

The  Solvency  Capital  Requirement  standard  formula  aims  at  achieving  the  right  balance 
between  risk-sensitivity  and  practicality.  It  allows  both  for  the  use  of  undertaking-specific 
parameters, where appropriate (see Article 104(7)), and standardised simplifications for SMEs 
(see Article 108).  

As  the  new  valuation  standards  take  due  account  of  credit  and  liquidity  characteristics  of 
assets,  as  the  Solvency  Capital  Requirement  captures  all  quantifiable  risks,  and  as  all 
investments are subject to the "prudent person" principle, quantitative investment limits and 
asset eligibility criteria will not be maintained. However, in the light of market developments, 
if  new  risks  emerge  which  are  not  covered  by  the  Solvency  Capital  Requirement  standard 
formula, Article 109(2) enables the Commission to adopt temporary implementing measures 
laying  down  investment  limits  and  asset  eligibility  criteria  whilst  the  formula  is  being 
updated.  

Internal models 

Articles 110 to 125 describe the requirements applying to (re)insurance undertakings using or 
wishing  to  use  a  full  or  partial  internal  model  in  the  calculation  of  the  Solvency  Capital 
Requirement. Before approval by the supervisory authorities is given to use an internal model, 
(re)insurance  undertakings  must  submit  an  application  (see  Article  110)  approved  by  the 
administrative or management body of the undertaking (see Article 114), demonstrating that 
they meet the use test, statistical quality standards, calibration standards, validation standards, 
and  documentation  standards  (see Articles  118  to  123).  Supervisory  authorities  must  decide 
whether  to  accept  or  reject  the  application  within  six  months  of  receipt  of  a  complete 
application from an (re)insurance undertaking. 

With respect to the use of partial internal models additional requirements are introduced that 
are  designed  to  prevent  cherry-picking  by  (re)insurance  undertakings  (see  Article  111).  In 
addition, Article 112 enables the Commission to adopt implementing measures adapting the 

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standards,  set  out  in  Articles  118  to  123,  with  respect  to  partial  internal  models  in  order  to 
take account of the limited scope of those models. 

Article  117  gives  supervisory  authorities  the  power  to  require  an  (re)insurance  undertaking 
calculating the Solvency Capital Requirement using the standard formula, to develop a partial 
or  full  internal  model  in  the  event  that  the  Solvency  Capital  Requirement  standard  formula 
does not accurately capture the risk profile of that undertaking. 

Minimum Capital Requirement – Articles 126 to 129 

The  Minimum  Capital  Requirementrepresents  a  level  of  capital  below  which  policyholders' 
interests  would  be  seriously  endangered  if  the  undertaking  were  allowed  to  continue  to 
operate. In the event that the Minimum Capital Requirement is breached ultimate supervisory 
action  is  triggered,  i.e.  authorisation  is  withdrawn  (see  Articles  127  and  137).  Undertakings 
are  therefore  required  to  hold  eligible  basic  own  funds  to  cover  the  Minimum  Capital 
Requirement  (see  Article  126).  As  ultimate  supervisory  action  may  require  authorisation  by 
national  courts,  the  Minimum  Capital  Requirement  needs  to  be  calculated  quarterly,  in 
accordance with a simple and robust formula, on the basis of auditable data. 

Article  127  on  the  specific  design  and  calibration  of  the  Minimum  Capital  Requirement 
includes a short list of general principles. Pending the results of QIS3, an open approach has 
been  adopted,  as  no  final  decision  has  been  reached  regarding  the  Minimum  Capital 
Requirement. 

In particular, the text enables the two following approaches to be tested: 

– 

– 

the  Minimum  Capital  Requirement  calculated  using  a  simplified  version  of  the 
standard  formula  (modular  approach)  taking  account  of  life  underwriting  risk,  non 
life  underwriting  risk  and  market  risk,  and  calibrated  to  a  one-year  90%  Value-at-
Risk; 

Minimum  Capital  Requirement  calculated  as  a  percentage  of  the  Solvency  Capital 
Requirement  (compact  approach),  calibrated  to  1/3  of  the  Solvency  Capital 
Requirement. 

For  example,  Article  127(1)  point  (c)  enables  the  Minimum  Capital  Requirement  to  be 
calibrated  to  a  confidence  level  between  80%  (as  1/3  of  an  Solvency  Capital  Requirement 
calibrated to a 99.5% VaR is equivalent to a 80% VaR, assuming a normal distribution) and 
90% (the level used in the modular approach being tested). 

So as to smooth the transition to the new regime (see Article 129), (re)insurance undertakings 
that comply with Solvency I at the date of entry into force of this Directive, but do not comply 
with  the  Minimum  Capital  Requirement,  have  one  year  in  order  to  bring  themselves  into 
compliance with the new regime. 

Investments – Articles 130 to 133 

All investments held by (re)insurance undertakings (i.e. assets covering technical provisions, 
plus  assets  covering  Solvency  Capital  Requirement  and  free  assets)  must  be  invested, 
managed  and  monitored  in  accordance  with  the  "prudent  person"  principle  laid  down  in 
Article 130. The prudent person principle requires (re)insurance undertakings to invest assets 
in the best interest of policyholders, adequately match investments and liabilities, and pay due 
attention to financial risks, such as liquidity and concentration risk.  

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5. 

GROUP SUPERVISION - ARTICLES 210 TO 268 

Introduction 

The  way  (re)insurance  groups  will  be  supervised  is  a  crucial  factor  for  the  success  of  the 
single  market  and  the  Solvency  II  regime.  The  proposal  therefore  seeks  to  find  appropriate 
ways of streamlining the supervision of (re)insurance groups in the EU. 

Main Improvements Applicable to All (Re)insurance Groups 

•  Group supervisor – identification and appointment: the proposal introduces the concept 
of "group supervisor". For each group, a single authority will be appointed with concrete 
coordination  and  decision  powers.  The  criteria  retained  are  inspired  by  the  Financial 
Conglomerates Directive, but the proposal introduces more flexibility where appropriate. 

•  Group  supervisor  –  rights  and  duties:  the  group  supervisor  is  given  primary 
responsibility  for  all  key  aspects  of  group  supervision  (group  solvency,  intragroup 
transactions, risk concentration, risk management and internal control). Such responsibility 
must be exercised in cooperation and consultation with local supervisors. In addition, for 
each  group,  coordination  arrangements  must  be  established  between  all  supervisors 
involved. 

•  Other  key  measures  to  ensure  efficient  group  supervision:  the  proposal  introduces,  in 
line with the Financial Conglomerates Directive, a complete set of provisions obliging all 
supervisors involved to  exchange  information  automatically  (essential  information)  or  on 
request  (relevant  information),  to  consult  each  other  prior  to  important  decisions,  and  to 
handle properly requests for verification of information. 

•  Group  solvency  –  choice  of  method:  with  a  view  to  ensuring  as  much  as  possible  that 
groups will benefit from diversification effects, the proposal expresses a strong preference 
for the consolidation method. 

•  Group  solvency  –  group  internal  model:  the  proposal  allows  a  group  to  apply  for  the 
permission  to  use  an  internal  model  for  the  calculation  of  the  group  Solvency  Capital 
Requirement and the solo Solvency Capital Requirement of related entities. The procedure 
is  much  inspired  by  the  Capital  Requirements  Directive  (2006/48/EC  -  Article  129). 
CEIOPS  can  be  consulted  at  the  request  of  the  parent  undertaking  or  of  any  of  the 
supervisors involved.  

•  Supervision  of  subgroups:  with  a  view  to  limiting  the  burden  for  groups,  the  proposal 
essentially states a) that group supervision should normally be carried out only at the top 
level in the EU, and b) that Member States may allow their supervisory authorities to carry 
out group supervision at the top level in a Member State. In practice, this should reduce the 
number of levels of supervision to a maximum of 3 (EU group, national subgroups, solo 
entities), which is in line with the Capital Requirements Directive. 

•  Implementing  measures:  with  a  view  to  ensuring  as  much  as  possible  convergence  in 
decisions  and  practices  of  group  supervisors,  the  proposal  contains  for  several  key 
provisions a reference to further implementing measures. 

Additional Improvements Applicable to Groups Using Group Support 

The proposal introduces an innovative regime which seeks to facilitate capital management by 
groups,  essentially  by  a)  allowing  under  certain  conditions  a  parent  undertaking  to  use 
declarations  of  group  support  to  meet  part  of  the  Solvency  Capital  Requirement  of  its 
subsidiaries,  and  b)  introducing  derogations  to  some  Articles  on  solo  supervision,  where 

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appropriate. The proposal allows the adoption of implementing measures, and provides for a 
review of the whole system five years after the transposition of the Directive.  

General Observation: Group Supervision Not only Supplementary 

The  current  EU  acquis  considers  group  supervision  as  merely  supplementary  to  solo 
supervision  (solo  supervision  is  carried  out  in  the  same  way  on  all  entities,  whether  or  not 
they  are  part  of  a  group,  and  group  supervision  is  merely  added  to  solo  supervision).  The 
proposal  changes  substantially  that  philosophy:  the  group  text  contains  many  provisions 
which  will  directly  influence  the  way  in  which  solo  supervision  is  carried  out  on  entities 
belonging to a group. With a view to reflecting explicitly that fundamental development, the 
word "supplementary" has been deleted from all places (including the title). 

DIRECTIVE 2007/44/EC 

The  changes  introduced  by  Directive  2007/44/EC  were  introduced  in  the  recast  of  the 
Solvency II Directive Proposal, taking into account the new regulatory procedure of scrutiny 
for  the  respective  comitology  provision.  The  following  recital,  Articles  and  Annexes  of  the 
Solvency II Directive Proposal have therefore been amended: recital 91, Articles 13, 24, 56-
62,  310  –  312  and  Annexes  VI  and  VII.  Moreover  Article  305  and  recitals  47  and  48  were 
introduced. 

DRAFT ROME I REGULATION 

In December 2007, a political agreement was reached in Council and European Parliament on 
the  so-called  Rome  I  Regulation  which  deals  with  the  law  applicable  on  contractual 
obligations. This draft Regulation is foreseen to be adopted in spring 2008. In order to take 
account  of  these  latest  developments,  the  provisions  on  applicable  law  and  conditions  of 
direct insurance contracts in Chapter I of TITLE II were deleted. A cross-reference was added 
in Article 176 to the draft Rome I Regulation setting out that any Member State not subject to 
that  Regulation  shall  apply  the  provisions  of  that  Regulation  in  order  to  determine  the  law 
applicable  to  insurance  contracts  falling  within  the  scope  of  Article  7  of  the  Regulation. 
Moreover, recital 60 was added. 

OTHER CHANGES 

At the occasion of preparing an amended proposal some technical improvements to the recast 
suggested by the Consultative Working Party consisting of the respective legal services of the 
European Parliament, the Council and the Commission, provided for by the above mentioned 
Inter-institutional  Agreement,  were  taken  up  in  order  to  take  account  of  better  regulation 
principles. As a consequence, minor changes have been made in recitals 29, 45, 51 and 76 as 
well as the following Articles and Annexes: 2, 6, 13, 14, 18, 23, 24, 26, 29, 32, 37, 39, 53, 61, 
64, 66, 68, 69, 71, 73, 117, 137, 138, 139, 140, 141, 148, 150, 153, 154, 156, 157, 160, 162, 
163, 164, 166, 173, 175, 177, 183, 188, 198, 200, 202, 204, 208, 214, 216, 236, 238, 239, 249, 
262,  264,  273,  278,  281,  283,  289,  290,  291,  303,  text  between  Articles  304  and  305,  306, 
309, text in TITLE IV, Annexes I, II, III and VII. 

The following Articles and Annex of the repealed Directives remain unchanged as compared 
to the current legal situation: 3, 5, 9, 11, 12, 16, 19-22, 24-26, 32, 33, 56-57, 60, 62-65, 68, 
69,  72,  145,  147,  149,  151,  152,  154,  155,  157-159,  166-169,  172-174,  177,  178-187,  189, 
191-194, 196-207, 269-279, 281, 282, 284-297, 300-302, 305, 307, 309 and Annex I. 

6. 

IMPLEMENTING MEASURES 

The  Directive  confers  implementing  powers  on  the  Commission.  The  cases  in  which 
implementing powers have been conferred are specifically listed in each relevant Article. In 

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exercising  these  implementing  powers,  the  Commission  will  be  assisted  by  the  European 
Insurance and Occupational Pensions Committee set up by Commission Decision 2004/9/EC. 
The measures to be adopted by the Commission will be subject to the advisory procedure or 
the  regulatory  procedure  with  scrutiny  laid  down  in  Articles  3,  5(a)(1)  to  (4),  and  7  of 
Decision 1999/468/EC. 

The  implementing  measures  will  be  used  to  further  define  the  principles  set  out  in  this 
Directive  so  as  to  enhance  harmonisation  and  supervisory  convergence.  They  will  be 
developed on the basis of mandates given by the Commission to CEIOPS and will be subject 
to consultation with stakeholders and to an impact assessment. 

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(cid:208) 2002/83/EC (adapted) 

2007/0143 (COD) 

Amended Proposal for a 

DIRECTIVE …/…/EC OF THE EUROPEAN PARLIAMENT AND OF THE 
COUNCIL 

of […] 

concerning life assurance ⌦ on the taking-up and pursuit of the business of Insurance 
and Reinsurance ⌫ 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Articles 47(2) and 55 thereof, 
Having regard to the proposal from the Commission17, 
Having regard to the opinion of the European Economic and Social Committee18, 
After consulting the Committee of the Regions19, 
Acting in accordance with the procedure laid down in Article 251 of the Treaty20, 

Whereas: 

(cid:216) new 

A  number  of  substantial  changes  are  to  be  made  to  the  First  Council  Directive 
73/239/EEC  of  24  July  1973  on  the  coordination  of  laws,  regulations  and 
administrative provisions relating to the taking up and pursuit of the business of direct 
insurance other than life assurance21, Council Directive 78/473/EEC of 30 May 1978 
on  the  coordination  of  laws,  regulations  and  administrative  provisions  relating  to 
Community  co-insurance22,  Council  Directive  87/344/EEC  of  22  June  1987  on  the 
coordination  of  laws,  regulations  and  administrative  provisions  relating  to  legal 
expenses insurance23, the Second Council Directive 88/357/EEC of 22 June 1988 on 
the  coordination  of  laws,  regulations  and  administrative  provisions  relating  to  direct 

OJ C […]. 
OJ C […]. 
OJ C […]. 
OJ C […]. 
OJ  L 228,  16.8.1973,  p. 3.  Directive  as  last  amended  by  Directive  2005/68/EC  of  the  European 
Parliament and of the Council (OJ L 323, 9.12.2005, p. 1). 
OJ L 151, 7.6.1978, p. 25. 
OJ L 185, 4.7.1987, p. 77. 

(1) 

17 
18 
19 
20 
21 

22 
23 

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insurance  other  than  life  assurance  and  laying  down  provisions  to  facilitate  the 
to  provide  services  and  amending  Directive 
effective  exercise  of  freedom 
73/239/EEC24,  Council  Directive  92/49/EEC  of  18 June  1992  on  the  coordination  of 
laws, regulations and administrative provisions relating to direct insurance other than 
life  assurance  and  amending  Directives  73/239/EEC  and  88/357/EEC  (third  non-life 
insurance  Directive)25,  Directive  98/78/EC  of  the  European  Parliament  and  of  the 
Council  of  27 October  1998  on  the  supplementary  supervision  of  insurance 
undertakings  in  an  insurance  group26,  Directive  2001/17/EC  of  the  European 
Parliament and of the Council of 19 March 2001 on the reorganisation and winding-up 
of insurance undertakings27, Directive 2002/83/EC of the European Parliament and of 
the Council of 5 November 2002 concerning life assurance28, Directive 2005/68/EC of 
the European Parliament and of the Council of 16 November 2005 on reinsurance and 
amending Council Directives 73/239/EEC, 92/49/EEC as well as Directives 98/78/EC 
and  2002/83/EC29  and  Directive  2007/44/EC  of  the  European  Parliament  and  of  the 
Council of 5 September 2007 amending Council Directive 92/49/EEC and Directives 
2002/83/EC,  2004/39/EC,  2005/68/EC  and  2006/48/EC  as  regards  procedural  rules 
and  evaluating  criteria  for  the  prudential  assessment  of  acquisitions  and  increase  of 
holdings in the financial sector30. In the interests of clarity those Directives should be 
recast.  

In  order  to  facilitate  the  taking  up  and  pursuit  of  the  activities  of  insurance  and 
reinsurance, it is necessary to eliminate the most serious differences between the laws 
of  the  Member  States  as  regards  the  rules  to  which  insurance  and  reinsurance 
undertakings  are  subject.  A  legal  framework  should  therefore  be  provided  for 
insurance and reinsurance undertakings to conduct insurance business throughout the 
internal market thus making it easier for insurance and reinsurance undertakings with 
head offices in the Community to cover commitments and risks situated therein 

It is in the interests of the proper functioning of the internal market that coordinated 
rules be established relating to the supervision of insurance groups and, with a view to 
the protection of creditors, to the reorganisation and winding-up proceedings in respect 
of insurance undertakings. 

It  is  appropriate  that  certain  undertakings  which  provide  insurance  services  are  not 
covered by the system established by this Directive due to their size, their legal status, 
their  nature  -  as  being  closely  linked  to  public  insurance  systems-  or  the  specific 
services  they  offer.  It  is  further  desirable  to  exclude  certain  institutions  in  several 
Member States whose business covers a very limited sector only and is restricted by 
law to a specific territory or to specified persons. 

OJ  L  172,  4.7.1988,  p.  1.  Directive  as  last  amended  by  Directive  2005/14/EC  of  the  European 
Parliament and of the Council (OJ L 149, 11.6.2005, p. 14). 
OJ L 228, 11.8.1992, p. 1. Directive as last amended by Directive 2007/44/EC (OJ L 247, 21.9.2007, p. 
1). 
OJ L 330, 5.12.1998, p. 1. Directive as last amended by Directive 2005/68/EC (OJ L 323, 9.12.2005, p. 
1). 
OJ L 110, 20.4.2001, p. 28. 
OJ L 345, 19.12.2002, p. 1. Directive as last amended by Directive 2007/44/EC (OJ L 247, 21.9.2007, 
p. 1). 
OJ L 323, 9.12.2005, p. 1. Directive as amended by Directive 2007/44/EC (OJ L 247, 21.9.2007, p. 1). 
OJ L 247, 21.9.2007, p. 1. 

(2) 

(3) 

(4) 

24 

25 

26 

27 
28 

29 
30 

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(5) 

(6) 

(7) 

(8) 

(9) 

31 

32 

33 

34 

35 

36 

Council Directive 72/166/EEC of 24 April 1972 on the approximation of the laws of 
Member  States  relating  to  insurance  against  civil  liability  in  respect  of  the  use  of 
motor  vehicles,  and  to  the  enforcement  of  the  obligation  to  insure  against  such 
liability31,  the  Seventh  Council  Directive  83/349/EEC  of  13  June  1983  based  on  the 
Article  54(3)(g)  of  the  Treaty  on  consolidated  accounts32,  the  Second  Council 
Directive  84/5/EEC  of  30  December  1983  on  the  approximation  of  the  laws  of  the 
Member  States  relating  to  insurance  against  civil  liability  in  respect  of  the  use  of 
motor vehicles33, Directive 2004/39/EC of the European Parliament and of the Council 
of  21  April  2004  on  markets  in  financial  instruments  amending  Council  Directives 
85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and 
the  Council  and  repealing  Council  Directive  93/22/EEC34  and  Directive 
of 
2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to 
the taking up and pursuit of the business of credit institutions35 lay down general rules 
in the fields of accounting, motor insurance liability, financial instruments and credit 
institutions and provide for definitions in those areas. It is appropriate that certain of 
those definitions apply for the purposes of this Directive. 

The  taking  up  of  insurance  or  of  reinsurance  activities  should  be  subject  to  prior 
authorisation.  It  is  therefore  necessary  to  lay  down  the  conditions  and  the  procedure 
for the granting of that authorisation as well as for any refusal. 

Since  this  Directive  constitutes  an  essential  instrument  for  the  achievement  of  the 
internal  market  insurance  and  reinsurance  undertakings  authorised  in  their  home 
Member States should be allowed to carry on, throughout the Community, any or all 
of  their  activities  by  establishing  branches  or  by  providing  services.  It  is  therefore 
appropriate to bring about such harmonisation as is necessary and sufficient to achieve 
the  mutual  recognition  of  authorisations  and  supervisory  systems,  and  thus  a  single 
authorisation  which  is  valid  throughout  the  Community  and  which  allows  the 
supervision of an undertaking to be carried out by the home Member State.  

Directive 2000/26/EC of the European Parliament and of the Council of 16 May 2000 
on the approximation  of  the  laws  of the Member States relating to insurance against 
civil liability in respect of the use of motor vehicles and amending Council Directives 
73/239/EEC and 88/357/EEC (Fourth motor insurance Directive)36 lays down rules on 
the appointment of claims representatives. Those rules should apply for the purposes 
of this Directive. 

Reinsurance undertakings should limit their objects to the business of reinsurance and 
related  operations.  Such  a  requirement  should  not  prevent  a  reinsurance  undertaking 
from carrying on activities such as the provision of statistical or actuarial advice, risk 
analysis or research for its clients. It may also include a holding company function and 

OJ L 103, 2.5.1972, p. 1. Directive as last amended by Directive 2005/14/EC (OJ L 149, 11.6.2005, p. 
14). 
OJ L 193, 18.7.1983, p. 1. Directive as last amended by Directive 2006/99/EC (OJ L 363, 20.12.2006, 
p. 137). 
OJ L 8, 11.1.1984, p. 17. Directive as last amended by Directive 2005/14/EC (OJ L 149, 11.6.2005, p. 
14). 
OJ L 145, 30.4.2004, p. 1. Directive as last amended by Directive 2006/31/EC (OJ L 114, 27.4.2006, p. 
60). 
OJ  L  177,  30.6.2006,  p.  1.  Directive  amended  by  Commission  Directive  2007/18/EC  (OJ  L  87, 
28.3.2007, p. 9). 
OJ L 181, 20.7.2000, p. 65. Directive as last amended by Directive 2005/14/EC(OJ L 149, 11.6.2005, p. 
14). 

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activities with respect to financial sector activities within the meaning of Article 2 (8) 
of  Directive  2002/87/EC  of  the  European  Parliament  and  of  the  Council  of  16 
December  2002  on  the  supplementary  supervision  of  credit  institutions,  insurance 
undertakings and investment firms 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 Parliament and 
of  the  Council37.  In  any  case,  this  requirement  does  not  allow  the  carrying  on  of 
unrelated banking and financial activities. 

(10)  The  protection  of  policyholders  presupposes 

insurance  and  reinsurance 
undertakings  are  subject  to  effective  solvency  requirements.  In  light  of  market 
developments  the  current  system  is  no  longer  adequate.  It  is  therefore  necessary  to 
introduce a new regulatory framework. 

that 

(11) 

In  line  with  the  latest  developments  in  risk  management,  in  the  context  of  the 
International  Association  of  Insurance  Supervisors,  the  International  Accounting 
Standards  Board  and  the  International  Actuarial  Association  and  with  recent 
developments  in  other  financial  sectors  an  economic  risk-based  approach  should  be 
adopted  which  provides  incentives  for  insurance  and  reinsurance  undertakings  to 
properly  measure  and  manage  their  risks.  Harmonisation  should  be  increased  by 
providing specific rules for the valuation of assets and liabilities, including technical 
provisions. 

(12)  The new solvency regime should not be too burdensome for small and medium-sized 

insurance undertakings. 

(13)  The  main  objective  of  insurance  and  reinsurance  regulation  and  supervision  is 
adequate  policyholder  protection.  Financial  stability  and  fair  and  stable  markets  are 
other objectives of insurance and reinsurance regulation and supervision which should 
also be taken into account but should not undermine the main objective.  

(14)  The  supervisory  authorities  of  the  Member  States  should  therefore  have  at  their 
disposal all means necessary to ensure the orderly pursuit of business by insurance and 
reinsurance  undertakings  throughout  the  Community  whether  carried  on  under  the 
right  of  establishment  or  the  freedom  to  provide  services.  In  order  to  ensure  the 
effectiveness of the supervision all actions taken by the supervisory authorities should 
be proportionate to the nature and the complexity of the risks inherent to the business 
of  an  insurance  or  reinsurance  undertaking,  regardless  of  the  importance  of  the 
undertaking concerned for the over-all financial stability for the market.  

(15)  Supervisory  authorities  should  be  able  to  obtain  from  insurance  and  reinsurance 
undertakings the information which is necessary for the purposes of supervision. 

(16)  The  supervisory  authorities  of  the  home  Member  State  should  be  responsible  for 
monitoring the financial health of insurance and reinsurance undertakings. To this end 
they should carry out regular reviews and evaluations.  

(17)  The  starting  point  for  the  adequacy  of  the  quantitative  requirements  in  the  insurance 
sector  is  the  Solvency  Capital  Requirement.  Supervisory  authorities  should  therefore 
impose  a  capital  add-on  to  the  Solvency  Capital  Requirement  only  under  strictly 
defined  exceptional  circumstances  following  the  supervisory  review  process.  The 
Solvency Capital Requirement standard formula is intended to reflect the risk profile 

37 

OJ L 35, 11.2.2003, p. 1. Directive as amended by Directive 2005/1/EC (OJ L 79, 24.3.2005, p. 9). 

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20 

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of  most  insurance  and  reinsurance  undertakings.  However,  there  may  be  some  cases 
where  the  standardised  approach  does  not  adequately  reflect  the  very  specific  risk 
profile  of  an  undertaking.  When  such  a  deviation  of  an  undertaking's  risk  profile  is 
material  and  the  development  of  a  partial  or  full  internal  model  is  inefficient,  the 
capital add-on may have a permanent character. In case of material deficiencies in the 
full  or  partial  internal  model  or  material  governance  failures  the  supervisory 
authorities should ensure that the undertaking concerned makes all efforts to remedy 
the deficiencies that led to the imposition of the capital add-on. 

(18)  Some  risks  may  only  be  properly  addressed  through  governance  requirements  rather 
than  through  the  quantitative  requirements  reflected  in  the  Solvency  Capital 
Requirement.  An  effective  governance  system  is  therefore  essential  for  the  adequate 
management of the insurance undertaking and for the regulatory system. 

(19)  All insurance and reinsurance undertakings should have, as an integrated part of their 
business strategy, a regular practice of assessing their over-all solvency needs with a 
view to their specific risk profile. The results of each assessment should be reported to 
the  supervisory  authority  as  part  of  the  information  to  be  provided  for  supervisory 
purposes. 

(20) 

In order to ensure effective supervision of outsourced activities, it is essential that the 
supervisory  authorities  of  the  outsourcing  insurance  or  reinsurance  undertaking  have 
access  to  all  relevant  data  held  by  the  outsourcing  service  provider  regardless  of 
whether the latter is a regulated or unregulated entity as well as the right to conduct 
on-site inspections. In order to take account of market developments and to ensure that 
the  conditions  for  outsourcing  continue  to  be  complied  with,  the  supervisory 
authorities should be informed prior to the outsourcing of important activities. These 
requirements take into account the work of the Joint Forum and are consistent with the 
current  rules  and  practices  in  the  banking  sector  and  the  Markets  in  Financial 
Instruments Directive and its application to credit institutions.  

(21) 

In  order  to  guarantee  transparency  insurance  and  reinsurance  undertakings  should 
disclose  at  least  annually  essential  information  on  their  solvency  and  financial 
condition.  Undertakings  should  be  allowed  to  disclose  additional  information  on  a 
voluntary basis. 

(22)  Provision  should  be  made  for  exchanges  of  information  between  the  supervisory 
authorities  and  authorities  or  bodies  which,  by  virtue  of  their  function,  help  to 
strengthen the stability of the financial system. It is therefore necessary to specify the 
conditions under which those exchanges of information should be possible. Moreover, 
where  information  may  be  disclosed  only  with  the  express  agreement  of  the 
supervisory  authorities,  those  authorities  should  be  enabled,  where  appropriate,  to 
make their agreement subject to compliance with strict conditions. 

(23) 

It is necessary to promote supervisory convergence not only in respect of supervisory 
tools  but  also  in  respect  of  supervisory  practices.  The  Committee  of  European 
Insurance  and  Occupational  Pensions  Supervisors  established  by  Commission 
Decision 2004/6/EC38 should play an important role in this respect and report regularly 
on the progress made. 

38 

OJ L 3, 7.1.2004, p. 30. 

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21 

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(24) 

In order to limit the administrative burden and avoid duplication of tasks, supervisory 
authorities  and  national  statistical  authorities  should  cooperate  and  exchange 
information.  

(25)  For  the  purposes  of  strengthening  the  supervision  of  insurance  and  reinsurance 
undertakings  and  the  protection  of  policyholders,  the  statutory  auditors  within  the 
meaning of Directive 2006/43/EC of the European Parliament and of the Council of 17 
May 2006 on statutory audits of annual accounts and consolidated accounts, amending 
Council  Directives  78/660/EEC  and  83/349/EEC  and  repealing  Council  Directive 
84/253/EEC39  should  have  a  duty  to  report  promptly,  any  facts  which  are  likely  to 
have a serious effect on the financial situation or the administrative organisation of an 
insurance or a reinsurance undertaking.  

(26) 

Insurance undertakings pursuing both life and non-life activities should manage those 
activities separately, in order to protect the interests of life policyholders. In particular, 
those  undertakings  should  be  subject  to  the  same  capital  requirements  as  those 
applicable to an equivalent insurance group, made up of a life insurance undertaking 
and a non-life undertaking, taking into account the increased transferability of capital 
in the case of composite insurance undertakings. 

(27)  The  assessment  of  the  financial  position  of  insurance  and  reinsurance  undertakings 
should  rely  on  sound  economic  principles  and  make  optimal  use  of  the  information 
provided  by  financial  markets,  as  well  as  generally  available  data  on  insurance 
technical risks. 

(28)  Valuation standards for supervisory purposes should be compatible with international 
accounting  developments,  to  the  extent  possible,  so  as  to  limit  the  administrative 
burden on insurance or reinsurance undertakings.  

(29) 

In  accordance  with  that  approach,  capital  requirements  should  be  covered  by  own 
funds, whether on or off the balance-sheet items. Since all financial resources do not 
provide  full  absorption  of  losses  in  the  case  of  winding-up  and  on  a  going-concern 
basis, own fund items should be classified in accordance with quality criteria, and the 
eligible  amount  of  own  funds  to  cover  capital  requirements  should  be  limited 
accordingly. The limits applicable to own fund items should only apply to determine 
the  solvency  standing  of  insurance  and  reinsurance  undertakings,  and  should  not 
further restrict the freedom of those undertakings with respect to their internal capital 
management.  

(30) 

In order to allow insurance  and reinsurance undertakings to meet their commitments 
towards  policyholders  and  beneficiaries,  Member  States  should  require  those 
undertakings  to  establish  adequate  technical  provisions.  The  calculation  of  those 
technical  provisions  should  be  harmonised  throughout  the  Community  in  order  to 
achieve better comparability and transparency.  

(31)  The  calculation  of  technical  provisions  should  be  consistent  with  the  valuation  of 
assets  and  other  liabilities,  market  consistent  and  in  line  with  international 
developments in accounting and supervision.  

(32)  The amount of technical provisions should reflect the characteristics of the underlying 
insurance portfolio. Undertaking-specific information should therefore only be used in 

39 

OJ L 157, 9.6.2006, p. 87. 

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22 

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their  calculation  insofar  as  that  information  enables  insurance  and  reinsurance 
undertakings to better reflect the characteristics of the underlying insurance portfolio. 

(33) 

It is necessary that the expected present value of insurance liabilities is calculated on 
the basis of current and credible information and realistic assumptions, taking account 
of financial guarantees and options in insurance or reinsurance contracts, to deliver an 
economic valuation of insurance or reinsurance obligations. The use of effective and 
harmonised actuarial techniques should be required. 

(34) 

In  order  to  reflect  the  specific  situation  of  small  and  medium  sized  undertakings, 
simplified  approaches  to  the  calculation  of  technical  provisions  should  be  provided 
for. 

(35)  The  supervisory  regime  should  provide  for  a  risk-sensitive  requirement,  which  is 
based  on  a  prospective  calculation  to  ensure  accurate  and  timely  intervention  by 
supervisory authorities (the Solvency Capital Requirement), and a minimum level of 
security below which the amount of financial resources should not fall (the Minimum 
Capital Requirement). Both capital requirements should be harmonised throughout the 
Community in order to achieve a uniform level of protection for policyholders.  

(36)  The  Solvency  Capital  Requirement  should  reflect  a  level  of  eligible  own  funds  that 
enables  insurance  and  reinsurance  undertakings  to  absorb  significant  losses  and  that 
gives  reasonable  assurance  to  policyholders  and  beneficiaries  that  payments  will  be 
made as they fall due. 

(37) 

In order to promote good risk management, and align regulatory capital requirements 
with industry practices, the Solvency Capital Requirement should be determined as the 
economic  capital  to  be  held  by  insurance  and  reinsurance  undertakings  in  order  to 
ensure  that  ruin  occurs  no  more  often  than  once  every  200  years.  That  economic 
capital should be calculated on the basis of the true risk profile of those undertakings, 
taking  account  of  the  impact  of  possible  risk  mitigation  techniques,  as  well  as 
diversification effects. 

(38)  Provision  should  be  made  to  lay  down  a  standard  formula  for  the  calculation  of  the 
Solvency Capital Requirement, to enable all insurance and reinsurance undertakings to 
assess  their  economic  capital.  For  the  structure  of  the  standard  formula,  a  modular 
approach  should  be  adopted,  which  means  that  the  individual  exposure  to  each  risk 
category should be assessed in a first step and then aggregated in a second step. Where 
the use of undertaking-specific parameters allows for the true underwriting risk profile 
of  the  undertaking  to  be  better  reflected,  this  should  be  allowed,  provided  such 
parameters are derived using a standardised methodology.  

(39) 

(40) 

In  order  to  reflect  the  specific  situation  of  small  and  medium  sized  undertakings, 
simplified  approaches  to  the  calculation  of  the  Solvency  Capital  Requirement  in 
accordance with the standard formula should be provided for. 

In accordance with the risk-oriented approach to the Solvency Capital Requirement it 
should be possible, in specific circumstances, to use partial or full internal models for 
the calculation of that requirement instead of the standard formula. In order to provide 
policyholders  and  beneficiaries  with  an  equivalent  level  of  protection,  such  internal 
models  should  be  subject  to  prior  supervisory  approval  on  the  basis  of  harmonised 
processes and standards. 

(41)  As a matter of principle, the new risk-based approach does not comprise the concept 
of  quantitative  investment  limits  and  asset  eligibility  criteria.  It  should  however  be 

EN 

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possible  to  introduce  investment  limits  and  asset  eligibility  criteria  to  address  risks 
which are not adequately covered by a sub-module of the standard formula. 

(42)  When  the  amount  of  eligible  basic  own  funds  falls  below  the  Minimum  Capital 
Requirement,  the  authorisation  of  insurance  and  reinsurance  undertakings  should  be 
withdrawn, if those undertakings are unable to re-establish the amount of eligible basic 
own funds at the level of the Minimum Capital Requirement within a short period of 
time. 

(43) 

(44) 

It is necessary that the Minimum Capital Requirement is calculated in accordance with 
a simple formula, on the basis of data which can be audited. 

Insurance  and  reinsurance  undertakings  should  have  assets  of  sufficient  quality  to 
cover  their  overall  financial  requirements.  All  investments  held  by  insurance  and 
reinsurance undertakings should be managed in accordance with the "prudent person" 
principle. 

(45)  Member  States  should  not  require  insurance  and  reinsurance  undertakings  to  invest 
their  assets  in  particular  categories  of  assets,  as  such  a  requirement  could  be 
incompatible with the liberalisation of capital movements provided for in Article 56 of 
the Treaty. 

(46) 

It is necessary to prohibit any provisions enabling Member States to require pledging 
of assets covering the technical provisions of an insurance or reinsurance undertaking, 
whatever  form  this  requirement  might  take,  when  the  insurer  is  reinsured  by  an 
insurance  or  reinsurance  undertaking  authorised  pursuant  to  this  Directive,  or  by  a 
third-country undertaking where the supervisory regime of that third country has been 
deemed equivalent. 

(47)  The  legal  framework  has  so  far  provided  neither  detailed  criteria  for  a  prudential 
assessment  of  a  proposed  acquisition  nor  a  procedure  for  their  application.  A 
clarification of the criteria and the process of prudential assessment is therefore needed 
to  provide  the  necessary  legal  certainty,  clarity  and  predictability  with  regard  to  the 
assessment process, as well as to the result thereof. These criteria and procedures have 
been introduced by Directive 2007/44/EC. As regards insurance and reinsurance these 
provisions should therefore be codified and integrated into this Directive. 

(48)  Maximum  harmonisation  throughout  the  Community  of  these  procedures  and 
prudential  assessments  is  therefore  critical.  However,  the  provisions  on  qualifying 
holdings  should  not  prevent  the  Member  States  from  requiring  that  the  supervisory 
authorities  are  to  be  informed  of  acquisitions  of  holdings  below  the  thresholds  laid 
down  in  those  provisions,  so  long  as  a  Member  State  imposes  no  more  than  one 
additional  threshold  below  10 %  for  this  purpose.  Nor  should  it  prevent  the 
supervisory  authorities  from  providing  general  guidance  as  to  when  such  holdings 
would be deemed to result in significant influence. 

(49) 

In  view  of  the  increasing  mobility  of  European  citizens,  motor  liability  insurance  is 
increasingly  being  offered  on  a  cross-border  basis.  To  ensure  the  continued  proper 
functioning of the green card system and the agreements between the national bureaux 
of  motor  insurers,  it  is  appropriate  that  Member  States  are  able  to  require  insurance 
undertakings providing motor liability insurance in their territory by way of provision 
of services to join and participate in the financing of the national bureau as well as of 
the  guarantee  fund  set  up  in  that  Member  State.  The  Member  State  of  provision  of 
services  should  require  undertakings  which  provide  motor  liability  insurance  to 

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appoint a representative in its territory to collect all necessary information in relation 
to claims and to represent the undertaking concerned. 

(50)  Within  the  framework of an  internal  market  it  is  in  the interest of policyholders that 
they should have access to the widest possible range of insurance products available in 
the Community. The Member State of the commitment or the Member State in which 
the  risk  is  situated  should  therefore  ensure  that  there  is  nothing  to  prevent  the 
marketing  within  its  territory  of  all  the  insurance  products  offered  for  sale  in  the 
Community  as  long  as  they  do  not  conflict  with  the  legal  provisions  protecting  the 
general  good  in  force  in  that  Member  State  and  in  so  far  as  the  general  good  is  not 
safeguarded by the rules of the home Member State. 

(51)  Provision  should  be  made  for  a  system  of  sanctions  to  be  imposed  when,  in  the 
Member  State  of  the  commitment  or  in  which  the  risk  is  situated,  an  insurance 
undertaking  does  not  comply  with  any  applicable  provisions  protecting  the  general 
good. 

(52) 

In an internal market for insurance, consumers have a wider and more varied choice of 
contracts.  If  they  are  to  benefit  fully  from  this  diversity  and  from  increased 
competition,  they  should  be  provided  with  whatever  information  is  necessary  before 
the conclusion of the contract and throughout the term of the contract to enable them 
to choose the contract best suited to their needs.  

(53)  An  insurance  undertaking  offering  assistance  contracts  should  possess  the  means 
necessary to provide the benefits in kind which it offers within an appropriate period 
of time. Special provisions should be laid down for calculating the Solvency Capital 
Requirement and the absolute floor of the Minimum Capital Requirements which such 
undertaking should possess. 

(54)  The effective pursuit of Community co-insurance business for activities which are by 
reason of their nature or their size likely to be covered by international co-insurance 
should be facilitated by a minimum of harmonisation in order to prevent distortion of 
competition  and  differences  in  treatment.  In  this  context,  the  leading  insurance 
undertaking  should  assess  claims  and  fix  the  amount  of  technical  provisions. 
Moreover, special co-operation should be provided for in the Community co-insurance 
field both between the supervisory authorities of the Member States and between those 
authorities and the Commission. 

(55) 

In  the  interest  of  the  protection  of  insured  persons,  national  law  concerning  legal 
expenses  insurance  should  be  harmonised.  Any  conflicts  of  interest  arising,  in 
particular from the fact that the insurance undertaking is covering another person or is 
covering a person in respect of both legal expenses and  any  other  class of insurance 
should be precluded as far as possible or be able to be resolved. To this end, a suitable 
level  of  protection  of  policyholders  can  be  achieved  by  different  means.  Whichever 
solution  is  adopted,  the  interest  of  persons  having  legal  expenses  cover  should  be 
protected by equivalent safeguards.  

(56)  Conflicts between insurance undertakings covering legal expenses and insured persons 
should  be  settled  in  the  fairest  and  speediest  manner  possible.  It  is  therefore 
appropriate  that  Member  States  provide  for  an  arbitration  procedure  or  a  procedure 
offering comparable guarantees. 

(57) 

In  some  Member  States,  private  or  voluntary  health  insurance  serves  as  a  partial  or 
complete alternative to health cover provided for by the social security systems. The 
particular  nature  of  such  health  insurance,  distinguishes  it  from  other  classes  of 

EN 

25 

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indemnity  insurance  and  life  insurance  insofar  as  it  is  necessary  to  ensure  that 
policyholders have effective access to private health cover or health cover taken out on 
a voluntary basis regardless of their age or risk profile. Given that nature and the social 
consequences of health insurance contracts, the supervisory authorities of the Member 
State in which a risk is situated should be able to require systematic notification of the 
general  and  special  policy  conditions  in  the  case  of  private  or  voluntary  health 
insurance in order to verify that such contracts are a partial or complete alternative to 
the health cover provided by the social security system. Such verification should not 
be a prior condition for the marketing of the products. 

(58)  To this end some Member States have adopted specific legal provisions. To protect the 
general good, it should be possible to adopt or maintain such legal provisions in so far 
as  they  do  not  unduly  restrict  the  right  of  establishment  or  the  freedom  to  provide 
services, it being understood that such provisions should apply in an identical manner. 
Those  legal  provisions  may  differ  in  nature  according  to  the  conditions  in  each 
Member State. The objective of protecting the general good may also be achieved by 
requiring  undertakings  offering  private  health  cover  or  health  cover  taken  out  on  a 
voluntary basis to offer standard policies in line with the cover provided by statutory 
social security schemes at a premium rate at or below a prescribed maximum and to 
participate in loss compensation schemes. As a further possibility, it may be required 
that the technical basis of private health cover or health cover taken out on a voluntary 
basis be similar to that of life insurance. 

(59)  Host Member States should be able to require any insurance undertaking which offers, 
within their territories, compulsory insurance against accidents at work at its own risk 
to  comply  with  the  specific  provisions  laid  down  in  their  national  law  on  such 
insurance. However, such a requirement should not apply to the provisions concerning 
financial  supervision,  which  should  remain  the  exclusive  responsibility  of  the  home 
Member State. 

(60)  Whereas those Member States not subject to the application of Regulation [ROME I] 
should apply the provisions of that Regulation in order to determine the law applicable 
to contracts of insurance falling within the scope of Article 7 of the Regulation. 

(61)  Appropriate rules should be provided for special purpose vehicles which assume risks 
from  insurance  and  reinsurance  undertakings  without  being  an  insurance  or 
reinsurance undertaking. Recoverable amounts from a special purpose vehicle should 
be considered as amounts deductible under reinsurance or retrocession contracts. 

(62)  Due to the special nature of finite reinsurance activities, Member States should ensure 
that insurance and reinsurance undertakings concluding finite reinsurance contracts or 
pursuing  finite  reinsurance  activities  can  properly  identify  measure  and  control  the 
risks arising from those contracts or activities. 

(63) 

In order to take account of the international aspects of reinsurance, provision should be 
made to enable the conclusion of international agreements with a third country aimed 
at defining the means of supervision over reinsurance entities which conduct business 
in  the  territory  of  each  contracting  party.  Moreover,  a  flexible  procedure  should  be 
provided for to make it possible to assess prudential equivalence with third countries 
on a Community basis, so as to improve liberalisation of reinsurance services in third 
countries, be it through establishment or cross-border provision of services. 

EN 

26 

   EN 

 
(64)  Measures  concerning  the  supervision  of  insurance  and  reinsurance  undertakings  in  a 
group  should  enable  the  authorities  supervising  an  insurance  or  reinsurance 
undertaking to form a more soundly based judgment of its financial situation. 

(65)  Such  group  supervision  should  take  into  account  insurance  holding  companies  and 
mixed-activity  insurance  holding  companies  to  the  extent  necessary.  However,  this 
Directive  should  not  in  any  way  imply  that  Member  States  are  required  to  apply 
supervision to those undertakings considered individually. 

(66)  Whilst  the  supervision  of  individual  insurance  and  reinsurance  undertakings  remains 
the  essential  principle  of  insurance  supervision  it  is  necessary  to  determine  which 
undertakings fall under the scope of supervision at group level. 

(67)  Group  supervision should apply in any case at the level of the ultimate participating 
undertaking  which  has  its  head  office  in  the  Community.  Member  States  should 
however be able to allow their supervisory authorities to apply group supervision at a 
limited number of lower levels, where they deem it necessary. 

(68) 

(69) 

(70) 

It  is  necessary  to  calculate  solvency  at  group  level  for  insurance  and  reinsurance 
undertakings forming part of a group.  

Insurance and reinsurance undertakings belonging to a group should be able to apply 
for the approval  of an internal model  to be used for the solvency calculation  at both 
group and individual levels. 

It is necessary to ensure that own funds are appropriately distributed within the group 
and  available  to  protect  policyholders  and  beneficiaries  where  needed.  To  this  end 
insurance  and  reinsurance  undertakings  within  a  group  should  have  sufficient  own 
funds to cover their solvency capital requirement, unless the objective of protection of 
policyholders  and  beneficiaries  can  effectively  be  achieved  otherwise.  Insurance  and 
reinsurance undertakings within a group should therefore be authorised to cover their 
Solvency  Capital  Requirement  with  group  support  declared  by  their  parent 
undertaking, under defined circumstances. In order to assess the need for and prepare 
any  possible  future  revision  of  the  group  support  regime,  the  Commission  should 
report  on  the  rules  of  the  Member  States  and  the  practices  of  the  supervisory 
authorities in this field. 

(71)  The  solvency  of  a  subsidiary  insurance  or  reinsurance  undertaking  of  an  insurance 
holding company, third-country insurance or reinsurance undertaking may be affected 
by the financial resources of the group of which it is a part and by the distribution of 
financial resources within that group. The supervisory authorities should therefore be 
provided  with  the  means  of  exercising  group  supervision  and  of  taking  appropriate 
measures at the level of the insurance or reinsurance undertaking where its solvency is 
or may be jeopardised. 

(72)  Risk  concentrations  and  intra-group  transactions  can  affect  the  financial  position  of 
insurance or reinsurance undertakings. The supervisory authorities should therefore be 
able to exercise general supervision over certain types of such risk concentrations and 
intra-group operations and take appropriate measures at the level of the insurance or 
reinsurance undertaking where its solvency is or may be jeopardised. 

(73) 

Insurance  and  reinsurance  undertakings  within  a  group  should  have  appropriate 
governance systems which should be subject to supervisory review. 

(74)  All insurance or reinsurance groups subject to group supervision should have a group 
supervisor appointed from among the supervisory authorities involved. The rights and 

EN 

27 

   EN 

 
duties of the group supervisor should comprise appropriate coordination and decision-
making  powers.  The  authorities  involved  in  the  supervision  of  insurance  and 
reinsurance  undertakings  belonging  to  the  same  group  should  establish  coordination 
arrangements. 

(75)  The  supervisory  authorities  should  have  access  to  all  the  information  relevant  to  the 
exercise of group supervision. Cooperation between the authorities responsible for the 
supervision  of  insurance  and  reinsurance  undertakings  as  well  as  between  those 
authorities and the authorities responsible for the supervision of undertakings active in 
other financial sectors should be established.  

(76) 

Insurance and reinsurance undertakings which are part of a group, the head of which is 
outside  the  Community  should  be  subject  to  equivalent  and  appropriate  group 
supervisory arrangements. It is therefore necessary to provide for transparency of rules 
and  exchange  of 
in  all  relevant 
circumstances. 

third-country  authorities 

information  with 

(77)  Since  national  legislation  concerning  reorganisation  measures  and  winding-up 
proceedings  is  not  harmonised  it  is  appropriate,  in  the  framework  of  the  Internal 
Market, to ensure the mutual recognition of reorganisation measures and winding-up 
legislation  of  the  Member  States  concerning  insurance  undertakings  as  well  as  the 
the  need  for  unity,  universality, 
necessary  cooperation 
coordination  and  publicity  for  such  measures  and  the  equivalent  treatment  and 
protection of insurance creditors. 

into  account 

taking 

(78) 

It  should  be  ensured  that  reorganisation  measures  which  were  adopted  by  the 
competent  authority  of  a  Member  State  in  order  to  preserve  or  restore  the  financial 
soundness of an insurance undertaking and to prevent as much as possible a winding-
up situation, produce full effects throughout the Community. However, the effects of 
any  such  reorganisation  measures  as  well  as  winding-up  proceedings  vis-à-vis  third 
countries should not be affected 

(79)  A  distinction  should  be  made  between  the  competent  authorities  for  the  purposes  of 
reorganisation  measures  and  winding-up  proceedings  and  the  supervisory  authorities 
of the insurance undertakings. 

(80)  The  definition  of  “branch”  for  insolvency  purposes,  should,  in  accordance  with 
existing  insolvency  principles,  take  account  of  the  single  legal  personality  of  the 
insurance  undertaking.  However,  the  legislation  of  the  home  Member  State  should 
determine the manner in which the assets and liabilities held by independent persons 
who have a permanent authority to act as agent for an insurance undertaking are to be 
treated in the winding-up of that insurance undertaking. 

(81)  Conditions should be laid down under which winding-up proceedings which, without 
being  founded  on  insolvency,  involve  a  priority  order  for  the  payment  of  insurance 
claims,  fall  within  the  scope  of  this  Directive.  Claims  by  the  employees  of  an 
insurance  undertaking  arising 
from  employment  contracts  and  employment 
relationships  should  be  capable  of  being  subrogated  to  a  national  wage  guarantee 
scheme. Such subrogated claims should benefit from the treatment determined by the 
home Member State's law (lex concursus). 

(82)  Reorganisation  measures  do  not  preclude  the  opening  of  winding-up  proceedings. 
Winding-up  proceedings  should  therefore  be  able  to  be  opened  in  the  absence  of,  or 
following,  the  adoption  of  reorganisation  measures  and  they  may  terminate  with 
composition or other analogous measures, including reorganisation measures. 

EN 

28 

   EN 

 
(83)  Only  the  competent  authorities  of  the  home  Member  State  should  be  empowered  to 
take  decisions  on  winding-up  proceedings  concerning  insurance  undertakings.  The 
decisions  should  produce  their  effects  throughout  the  Community  and  should  be 
recognised  by  all  Member  States.  The  decisions  should  be  published  in  accordance 
with  the  procedures  of  the  home  Member  State  and  in  the  Official  Journal  of  the 
European Union. Information should also be made available to known creditors who 
are resident in the Community who should have the right to lodge claims and submit 
observations. 

(84)  All  the  assets  and  liabilities  of  the  insurance  undertaking  should  be  taken  into 

consideration in the winding-up proceedings. 

(85)  All  the  conditions  for  the  opening,  conduct  and  closure  of  winding-up  proceedings 

should be governed by the law of the home Member State. 

(86) 

(87) 

In  order  to  ensure  coordinated  action  amongst  the  Member  States  the  supervisory 
authorities of the home Member State and those of all the other Member States should 
be informed as a matter of urgency of the opening of winding-up proceedings. 

It  is  of  utmost  importance  that  insured  persons,  policyholders,  beneficiaries  and  any 
injured  party  having  a  direct  right  of  action  against  the  insurance  undertaking  on  a 
claim  arising  from  insurance  operations  be  protected  in  winding-up  proceedings,  it 
being  understood  that  such  protection  does  not  include  claims  which  arise  not  from 
obligations  under  insurance  contracts  or  insurance  operations  but  from  civil  liability 
caused  by  an  agent  in  negotiations  for  which,  according  to  the  law  applicable  to  the 
insurance  contract  or  operation,  the  agent  himself  is  not  responsible  under  such 
insurance  contract  or  operation.  In  order  to  achieve  that  objective,  Member  States 
should  be  provided  with  a  choice  between  equivalent  methods  to  ensure  special 
treatment for insurance creditors, neither of those methods impeding a Member State 
from  establishing  a  ranking  between  different  categories  of  insurance  claims. 
Furthermore,  an  appropriate  balance  should  be  ensured  between  the  protection  of 
insurance creditors and other privileged creditors protected under the legislation of the 
Member State concerned. 

(88)  The  opening  of  winding-up  proceedings  should  involve  the  withdrawal  of  the 
authorisation to conduct business granted to the insurance undertaking unless this has 
already occurred. 

(89)  Creditors  should  have  the  right  to  lodge  claims  or  to  submit  written  observations  in 
winding-up proceedings. Claims by creditors resident in a Member State other than the 
home  Member  State  should  be  treated  in  the  same  way  as  equivalent  claims  in  the 
home  Member  State  without  any  discrimination  on  the  grounds  of  nationality  or 
residence. 

(90) 

In order to protect legitimate expectations and the certainty of certain transactions in 
Member States other than the home Member State, it is necessary to determine the law 
applicable  to  the  effects  of  reorganisation  measures  and  winding-up  proceedings  on 
pending lawsuits and on individual enforcement actions arising from lawsuits. 

(91)  The measures necessary for the implementation of this Directive should be adopted in 
accordance  with  Council  Decision  1999/468/EC  of  28  June  1999  laying  down  the 

EN 

29 

   EN 

 
procedures for the exercise of implementing powers conferred on the Commission40. 
In  particular  power  should  be  conferred  on  the  Commission  to  adopt  measures 
concerning  the  adaptation  of  Annexes  and  measures  specifying  in  particular  the 
supervisory  powers  and  actions  to  be  taken  and  laying  down  more  detailed 
requirements  in  areas  such  as  the  governance  system,  public  disclosure,  assessment 
criteria in relation to qualiying holdings, calculation of technical provisions and capital 
requirements,  investment  rules  and  group  supervision.  Since  those  measures  are  of 
general scope and are designed to amend non-essential elements of this Directive, and 
to supplement it by the addition of new non-essential elements they must be adopted in 
accordance with the regulatory procedure with scrutiny provided for in Article 5a of 
Decision 1999/468/EC. 

(92)  Since  the  objectives  of  the  action  to  be  taken  cannot  be  sufficiently  achieved  by  the 
Member  States  and  can  therefore,  by  reason  of  their  scale  and  effects,  be  better 
achieved  at  Community  level,  the  Community  may  adopt  measures,  in  accordance 
with the principle of  subsidiarity  as set out in Article 5 of the Treaty. In accordance 
with the principle of proportionality, as set out in that Article, this Directive does not 
go beyond what is necessary in order to achieve those objectives. 

(93)  The provisions of Council Directive 64/225/EEC of 25 February 1964 on the abolition 
of restrictions on freedom of establishment and freedom to provide services in respect 
of  reinsurance  and  retrocession41,  Council  Directive  73/240/EEC  of  24  July  1973 
abolishing restrictions on freedom of establishment in the business of direct insurance 
other than life insurance42, Council Directive 76/580/EEC of 29 June 1976 amending 
Directive  73/239/EEC  on  the  coordination  of  laws,  regulations  and  administrative 
provisions  relating  to  the  taking  up  and  pursuit  of  the  business  of  direct  insurance 
other  than  life  assurance43  and  Council  Directive  84/641/EEC  of  10  December  1984 
amending, particularly as regards tourist assistance, the First Directive (73/239/EEC) 
on the coordination of laws, regulations and administrative provisions relating to the 
taking-up and pursuit of the business of direct insurance other than life44 have become 
obsolete and should therefore be repealed. 

(94)  The obligation to transpose this Directive into national law should be confined to those 
provisions  which  represent  a  substantive  change  as  compared  with  the  earlier 
Directives.  The  obligation  to  transpose  the  provisions  which  are  unchanged  arises 
under the earlier Directives. 

(95)  This  Directive  should  be  without  prejudice  to  the  obligations  of  the  Member  States 
relating to the time-limits for transposition into national law of the Directives set out in 
Annex VI, Part B, 

40 

41 
42 
43 
44 

OJ L 184, 17.7.1999, p. 23. Decision as amended by Decision 2006/512/EC (OJ L 200, 22.7.2006, p. 
11). 
OJ 56, 4.4.1964, p. 878. Directive as amended by the Act of Accession 1972. 
OJ L 228, 16.8.1973, p. 20. 
OJ L 189, 13.7.1976, p. 13. 
OJ L 339, 27.12.1984, p. 21. 

EN 

30 

   EN 

 
                                                 
HAVE ADOPTED THIS DIRECTIVE: 

TITLE I  

(cid:208) 2002/83/EC (adapted) 

⌦ GENERAL RULES ON THE TAKING-UP AND PURSUIT OF 
DIRECT INSURANCE AND REINSURANCE ⌫ 

CHAPTER I  

⌦ SUBJECT MATTER, SCOPE AND ⌫ DEFINITIONS AND 
SCOPE 

SECTION 1 - SUBJECT MATTER AND SCOPE 

(cid:208) 2002/83/EC Art. 2 (adapted) 

Article 1 

⌦ Subject matter ⌫ 

This Directive concerns ⌦ lays down rules concerning the following: ⌫ 

(1). 

the  taking-up  and  pursuit  ⌦,  within  the  Community, ⌫  of  the  self-employed 
activity  ⌦ activities ⌫  of  direct  insurance  carried  on  by  undertakings  which  are 
established in a Member State or wish to become established there in the form of the 
activities defined below: ⌦ and reinsurance; ⌫ 

⌦ (2) 

the supplementary supervision in the case of insurance and reinsurance groups; ⌫ 

⌦ (3) 

the reorganisation and winding-up of direct insurance undertakings. ⌫ 

(cid:208) 84/641/EEC Art. 1 and 
2002/83/EC Art. 2 (adapted) 

Article 2  

⌦ Scope ⌫ 

1. 

This  Directive  concerns  the  taking-up  and  pursuit  of  the  self-employed  activity  of 
⌦ shall  apply  to ⌫  direct  ⌦ life  and  non-life ⌫  insurance,  including  the 
provision of assistance referred to in paragraph 2, carried on by undertakings which 
are  established  in  the  territory  of  a  Member  State  or  which  wish  to  become 
established there. 

EN 

31 

   EN 

 
 
 
 
 
 
(cid:208) 2005/68/EC Art. 1 (adapted) 

1. This Directive lays down rules for the taking up and pursuit of the self-employed 
activity  of  ⌦ It  shall  also  apply  to ⌫  reinsurance  carried  on  by  reinsurance 
undertakings, which conduct only reinsurance activities, and which are established in 
⌦ the territory of ⌫ a Member State or ⌦ which ⌫ wish to become established 
therein ⌦ with the exception of Title IV ⌫ . 

2. 

(cid:208) 84/641/EEC Art. 1 (adapted) 

⌦ For the purposes of the first subparagraph of paragraph 1 non-life insurance shall 
include ⌫ Tthe assistance activity shall be the ⌦ which is ⌫ assistance provided 
for persons who get into difficulties while travelling, while away from home or while 
away from their permanent⌦ habitual ⌫ residence. It shall consist in undertaking, 
against  the  prior  payment  of  a  premium,  to  make  aid  immediately  available  to  the 
beneficiary under an assistance contract where that person is in difficulties following 
the occurrence of a chance event, in the cases and under the conditions set out in the 
contract. 

The aid may consist in the provision of benefits in cash or in kind. The provision of 
benefits  in  kind  may  also  be  effected  by  means  of  the  staff  and  equipment  of  the 
person providing them. 

The  assistance  activity  does  ⌦ shall ⌫  not  cover  servicing,  maintenance,  after-
sales service or the mere indication or provision of aid as an intermediary. 

3. 

The classification by classes of the activity referred to in this Article appears in the 
Annex. 

(cid:208) 2002/83/EC (adapted) 
(cid:214) new 

⌦ 3.  As far as life insurance is concerned this Directive shall apply to the following: ⌫ 

(a) 

1. the following kinds of assurance ⌦ life insurance activities ⌫ where they 
are on a contractual basis: 

(ai) 

life  assurance  ⌦ insurance ⌫  ,  that  is  to  say,  the  class  of  assurance 
which comprises, in particular, assurance on survival to a stipulated age 
only, assurance on death only, assurance on survival to a stipulated age 
or  on  earlier  death,  life  assurance  with  return  of  premiums,  marriage 
assurance, birth assurance; 

(bii)  annuities; 

(ciii)  supplementary 

in 

insurance  ⌦ underwritten 

life 
insurance ⌫ carried on by life assurance undertakings, that is to say, in 
particular,  insurance  against  personal  injury  including  incapacity  for 
employment,  insurance  against  death  resulting  from  an  accident  and 
insurance against disability resulting from an accident or sickness, where 
these  various  kinds  of  insurance  are  underwritten  in  addition  to  life 
assurance; 

addition 

to 

EN 

32 

   EN 

 
 
 
 
(div)  the  type  of  ⌦ permanent  health ⌫  insurance  ⌦ not  subject  to 
cancellation  currently ⌫  existing  in  Ireland  and  the  United  Kingdom 
known as permanent health insurance not subject to cancellation; 

(b)  2. the following operations, where they are on a contractual basis, in so far as 
they are subject to supervision by the administrative authorities responsible for 
the supervision of private insurance: 

(ai) 

tontines ⌦ operations ⌫ whereby associations of subscribers are set up 
with  a  view  to  jointly  capitalising  their  contributions  and  subsequently 
distributing  the  assets  thus  accumulated  among  the  survivors  or  among 
the beneficiaries of the deceased ⌦ (tontines) ⌫ ; 

(bii)  capital redemption operations based on actuarial calculation whereby, in 
return  for  single  or  periodic  payments  agreed  in  advance,  commitments 
of specified duration and amount are undertaken; 

(ciii)  management  of  group  pension  funds,  i.e.  operations  consisting,  for  the 
the 
undertaking 
⌦ management  of ⌫ 
the  assets 
investments,  and 
representing  the  reserves  of  bodies  that  effect  payments  on  death  or 
survival or in the event of discontinuance or curtailment of activity; 

in  managing  (cid:214) comprising  

in  particular 

concerned, 

(div)  the operations referred to in point (ciii) where they are accompanied by 
insurance  covering  either  conservation  of  capital  or  payment  of  a 
minimum interest; 

(ev)  the  operations  carried  out  by  assurance  ⌦ life 

insurance ⌫ 
undertakings such as those referred to in Chapter 1, Title 4 of Book IV of 
the French «Code des assurances»., 

3. (c) Ooperations  relating  to  the  length  of  human  life  which  are  prescribed  by  or 
provided for in social insurance legislation, when ⌦ in so far as ⌫ they are 
effected or managed ⌦ by life insurance undertakings ⌫ at their own risk by 
assurance undertakings in accordance with the laws of a Member State. 

(cid:208) 73/239/EEC Art. 2(1)(d) and 
2002/83/EC Art. 3(4) (adapted) 
(cid:214) new 

⌦ SECTION 2 - EXCLUSIONS FROM SCOPE ⌫ 

⌦ SUBSECTION 1 - GENERAL ⌫ 

Article 3 

⌦ Statutory systems ⌫ 

subject  to  the  application  of  ⌦ Without  prejudice  to  point  (c)  of ⌫  Article  2(3),  ⌦ this 
Directive shall not apply to ⌫ insurance forming part of a statutory system of social security; 

EN 

33 

   EN 

 
 
 
(cid:216) new 

Article 4 

Exclusion from scope due to size 

1. 

2. 

Without  prejudice  to  Articles  5  to  10  this  Directive  shall  not  apply  to  insurance 
undertakings whose annual premium income does not exceed EUR 5 million. 

If  the  amount  set  out  in  paragraph  1  is  exceeded  for  three  consecutive  years  this 
Directive shall apply from the fourth year.  

⌦ SUBSECTION 2 – NON – LIFE ⌫ 

(cid:208) 73/239/EEC Art. 2 (adapted) 

Article 5 

⌦ Operations ⌫ 

⌦ For non-life insurance undertakings, ⌫ Tthis Directive does ⌦ shall ⌫ not apply to 

1. 

The following kinds of insurance: 

(a) Life assurance, that is to say, the branch of insurance which comprises, in 
particular,  assurance  on  survival  to  a  stipulated  age  only,  assurance  on  death 
only, assurance on survival to a stipulated age or an earlier death, life assurance 
with return of premiums, tontines, marriage assurance, and birth assurance; 

(b) Annuities; 

(c) Supplementary insurance carried on by life-assurance undertakings, that is 
to say, insurance against personal injury including incapacity for employment, 
insurance  against  death  resulting  from  an  accident,  and  insurance  against 
disability resulting from an accident or sickness, where these various kinds of 
insurance are underwritten in addition to life assurance; 

(e) The type of insurance existing in Ireland and the United Kingdom known as 
«permanent health insurance not subject to cancellation». 

2. Tthe following operations: 

(a1) 

(b2) 

(c3) 

Ccapital redemption operations, as defined by the law in each Member State; 

Ooperations  of  provident  and  mutual  benefit  institutions  whose  benefits  vary 
according to the resources available and in which the contributions of the members 
are determined on a flat-rate basis; 

Ooperations  carried  out  by  organizations  not  having  a  legal  personality  with  the 
purpose  of  providing  mutual  cover  for  their  members  without  there  being  any 
payment of premiums or constitution of technical reserves; 

EN 

34 

   EN 

 
 
 
 
 
 
 
 
 
(d4) 

Pending further coordination, export credit insurance operations for the account of or 
guaranteed by the State, or where the State is the insurer. 

(cid:208) 87/343/EEC Art. 1.1 (adapted) 

(cid:208) 84/641/EEC Art. 2 (adapted) 
(cid:214) new 

Article 6  

⌦ Assistance ⌫ 

⌦ 1.  This Directive shall not apply to ⌫ The assistance activity ⌦ which fulfils all the 

following conditions: ⌫ 

(a) 

in which liability is limited to the following operations ⌦ the assistance is ⌫ 
provided  in  the  event  of  an  accident  or  breakdown  involving  a  road  vehicle 
which normally ⌦ when the accident or breakdown ⌫ occurs in the territory 
of the Member State of the undertaking providing cover:; 

⌦ (b) 

the liability for the assistance is limited to the following operations: ⌫ 

(i) 

(ii) 

an  on-the-spot  breakdown  service  for  which  the  undertaking  providing 
cover uses, in most circumstances, its own staff and equipment; 

the  conveyance  of  the  vehicle  to  the  nearest  or  the  most  appropriate 
location  at  which  repairs  may  be  carried  out  and  the  possible 
accompaniment, normally by the same means of assistance, of the driver 
and  passengers  to  the  nearest  location  from  where  they  may  continue 
their journey by other means; 

(iii) 

if provided for by the Member State of the undertaking providing cover, 
the  conveyance  of  the  vehicle,  possibly  accompanied  by  the  driver  and 
passengers,  to  their  home,  point  of  departure  or  original  destination 
within the same State,; 

2. 

(c) 

unless  such  operations  are  ⌦ the  assistance  is  not ⌫  carried  out  by  an 
undertaking subject to this Directive. 

In the cases referred to in the first two indents points (i) and (ii) of paragraph 1(b), 
the condition that the accident or breakdown must have happened in the territory of 
the Member State of the undertaking providing cover (a) shall not  apply where  the 
latter  is  a  body  of  which  the  beneficiary  is  a  member  ⌦ of  the  body  providing 
cover ⌫ and the breakdown service or conveyance of the vehicle is provided simply 
on  presentation  of  a  membership  card,  without any additional premium being paid, 
by a similar body in the country concerned on the basis of a reciprocal agreement;, 
(b)  shall  not  preclude  the  provision  of  such  assistance  in  ⌦ or,  in  the  case  of ⌫ 
Ireland  and  the  United  Kingdom  ⌦ ,  where  the  assistance  operations  are 
provided ⌫ by a single body operating in both States. 

⌦ 3.  This  Directive  shall  not  apply  in  the  case  of  operations  as ⌫  In  the  circumstances 
referred to in the third indent point (iii) of paragraph 1(b), where the accident or the 
breakdown  has  occurred  in  the  territory  of  Ireland  or,  in  the  case  of  the  United 

EN 

35 

   EN 

 
 
 
 
4. 

Kingdom,  in  the  territory  of  Northern  Ireland,  ⌦ and ⌫  the  vehicle,  possibly 
accompanied by the driver and passengers, may be ⌦ is ⌫ conveyed to their home, 
point of departure or original destination within either territory. 

Moreover, the ⌦ This ⌫ Directive does ⌦ shall ⌫ not concern ⌦ apply to ⌫ 
assistance operations carried out ⌦ by the Automobile Club of the Grand Duchy of 
Luxembourg where the ⌫ on the occasion of an accident to or the breakdown of a 
road  vehicle  ⌦ has  occurred  outside  the  territory  of  the  Grand  Duchy  of 
Luxembourg ⌫  and  consisting  ⌦ the  assistance  consists ⌫  in  conveying  the 
vehicle which has been involved in an ⌦ that ⌫ accident or ⌦ breakdown ⌫ has 
broken  down  outside  the  territory  of  the  Grand  Duchy  of  Luxembourg,  possibly 
accompanied by the driver and passengers, to their home, where such operations are 
carried out by the Automobile Club of the Grand Duchy of Luxembourg. 

Undertakings  subject  to  this  Directive  may  engage  in  the  activity  referred  to  under 
this  point  only  if  they  have  received  authorization  for  class  18  in  point  A  of  the 
Annex  without  prejudice  to  point  C  of  the  said  Annex.  In  that  event  this  Directive 
shall apply to the operations in question. 

(cid:208) 2002/13/EC Art. 1.1 (adapted) 

This Directive shall not apply to undertakings which fulfil all the following conditions: 

the undertaking does not pursue any activity falling within the scope of this Directive 
other than the one described in class 18 in point A of the Annex, 

this activity is carried out exclusively on a local basis and consists only of benefits in 
kind, and 

the  total  annual  income  collected  in  respect  of  the  activity  of  assistance  to  persons 
who get into difficulties does not exceed EUR 200000. 

Article 7  

⌦ Mutual undertakings ⌫ 

1. 

This  Directive  shall  not  apply  to  mutual  associations  which  fulfil  all  the  following 
conditions: 

(a) 

(b) 

(c) 

(d) 

the  articles  of  association  must  contain  provisions  for  calling  up  additional 
contributions or reducing their benefits; 

their  business  does  not  cover  liability  risks  unless  these  constitute  ancillary 
cover  within  the  meaning  of  point  C  of  the  Annex  I  or  credit  and  suretyship 
risks; 

the annual contribution income for the activities covered by this Directive must 
not exceed EUR 5 million; and 

at  least  half  of  the  contribution  income  from  the  activities  covered  by  this 
Directive must come from persons who are members of the mutual association. 

EN 

36 

   EN 

 
 
 
 
(cid:208) 73/239/EEC Art. 3 (adapted)  

2. This Directive shall not, moreover, apply to mutual associations ⌦ undertakings carrying 
on non-life insurance activities and ⌫ which have concluded with other associations of this 
nature ⌦ mutual undertakings ⌫an agreement which provides for the full reinsurance of the 
insurance  policies  issued  by  them  or  under  which  the  concessionary  ⌦ accepting ⌫ 
undertaking  is  to  meet  the  liabilities  arising  under  such  policies  in  the  place  of  the  ceding 
undertaking. In such a case the concessionary ⌦ accepting ⌫ undertaking shall be subject 
to the rules of this Directive. 

(cid:208) 73/239/EEC Art. 4 (adapted) 

Article 8  

⌦ Institutions ⌫ 

This Directive shall not apply to the following institutions ⌦ carrying on non-life insurance 
activities ⌫ unless their statutes or the law are amended as regards capacity: 

(f1) 

In Denmark, Falcks Redningskorps A/S, København ⌦ Danmark ⌫ ; 

(cid:208) 84/641/EEC Art. 4 (adapted) 

(a2) 

In Germany, 

following 

The 
(Monopolanstalten): 

institutions 

(cid:208) 73/239/EEC Art. 4 (adapted) 

under 

public 

law 

enjoying 

a  monopoly 

1. Badische Gebäudeversicherungsanstalt, Karlsruhe, 

2. Bayerische Landesbrandversicherungsanstalt, Munich, 

3.  Bayerische  Landestierversicherungsanstalt,  Schlachtviehversicherung, 
Munich, 

4. Braunschweigische Landesbrandversicherungsanstalt, Brunswick, 

5. Hamburger Feuerkasse, Hamburg, 

6. 
Brandversicherungskammer), Darmstadt, 

Hessische 

Brandversicherungsanstalt 

(Hessische 

7. Hessische Brandversicherungsanstalt, Kassel, 

8. Hohenzollernsche Feuerversicherungsanstalt, Sigmaringen, 

9. Lippische Landesbrandversicherungsanstalt, Detmold, 

10. Nassauische Brandversicherungsanstalt, Wiesbaden, 

11. Oldenburgische Landesbrandkasse, Oldenburg, 

12. Ostfriesische Landschaftliche Brandkasse, Aurich, 

EN 

37 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13. Feuersozietät Berlin, Berlin, 

14. Württembergische Gebäudebrandversicherungsanstalt, Stuttgart. 

However,  territorial  capacity  shall  not  be  regarded  as  modified  in  the  case  of  a 
merger between such institutions which has the effect of maintaining for the benefit 
of the new institution the territorial capacity of the institutions which have merged, 
nor  shall  capacity  as  to  the  classes  of  insurance  be  regarded  as  modified  if  one  of 
these institutions takes over in respect of the same territory one or more of the classes 
of another such institution. 

Tthe following semi-public institutions: 

1.(a)  Postbeamtenkrankenkasse, 

2. (b) Krankenversorgung der Bundesbahnbeamten; 

(b)In France 

The following institutions: 

1. Caisse départementale des incendiés des Ardennes, 

2. Caisse départementale des incendiés de la Côte-d'Or, 

3. Caisse départementale des incendiés de la Marne, 

4. Caisse départementale des incendiés de la Meuse, 

5. Caisse départementale des incendiés de la Somme, 

6. Caisse départementale grêle du Gers, 

7. Caisse départementale grêle de l'Hérault; 

(c3) 

In Ireland, ⌦ the ⌫ Voluntary Health Insurance Board; 

(cid:208) Act of Accession of Spain and 
Portugal Art. 26 and Annex I, p. 
156 (adapted) 
(cid:214) new 

(g4) 

In Spain,  

The following institutions: 

1. Comisaría de Seguro Obligatorio de Viajeros, 

2. ⌦ the ⌫ Consorcio de Compensación de Seguros, 

3. Fondo Nacional de Garantía de Riesgos de la Circulación. 

(d5) 

In Italy, 

Tthe Cassa di Previdenza per l'assicurazione degli sportivi (Sportass) T. 

(e) 

In the United Kingdom, The Crown Agents; 

(cid:208) 73/239/EEC Art. 4 

EN 

38 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(cid:208) 2002/83/EC Art. 3 (adapted) 
(cid:214) new 

⌦ SUBSECTION 3 - LIFE ⌫ 

Article 9  

⌦ Operations and ⌫ Aactivities and bodies excluded 

⌦ As far as life insurance undertakings are concerned, ⌫ Tthis Directive shall not concern 
⌦ apply to the following operations and activities ⌫ : 

(1) 

(2) 

(3) 

1. subject to the application of Article 2(1)(c), the classes designated in the Annex to 
Directive 73/239/EEC; 

2.  operations  of  provident  and  mutual-benefit  institutions  whose  benefits  vary 
according  to  the  resources  available  and  which  require  each  of  their  members  to 
contribute at the appropriate flat rate; 

3.  operations  carried  out  by  organisations  other  than  undertakings  referred  to  in 
Article 2, whose object is to provide benefits for employed or self-employed persons 
belonging to an undertaking or group of undertakings, or a trade or group of trades, 
in  the  event  of  death  or  survival  or  of  discontinuance  or  curtailment  of  activity, 
whether or not the commitments arising from such operations are fully covered at all 
times by mathematical provisions; 

8.  the  pension  activities  of  pension  insurance  undertakings  prescribed  in  the 
Employees  Pension  Act  (TELTyEL)  and  other  related  Finnish  legislation  provided 
that: 

(a) 

(b) 

pension  insurance  companies  which  already  under  Finnish  law  are  obliged  to 
have  separate  accounting  and  management  systems  for 
their  pension 
activitieswill furthermore, as from the date of accession ⌦ 1 January 1995 ⌫ 
, set up separate legal entities for carrying out these activities; 

the Finnish authorities shall allow in a non-discriminatory manner all nationals 
and  companies  of  Member  States  to  perform  according  to  Finnish  legislation 
the activities specified in Article 2 related to this exemption whether by means 
of:  ownership  or  participation  in  an  existing  insurance  company  or  group, 
⌦ or by means of ⌫ creation or participation of new insurance companies or 
groups, including pension insurance companies.; 

(c) the Finnish authorities will submit to the Commission for approval a report 
within  three  months  from  the  date  of  accession,  stating  which  measures  have 
been taken to separate TEL activities from normal insurance activities carried 
out by Finnish insurance companies in order to conform to all the requirements 
of this Directive. 

Article 10  

⌦ Organisations, undertakings and institutions ⌫ 

⌦ As  far  as  life  insurance  is  concerned  this  Directive  shall  not  apply  to  the  following 
organisations, undertakings and institutions: ⌫ 

EN 

39 

   EN 

 
 
 
 
 
 
(1) 

5  organisations  which  undertake  to  provide  benefits  solely  in  the  event  of  death, 
where  the  amount  of  such  benefits  does  not  exceed  the  average  funeral  costs  for  a 
single death or where the benefits are provided in kind; 

6. mutual associations, where: 

- 

- 

the  articles  of  association  contain  provisions  for  calling  up  additional 
contributions or reducing their benefits or claiming assistance from other 
persons who have undertaken to provide it,; and 

the  annual  contribution  income  for  the  activities  covered  by  this 
Directive does not exceed EUR 5 million for three consecutive years.; If 
this  amount  is  exceeded  for  three  consecutive  years  this  Directive  shall 
apply with effect from the fourth year. 

Nevertheless,  the  provisions  of  this  paragraph  shall  not  prevent  a  mutual  assurance 
undertaking from applying, or continuing, to be licensed under this Directive; 

(2) 

7.  the  «Versorgungsverband  deutscher  Wirtschaftsorganisationen»  in  Germany 
unless its statutes are amended as regards the scope of its activities (cid:214) capacity . ; 

⌦ SUBSECTION 4 - REINSURANCE ⌫ 

(cid:208) 2005/68/EC Art. 1 (adapted) 

Article 11  

⌦ Reinsurance ⌫ 

2. ⌦ As far as reinsurance is concerned ⌫ Tthis Directive shall not apply to the following: 

(a) insurance undertakings to which Directives 73/239/EEC or 2002/83/EC apply; 

(b) activities and bodies referred to in Articles 2 and 3 of Directive 73/239/EEC; 

(c) activities and bodies referred to in Article 3 of Directive 2002/83/EC; 

(d) the activity of reinsurance conducted or fully guaranteed by the government of a Member 
State when this is acting, for reasons of substantial public interest, in the capacity of reinsurer 
of  last  resort,  including  in  circumstances  where  such  a  role  is  required  by  a  situation  in  the 
market in which it is not feasible to obtain adequate commercial cover. 

(cid:208) 2005/68/EC Art. 62 (adapted) 

Article 12 

Reinsurance undertakings closing their activity 

1. 

2. 

Reinsurance undertakings which by 10 December 2007 have ceased to conduct new 
reinsurance  contracts  and  exclusively  administer  their  existing  portfolio  in  order  to 
terminate their activity shall not be subject to this Directive. 

Member  States  shall  draw  up  the  ⌦ a ⌫  list  of  the  reinsurance  undertakings 
concerned and they shall communicate that list to all the other Member States. 

EN 

40 

   EN 

 
 
 
 
 
 
 
 
 
(cid:208) 98/78/EC Art. 1 and 
2001/17/EC Art. 2 (adapted) 

⌦ SECTION 3 - DEFINITIONS ⌫ 

Article 13 

Definitions 

1. For the purposes of this Directive ⌦ , the following definitions shall apply ⌫ : 

(a1) 

«insurance  undertaking»  means  an  ⌦ direct 
insurance ⌫ 
undertaking which has received official authorisation in accordance with Article 14 6 
of Directive 73/239/EEC or Article 6 of Directive 79/267/EEC; 

life  or  non-life 

(cid:208) 98/78/EC Art. 1 (b) (adapted) 
(cid:214) new 

(b2) 

non-member⌦ third ⌫-country insurance undertaking means an ⌦ insurance ⌫ 
undertaking  which  would  require  authorisation  in  accordance  with  Article  14  6  of 
Directive  73/239/EEC  or  Article  6  of  Directive  79/267/EEC  if  it  had  its 
registered (cid:214) head  office in the Community; 

(cid:208) 2005/68/EC Art. 2(1)(c) and 
Art. 59(2)(a) (adapted) 

(c3) 

reinsurance  undertaking  means  an  undertaking,  which  has  received  official 
authorisation  in  accordance  with  Article  14 3  of  Directive  2005/68/EC  of  the 
European  Parliament  and  of  the  Council  of  16 November  2005  ⌦ to  carry ⌫  on 
reinsurance ⌦ activities ⌫ ; 

(cid:208) 2005/68/EC Art. 59(2)(b) 
(adapted) 

(l4) 

non-member⌦ third ⌫-country 
an 
⌦ reinsurance ⌫  undertaking  which  would  require  authorisation  in  accordance 
with  Article  14 3  of  Directive  2005/68/EC  if  it  had  its  head  office  in  the 
Community;. 

undertaking 

reinsurance 

means 

(cid:208) 2005/68/EC Art. 2(1) (adapted) 

(a5) 

«reinsurance» means ⌦ either of the following: ⌫ 

(a) 

(b) 

the activity consisting in accepting risks ceded by an insurance undertaking or 
by another reinsurance undertaking.; 

Iin  the  case  of  the  association  of  underwriters  known  as  Lloyd's,  reinsurance 
also means the activity consisting in accepting risks, ceded by any member of 
Lloyd's, by an insurance or reinsurance undertaking other than the association 
of underwriters known as Lloyd's; 

EN 

41 

   EN 

 
 
 
 
 
 
 
(e)«establishment» means the head office or a branch of a reinsurance undertaking, 
account being taken of point (d); 

(c6) 

home Member State shall mean ⌦ means any of the following: ⌫ 

⌦ (a) 

for non-life insurance, ⌫ the Member State in which the head office of 

the insurance undertaking covering a ⌦ the ⌫ risk is situated; 

(cid:208) 92/49/EEC Art. 1 (c) (adapted) 

(cid:208) 2002/83/EC Art. 1(1)(e) 
(adapted) 

(eb)  «home Member State» shall mean ⌦ for life insurance, ⌫ the Member State 
in  which  the  head  office  of  the  assurance  ⌦ insurance ⌫  undertaking 
covering the commitment is situated; 

(cid:208) 2005/68/EC Art. 2(1)(f) 
(adapted) 

(fc)  «home  Member  State»  means  ⌦ for  reinsurance, ⌫  the  Member  State  in 

which the head office of the reinsurance undertaking is situated; 

(cid:208) 92/49/EEC Art. 1(d) and (e) 
(adapted) 

(d)Member  State  of  the  branch  shall  mean  the  Member  State  in  which  the  branch 
covering a risk is situated; 

(e)Member State of the provision of services shall mean the Member State in which a 
risk is situated, as defined in Article 2 (d) of Directive 88/357/EEC, if it is covered 
by an insurance undertaking or a branch situated in another Member State; 

(cid:208) 2005/68/EC Art. 2(1) (adapted) 

(g)«Member State of the branch» means the Member State in which the branch of a 
reinsurance undertaking is situated; 

(h7) 

«host  Member  State»  means  the  Member  State  ⌦ other  than  the  home  Member 
State ⌫ in which ⌦ an insurance or ⌫ a reinsurance undertaking has a branch or 
provides services; 

(k8) 

competent  ⌦ supervisory ⌫  authorities  means  the  national  authorities  which  are 
empowered by law or regulation to supervise insurance undertakings or reinsurance 
undertakings; 

(cid:208) 2005/68/EC Art. 59(2)(a) 
(adapted) 

EN 

42 

   EN 

 
 
 
 
 
 
 
 
 
 
 
(cid:208) 2002/83/EC Art. 1(1) (adapted) 

(b)«branch» shall mean an agency or branch of an assurance undertaking; 

Any permanent presence of an undertaking in the territory of a Member State shall 
be  treated  in  the  same  way  as  an  agency  or  branch,  even  if  that  presence  does  not 
take the form of a branch or agency, but consists merely of an office managed by the 
undertaking's  own  staff  or  by  a  person  who  is  independent  but  has  permanent 
authority to act for the undertaking as an agency would; 

(d9) 

«branch»  means  an  agency  or  a  branch  of  a  ⌦ an  insurance  or ⌫  reinsurance 
undertaking  ⌦ which  is  located  in  the  territory  of  a  Member  State  other  than  the 
home Member State ⌫ ; 

(cid:208) 2005/68/EC Art. 2(1) (adapted) 

(b)branch  shall  mean  an  agency  or  branch  of  an  insurance  undertaking,  having 
regard to Article 3 of Directive 88/357/EEC; 

(cid:208) 92/49/EEC Art. 1 (adapted) 

(b) «branch» means any permanent presence of an insurance undertaking in the territory of a 
Member  State  other  than  the  home  Member  State  which  carries  out  insurance 
business; 

(cid:208) 2001/17/EC Art. 2 (adapted) 

(cid:208) 88/357/EEC Art. 2 (adapted) 
(cid:214) new 

(a)«first Directive» means: 

Directive 73/239/EEC; 

(b)«undertaking»: 

– 

for the purposes of applying Titles I and II, means: 

any undertaking which has received official authorization under Article 6 or 23 
of the first Directive, 

– 

for the purposes of applying Title III and Title V, means: 

any  undertaking  which  has  received  official  authorization  under  Article  6  of 
the first Directive; 

(c)«establishment»: 

means the head office, agency or branch of an undertaking, account being taken of 
Article 3; 

(d10) 

«Member State where the risk is situated» means ⌦ any of the following ⌫ (cid:214) as 
of the date of conclusion of the non-life insurance contract  : 

EN 

43 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a) 

(b) 

(c) 

the Member State in which the property is situated, where the insurance relates 
either to buildings or to buildings and their contents, in so far as the contents 
are covered by the same insurance policy,; 

the Member State of registration, where the insurance relates to vehicles of any 
type,; 

the  Member  State  where  the  policy-holder  took  out  the  policy  in  the  case  of 
policies  of  a  duration  of  four  months  or  less  covering  travel  or  holiday  risks, 
whatever the class concerned,; 

(d)  ⌦ in all cases not explicitly covered by points (a), (b) or (c), ⌫ the Member 

State where ⌦ in which either of the following is situated: ⌫ 

⌦ (i)  the  habitual  residence  of ⌫  the  policy-holder;  has  his  habitual 

residence or, 

(ii) 

if the policy-holder is a legal person, the Member State where the latter's 
establishment,  to  which  the  contract  relates,  is  situated,  in  all  cases  not 
explicitly covered by the foregoing indents; 

(e) 

«Member State of establishment» means: 

the Member State in which the establishment covering the risk is situated; 

(f)«Member State of provision of services» means: 

the Member State in which the risk is situated when it is covered by an establishment 
situated in another Member State. 

(cid:208) 2002/83/EC Art. 1(1) (adapted) 
(cid:214) new 

(c)«establishment»  shall  mean  the  head  office,  an  agency  or  a  branch  of  an 
undertaking; 

(d)«commitment»  shall  mean  a  commitment  represented  by  one  of  the  kinds  of 
insurance or operations referred to in Article 2; 

(f)«Member State of the branch» shall mean the Member State in which the branch 
covering the commitment is situated; 

(g11) 

«Member State of the commitment» shall mean means the Member State ⌦ in which 
any of the following is situated ⌫(cid:214) as of the date of conclusion of the life insurance 
contract:  

(a)  where 

the  policy  holder  has  his/her  habitual 

residence  ⌦ of 

the 

policyholder; ⌫ or, 

(b) 

if  the  policyholder  is  a  legal  person,  the  Member  State  where  the  latter's 
establishment, to which the contract relates, is situated; 

(h)«Member State of the provision of services» shall mean the Member State of the 
commitment, if the commitment is covered by an assurance undertaking or a branch 
situated in another Member State; 

EN 

44 

   EN 

 
 
 
 
 
 
 
 
 
(d12) 

parent  undertaking  means  a  parent  undertaking  within  the  meaning  of  Article  1  of 
Council  Directive  83/349/EEC45  and  any  undertaking  which,  in  the  opinion  of  the 
competent  authorities,  effectively  exercises  a  dominant  influence  over  another 
undertaking; 

(cid:208) 98/78/EC Art. 1(d) 

(cid:208) 98/78/EC Art. 1(e) (adapted) 

(e13) 

subsidiary  undertaking  means  ⌦ any ⌫  a  subsidiary  undertaking  within  the 
meaning of Article 1 of Directive 83/349/EEC ⌦ , including subsidiaries thereof ⌫ 
and any undertaking over which, in the opinion of the competent authorities, a parent 
undertaking effectively exercises a dominant influence. All subsidiaries of subsidiary 
undertakings shall also be considered subsidiaries of the parent undertaking which is 
at the head of those undertakings; 

(cid:208) 92/49/EEC Art. 1(f), 
2002/83/EC Art. 1(1)(i) and 
2005/68/EC Art. 2(1) (i) (adapted) 

(i14) 

«control» means the relationship between a parent undertaking and a subsidiary, as 
defined ⌦ set out ⌫ in Article 1 of Directive 83/349/EEC, or a similar relationship 
between any natural or legal person and an undertaking; 

(cid:208) 95/26/EC Art. 2(1) and 
2002/83/EC Art. 1(1)(r) (adapted) 

(r15) 

«close»  links  shall  mean  means  a  situation  in  which  two  or  more  natural  or  legal 
persons are linked by: ⌦ control or ⌫ 

(i) participation, which shall mean the ownership, direct or by way of control, 
of 20 % or more of the voting rights or capital of an undertaking; or 

(ii)  control,  which  shall  mean  the  relationship  between  a  parent  undertaking 
and a subsidiary, in all the cases referred to in Article 1(1) and (2) of Directive 
83/349/EEC, or a similar relationship between any natural or legal person and 
an  undertaking;  any  subsidiary  undertaking  of  a  subsidiary  undertaking  shall 
also be considered a subsidiary of the parent undertaking which is at the head 
of those undertakings. 

Aa situation in which two or more natural or legal persons are permanently linked to 
one  and  the  same  person  by  a  control  relationship  shall  also  be  regarded  as 
constituting a close link between such persons; 

45 

OJ L 193, 18.7.1983, p. 1. 

EN 

45 

   EN 

 
 
 
 
 
 
 
 
                                                 
(cid:208) 2005/68/EC Art. 2(1)(n)(i) 
(adapted) 

(n)«close links» means a situation in which two or more natural or legal persons are 
linked by: 

(i16) 

participation, which shall mean means the ownership, direct or by way of control, of 
20 % or more of the voting rights or capital of an undertaking,; or 

(ii)  control,  in  all  the  cases  referred  to  in  Article 1(1)  and  (2)  of  Directive 
83/349/EEC or a similar relationship between any natural or legal person and 
an undertaking; 

(cid:208) 92/49/EEC Art. 1(g), 
2002/83/EC Art. 1(1)(j) and 
2005/68/EC Art. 2(1)(j) (adapted) 

(j17) 

«qualifying  holding»  means  a  direct  or  indirect  holding  in  an  undertaking  which 
represents  10 %  or  more  of  the  capital  or  of  the  voting  rights  or  which  makes  it 
possible to exercise a significant influence over the management of the ⌦ that ⌫ 
undertaking in which a holding subsists; 

(m18)  «regulated market» shall mean means ⌦ either of the following ⌫ : 

(cid:208) 2002/83/EC Art. 1(1)(m) 
(adapted) 

(a) 

in  the  case  of  a  market  situated  in  a  Member  State,  a  regulated  market  as 
defined in Article 1(13)4(1)(14) of Directive 93/22/EEC, and2004/39/EC of the 
European Parliament and of the Council46; 

(b) 

in the case of a market situated in a third country, a financial market ⌦ which 
fulfils the following conditions: ⌫ 

(i)  ⌦ it  is ⌫  recognised  by  the  home  Member  State  of  the  assurance 
⌦ insurance ⌫  undertaking  which  ⌦ and ⌫  meets  comparable 
requirements. ⌦ comparable to those under Directive 2004/39/EC; ⌫ 

(ii)  Any  ⌦ the ⌫  financial  instruments  dealt  in  on  that  market  must  be 
⌦ are ⌫ of a quality comparable to that of the instruments dealt in on 
the  regulated  market  or  markets  of  the  ⌦ home ⌫  Member  State  in 
question; 

(a)«Unit  of  account»  means  the  European  unit  of  account  (EUA)  as  defined  by 
Commission Decision 3289/75/ECSC47. Wherever this Directive refers to the unit of 

(cid:208) 76/580/EEC Art. 1(1) and Art. 
1(2) (adapted) 

46 
47 

OJ L 145, 30.4.2004, p. 1. 
OJ No L 327, 19. 12. 1975, p. 4. 

EN 

46 

   EN 

 
 
 
 
 
 
 
 
                                                 
account,  the  conversion  value  in  national  currency  to  be  adopted  shall,  as  from  31 
December of each year, be that of the last day of the preceding month of October for 
which EUA conversion values are available in all the Community currencies; 

(b) 

«Matching assets» means the representation of underwriting liabilities expressed in a 
particular currency by assets expressed or realizable in the same currency; 

(cid:208) 73/239/EEC Art.5(b) 

(cid:208) 90/618/EEC Art. 1 (adapted) 

(a) "vehicle' means a vehicle as defined in Article 1 ( 1 ) of Directive 72/166/EEC; 

(b19) 

(c20) 

" ⌦ national ⌫ bureau' means a national insurers' bureau as defined in Article 1(3) 
of Council Directive 72/166/EEC48; 

"⌦ national ⌫  guarantee  fund'  means  the  body  referred  to  in  Article  1(4)  of 
Council Directive 84/5/EEC49; 

(q) 

capital  at  risk  shall  mean  the  amount  payable  on  death  less  the  mathematical 
provision for the main risk;  

(cid:208) 2002/83/ECArt. 1(1)(q) 

(o21) 

«financial undertaking» means one ⌦ any ⌫ of the following entities: 

(cid:208) 2005/68/EC Art. 2(1) (adapted) 

(ia)  a  credit  institution,  a  financial  institution  or  an  ancillary  banking  services 
undertaking  within  the  meaning  of  Article 14(5)  and  (21)  of  Directive 
2000/12/EC50, 2006/48/EC of the European Parliament and of the Council51; 

(iib)  an insurance undertaking, ⌦ or ⌫ a reinsurance undertaking or an insurance 
holding  company  within  the  meaning  of  point  (e)  of  Article 1(i)  of  Directive 
98/78/EC, 210(1); 

(iiic)  an investment firm or a financial institution within the meaning of point 1 of 

Article 4(1) of Directive 2004/39/EC ;, 

(ivd)  a  mixed  financial  holding  company  within  the  meaning  of  Article 2(15)  of 
Directive 2002/87/EC of the European Parliament and of the Council52; 

48 
49
50 

51 
52 

OJ L 103, 2.5.1972, p. 1. 
OJ L 8, 11.1.1984, p. 17. 
Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the 
taking up and pursuit of the business of credit institutions (OJ L 126, 26.5.2000, p. 1). Directive as last 
amended by Directive 2005/1/EC. 
OJ L 177, 30.6.2006, p. 1. 
OJ L 35, 11.2.2002, p. 1. 

EN 

47 

   EN 

 
 
 
 
 
                                                 
 
(cid:208) 2005/68/EC Art. 59.2(b) 
(adapted) 

(l)non-member country reinsurance undertaking means an undertaking which would 
require authorisation in accordance with Article 3 of Directive 2005/68/EC if it had 
its head office in the Community. 

(cid:208) 2005/68/EC Art. 2(1)(p) 
(adapted) 

p(22) 

«special purpose vehicle» means any undertaking, whether incorporated or not, other 
than  an  existing  insurance  or  reinsurance  undertaking,  which  assumes  risks  from 
insurance  or  reinsurance  undertakings  and  which  fully  funds  its  exposure  to  such 
risks  through  the  proceeds  of  a  debt  issuance  or  some  ⌦ any ⌫  other  financing 
mechanism  where  the  repayment  rights  of  the  providers  of  such  debt  or  other 
financing  mechanism  are  subordinated  to  the  reinsurance  obligations  of  such  a 
vehicle ⌦ an undertaking ⌫ ; 

(cid:208) 2005/68/EC Art. 2(1)(b) 

(b) 

captive reinsurance undertaking means a reinsurance undertaking owned either by a 
financial undertaking other than an insurance or a reinsurance undertaking or a group 
of insurance or reinsurance undertakings to which Directive 98/78/EC applies, or by 
a  non-financial  undertaking,  the  purpose  of  which  is  to  provide  reinsurance  cover 
exclusively for the risks of the undertaking or undertakings to which it belongs or of 
an  undertaking  or  undertakings  of  the  group  of  which  the  captive  reinsurance 
undertaking is a member; 

(cid:216) new 

(23) 

Outsourcing means an arrangement of any form between an insurance or reinsurance 
undertaking and a service provider, whether a supervised entity or not, by which that 
service provider performs a process, a service or an activity, whether directly or by 
sub-outsourcing,  which  would  otherwise  be  performed  by  the  insurance  or 
reinsurance undertaking itself; 

(24) 

Underwriting  risk  means  the  risk  of  loss,  or  of  adverse  change  in  the  value  of 
insurance liabilities, due to inadequate pricing and provisioning assumptions;  

(25)  Market  risk  means  the  risk  of  loss,  or  of  adverse  change  in  the  financial  situation, 
resulting, directly or indirectly, from fluctuations in the level and in the volatility of 
market prices of assets, liabilities and financial instruments;  

(26) 

Credit  risk  means  the  risk  of  loss,  or  of  adverse  change  in  the  financial  situation, 
resulting  from  fluctuations  in  the  credit  standing  of  issuers  of  securities, 
counterparties and any debtors to which insurance and reinsurance undertakings are 
exposed,  in  the  form  of  counterparty  default  risk,  or  spread  risk,  or  market  risk 
concentrations; 

(27) 

Operational  risk  means  the  risk  of  loss  arising  from  inadequate  or  failed  internal 
processes, or from personnel and systems, or from external events; 

EN 

48 

   EN 

 
 
 
 
 
 
(28) 

(29) 

(30) 

(31) 

(32) 

(33) 

Liquidity risk means the risk that insurance and reinsurance undertakings are unable 
to  realise  investments  and  other  assets  in  order  to  settle  their  financial  obligations 
when they fall due; 

Concentration  risk  means  all  risk  exposures  with  a  loss  potential  which  is  large 
enough to threaten the solvency or the financial position of insurance and reinsurance 
undertakings;; 

Risk  mitigation  techniques  means  all  techniques,  which  enable  insurance  and 
reinsurance undertakings to transfer part or all of their risks to another party; 

Diversification  effects  means  the  reduction  in  the  risk  exposure  of  insurance  and 
reinsurance undertakings and groups related to the diversification of  their  business, 
resulting  from  the  fact  that  the  adverse  outcome  from  one  risk  can  be  offset  by  a 
more  favourable  outcome  from  another  risk,  where  those  risks  are  not  fully 
correlated; 

Probability  distribution  forecast  means  a  mathematical  function  that  assigns  to  an 
exhaustive set of mutually exclusive future events a probability of realisation; 

Risk measure means a mathematical function which assigns a monetary amount to a 
given probability distribution forecast and increases monotonically with the level of 
risk exposure underlying that probability distribution forecast; 

(cid:208) 2005/68/EC Art. 2 

2. For the purposes of paragraph 1(a) of this Article, the provision of cover by a reinsurance 
undertaking to an institution for occupational retirement provision falling under the scope of 
Directive  2003/41/EC53  where  the  law  of  the  institution's  home  Member  State  permits  such 
provision, shall also be considered as an activity falling under the scope of this Directive. 

For the purposes of paragraph 1(d), any permanent presence of a reinsurance undertaking in 
the territory of a Member State shall be treated in the same way as an agency or branch, even 
if that presence does not take the form of a branch or agency, but consists merely of an office 
managed by the undertaking's own staff or by a person who is independent but has permanent 
authority to act for the undertaking as an agency would. 

For the purposes of paragraph 1(j) of this Article, and in the context of Articles 12 and 19 to 
23 and of the other levels of holding referred to in Article 19 to 23, the voting rights referred 
to in Article 92 of Directive 2001/34/EC54 shall be taken into account. 

For  the  purposes  of  paragraph 1(l),  any  subsidiary  of  a  subsidiary  undertaking  shall  also  be 
regarded  as  a  subsidiary  of  the  undertaking  which  is  those  undertakings'  ultimate  parent 
undertaking. 

For the purposes of paragraph 1(n): 

any  subsidiary  undertaking  of  a  subsidiary  undertaking  shall  be  considered  a 
subsidiary of the parent undertaking which is at the head of those undertakings; 

53 

54 

Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003 on the activities 
and supervision of institutions for occupational retirement provision (OJ L 235, 23.9.2003, p. 10). 
Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission 
of  securities  to  official  stock  exchange  listing  and  on  information  to  be  published  on  those  securities 
(OJ L 184, 6.7.2001, p. 1). Directive as last amended by Directive 2005/1/EC. 

EN 

49 

   EN 

 
 
                                                 
a situation in which two or more natural or legal persons are permanently linked to 
one  and  the  same  person  by  a  control  relationship  shall  also  be  regarded  as 
constituting a close link between such persons. 

(cid:208) 2002/83/EC Art. 1(2) and 
2005/68/EC Art. 2 

2. Wherever this Directive refers to the euro, the conversion value in national currency to be 
adopted shall as from 31 December of each year be that of the last day of the preceding month 
of  October  for  which  euro  conversion  values  are  available  in  all  the  relevant  Community 
currencies. 

TITLE CHAPTER II - THE TAKING UP OF THE BUSINESS 
OF LIFE ASSURANCE 

(cid:208) 2002/83/EC (adapted) 

Article 14 

Principle of authorisation 

(cid:208) 92/49/EEC Art. 4 (adapted) 

1. 

2. 

The  taking  up  of  the  business  of  direct  insurance ⌦ or  of  reinsurance  covered  by 
this Directive ⌫ shall be subject to prior official authorisation. 

Such ⌦ The ⌫ authorisation ⌦ referred to in paragraph 1 ⌫ shall be sought from 
the  competent ⌦ supervisory ⌫  authorities  of  the  home  Member  State  by ⌦ the 
following ⌫: 

(a) 

(b) 

any undertaking which establishes ⌦ is establishing ⌫ its head office within 
the territory of that State; 

any  ⌦ insurance ⌫  undertaking  which,  having  received  the  ⌦ an ⌫ 
authorisation  referred  to  in  the  first  subparagraph  ⌦ pursuant  to  paragraph 
1 ⌫,  ⌦ wishes  to ⌫  extends  its  business  to  an  entire  class  or  to  other 
⌦ insurance ⌫ classes ⌦ other than those already authorised; ⌫ . 

(c) 

any reinsurance undertaking which, having received an authorisation pursuant 
to  paragraph  1,  wishes  to  extend  its  business  to  reinsurance  activities,  other 
than those already authorised. 

(cid:216) new 

3. 

Nevertheless,  the  provisions  of  this  Article  (cid:214) 4   shall  not  prevent  a  mutual 
licensed 
insurance  any  undertaking  from  applying,  or  continuing, 
⌦ authorised ⌫ under this Directive. 

to  be 

(cid:208) 2002/13/EC Art. 1(1) (adapted) 
(cid:214) new 

EN 

50 

   EN 

 
 
 
 
 
 
 
(cid:208) 2002/83/EC Art. 5 (adapted) 

Article 15 

Scope of authorisation 

1. 

2. 

⌦ An ⌫ Aauthorisation ⌦ pursuant to Article 14 ⌫ shall be valid for the entire 
Community. It shall permit an assurance undertaking ⌦ insurance and reinsurance 
undertakings ⌫  to  carry  on  business  there,  under  either  ⌦ that  authorisation 
covering  also ⌫  the  right  of  establishment  or  ⌦ and  the ⌫  freedom  to  provide 
services. 

⌦ Subject to Article 14, ⌫ Aauthorisation shall be granted for a particular class of 
assurance ⌦ direct insurance ⌫ as listed in point A of Annex I or in Annex II. It 
shall  cover  the  entire  class,  unless  the  applicant  wishes  to  cover  only  some  of  the 
risks pertaining to that class. 

The  risks  included  in  a  class  may  not  be  included  in  any  other  class  except  in  the 
cases referred to in point C Article 16(1). 

(cid:208) 73/239/EEC Annex, pt. A 

Each  Member  State  may  grant  a  Authorisation  ⌦ may  be  granted ⌫  for  two  or 
more of the classes, where its ⌦ the ⌫ national laws permit ⌦ of a Member State 
permits ⌫ such classes to be carried on simultaneously. 

(cid:208) 2002/83/EC Art. 5(2) (adapted) 

(cid:208) 92/49/EEC Art. 5(2) (adapted) 

However: 

(a)3.  ⌦ As  far  as  non-life  insurance  is  concerned, ⌫  Member  States  may  grant 
authorisation for the groups of classes listed in point B of the Annex I, attaching to 
them the appropriate denominations specified therein.; 

(b) authorization granted for one class or a group of classes shall also be valid for the purpose 
of covering ancillary risks included in another class if the conditions imposed in point C of 
the Annex are fulfilled. 

The competent ⌦ supervisory ⌫ authorities may restrict ⌦ limit ⌫ authorisation 
requested for one of the classes to the operations set out in the scheme of operations 
referred to in Article 7 23. 

(cid:208) 2002/83/EC Art. 5(2) (adapted) 

4. 

Undertakings  subject  to  this  Directive  may  engage  in  the  activity  referred  to  under 
this point ⌦ in Article 6 ⌫only if they have received authorisation for class 18 in 

(cid:208) 84/641/EEC Art. 2 (adapted) 

EN 

51 

   EN 

 
 
 
 
 
 
 
 
point A of the Annex I without prejudice to point C of the said Annex Article 16(1). 
In that event this Directive shall apply to the operations in question. 

(cid:208) 2005/68/EC Art. 4 (adapted) 

25.  ⌦ As far as reinsurance is concerned, ⌫ Aauthorisation shall be granted for non-
life  reinsurance  activities  ⌦ activity ⌫,  life  reassurance  activities  ⌦ reinsurance 
activity ⌫  or  all  kinds  of  reinsurance  ⌦ activity ⌫  activities,  according  to  the 
request made by the applicant. 

It ⌦ The application ⌫ shall be considered in the light of the scheme of operations 
to be submitted pursuant to point (c) of Articles 6(b) and 11 18(1) and the fulfilment 
of  the  conditions  laid  down  for  authorisation  by  the  Member  State  from  which  the 
authorisation is sought. 

(cid:208) 73/239/EEC Annex, pt. C 
(adapted) 

Article 16 

⌦ Ancillary risks ⌫ 

1. 

An  ⌦ insurance ⌫  undertaking  obtaining  ⌦ which  has  obtained ⌫  an 
authorisation for a principal risk belonging to one class or a group of classes ⌦ as 
set out in Annex I ⌫ may also insure risks included in another class without ⌦ the 
need to obtain ⌫ an authorisation being necessary for them if they ⌦ in respect of 
such risks provided that the risks fulfil all the following conditions ⌫ : 

(a)  ⌦ they ⌫ are connected with the principal risk,; 

(b)  ⌦ they ⌫ concern the object which is covered against the principal risk,; and 

(c)  ⌦ they ⌫ are covered by the contract insuring the principal risk. 

2. 

However  ⌦ By  way  of  derogation  from  paragraph  1 ⌫  ,  the  risks  included  in 
classes 14, 15 and 17 in point A of Annex I may not be regarded as risks ancillary to 
other classes. 

(cid:208) 87/344/EEC Art. 9 (adapted) 

Nonetheless  ⌦ However ⌫  ,  the  risk  included  in  class  17  (legal  expenses 
insurance)  ⌦ as  set  out  in  class  17 ⌫  may  be  regarded  as  an  ancillary  risk  of 
⌦ ancillary to ⌫ class 18, where the conditions laid down in the first subparagraph 
⌦ 1 and either of the following ⌫ are fulfilled,: 

(a)  where the main risk relates solely to the assistance provided for persons who 
fall  into  difficulties  while  travelling,  while  away  from  home  or  while  away 
from their permanent⌦ habitual ⌫ residence.; 

(b)  Legal expenses ⌦ the ⌫ insurance may also be regarded as an ancillary risk 
under the conditions set out in the first subparagraph where it concerns disputes 
or risks arising out of, or in connection with, the use of sea-going vessels. 

EN 

52 

   EN 

 
 
 
 
 
(cid:208) 2005/68/EC Art. 5 (adapted) 

Article 17 

Form of the ⌦ insurance or ⌫ reinsurance undertaking 

1. 

2. 

The  home  Member  State  shall  require  every  reinsurance  undertaking  for  which 
authorisation is sought ⌦ under Article 14 ⌫ to adopt one of the forms set out in 
Annex IIII. 

Member States may, where appropriate, set up undertakings in any public-law form 
provided  that  such  bodies  have  as  their  objects  ⌦ insurance  or ⌫  reinsurance 
operations  under  conditions  equivalent 
those  under  which  private-law 
undertakings operate. 

to 

⌦ 3.  The Commission may adopt implementing measures relating to the extension of the 

forms set out in Annex III . ⌫ 

(cid:208) 2002/83/EC Art. 64 (adapted) 

Those  implementing  measures  designed  to  amend  non-essential  elements  of  this 
Directive  inter  alia  by  supplementing  it,  shall  be  adopted  in  accordance  with  the 
regulatory procedure with scrutiny referred to in Article 304(3). 

(cid:216) new 

(cid:208) 2005/68/EC Art. 6 (adapted) 

Article 18 

Conditions ⌦ for authorisation ⌫ 

1. 

The  home  Member  State  shall  require  every  reinsurance  undertaking  for  which 
authorisation is sought to: 

(ba)  ⌦ as  far  as  insurance  undertakings  are  concerned, ⌫  limit  its  ⌦ their ⌫ 
objects  to  the  business  of  insurance  and  ⌦ related ⌫  operations  arising 
directly therefrom, to the exclusion of all other commercial business; 

(cid:208) 92/49/EEC Art. 6 (adapted) 

(cid:208) 2005/68/EC Art. 6 (adapted) 

(ab)  ⌦ as far as reinsurance undertakings are concerned, ⌫ limit its ⌦ their ⌫ 
objects to the business of reinsurance and related operations; this requirement 
may include a holding company function and activities with respect to financial 
sector  activities  within  the  meaning  of  Article 2  ⌦(8) ⌫,  point  (8),  of 
Directive 2002/87/EC; 

EN 

53 

   EN 

 
 
 
 
 
 
 
 
 
(cid:208) 2002/83/EC Art. 6(1) 
(cid:214) new 

(c) 

submit a scheme of operations in accordance with Article 7 23; 

(d)  possess  the  minimum  guarantee  fund  (cid:214) hold  the  eligible  basic  own  funds  to 
cover the absolute floor of the Minimum Capital Requirement  provided for 
in point (d) of Article 29(2) 127(1); 

(cid:216) new 

(e) 

(f) 

show evidence that it will be in a position to hold eligible own funds to cover 
the  Solvency  Capital  Requirement,  as  provided  for  in  Article  100,  going 
forward; 

show evidence that it will be in a position to hold eligible basic own funds to 
cover the Minimum Capital Requirement, as provided for in Article 126, going 
forward; 

(cid:208) 2002/83/EC Art. 6(1), 
92/49/EEC Art. 6(e) and 
2005/68/EC Art. 6(d) 
(cid:214) new 

(eg)  (cid:214) provide information on the structure of the governance system referred to in 
Chapter  IV,  Section  2,  be  effectively  run  by  persons  of  good  repute  with 
appropriate professional qualifications or experience. 

(cid:208) 2000/26/EC Art. 8(a) (adapted) 

the  ⌦ all ⌫  claims 

(fh)  ⌦ as  far  as  non-life  insurance  is  concerned ⌫  communicate  the  name  and 
representative  ⌦ representatives ⌫ 
address  of 
appointed ⌦ pursuant  to  Article  4  of  Directive  2000/26/EC  of  the  European 
Parliament  and  of  the  Council55 ⌫  in  each  Member  State  other  than  the 
Member State in which the authorisation is sought if the risks to be covered are 
classified in class 10 of point A of the Annex I, other than carrier's liability. 

(cid:208) 92/49/EEC Art. 6 (adapted) 
(cid:214) new 

2. 

An ⌦ insurance ⌫ undertaking seeking authorisation to extend its business to other 
classes  or  to  extend  an  authorisation  covering  only  some  of  the  risks  pertaining  to 
one  class  shall  be  required  to  submit  a  scheme  of  operations  in  accordance  with 
Article 9 23. 

It shall, furthermore ⌦ in  addition ⌫, be required to show proof that it possesses 
the  solvency  margin  (cid:214) eligible  own  funds  to  cover  the  Solvency  Capital 
Requirement  and  Minimum  Capital  Requirement  provided  for  in  Articles  16 

55 

OJ L 181, 20.7.2000, p. 65. 

EN 

54 

   EN 

 
 
 
 
 
 
                                                 
3. 

4. 

100(1) and  126.  and,  if  with  regard  to  such  other  classes  Article  17  (2)  requires  a 
higher minimum guarantee fund than before, that it possesses that minimum. 

(cid:216) new 

Without  prejudice  to  paragraph  2,  an  insurance  undertaking  carrying  on  life 
activities, and seeking authorisation to extend its business to the risks listed in classes 
1  or  2  in  point  A  of  Annex  I  as  referred  to  in  Article  72,  shall  demonstrate  the 
following:  

(a) 

that it possesses the eligible basic own funds to cover the absolute floor of the 
Minimum Capital Requirement for life insurance undertakings and the absolute 
floor of the Minimum Capital Requirement for non-life insurance undertakings, 
as referred to in point (d) of Article 127(1); 

(b) 

that  it  undertakes  to  cover  the  minimum  financial  obligations  referred  to  in 
Article 73 

(3), going forward. 

Without  prejudice  to  paragraph  2,  an  insurance  undertaking  carrying  on  non-life 
activities  for  the  risks  listed  in  classes  1  or  2  in  point  A  of  Annex  I,  and  seeking 
authorisation to extend its business to life insurance risks as referred to in Article 72, 
shall demonstrate that the following:  

(a) 

that it possesses the eligible basic own funds to cover the absolute floor of the 
Minimum Capital Requirement for life insurance undertakings and the absolute 
floor of the Minimum Capital Requirement for non-life insurance undertakings, 
as referred to in point (d) of Article 127(1); 

(b) 

that  it  undertakes  to  cover  the  minimum  financial  obligations  referred  to  in 
Article 73(3) going forward. 

(cid:208) 2005/68/EC Art. 7 (adapted) 

Article 19 

Close links 

1.  Where  close  links  exist  between  the  ⌦ insurance  undertaking  or ⌫  reinsurance 
undertaking and other natural or legal persons, the competent ⌦ supervisory ⌫ authorities 
shall  grant  authorisation  only  if  those  links  do  not  prevent  the  effective  exercise  of  their 
supervisory functions. 

2.  The  competent  ⌦ supervisory ⌫  authorities  shall  refuse  authorisation  if  the  laws, 
regulations or administrative provisions of a non-member ⌦ third ⌫ country governing one 
or more natural or legal persons with which the ⌦ insurance or ⌫ reinsurance undertaking 
has close links, or difficulties involved in their enforcement ⌦ of those laws ⌫ , prevent the 
effective exercise of their supervisory functions. 

3.  The  competent  ⌦ supervisory ⌫  authorities  shall  require  reinsurance  undertakings  to 
provide  them  with  the  information  they  require  to  monitor  compliance  with  the  conditions 
referred to in the first paragraph 1 on a continuous basis. 

EN 

55 

   EN 

 
 
 
 
(cid:208) 2005/68/EC Art. 8 (adapted) 

Article 20 

Head office of the ⌦ insurance or ⌫ reinsurance undertaking 

Member  States  shall  require  that  the  head  offices  of  ⌦ insurance  or ⌫  reinsurance 
undertakings be situated in the same Member State as their registered offices. 

(cid:208) 2005/68/EC Art. 9 

Article 21 

Policy conditions and scales of premiums 

51. 

2. 

3. 

(cid:208) 2002/83/EC Art. 6(5) (adapted) 

Member States shall not adopt provisions requiring ⌦ require ⌫ the prior approval 
or  systematic  notification  of  general  and  special  policy  conditions,  of  scales  of 
premiums,  of  the  technical  bases,  used  in  particular  for  calculating  scales  of 
premiums and technical provisions, or of forms and other printed documents which 
an  assurance  undertaking  intends  to  use  in  its  dealings  with  policyholders  ⌦ or 
ceding or retro-ceding undertakings ⌫. 

Notwithstanding  the  first  subparagraph, ⌦ However,  for  life  insurance  and ⌫  for 
the  sole  purpose  of  verifying  compliance  with  national  provisions  concerning 
actuarial  principles,  the  home  Member  State  may  require  systematic  notification  of 
the technical bases used for calculating scales of premiums and technical provisions,. 
without  tThat  requirement  constituting ⌦ shall  not  constitute ⌫  a  prior  condition 
for an assurance ⌦ the authorisation of a life insurance ⌫ undertaking to carry on 
its business. 

(cid:208) 92/49/EEC Art. 6 (adapted) 

Member States may ⌦ shall ⌫ not retain or introduce prior notification or approval 
of  proposed  increases  in  premium  rates  except  as  part  of  general  price-control 
systems. 

Nothing  in  this  Directive  shall  prevent  Member  States  from ⌦ may ⌫  subjecting 
undertakings seeking or having obtained authorisation for class 18 in point A of the 
Annex  I  to  checks  on  their  direct  or  indirect  resources  in  staff  and  equipment, 
including  the  qualification  of  their  medical  teams  and  the  quality  of  the  equipment 
available  to  such  undertakings  to  meet  their  commitments  arising  out  of  this 
⌦ that ⌫ class of insurance. 

34. 

Nothing in this Directive shall prevent Member States from ⌦ may ⌫ maintaining 
in  force  or  introducing  ⌦ introduce ⌫  laws,  regulations  or  administrative 
provisions  requiring  approval  of  the  memorandum  and  articles  of  association  and 

EN 

56 

   EN 

 
 
 
 
 
 
 
communication  of  any  other  documents  necessary  for  the  normal  exercise  of 
supervision. 

(cid:208) 2005/68/EC Art. 10 (adapted) 

Article 22 

Economic requirements of the market 

Member  States  may  ⌦ shall ⌫  not  require  that  any  application  for  authorisation  be 
considered in the light of the economic requirements of the market. 

(cid:208) 2005/68/EC Art. 11 (adapted) 
(cid:214) new 

Article 23 

Scheme of operations 

1. 

The scheme of operations referred to in point (c) of Article 6(b) 18(1) shall include 
particulars or evidence of ⌦ the following ⌫ : 

(a) 

(b) 

(c) 

(d) 

the  nature  of  the  risks ⌦ or  commitments ⌫  which  the ⌦ insurance  or ⌫ 
reinsurance undertaking ⌦ concerned ⌫ proposes to cover; 

the  kinds  of  reinsurance  arrangements  which  the  reinsurance  undertaking 
proposes to make with ceding undertakings; 

the guiding principles as ⌦ to reinsurance and ⌫ to retrocession; 

the  (cid:214) basic  own  fund   items  constituting  the  (cid:214) absolute  floor  of  the 
Minimum Capital Requirement  minimum guarantee fund ;; 

(cid:208) 92/49/EEC Art. 7 (adapted) 

(de)  estimates  of  the  costs  of  setting  up  the  administrative  services  and  the 
organization  for  securing  business;  the  financial  resources  intended  to  meet 
those costs and, if the risks to be covered are classified in class 18 in point A of 
the  Annex  I,  the  resources  at  the  undertaking's  disposal  ⌦ of  the  insurance 
undertaking ⌫ for the provision of the assistance promised. 

2. 

In  addition  to  the  requirements  ⌦ set  out ⌫  in  paragraph 1,  the  scheme  of 
operations shall for the first three financial years contain ⌦ the scheme shall include 
the following ⌫ : 

(a)  estimates  of  management  expenses  other  than  installation  costs,  in  particular 

(cid:208) 2005/68/EC Art. 11 (adapted) 

current general expenses and commissions; 

(b) estimates of premiums or contributions and claims; 

(ca)  a forecast balance sheet; 

EN 

57 

   EN 

 
 
 
 
 
 
 
(cid:216) new 

(b) 

(c) 

estimates  of  the  future  Solvency  Capital  Requirement,  as  provided  for  in 
Chapter VI, Section 4, Subsection 1, on the basis of the forecast balance sheet 
referred  to  in  point  (a),  as  well  as  the  method  of  calculation  used  to  derive 
those estimates; 

estimates  of  the  future  Minimum  Capital  Requirement,  as  provided  for  in 
Articles 126 and 127, on the basis of the forecast balance sheet referred to in 
point (a), as well as the method of calculation used to derive those estimates; 

(cid:208) 2005/68/EC Art. 11 
(cid:214) new 

(d) 

estimates  of  the  financial  resources  intended  to  cover  (cid:214) technical  provisions, 
the  Minimum  Capital  Requirement   underwriting 
the 
(cid:214) Solvency Capital Requirement  solvency margin.  

liabilities  and 

(cid:208) 92/49/EEC Art. 7 (adapted) 

and,(e) in addition ⌦ for non-life insurance and reinsurance also the following ⌫ , 

for the first three financial years: 

(ei)  estimates  of  management  expenses  other  than  installation  costs,  in 

particular current general expenses and commissions; 

(fii)  estimates of premiums or contributions and claims; 

(cid:208) 2002/83/EC Art. 7 (adapted) 

(f) 

in  addition,  ⌦for  life  insurance  also ⌫  ,  for  the  first  three  financial  years:
 (e) a plan setting out detailed estimates of income and expenditure in respect of 
direct  business,  ⌦  reinsurance  ⌫  reassurance  acceptances  and  ⌦ 
reinsurance ⌫ reassurance cessions;. 

(f) a forecast balance sheet; 

(g)  estimates  relating  to  the  financial  resources  intended  to  cover  underwriting 
liabilities and the solvency margin. 

(cid:208) 2005/68/EC Art. 12 (adapted) 

Article 24 

Shareholders and members with qualifying holdings 

1. 

The  competent  ⌦ supervisory ⌫  authorities  of  the  home  Member  State  shall  not 
grant  to  an  undertaking  an  authorisation  to  take  up  the  business  of  ⌦ insurance 
or ⌫  reinsurance  before  they  have  been  informed  of  the  identities  of  the 
shareholders  or  members,  direct  or  indirect,  whether  natural  or  legal  persons,  who 
have qualifying holdings in that undertaking and of the amounts of those holdings. 

EN 

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The same ⌦ Those ⌫ authorities shall refuse authorisation if, taking into account 
the  need  to  ensure  the  sound  and  prudent  management  of  a ⌦ an  insurance  or ⌫ 
reinsurance  undertaking,  they  are  not  satisfied  as  to  the  qualifications  of  the 
shareholders or members. 

(cid:208) 2007/44/EC Art. 1(1), Art. 2(1) 
and Art. 4(1) (adapted) 

2. 

For  the purposes  of this definition paragraph 1, in the context of Articles 8 and  15 
and of the other levels of holding referred to in Article 15, the voting rights referred 
to in Articles 9 and 10 of Directive 2004/109/EC, as well as the conditions regarding 
aggregation  thereof  laid  down  in  Article  12(4)  and  (5)  of  that  Directive,  shall  be 
taken into account. 

Member States shall not take into account voting rights or shares which investment 
firms  or  credit  institutions  may  hold  as  a  result  of  providing  the  underwriting  of 
financial instruments and/or placing of financial instruments on a firm commitment 
basis  included  under  point  6  of  Section  A  of  Annex  I  to  Directive  2004/39/EC, 
provided  that  those  rights  are,  on  the  one  hand,  not  exercised  or  otherwise  used  to 
intervene in the management of the issuer and, on the other, disposed of within one 
year of the acqusition". 

(cid:208) 73/239/EEC Art. 12, 
2002/83/EC Art. 9, and 
2005/68/EC Art. 13 (adapted) 

Article 25 

Refusal of authorisation 

Any decision to refuse an authorisation shall be accompanied by the precise grounds for doing 
so and notified to the undertaking in question ⌦ concerned ⌫ . 

Each Member State shall make provision for a right to apply to the courts should there be any 
refusal ⌦ where an authorisation is refused ⌫. 

(cid:208) 73/239/EEC Art. 12, 
2002/83/EC Art. 9 and 
2005/68/EC Art. 13 (adapted) 

(cid:208) 73/239/EEC Art. 12, 
2002/83/EC Art. 9, and 
2005/68/EC Art. 13 (adapted) 

the  competent 
Such  provision  shall  also  be  made  with  regard 
⌦ supervisory ⌫ authorities have not dealt with an application for an authorisation upon the 
expiry of a period of ⌦ within ⌫ six months from ⌦ of ⌫ the date of its receipt. 

to  cases  where 

EN 

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(cid:208) 2005/68/EC Art. 60(2) 
(adapted) 

Article 26 

Prior consultation with the competent ⌦ supervisory ⌫ authorities of other Member States 

1. 

The  competent  ⌦ supervisory ⌫  authorities  of  the  other  Member  State  involved 
shall  be  consulted  prior  to  the  granting  of  an  authorisation  to  a  life  assurance 
⌦ an ⌫ undertaking, which is ⌦ any of the following ⌫: 

(cid:208) 2005/68/EC Art. 14, Art. 57(1) 
and Art. 60(2) (adapted) 

(a) 

(b) 

a  subsidiary  of  an  insurance  or  reinsurance  undertaking  authorised  in  another 
Member State; or 

a  subsidiary  of  the  parent  undertaking  of  an  insurance  or  reinsurance 
undertaking authorised in another Member State; or 

(c)  ⌦ an undertaking ⌫ controlled by the same person, whether natural or legal, 
who  controls  an  insurance  or  reinsurance  undertaking  authorised  in  another 
Member State. 

(cid:208) 2005/68/EC Art. 60(2) 
(adapted) 

2. 

The  competent  authority  ⌦ authorities ⌫  of  a  Member  State  involved  ⌦ which 
are ⌫ responsible for the supervision of credit institutions or investment firms shall 
be  consulted  prior  to  the  granting  of  an  authorisation  to  a  life  assurance  ⌦ an 
insurance ⌫ undertaking which is ⌦ any of the following ⌫ : 

(cid:208) 2005/68/EC Art. 14, Art. 57.1 
and Art. 60.2 (adapted) 

(a) 

(b) 

a  subsidiary  of  a  credit  institution  or  investment  firm  authorised  in  the 
Community; or 

a subsidiary of the parent undertaking of a credit institution or investment firm 
authorised in the Community; or 

(c)  ⌦ an undertaking ⌫ controlled by the same person, whether natural or legal, 
who  controls  a  credit  institution  or  investment  firm  authorised  in  the 
Community. 

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(cid:208) 2002/87/EC Art. 22(1), and 
2005/68/EC Art. 14 and Art. 60(2) 
(adapted) 
(cid:214) new 

3. 

The  relevant  competent  authorities  referred  to  in  paragraphs  1  and  2  shall  in 
particular  consult  each  other  when  assessing  the  suitability  of  the  shareholders  and 
the (cid:214) fit and proper requirements of all persons who effectively run the undertaking 
or have other key functions  reputation and experience of directors involved in the 
management of another entity of the same group. 

They  shall  inform  each  other  of  any  information  regarding  the  suitability  of 
shareholders and the (cid:214) fit and proper requirements of all persons who effectively run 
the undertaking or have other key functions  reputation and experience of directors 
which is of relevance to the other competent authorities involved for the granting of 
an authorisation as well as for the ongoing assessment of compliance with operating 
conditions. 

(cid:208) 2002/83/EC (adapted) 

TITLE III 

CONDITIONS GOVERNING THE BUSINESS OF ASSURANCE 

CHAPTER 1 III 

PRINCIPLES AND METHODS OF FINANCIAL SUPERVISION 
⌦ SUPERVISORY AUTHORITIES AND GENERAL RULES ⌫ 

(cid:216) new 

Article 27 

Main objective of supervision 

Member  States  shall  ensure  that  the  supervisory  authorities  are  provided  with  the  necessary 
means  to  achieve  the  main  objective  of  supervision,  namely  the  protection  of  policyholders 
and beneficiaries. 

Article 28 

General principles of supervision 

1. 

Supervision  shall  be  based  on  a  prospective  and  risk-oriented  approach.  It  shall 
include the verification on a continuous basis of the proper operation of the insurance 
or  reinsurance  business  and  of  the  compliance  with  supervisory  provisions  by 
insurance and reinsurance undertakings. 

EN 

61 

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2. 

3. 

1. 

2. 

Supervision shall be carried out both off-site and on-site.  

Member  States  shall  ensure  that  the  requirements  laid  down  in  this  Directive  are 
applied in a manner which is proportionate to the nature, complexity and scale of the 
risks inherent in the business of an insurance or reinsurance undertaking. 

(cid:208) 2005/68/EC Art. 15 (adapted) 
and 2002/83/EC Art. 10 (adapted)  
(cid:214) new 

Article 29 

Competent ⌦ Supervisory ⌫ authorities and object ⌦ scope ⌫ of supervision 

The  financial  supervision  of  a  ⌦ insurance  and ⌫  reinsurance  undertaking 
⌦ undertakings ⌫  ,  including  that  of  the  business  it  carries ⌦ they  carry ⌫  on 
either  through  branches  or  under  the  freedom  to  provide  services,  shall  be  the  sole 
responsibility of the home Member State. 

If  the  competent  authorities  of  the  host  Member  State  have  reason  to  consider  that 
the activities of a reinsurance undertaking might affect its financial soundness, they 
shall  inform  the  competent  authorities  of  the  reinsurance  undertaking's  home 
Member  State.  The  latter  authorities  shall  determine  whether  the  reinsurance 
undertaking is complying with the prudential rules laid down in this Directive. 

The  fFinancial  supervision  pursuant  to  paragraph 1  shall  include  verification,  with 
respect  to  the  reinsurance  undertaking's  entire  business  ⌦ of  the  insurance  and 
reinsurance undertaking ⌫, of its state of solvency, of the establishment of technical 
provisions  and  of  the  (cid:214) eligible  own  funds   assets  covering  them,  in  accordance 
with  the  rules  laid  down  or  practices  followed  in  the  home  Member  State  under 
provisions adopted at Community level. 

(cid:208) 92/49/EEC Art. 9 (adapted) 

Where the ⌦ insurance ⌫ undertaking in question ⌦ concerned ⌫ is authorised 
to cover the risks classified in class 18 in point A of the Annex I, supervision shall 
extend  to  monitoring  of  the  technical  resources  which  the  ⌦ insurance ⌫ 
undertaking  has  at  its  disposal  for  the  purpose  of  carrying  out  the  assistance 
operations  it  has  undertaken  to  perform,  where  the  law  of  the  home  Member  State 
provides for the monitoring of such resources. 

3. 

The competent supervisory authorities of the home Member State shall require every 
insurance  undertaking  to  have  sound  administrative  and  accounting  procedures  and 
adequate internal control mechanisms.  

13. 

If  the  competent⌦ supervisory ⌫  authorities  of  the  Member  State  ⌦ where  the 
risk is situated or ⌫ of the commitment have reason to consider that the activities of 
an  assurance ⌦ insurance  or  reinsurance ⌫  undertaking  might  affect  its  financial 

(cid:208) 2002/83/EC Art. 10(1) 
(adapted) 

EN 

62 

   EN 

 
 
 
 
 
soundness,  they  shall  inform  the  competent  ⌦ supervisory ⌫  authorities  of  the 
undertaking's home Member State ⌦ of that undertaking ⌫. 

The  latter  ⌦ supervisory ⌫  authorities  ⌦ of  the  home  Member  State ⌫  shall 
determine  whether  the  undertaking  is  complying  with  the  prudential  principles  laid 
down in this Directive. 

(cid:216) new 

Article 30 

Transparency and accountability 

1. 

2. 

3. 

4. 

The supervisory authorities shall conduct their tasks in a transparent and accountable 
manner with due respect for the protection of confidential information. 

Member States shall ensure that the following information is disclosed: 

(a) 

(b) 

(c) 

(d) 

the texts of laws, regulations, administrative rules and general guidance in the 
field of insurance regulation; 

the general criteria and methods used in the supervisory review process as set 
out in Article 36; 

aggregate  statistical  data  on  key  aspects  of  the  application  of  the  prudential 
framework; 

the  manner  of  exercise  of  the  options  and  discretions  provided  for  in  this 
Directive 

(e) 

the objectives of the supervision and its main functions and activities. 

The disclosure, provided for in the first subparagraph shall be sufficient to enable a 
comparison of the supervisory approaches adopted by the supervisory authorities of 
the different Member States. 

The disclosure shall be made in a common format and be updated regularly. It shall 
be accessible at a single electronic location in each Member State. 

Member  States  may  provide  for  transparent  procedures  regarding  the  appointment 
and  dismissal  of  the  members  of  the  governing  and  managing  bodies  of  their 
supervisory authorities.  

The  Commission  shall  adopt  implementing  measures  relating  to  paragraph  2 
specifying the key aspects on which aggregate statistical data are to be disclosed, and 
the format, structure, contents list and publication date of the disclosures. 

Those measures designed to amend non-essential elements of this Directive shall be 
adopted  in  accordance  with  the  regulatory  procedure  with  scrutiny  referred  to  in 
Article 304(3). 

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(cid:208) 2005/68/EC Art. 60(3) 
(adapted) 
(cid:214) new 

⌦ Article 31 

1. 

32. 

4. 

Prohibition of refusal of reinsurance contracts or retrocession contracts ⌫ 

The  home  Member  State  of  the ⌦ an ⌫  insurance  undertaking  shall  not  refuse  a 
reinsurance  contract  concluded  by  the  insurance  undertaking  with  a  reinsurance 
undertaking  authorised  in  accordance  with  Directive  2005/68/EC  or  an  insurance 
this 
undertaking  authorised 
DirectiveArticle  14  on  grounds  directly  related  to  the  financial  soundness  of  the 
⌦ that ⌫ reinsurance undertaking or the ⌦ that ⌫ insurance undertaking. 

in  accordance  with  Directive  73/239/EEC  or 

(cid:208) 2005/68/EC Art. 15 (adapted) 

The  home  Member  State  of  the  reinsurance  undertaking  shall  not  refuse  a 
retrocession  contract  concluded  by  the  ⌦ a ⌫  reinsurance  undertaking  with  a 
reinsurance undertaking authorised in accordance with this Directive or an insurance 
undertaking  authorised  in  accordance  with  Directives  73/239/EEC  or  2002/83/EC 
Article 14 on grounds directly related to the financial soundness of that reinsurance 
undertaking or that insurance undertaking. 

The competent authorities of the home Member State shall require every reinsurance 
undertaking  to  have  sound  administrative  and  accounting  procedures  and  adequate 
internal control mechanisms. 

(cid:208) 2005/68/EC Art. 16 (adapted) 

Article 32 

Supervision of branches established in another Member State 

The  Member  State  of  the  branch ⌦ States ⌫  shall  provide  that,  where  a ⌦ an  insurance 
or ⌫  reinsurance  undertaking  authorised  in  another  Member  State  carries  on  business 
through  a  branch,  the  competent  ⌦ supervisory ⌫  authorities  of  the  home  Member  State 
may,  after  having  first  informed  the  competent  ⌦ supervisory ⌫  authorities  of  the 
⌦ host ⌫ Member State of the branch ⌦ concerned ⌫, carry out themselves, or through 
the  intermediary  of  persons  they  appoint  ⌦ appointed ⌫  for  that  purpose,  on-the-spot 
verification ⌦ on-site  verifications ⌫  of  the  information  necessary  to  ensure  the  financial 
supervision of the undertaking. 

The  authorities  of  the  ⌦ host ⌫  Member  State  of  the  branch  ⌦ concerned ⌫  may 
participate in that verification ⌦ those verifications ⌫. 

EN 

64 

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(cid:208) 2002/83/EC Art. 13 (adapted) 

Article 33 

Accounting, prudential and statistical information: supervisory powers 

1. 

12. 

23. 

(cid:208) 84/641/EEC Art. 11 (adapted) 

Each  Member  State  ⌦ States ⌫  shall 
require  every  ⌦ insurance  and 
reinsurance ⌫ undertaking whose head office is situated in its ⌦ their ⌫ territory 
to  produce  an  annual  account,  covering  all  types  of  operation,  of  its  financial 
situation, solvency and, as regards cover for risks listed in class under No 18 in point 
A  of  the  Annex  I,  other  resources  available  to  them  for  meeting  their  liabilities, 
where its ⌦ their ⌫ laws provide for supervision of such resources. 

(cid:208) 87/343/EEC Art. 1.7 (adapted) 

In  respect  of  credit  insurance,  the ⌦ non-life  insurance ⌫ undertaking  shall  make 
available  to  the  supervisory  authority ⌦ authorities ⌫  accounts  showing  both  the 
technical  results  and  the  technical  ⌦ provisions ⌫  reserves  relating  to  that 
business. 

(cid:208) 2005/68/EC Art. 17 (adapted) 

Member  States  shall  require  ⌦ insurance  and ⌫  reinsurance  undertakings  with 
⌦ whose ⌫  head  offices  ⌦ is  situated ⌫  within  their  territories  to  render 
⌦ submit ⌫ periodically the returns, together with statistical documents, which are 
necessary for the purposes of supervision. 

The  competent  ⌦ supervisory ⌫  authorities  shall  provide  each  other  with  any 
documents and information that are useful for the purposes of supervision. 

(cid:208) 2002/83/EC Art. 13 (adapted) 
(cid:214) new 

⌦ Article 34 

General Supervisory powers ⌫ 

(cid:216) new 

1. 

2. 

Member  States  shall  ensure  that  the  supervisory  authorities  have  the  power  to  take 
preventive  and  corrective  measures  to  ensure  that  insurance  and  reinsurance 
undertakings  comply  with  the  laws,  regulations  and  administrative  provisions 
adopted pursuant to this Directive. 

The  supervisory  authorities  shall  have  the  power  to  take  any  measures,  including 
where  appropriate,  those  of  an  administrative  or  financial  nature,  with  regard  to 

EN 

65 

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3. 

4. 

insurance  or  reinsurance  undertakings,  and  the  members  of  their  administrative  or 
management body or the persons who control that body. 

Member States shall ensure that supervisory authorities have the power to require all 
information necessary to conduct supervision in accordance with Article 35. 

Member States shall ensure that supervisory authorities have the power to develop, in 
addition  to  the  calculation  of  the  Solvency  Capital  Requirement  and  where 
appropriate,  quantitative  tools  under  the  supervisory  review  process  to  assess  the 
ability of the insurance or reinsurance undertakings to cope with possible events or 
future changes in economic conditions that could have unfavourable effects on their 
overall financial standing. The supervisory authorities shall require that such tests are 
performed by the undertakings. 

⌦ 5.  The  supervisory  authorities  shall  have  the  power  to  carry  out  on-site  inspections  at 

the premises of the insurance and reinsurance undertakings. ⌫ 

(cid:208) 2002/83/EC Art. 13 (adapted) 

6. 

Supervisory powers shall be applied in a timely and proportionate manner. 

(cid:216) new 

7. 

The  powers  with  regard  to  insurance  and  reinsurance  undertakings  referred  to  in 
paragraphs 1 to 5 shall be available with regard to out-sourced activities of insurance 
and reinsurance undertakings. 

(cid:216) new 

8.(c) 

ensure  that  those ⌦ The ⌫  measures ⌦ set  out  in  paragraphs  1  to  5  and  7  shall 
be ⌫ are carried out, if need be by enforcement, where appropriate, through judicial 
channels. 

(cid:208) 2002/83/EC Art. 13 (adapted) 

(cid:208) 2002/83/EC Art. 13 (adapted) 

3.  Every  Member  State  shall  take  all  steps  necessary  to  ensure  that  the  competent 
authorities have the powers and means necessary for the supervision of the business 
of  assurance  undertakings  with  head  offices  within  their  territories,  including 
business  carried  on  outside  those  territories,  in  accordance  with  the  Council 
directives  governing  those  activities  and  for  the  purpose  of  seeing  that  they  are 
implemented. 

These powers and means must, in particular, enable the competent authorities to: 

(a)  make detailed enquiries regarding the assurance undertaking's situation and the 

whole of its business, inter alia, by: 

- 

gathering  information  or  requiring  the  submission  of  documents 
concerning its assurance business, 

EN 

66 

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- 

carrying  out  on-the-spot  investigations  at  the  assurance  undertaking's 
premises; 

(b) 

take  any  measures,  with  regard  to  the  assurance  undertaking,  its  directors  or 
managers or the persons who control it, that are appropriate and necessary to 
ensure  that  the  undertaking's  business  continues  to  comply  with  the  laws, 
regulations  and  administrative  provisions  with  which  the  undertaking  must 
comply in each Member State and in particular with the scheme of operations 
in so far as it remains mandatory, and to prevent or remedy any irregularities 
prejudicial to the interests of the assured persons; 

(cid:216) new 

Article 35 

Information to be provided for supervisory purposes 

1. 

Member States shall require insurance and reinsurance undertakings to submit to the 
supervisory  authorities  the  information  which  is  necessary  for  the  purposes  of 
supervision. That information shall include at least the information necessary for the 
following when performing the process referred to in Article 36: 

(a) 

to  assess  the  system  of  governance  applied  by  the  undertakings,  the  business 
they are carrying on, the valuation principles applied for solvency purposes, the 
risks faced and the risk management systems, and their capital structure, needs 
and management; 

(b) 

to  make  any  appropriate  decisions  resulting  from  the  exercise  of  their 
supervisory rights and duties. 

2. 

Member  States  shall  ensure  that  the  supervisory  authorities  have  the  following 
powers: 

(a) 

to determine the nature, the scope and the format of the information referred to 
in  paragraph  1  which  they  require  insurance  and  reinsurance  undertakings  to 
submit at the following points in time: 

(i) 

at predefined periods; 

(ii)  upon occurrence of predefined events; 

(iii)  during  enquiries  regarding  the  situation  of  an  insurance  or  reinsurance 

undertaking; 

(b) 

to obtain any information regarding contracts which are held by intermediaries 
or regarding contracts which are entered into with third parties; 

(c) 

to require information from external experts, such as auditors and actuaries. 

3. 

The information referred to in paragraphs 1 and 2 shall comprise the following: 

(a) 

qualitative  or  quantitative  elements,  or  any  appropriate  combination 
thereof; 

(b)  historic, current or prospective elements, or any appropriate combination 

thereof; 

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(c) 

data  from  internal  or  external  sources,  or  any  appropriate  combination 
thereof. 

4. 

The  information  referred  to  in  paragraphs  1  and  2  shall  comply  with  the  following 
principles: 

5. 

6. 

(a) 

(b) 

it  must  reflect  the  nature,  scale  and  complexity  of  the  business  of  the 
undertaking concerned; 

it  must  be  accessible,  complete  in  all  material  respects,  comparable  and 
consistent over time; 

(c) 

it must be relevant, reliable and comprehensible. 

Member  States  shall  require  insurance  and  reinsurance  undertakings  to  have 
appropriate  systems  and  structures  in  place  to  fulfil  the  requirements  laid  down  in 
paragraphs  1  to  4  as  well  as  a  written  policy,  approved  by  the  administrative  or 
management body of the insurance or reinsurance undertaking, ensuring the on-going 
appropriateness of the information submitted. 

The  Commission  shall  adopt  implementing  measures  specifying  the  information 
referred  to  in  paragraphs  1  to  5,  with  a  view  to  ensuring  to  the  appropriate  extent 
convergence of supervisory reporting. 

Those  measures,  designed  to  amend  non-essential  elements  of  this  Directive,  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304 (3). 

Member  States  may  also  make  provision  for  the  competent authorities  to  obtain  any 
information regarding contracts which are held by intermediaries. 

(cid:208) 2002/83/EC Art. 13 and 
2005/68/EC Art. 17(4) (adapted) 

(cid:216) new 

Article 36 

Supervisory review process  

1. 

Member States shall ensure that the supervisory authorities review and evaluate the 
strategies, processes and reporting procedures which are established by the insurance 
and reinsurance undertakings to comply with the laws, regulations and administrative 
provisions adopted pursuant to this Directive. 

That  review  and  evaluation  shall  comprise  the  assessment  of  the  qualitative 
requirements relating to the system of governance, the assessment of the risks which 
the  undertakings  concerned  face  or  may  face  and  the  assessment  of  the  ability  of 
those  undertakings  to  assess  those  risks  taking  into  account  the  environment  the 
undertakings are operating in. 

2. 

The supervisory authorities shall in particular review and evaluate compliance with 
the following: 

(a) 

the system of governance as set out in Chapter IV, Section 2;  

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(b) 

the technical provisions as set out in Chapter VI, Section 2; 

(c) 

the capital requirements as set out in Chapter VI, Sections 4 and 5; 

(d) 

the investment rules as set out in Chapter VI, Section 6; 

(e) 

the quality and quantity of own funds as set out in Chapter VI, Section 3; 

(f)  where  the  insurance  or  reinsurance  undertaking  uses  a  full  or  partial  internal 
model, on-going compliance with the requirements for full and partial internal 
models set out in Chapter VI, Section 4, Subsection 3.  

The  supervisory  authorities  shall  have  in  place  appropriate  monitoring  tools  that 
enable  them  to  identify  deteriorating  financial  conditions  in  an  insurance  or 
reinsurance undertaking and to monitor how that deterioration is remedied. 

The supervisory authorities shall assess the adequacy of the methods and practices of 
the  insurance  and  reinsurance  undertakings  designed  to  identify  possible  events  or 
future changes in economic conditions that could have adverse effects on the overall 
financial standing of the undertaking concerned. 

The supervisory authorities shall assess the ability of the undertakings to withstand 
those possible events or future changes in economic conditions. 

The supervisory authorities shall have the necessary powers to require insurance and 
reinsurance  undertakings  to  remedy  weaknesses  or  deficiencies  identified  in  the 
supervisory review process. 

3. 

4. 

5. 

6. 

The review and evaluation shall be conducted regularly. 

The supervisory authorities shall establish the minimum frequency and scope of the 
reviews,  evaluations  and  assessments  referred  to  in  paragraphs  1,  2  and  4  having 
regard  to  the  nature,  scale  and  complexity  of  the  activities  of  the  insurance  or 
reinsurance undertaking concerned. 

Article 37 

Capital add-on 

1. 

Following the supervisory review process supervisory authorities may in exceptional 
circumstances set, a capital add-on for an insurance or reinsurance undertaking by a 
decision stating the reasons. That possibility shall only exist in the following cases: 

(a) 

(b) 

the  supervisory  authority  concludes  that  the  risk  profile  of  the  insurance  or 
reinsurance undertaking deviates significantly from the assumptions underlying 
the Solvency Capital Requirement, as calculated using the standard formula in 
accordance  with  Chapter  VI,  Section  4,  Subsection  2  and  the  request  under 
Article  117  has  proven  inefficient  or  while  a  partial  or  full  internal  model  is 
being developed in accordance with that Article; 

the  supervisory  authority  concludes  that  the  risk  profile  of  the  insurance  or 
reinsurance undertaking deviates significantly from the assumptions underlying 
the  Solvency  Capital  Requirement,  as  calculated  using  an  internal  model  or 
partial internal model in accordance with Chapter VI, Section 4, Subsection 3, 
because certain quantifiable risks are captured insufficiently and the adaptation 
of  the  model  to  better  reflect  the  given  risk  profile  has  failed  within  an 
appropriate timeframe; 

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2 

3. 

4. 

5. 

6. 

(c) 

the  supervisory  authority  concludes  that  the  system  of  governance  of  an 
insurance or reinsurance undertaking deviates significantly from the standards 
laid down in Chapter IV, Section 2, that those deviations prevent it from being 
able to properly assess and manage the risks that it is or could be exposed to 
and  the  application  of  other  measures  is  in  itself  unlikely  to  improve  the 
deficiencies sufficiently within an appropriate timeframe. 

In the cases set out in points (a) and (b) of paragraph 1 the capital add-on shall  be 
calculated  in  such  a  way  as  to  ensure  that  the  undertaking  complies  with  Article 
101(3). 

In the cases set out in points (b) and (c) of paragraph 1 the supervisory authority shall 
ensure that the insurance or reinsurance undertaking makes all efforts to remedy the 
deficiencies that led to the imposition of the capital add-on. 

The capital add-on referred to in paragraph 1 shall be reviewed at least once a year 
by the supervisory authority and be removed when the undertaking has remedied the 
deficiencies which led to its imposition. 

The capital add-on may have a permanent character only where the conditions set out 
in  point  (a)  of  paragraph  1  continue  to  apply  because  the  risk  profile  of  the 
undertaking  concerned  continues  to  deviate  significantly  from  the  assumptions 
underlying  the  Solvency  Capital  Requirement,  as  calculated  in  accordance  with 
Chapter VI, Section 4, Subsection 2. 

The Solvency Capital Requirement including the capital add-on imposed according 
to  points  (a)  and  (b)  of  paragraph  1  shall  replace  the  inadequate  Solvency  Capital 
Requirement. 

The  Solvency  Capital  Requirement  including  the  capital  add-on  shall  in  any  case 
replace  the  inadequate  Solvency  Capital  Requirement  for  the  purposes  of 
establishing the non-compliance with the Solvency Capital Requirement referred to 
in Article 136. 

laying  down  further 
The  Commission  shall  adopt 
specifications  for  the  circumstances  under  which  a  capital  add-on  may  be  imposed 
and the calculation thereof. 

implementing  measures 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304(3). 

Article 38 

Supervision of outsourced activities 

1. 

Member  States  shall  ensure  that  insurance  or  reinsurance  undertakings  which 
outsource an activity, in accordance with Article 48, provide for the following: 

(a) 

(b) 

the  service  provider  must  cooperate  with  the  supervisory  authorities  of  the 
insurance  and  reinsurance  undertaking  in  connection  with  the  outsourced 
activity; 

the  insurance  and  reinsurance  undertakings,  their  auditors  and  the  relevant 
supervisory  authorities  must  have  effective  access  to  data  related  to  the 
outsourced  activities,  as  well  as  to  the  business  premises  of  the  service 

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2. 

1. 

provider,  where  those  premises  are  located  within  the  Community,  and  the 
supervisory authorities must be able to exercise those rights of access. 

The Member State where the service provider is located shall permit the supervisory 
authorities  of  the  insurance  or  reinsurance  undertaking  to  carry  out  themselves,  or 
through the intermediary of persons they appoint for that purpose, on-site-inspections 
at  the  premises  of  the  service  provider,  after  having  first  informed  its  own 
appropriate  authorities.  In  the  case  of  a  non  supervised  entity  the  appropriate 
authority shall be the supervisory authority. 

The  supervisory  authorities  of  the  Member  State  of  the  insurance  or  reinsurance 
undertaking  may  delegate  such  on-site  inspections  to  the  supervisory  authorities  of 
the Member State where the service provider is located. 

(cid:208) 2002/83/EC Art. 14 (adapted) 
(cid:214) new 

Article 39 

Transfer of portfolio 

Under  the  conditions  laid  down  by  national  law,  each  Member  State ⌦ States ⌫ 
shall  authorise  assurance  ⌦ insurance  and  reinsurance ⌫  undertakings  with  head 
offices  within  its  ⌦ their ⌫  territory  to  transfer  all  or  part  of  their  portfolios  of 
contracts,  concluded  ⌦ either ⌫  under  either  the  right  of  establishment  or  the 
freedom  to  provide  services,  to  an  accepting  office  ⌦ undertaking ⌫  established 
within the Community. , 

⌦ Such  transfer  may  only  be  authorised ⌫  if  the  competent⌦ supervisory ⌫ 
authorities  of  the  home  Member  State  of  the  accepting  ⌦ undertaking ⌫  office 
certify  that  after  taking  the  transfer  into  account,  the  latter  ⌦ accepting 
undertaking ⌫ possesses the necessary (cid:214) eligible own funds to cover the Solvency 
Capital Requirement referred to in Article 100 subparagraph 1  solvency margin. 

⌦ 2. 

In the case of insurance undertakings paragraphs 3 to 6 shall apply. ⌫ 

23. 

34. 

45. 

Where a branch proposes to transfer all or part of its portfolio of contracts, concluded 
under  either  the  right  of  establishment  or  the  freedom  to  provide  services,  the 
Member State of the branch ⌦ where that branch is situated ⌫ shall be consulted. 

In  the  circumstances  referred  to  in  paragraphs  1  and  23,  the  ⌦ supervisory ⌫ 
authorities of the home Member State of the transferring assurance ⌦ insurance ⌫ 
undertaking  shall  authorise  the  transfer  after  obtaining  the  agreement  of  the 
competent ⌦ supervisory ⌫ authorities ⌦ of the Member States in which the risks 
are situated, or ⌫ of the Member States of the commitment. 

The competent ⌦ supervisory ⌫ authorities of the Member States consulted shall 
give their opinion or consent to the competent ⌦ supervisory ⌫ authorities of the 
home  Member  State  of  the  transferring  assurance  ⌦ insurance ⌫  undertaking 
within three months of receiving a request ⌦ for consultation. ⌫ ; 

tThe absence of any response within that period from the authorities consulted shall 
be considered equivalent to a favourable opinion or ⌦ as ⌫ tacit consent. 

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56. 

A  transfer  authorised  in  accordance  with  this  Article  paragraphs  1  to  5  shall  be 
published as laid down by national law ⌦ in the Member State in which the risk is 
situated, or ⌫ in the Member State of the commitment. 

Such  transfers  shall  automatically  be  valid  against  policyholders,  the  assured 
⌦ insured ⌫ persons and any other person having rights or obligations arising out 
of the contracts transferred. 

(cid:208) 92/49/EEC Art. 12 and 
2002/83/EC Art. 14 (adapted) 

This provision The first and second subparagraphs of this paragraph shall not affect 
⌦ the  right  of ⌫  the  Member  States'  rights  to  give  policy-holders  the  option  of 
cancelling contracts within a fixed period after a transfer. 

TITLE III CHAPTER IV - CONDITIONS GOVERNING THE 
BUSINESS OF ASSURANCE 

SECTION 1 – RESPONSIBILITY OF THE ADMINISTRATIVE OR MANAGEMENT 
BODY 

(cid:216) new 

(cid:216) new 

Article 40 

Responsibility of the administrative or management body  

Member States shall ensure that the administrative or management body of the insurance or 
reinsurance undertaking has the ultimate responsibility for the compliance, by the undertaking 
concerned, with the laws, regulations and administrative provisions adopted pursuant to this 
Directive. 

SECTION 2 - SYSTEM OF GOVERNANCE 

(cid:216) new 

Article 41 

General governance requirements 

1. 

Member  States  shall  require  all  insurance  and  reinsurance  undertakings  to  have  in 
place  an  effective  system  of  governance  which  provides  for  sound  and  prudent 
management of the business. 

That  system  shall  at  least  include  an  adequate  transparent  organisational  structure 
with a clear allocation and appropriate segregation of responsibilities and an effective 

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2. 

3. 

4. 

system for ensuring the transmission of information. It shall include compliance with 
the requirements laid down in Articles 42 to 48. 

The system of governance shall be subject to regular internal review. 

The system of governance shall be proportionate to the nature, scale and complexity 
of the operations of the insurance or reinsurance undertaking. 

Insurance  and  reinsurance  undertakings  shall  have  written  policies  in  relation  to  at 
least  risk  management,  internal  control,  internal  audit  and,  where  relevant, 
outsourcing. They shall ensure that those policies are implemented. 

Those  written  policies  shall  be  reviewed  at  least  annually. They  shall  be  subject  to 
prior approval by the administrative or management body and be adapted in view of 
any significant change in the system or area concerned. 

The  supervisory  authorities  shall  have  appropriate  means,  methods  and  powers  for 
verifying  the  system  of  governance  of  the  insurance  and  reinsurance  undertakings 
and for evaluating emerging risks identified by those undertakings which may affect 
their financial soundness. 

The  Member  States  shall  ensure  that  the  supervisory  authorities  have  the  powers 
necessary to request that the system of governance be improved and strengthened to 
ensure compliance with the requirements set out in Articles 42 to 48.  

Article 42 

Fit and proper requirements for persons who effectively run the undertaking or have other key 
functions  

1. 

2. 

3. 

1. 

Insurance and reinsurance undertakings shall ensure that all persons who effectively 
run  the  undertaking  or  have  other  key  functions  meet  at  all  times  the  following 
requirements: 

(a) 

their  professional  qualifications,  knowledge  and  experience  are  adequate  to 
enable sound and prudent management (fit); 

(b) 

they are of the highest repute and integrity (proper). 

Insurance and reinsurance undertakings shall notify the supervisory authority of any 
changes  to  the  identity  of  the  persons  who  effectively  run  the  undertaking  or  have 
other  key  functions,  along  with  all  information  needed  to  assess  whether  any  new 
persons appointed to manage the undertaking are fit and proper. 

Insurance and reinsurance undertakings shall notify their supervisory authority if any 
of the persons mentioned in paragraphs 1 and 2 have been replaced because they no 
longer fulfil the requirements referred to in point (b) of paragraph 1.  

Article 43 

Risk Management  

Insurance  and  reinsurance  undertakings  shall  have  in  place  an  effective  risk 
management  system  comprising  strategies,  processes  and  reporting  procedures 
necessary  to  monitor,  manage  and  report,  on  a  continuous  basis  the  risks,  on  an 

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individual  and  aggregated  level,  to  which  they  are  or  could  be  exposed,  and  their 
interdependencies. 

That  risk  management  system  shall  be  well  integrated  into  the  organisational 
structure  of  the  insurance  or  reinsurance  undertaking.  It  shall  contain  contingency 
plans.  

2. 

The risk management system shall cover the risks to be included in the calculation of 
the  Solvency  Capital  Requirement  as  set  out  in  Article  101(4)  as  well  as  the  risks 
which are not or not fully included in the calculation thereof. 

It shall cover at least the following areas: 

(a) 

underwriting and reserving; 

(b) 

asset – liability management; 

(c) 

investment, in particular derivatives and similar commitments; 

(d) 

liquidity and concentration risk management; 

(e) 

reinsurance and other risk mitigation techniques. 

3. 

4. 

5. 

The  written  policy  on  risk  management  referred  to  in  Article  41(3)  shall  comprise 
policies relating to points (a) to (e) of the second subparagraph of this paragraph.  

As regards investment risk insurance and reinsurance undertakings shall demonstrate 
that they comply with Chapter VI, Section 6. 

Insurance and reinsurance undertakings shall provide for a risk management function 
which shall be structured in such a way as to facilitate the implementation of the risk 
management system.  

For  insurance  and  reinsurance  undertakings  using  a  partial  or  full  internal  model 
approved  in  accordance  with  Articles  110  and  111  the  risk  management  function 
shall cover the following additional tasks: 

(a) 

to design and implement the internal model; 

(b) 

to test and validate the internal model; 

(c) 

(d) 

to document the internal model and any subsequent changes made to it; 

to inform the administrative or management body about the performance of the 
internal  model,  suggesting  areas  needing  improvement,  and  up-dating  that 
body on the status of efforts to improve previously identified weaknesses; 

(e) 

to  analyse  the  performance  of  the  internal  model  and  to  produce  summary 
reports thereof. 

Article 44 

Own risk and solvency assessment 

1. 

As  part  of  its  risk  management  system  every  insurance  or  reinsurance  undertaking 
shall conduct its own risk and solvency assessment. 

That assessment shall include at least the following: 

(a) 

the  overall  solvency  needs  taking  into  account  the  specific  risk  profile, 
approved risk tolerance limits and the business strategy of the undertaking; 

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(b) 

(c) 

the  compliance,  on  a  continuous  basis,  with  the  capital  requirements,  as  laid 
down  in  Chapters  VI,  Sections  4  and  5  and  with  the  requirements  regarding 
technical provisions, as laid down in Chapter VI, Section 2. 

from 

the  assumptions  underlying 

the  extent  to  which  the  risk  profile  of  the  undertaking  concerned  deviates 
the  Solvency  Capital 
significantly 
Requirement  as  laid  down  in  Article  101  (3),  calculated  with  the  standard 
formula  in  accordance  with  Chapter  VI,  Section  4,  Subsection  2  or  with  its 
partial  or  full  internal  model  in  accordance  with  Chapter  VI,  Section  4, 
Subsection 3. 

2. 

3. 

4. 

5. 

6. 

1. 

2. 

For the purposes of point (a) of paragraph 1, the undertaking concerned shall have in 
place processes which enable it to properly identify and measure the risks it faces in 
the short and the long term and also to identify possible events or future changes in 
economic  conditions  that  could  have  unfavourable  effects  on  its  overall  financial 
standing.  The  undertaking  shall  demonstrate  the  methods  used  to  determine  its 
overall solvency needs. 

In the case referred to in point (c) of paragraph 1 when an internal model is used, the 
assessment  shall  be  performed  together  with  the  recalibration  that  transforms  the 
internal  risk  numbers  into  the  Solvency  Capital  Requirement  risk  measure  and 
calibration. 

The  own  risk  and  solvency  assessment  shall  be  an  integral  part  of  the  business 
strategy and shall be taken into account on an ongoing basis in the strategic decisions 
of the undertaking. 

Insurance  and  reinsurance  undertakings  shall  perform  the  assessment  referred  to  in 
paragraph 1 regularly and without any delay following any significant change in their 
risk profile. 

The insurance and reinsurance undertakings shall inform the supervisory authorities 
of  the  results  of  each  own  risk  and  solvency  assessment  as  part  of  the  information 
reported under Article 35. 

Article 45 

Internal Control 

Insurance  and  reinsurance  undertakings  shall  have  in  place  an  effective  internal 
control system. 

That  system  shall  at  least  include  administrative  and  accounting  procedures,  an 
internal  control  framework,  appropriate  reporting  arrangements  at  all  levels  of  the 
undertaking and a permanent compliance function. 

The  compliance  function  shall  include  advising  the  administrative  or  management 
body on compliance with the laws, regulations and administrative provisions adopted 
pursuant to this Directive. It shall also include an assessment of the possible impact 
of  any  changes  in  the  legal  environment  on  the  operations  of  the  undertaking 
concerned and the identification and assessment of compliance risk.  

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Article 46 

Internal Audit 

1. 

2. 

3. 

4. 

Insurance and reinsurance undertakings shall provide for an effective and permanent 
internal audit function. 

The  internal  audit  function  shall  include  the  examination  of  the  compliance  of  the 
activities of an insurance and reinsurance undertaking with all its internal strategies, 
processes and reporting procedures. 

The  internal  audit  function  shall  also  include  an  evaluation  of  whether  the  internal 
control system of the undertaking remains sufficient and appropriate for its business.  

The internal audit function shall be objective and independent from the operational 
functions.  

Any  findings  and  recommendations  of  the  internal  audit  shall  be  reported  to  the 
administrative or management body which shall ensure compliance with the internal 
audit findings and recommendations. 

Article 47 

Actuarial Function 

1. 

Insurance  and  reinsurance  undertakings  shall  provide  for  an  effective  actuarial 
function to undertake the following : 

(a) 

(b) 

(c) 

to coordinate the calculation of technical provisions; 

to ensure the appropriateness of the methodologies and underlying models used 
as well as the assumptions made in the calculation of technical provisions; 

to  assess  the  sufficiency  and  quality  of  the  data  used  in  the  calculation  of 
technical provisions; 

(d) 

to compare best estimates against experience; 

(e) 

(f) 

(g) 

(h) 

(i) 

to  inform  the  administrative  or  management  body  of  the  reliability  and 
adequacy of the calculation of technical provisions; 

to oversee the calculation of technical provisions in the cases set out in Article 
81; 

to express an opinion on the overall underwriting policy; 

to express an opinion on the adequacy of reinsurance arrangements; 

to  contribute  to  the  effective  implementation  of  the  risk  management  system 
referred  to  in  Article  43,  in  particular  with  respect  to  the  risk  modelling 
underlying  the  calculation  of  the  capital  requirements  set  out  in  Chapter  VI, 
Sections 4 and 5 and the assessment referred to in Article 44. 

2. 

The  actuarial function shall be carried out by persons with sufficient knowledge of 
actuarial and financial mathematics and able where appropriate, to demonstrate their 
relevant experience and expertise with applicable professional and other standards. 

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Article 48 

Outsourcing 

1. 

2. 

Member  States  shall  ensure  that,  when  insurance  and  reinsurance  undertakings 
outsource critical or important operational functions or any insurance or reinsurance 
activities,  the  undertakings  remain  fully  responsible  for  discharging  all  of  their 
obligations under this Directive. 

Outsourcing of important operational activities shall not be undertaken in such a way 
as to lead to any of the following:  

(a) 

impairing  materially  the  quality  of  the  governance  system  of  the  undertaking 
concerned; 

(b) 

increasing unduly the operational risk; 

(c) 

impairing the ability  of the supervisory  authorities  to  monitor  the  compliance 
of the undertaking with its obligations; 

(d)  undermining continuous and satisfactory service to policyholders. 

3. 

Insurance  and  reinsurance  undertakings  shall,  in  a  timely  manner,  notify  the 
supervisory authorities prior to the outsourcing of important activities as well as of 
any subsequent material developments with respect to those activities. 

Article 49 

Implementing measures 

The Commission shall adopt implementing measures to further specify the following: 

(1) 

(2) 

(3) 

(4) 

the elements of the systems referred to in Articles 41, 43, 45 and 46, and in particular 
the areas to be covered by the asset – liability management and investment policy, as 
referred to in Article 43(2), of insurance and reinsurance undertakings; 

the functions referred to in Articles 43, 45, 46 and 47; 

the requirements set out in Article 42 and the functions subject thereto; 

the conditions under which outsourcing may be performed. 

Those measures designed to amend non-essential elements of this Directive by supplementing 
it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in 
Article 304(3). 

SECTION 3 – PUBLIC DISCLOSURE 

Article 50 

Report on Solvency and financial condition: contents 

1. 

Member States shall, taking into account the principles set out in paragraphs 3 and 4 
of Article 35, require insurance and reinsurance undertakings to publicly disclose, on 
an annual basis, a report on their solvency and financial condition. 

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That  report  shall  contain  the  following  information,  either  in  full  or  by  way  of 
references  to  equivalent  information  disclosed  publicly  under  other  legal  or 
regulatory requirements: 

(a) 

(b) 

(c) 

(d) 

a description of the business and the performance of the undertaking; 

a  description  of  the  system  of  governance  and  an  assessment  of  its  adequacy 
for the risk profile of the undertaking; 

a  description,  separately  for  each  category  of  risk,  of  the  risk  exposure, 
concentration, mitigation and sensitivity; 

a description, separately for assets, technical provisions, and other liabilities, of 
the bases and methods used for their valuation, together with an explanation of 
any  major  differences  in  the  bases  and  methods  used  for  their  valuation  in 
financial statements; 

(e) 

a description of the capital management, including at least the following: 

(i) 

the structure and amount of own funds, and their quality; 

(ii) 

(iii) 

(iv) 

the  amounts  of  the  Minimum  Capital  Requirement  and  of  the  Solvency 
Capital Requirement; 

information  allowing  a  proper  understanding  of  the  main  differences 
between  the  standard  formula  and  any  internal  model  used  by  the 
undertaking for the calculation of its Solvency Capital Requirement; 

the  amount  of  any  non  compliance  with  the  Minimum  Capital 
Requirement  or  any  significant  non  compliance  with  the  Solvency 
Capital  Requirement  during  the  reporting  period,  even  if  subsequently 
resolved,  with  an  explanation  of  its  origin  and  consequences  as  well  as 
any remedial measures taken. 

2. 

The description referred to in point (e)(i) of paragraph 1 shall include an analysis of 
any  significant  changes  as  compared  to  the  previous  reporting  period  and  an 
explanation  of  any  major  differences  in  relation  to  the  value  of  such  elements  in 
financial statements, and a brief description of the capital transferability. 

The  disclosure  of  the  Solvency  Capital  Requirement  referred  to  in  point  (e)(ii)  of 
paragraph 1 shall show separately the amount calculated in accordance with Chapter 
VI,  Section  4,  Subsections  2  and  3  and  any  capital  add-on  imposed  in  accordance 
with  Article  37,  together  with  concise  information  on  its  justification  by  the 
supervisory authority concerned.  

However, and without prejudice to any disclosure mandatory under any other legal or 
regulatory requirements, Member States may provide that the capital add-on need not 
be separately disclosed during a transitional period not exceeding five years after the 
date referred to in Article 310. 

The  disclosure  of  the  Solvency  Capital  Requirement  shall  be  accompanied,  where 
applicable,  by  an  indication  that  its  final  amount  is  still  subject  to  supervisory 
assessment. 

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Article 51 

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Information for and reports by the Committee of European Insurance and Occupational 
Pensions Supervisors 

1 

Member  States  shall  require  the  supervisory  authorities  to  provide  the  following 
information  to  the  Committee  of  European  Insurance  and  Occupational  Pensions 
Supervisors on an annual basis: 

(a) 

the average capital add-on per undertaking and the distribution of capital add-
ons  imposed  by  the  supervisory  authority  during  the  previous  year,  measured 
as  a  percentage  of  the  Solvency  Capital  Requirement,  shown  separately  as 
follows: 

(i) 

for all insurance and reinsurance undertakings together; 

(ii) 

for life insurance undertakings; 

(iii)  for non-life insurance undertakings and reinsurance undertakings; 

(b) 

for each of the disclosures set out in point (a), the proportion of capital add-ons 
imposed under points (a), (b) and (c) of Article 37(1) respectively. 

2. 

The Committee of European Insurance and Occupational Pensions Supervisors shall 
publicly disclose, on an annual basis, the following information:  

(a) 

the total distribution of capital add-ons throughout  the  Community,  measured 
as  a  percentage  of  the  Solvency  Capital  Requirement,  for  each  of  the 
following: 

(i) 

all insurance and reinsurance undertakings; 

(ii) 

life insurance undertakings; 

(iii)  non-life insurance undertakings and reinsurance undertakings; 

(b) 

for each of the disclosures referred to in point (a), the proportion of capital add-
ons imposed under points (a), (b) and (c) of Article 37(1) respectively. 

In  addition,  that  Committee  shall  disclose  on  an  annual  basis  the  following 
information: 

(a) 

the  distribution  of  capital  add-ons,  measured  as  a  percentage  of  the  Solvency 
Capital  Requirement,  covering  all  insurance  and  reinsurance  undertakings  in 
each Member State; 

(b) 

for  the  disclosure  referred  to  in  point  (a),  the  proportion  of  capital  add-ons 
imposed under points (a), (b) and (c) of Article 37(1) respectively. 

3. 

The Committee of European Insurance and Occupational Pensions Supervisors shall 
provide the information referred to in paragraph 2 to the Commission, together with 
a report outlining the degree of supervisory convergence in the use of capital add-ons 
between supervisory authorities in the different Member States.  

Article 52 

Report on Solvency and financial condition: applicable principles 

1. 

Supervisory  authorities  shall  permit  insurance  and  reinsurance  undertakings  not  to 
disclose information in the following cases: 

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(a) 

(b) 

if,  by  disclosing  such  information,  the  competitors  of  the  undertaking  gain 
significant undue advantage; 

if  there  are  obligations  to  policyholders  or  other  counterparty  relationships 
binding an undertaking to secrecy or confidentiality. 

Where  non  disclosure  of  information  is  approved  by  the  supervisory  authority, 
undertakings  shall  state  this  in  the  report  on  solvency  and  financial  condition  and 
explain the reasons. 

Supervisory authorities shall permit insurance and reinsurance undertakings, to make 
use  of  –  or  refer  to  -  public  disclosures  made  under  other  legal  or  regulatory 
requirements,  to  the  extent  that  those  disclosures  are  equivalent  to  the  information 
required under Article 50 in both their nature and scope. 

Paragraphs  1  and  2  shall  not  apply  to  the  information  referred  to  in  point  (e)  of 
Article 50(1). 

2. 

3. 

4. 

Article 53 

Report on solvency and financial condition: updates and additional voluntary information 

1. 

In  the  event  of  any  major  development  affecting  significantly  the  relevance  of  the 
information  disclosed  in  accordance  with  Articles  50  and  52,  insurance  and 
reinsurance  undertakings  shall  disclose  appropriate  information  on  its  nature  and 
effects. 

For the purposes of the first subparagraph, at least the following shall be regarded as 
major developments: 

(a)  where non compliance with the Minimum Capital Requirement is observed and 
the supervisory authorities either consider that the undertaking will not be able 
to submit a viable recovery plan or do not obtain such a plan within one month;  

(b)  where a significant non compliance with the Solvency Capital Requirement is 
observed  and  the  supervisory authorities do not obtain a recovery plan which 
they consider viable within two months.  

In  the  cases  referred  to  in  point  (a)  of  the  second  subparagraph,  the  supervisory 
authorities  shall  require  the  undertaking  concerned  to  disclose  immediately  the 
amount  of  the  non  compliance,  together  with  an  explanation  of  its  origin  and 
consequences, including any remedial measure taken. Where, in spite of a recovery 
plan initially considered  to  be viable, a  non  compliance  with  the  Minimum Capital 
Requirement  has  not  been  resolved  two  months  after  its  observation,  it  shall  be 
disclosed  at  the  end  of  that  period,  together  with  an  explanation  of  its  origin  and 
consequences, including any remedial measure taken. 

In  the  case  referred  to  in  point  (b)  of  the  second  subparagraph,  the  supervisory 
authorities  shall  require  the  undertaking  concerned  to  disclose  immediately  the 
amount  of  the  non  compliance,  together  with  an  explanation  of  its  origin  and 
consequences, including any remedial measure taken. Where, in spite of the recovery 
plan initially considered to be viable, a significant non compliance with the Solvency 
Capital Requirement has not been resolved four months after its observation, it shall 
be disclosed at the end of that period, together with an explanation of its origin and 
consequences, including any remedial measure taken. 

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2. 

1. 

2. 

Insurance  and  reinsurance  undertakings  may  disclose,  on  a  voluntary  basis,  any 
information or explanation related to their solvency and financial condition which is 
not  already  required  to  be  disclosed  in  accordance  with  Articles  50  and  52  and 
paragraph 1. 

Article 54 

Report on Solvency and financial condition: policy and approval 

Member  States  shall  require  insurance  and  reinsurance  undertakings  to  have 
appropriate  systems  and  structures  in  place  to  fulfil  the  requirements  laid  down  in 
Articles 50, 52 and 53(1), as well as to have a written policy ensuring the on-going 
appropriateness of any information disclosed in accordance with Articles 50, 52 and 
53. 

The  solvency  and  financial  condition  report  shall  be  subject  to  approval  by  the 
administrative or management body of the insurance or reinsurance undertaking and 
be published only after that approval. 

Article 55 

Solvency and financial condition report: implementing measures 

The Commission shall adopt implementing measures further specifying the information which 
must be disclosed and the means by which this is to be achieved.  

Those  measures  designed 
this  Directive,  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny 
referred to in Article 304(3). 

to  amend  non-essential  elements  of 

SECTION 2 4 - QUALIFYING HOLDINGS 

(cid:208) 2002/83/EC Art. 15 (adapted) 

Article 56 

⌦ Acquisitions ⌫ 

(cid:208) 2007/44/EC Art. 1(2)(a), Art. 
2(2)(a) and Art. 4(2) (adapted) 

1. Member States shall require any natural or legal person or such persons acting in concert 
(hereinafter referred to as the proposed acquirer), who have taken a decision either to acquire, 
directly or indirectly, a qualifying holding in an insurance ⌦ or reinsurance ⌫ undertaking 
or to further increase, directly or indirectly, such a qualifying holding in an insurance ⌦ or 
reinsurance ⌫ undertaking as a result of which the proportion of the voting rights or of the 
capital  held  would  reach  or  exceed  20  %,  30  %  or  50  %  or  so  that  the  insurance  ⌦ or 
reinsurance ⌫  undertaking  would  become  its  subsidiary  (hereinafter  referred  to  as  the 
proposed acquisition), first to notify in writing the competent ⌦ supervisory ⌫ authorities 
of  the insurance ⌦  or  reinsurance ⌫  undertaking  in  which  they  are  seeking  to  acquire  or 
increase  a  qualifying  holding,  indicating  the  size  of  the  intended  holding  and  relevant 

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information, as referred to in Article 15b(4) 58(4). Member States need not apply the 30 % 
threshold  where,  in  accordance  with  Article  9(3)(a)  of  Directive  2004/109/EC,  they  apply  a 
threshold of one-third. 

(cid:208) 2007/44/EC Art. 1(2)(c), Art. 
2(2)(c) and Art. 4(5) (adapted) 

2.  Member  States  shall  require  any  natural  or  legal  person  who  has  taken  a  decision  to 
dispose, directly or indirectly, of a qualifying holding in an insurance ⌦ or reinsurance ⌫ 
undertaking first to notify in writing the competent ⌦ supervisory ⌫ authorities of the home 
Member State, indicating the size of his intended holding. Such a person shall likewise notify 
the  competent  ⌦ supervisory ⌫  authorities  if  he  has  taken  a  decision  to  reduce  his 
qualifying holding so that the proportion of the voting rights or of the capital held would fall 
below 20 %, 30 % or 50 % or so that the insurance ⌦ or reinsurance ⌫ undertaking would 
cease  to  be  his  subsidiary.  Member  States  need  not  apply  the  30  %  threshold  where,  in 
accordance  with  Article  9(3)(a)  of  Directive  2004/109/EC,  they  apply  a  threshold  of  one-
third. 

(cid:208) 2007/44/EC Art. 1(3), Art. 2(3) 
and Art. 4(2) (adapted) 

Article 57 

Assessment period 

1. The competent ⌦ supervisory ⌫ authorities shall, promptly and in any event within two 
working days following receipt of the notification required under Article 15(1) 56(1), as well 
as following the possible subsequent receipt of the information referred to in paragraph 2 of 
this Article, acknowledge receipt thereof in writing to the proposed acquirer. 

2.  The  competent  authorities  shall,  promptly  and  in  any  event  within  two  working  days 
following receipt of the notification, as well as following the possible subsequent receipt of 
the  information  referred  to  in  paragraph  3,  acknowledge  receipt  thereof  in  writing  to  the 
proposed acquirer. 

(cid:208) 2007/44/EC Art. 4(2) (adapted) 

(cid:208) 2007/44/EC Art. 1(3), Art. 2(3) 
and Art. 4(2) (adapted) 

The competent ⌦ supervisory ⌫ authorities shall have a maximum of 60 working days as 
from the date of the written acknowledgement of receipt of the notification and all documents 
required by the Member State to be attached to the notification on the basis of the list referred 
to in Article 15b(4) 58 (4) (hereinafter referred to as the assessment period), to carry out the 
assessment provided for in Article 58 15b(1) 58(1) (hereinafter referred to as the assessment). 

The competent ⌦ supervisory ⌫ authorities shall inform the proposed acquirer of the date 
of the expiry of the assessment period at the time of acknowledging receipt. 

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2.  The  competent  ⌦ supervisory ⌫  authorities  may,  during  the  assessment  period,  if 
necessary,  and  no  later  than  on  the  50th  working  day  of  the  assessment  period,  request  any 
further information that is necessary to complete the assessment. Such request shall be made 
in writing and shall specify the additional information needed. 

the  period  between 

the  date  of  request  for 

the  competent 
For 
⌦ supervisory ⌫ authorities and the receipt of a response thereto by the proposed acquirer, 
the assessment period shall be interrupted. The interruption shall not exceed 20 working days. 
Any  further  requests  by  the  competent  ⌦ supervisory ⌫  authorities  for  completion  or 
clarification of the information shall be at their discretion but may not result in an interruption 
of the assessment period. 

information  by 

3. The competent ⌦ supervisory ⌫ authorities may extend the interruption referred to in the 
second subparagraph of paragraph 2 up to 30 working days if the proposed acquirer is: 

(a) 

(b) 

situated or regulated outside the Community; or 

a natural or legal person not subject to supervision under this Directive or Directives 
85/611/EEC56, 2002/83/EC, 2004/39/EC, 2005/68/EC or 2006/48/EC. 

4. If the competent ⌦ supervisory ⌫ authorities, upon completion of the assessment, decide 
to oppose the proposed acquisition, they shall, within two working days, and not exceeding 
the  assessment  period,  inform  the  proposed  acquirer  in  writing  and  provide  the  reasons  for 
that decision. Subject to national law, an appropriate statement of the reasons for the decision 
may be made accessible to the public at the request of the proposed acquirer. This shall not 
prevent  a  Member  State  from  allowing  the  competent ⌦ supervisory ⌫  authority  to  make 
such disclosure in the absence of a request by the proposed acquirer. 

5.  If  the  competent  ⌦ supervisory ⌫  authorities  do  not  oppose  the  proposed  acquisition 
within the assessment period in writing, it shall be deemed to be approved. 

6.  The  competent ⌦ supervisory ⌫  authorities  may  fix  a  maximum  period  for  concluding 
the proposed acquisition and extend it where appropriate. 

7.  Member  States  may  not  impose  requirements  for  the  notification  to  and  approval  by  the 
competent ⌦ supervisory ⌫ authorities of direct or indirect acquisitions of voting rights or 
capital that are more stringent than those set out in this Directive. 

(cid:208) 2007/44/EC Art. 2(4), Art. 4(6), 
Art. 1(4) (adapted) 
(cid:214) new 

8.  (cid:214) The  Commission 
specifying 
the  adjustments of the criteria set out in Article 15b(1) 58 (1), in order to take account of 
future developments and to ensure the uniform application of this Directive ⌦ Articles 56 to 
62 ⌫. 

implementing  measures 

shall  adopt 

further 

(cid:214) Those  measures  designed  to  amend  non-essential  elements  of  this  Directive  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny 
referred to in Article 304(3). 

56 

OJ L 375, 31.12.1985, p. 3. 

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(cid:208) 2007/44/EC Art. 1(3), Art. 2(3) 
and Art. 4(3) (adapted) 

Article 58 

Assessment 

1.  In  assessing  the  notification  provided  for  in  Article  15(1)  56(1)  and  the  information 
referred  to  in  Article  57  15a(2)  (2),  the  competent  ⌦ supervisory ⌫  authorities  shall,  in 
order  to  ensure  the  sound  and  prudent  management  of  the  ⌦ insurance  or  reinsurance ⌫ 
undertaking in which an acquisition is proposed, and having regard to the likely influence of 
the  proposed  acquirer  on  the  ⌦ insurance  or  reinsurance ⌫  undertaking,  appraise  the 
suitability  of  the  proposed  acquirer  and  the  financial  soundness  of  the  proposed  acquisition 
against all of the following criteria: 

(a) 

(b) 

(c) 

(d) 

(e) 

the reputation of the proposed acquirer; 

the  reputation  and  experience  of  any  person  who  will  direct  the  business  of  the 
⌦ insurance or reinsurance ⌫ undertaking as a result of the proposed acquisition; 

the financial soundness of the proposed acquirer, in particular in relation to the type 
of  business  pursued  and  envisaged  in  the  ⌦ insurance  or  reinsurance ⌫ 
undertaking in which the acquisition is proposed; 

whether the insurance ⌦ or reinsurance ⌫ undertaking will be able to comply and 
continue  to  comply  with  the  prudential  requirements  based  on  this  Directive  and, 
where  applicable,  other  Directives,  notably,  Directives  73/239/EEC,  98/78/EC, 
2002/13/EC  and  2002/87/EC,  in  particular,  whether  the  group  of  which  it  will 
become a part has a structure that makes it possible to exercise effective supervision, 
the  competent  ⌦ supervisory ⌫ 
effectively  exchange 
authorities  and  determine  the  allocation  of  responsibilities  among  the  competent 
⌦ supervisory ⌫ authorities; 

information  among 

whether there are reasonable grounds to suspect that, in connection with the proposed 
acquisition, money laundering or terrorist financing within the meaning of Article 1 
of  Directive  2005/60/EC  is  being  or  has  been  committed  or  attempted,  or  that  the 
proposed acquisition could increase the risk thereof. 

2. The competent ⌦ supervisory ⌫ authorities may oppose the proposed acquisition only if 
there are reasonable grounds for doing so on the basis of the criteria set out in paragraph 1 or 
if the information provided by the proposed acquirer is incomplete. 

3. Member States shall neither impose any prior conditions in respect of the level of holding 
that must be acquired nor allow their competent ⌦ supervisory ⌫ authorities to examine the 
proposed acquisition in terms of the economic needs of the market. 

4.  Member  States  shall  make  publicly  available  a  list  specifying  the  information  that  is 
necessary  to  carry  out  the  assessment  and  that  must  be  provided  to  the  competent 
⌦ supervisory ⌫  authorities  at  the  time  of  notification  referred  to  in  Article  15(1)  56(1). 
The  information  required  shall  be  proportionate  and  adapted  to  the  nature  of  the  proposed 
acquirer and the proposed acquisition. Member States shall not require information that is not 
relevant for a prudential assessment. 

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5.  Notwithstanding  Article  57  15a(1),  (2)  and  (3)  (1),  (2)  and  (3),  where  two  or  more 
proposals  to  acquire  or  increase  qualifying  holdings  in  the  same  ⌦ insurance  or 
reinsurance ⌫ undertaking have been notified to the competent ⌦ supervisory ⌫ authority, 
the latter shall treat the proposed acquirers in a non-discriminatory manner. 

Article 59 

Acquisitions by regulated financial undertakings 

1. The relevant competent ⌦ supervisory ⌫ authorities shall work in full consultation with 
each other when carrying out the assessment if the proposed acquirer is one of the following: 

(a) 

(b) 

(c) 

institution,  assurance  undertaking, 

insurance  ⌦ or  reinsurance ⌫ 
a  credit 
undertaking,  reinsurance  undertaking,  investment  firm  or  management  company 
within  the  meaning  of  Article  1a,  point  2  of  Directive  85/611/EEC  (hereinafter 
referred  to  as  the  "UCITS  management  company")  authorised  in  another  Member 
State or in a sector other than that in which the acquisition is proposed; 

the parent undertaking of a credit institution, assurance undertaking, insurance ⌦ or 
reinsurance ⌫  undertaking,  reinsurance  undertaking,  investment  firm  or  UCITS 
management company authorised in another Member State or in a sector other than 
that in which the acquisition is proposed; or 

a  natural  or  legal  person  controlling  a  credit  institution,  assurance  undertaking, 
insurance ⌦ or reinsurance ⌫ undertaking, investment firm or UCITS management 
company authorised in another Member State or in a sector other than that in which 
the acquisition is proposed. 

2.  The  competent  ⌦ supervisory ⌫  authorities  shall,  without  undue  delay,  provide  each 
other with any information which is essential or relevant for the assessment. In this regard, the 
competent  ⌦ supervisory ⌫  authorities  shall  communicate  to  each  other  upon  request  all 
relevant information and shall communicate on their own initiative all essential information. 
A  decision  by  the  competent ⌦ supervisory ⌫  authority  that  has  authorised  the  insurance 
⌦ or  reinsurance ⌫  undertaking  in  which  the  acquisition  is  proposed  shall  indicate  any 
views  or  reservations  expressed  by  the  competent  ⌦ supervisory ⌫  authority  responsible 
for the proposed acquirer. 

(cid:208) 2005/68/EC Art. 21 (adapted) 

Article 58 

Disposals 

Member States shall require any natural or legal person who proposes to dispose, directly or 
indirectly, of a qualifying holding in a reinsurance undertaking first to inform the comptetent 
authorities of the home Member States, indicating the size of his intended holding. 

(cid:208) 2002/83/EC, 92/49/EEC Art. 15 
and 2005/68/EC Art. 22 (adapted) 

EN 

Article 60 

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Information to the competent ⌦ supervisory ⌫ authority by the insurance ⌦ or 
reinsurance ⌫ undertaking 

On  becoming  aware  of  them, ⌦ insurance  or ⌫  reinsurance  undertakings  shall  inform  the 
competent ⌦ supervisory ⌫ authorities of their home Member States of any acquisitions or 
disposals of holdings in their capital that cause ⌦ those ⌫ holdings to exceed or fall below 
any of the thresholds referred to in Articles 19 56 and 57 (1) to (7). 

(cid:208) 2002/83/EC, 92/49/EEC Art. 15 
and 2005/68/EC Art. 22 (adapted) 

They shall also, at least once a year, inform them ⌦ supervisory authorities ⌫ of the names 
of shareholders and members possessing qualifying holdings and the sizes of such holdings as 
shown, for example, by the information received at annual general meetings of shareholders 
or members or as a result of compliance with the regulations relating to companies listed on 
stock exchanges. 

(cid:208) 2005/68/EC Art. 23 (adapted) 
(cid:214) new 

Article 61 

Qualifying holdings:, powers of the competent ⌦ supervisory ⌫ authority 

Member States shall require that, where the influence exercised by the persons referred to in 
Article 1956 and 57 (1) to (7) is likely to operate against the prudent and sound management 
of  a  ⌦ an  insurance  or ⌫  reinsurance  undertaking,  the  competent  ⌦ supervisory ⌫ 
authorities of the home Member State ⌦ of that undertaking in which a qualifying holding is 
sought or increased ⌫ shall take appropriate measures to put an end to that situation. Such 
measures may consist, for example, in injunctions, penalties (cid:214) sanctions  against directors 
and managers, or suspension of the exercise of the voting rights attaching to the shares held 
by the shareholders or members in question. 

Similar  measures  shall  apply  to  natural  or  legal  persons  failing  to  comply  with  the 
⌦ notification ⌫ obligation to provide prior information imposed pursuant to ⌦ referred to 
in ⌫ Article 19 56 and 57 (1) to (7). 

If  a  holding  is  acquired  despite  the  opposition  of  the  competent  ⌦ supervisory ⌫ 
authorities,  the  Member  States  shall,  regardless  of  any  other  penalties  (cid:214) sanctions   to  be 
adopted, provide either for ⌦ any of the following: ⌫ 

(1)  ⌦ the  suspension  of  the ⌫  exercise  of  the  corresponding  voting  rights;  to  be 

suspended, 

(2) 

or for the nullity of ⌦ any ⌫ votes cast or for the possibility of their annulment. 

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(cid:208) 2007/44/EC Art. 1(1), Art. 2(1) 
and Art. 4(1) (adapted) 

Article 62 

⌦ Voting rights ⌫ 

For the purposes of this definition Section, in the context of Articles 8 and 15 and of the other 
levels of holding referred to in Article 15, the voting rights referred to in Articles 9 and 10 of 
Directive 2004/109/EC, as well as the conditions regarding aggregation thereof laid down in 
Article 12(4) and (5) of that Directive, shall be taken into account. 

Member States shall not take into account voting rights or shares which investment firms or 
credit institutions may hold as a result of providing the underwriting of financial instruments 
and/or placing of financial instruments on a firm commitment basis included under point 6 of 
Section  A  of  Annex  I  to  Directive  2004/39/EC,  provided  that  those  rights  are,  on  the  one 
hand, not exercised or otherwise used to intervene in the management of the issuer and, on the 
other, disposed of within one year of acquisition. 

(cid:208) 2007/44/EC Art. 6 

Article 6 

Review 

By 21 March 2011, the Commission shall, in cooperation with the Member States, review the 
application of this Directive and submit a report to the European Parliament and the Council, 
together with any appropriate proposals. 

SECTION 35 - PROFESSIONAL SECRECY, AND EXCHANGES OF INFORMATION 
⌦ AND PROMOTION OF SUPERVISORY CONVERGENCE⌫ 

(cid:208) 2005/68/EC Art. 24 (adapted) 

(cid:208) 2005/68/EC Art. 24 (adapted) 

Article 63 

Obligation 

1.Member States shall provide that all persons ⌦ who are ⌫ working or who have worked 
for  the  competent  ⌦ supervisory ⌫  authorities,  as  well  as  auditors  and  experts  acting  on 
behalf  of  the  competent  ⌦ those ⌫  authorities,  are  bound  by  an  ⌦ the ⌫  obligation  of 
professional secrecy. 

Pursuant  to  that  obligation,  and  wWithout  prejudice  to  cases  covered  by  criminal  law,  no 
⌦ any ⌫  confidential  information  which  they  may  receive  while  ⌦ received  by  such 
persons  whilst ⌫  performing  their  duties  may  ⌦ not ⌫  be  divulged  to  any  person  or 

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authority  whatsoever,  except  in  summary  or  aggregate  form,  such  that  individual 
⌦ insurance and ⌫ reinsurance undertakings cannot be identified. 

2.However,  where  a  ⌦ an  insurance  or ⌫  reinsurance  undertaking  has  been  declared 
bankrupt or is being compulsorily wound up, confidential information which does not concern 
third  parties  involved  in  attempts  to  rescue  that  undertaking  may  be  divulged  in  civil  or 
commercial proceedings. 

(cid:208)2005/68/EC Art. 25 (adapted) 

Article 64 

Exchange of information between competent ⌦ supervisory ⌫ authorities of Member 
States 

Article 2463  shall  not  prevent  the  competent  ⌦ preclude  the  exchange  of  information 
between supervisory ⌫ authorities of different Member States from exchanging information 
in  accordance  with  the  Directives  applicable  to  reinsurance  undertakings.  Such  information 
shall  be  subject  to  the  conditions  ⌦ obligation ⌫  of  professional  secrecy  laid  down  in 
Article 24 63. 

(cid:208) 2005/68/EC Art. 26 (adapted) 

Article 65 

Cooperation agreements with third countries 

Member States may conclude cooperation  agreements  providing for ⌦ the ⌫ exchange of 
information  with  the  competent  ⌦ supervisory ⌫  authorities  of  third  countries  or  with 
authorities  or  bodies  of  third  countries  as  defined  in  Article 28  67  (1)  and  (2)  only  if  the 
information  ⌦ to  be ⌫  disclosed  is  subject  to  guarantees  of  professional  secrecy  at  least 
equivalent  to  those  referred  to  in  this  Section.  Such  exchange  of  information  shall 
⌦ must ⌫  be  intended  for  the  performance  of  the  supervisory  task  of  the  ⌦ those ⌫ 
authorities or bodies mentioned. 

(cid:208) 2002/83/EC, 2000/64/EC Art. 2 
and 2005/68/EC Art. 26 (adapted) 

Where the information ⌦ to be disclosed by a Member State to a third country ⌫ originates 
in  another  Member  State,  it  may  not  be  disclosed  without  the  express  agreement  of  the 
competent  ⌦ supervisory ⌫  authorities  which  have  disclosed  it  ⌦ of  that  Member 
State ⌫ and, where appropriate, solely for the purposes for which those authorities gave their 
agreement. 

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(cid:208) 2005/68/EC Art. 27 (adapted) 
(cid:214) new 

Article 66 

Use of confidential information 

Competent  ⌦ Supervisory ⌫  authorities  receiving  ⌦ which  receive ⌫  confidential 
information under Articles 24 63 and ⌦ or ⌫ 25 64 may use it only in the course of their 
duties ⌦ and for the following purposes ⌫ : 

(a1) 

(b2) 

(c3) 

(d4) 

to check that the conditions governing the taking up of the business of ⌦ insurance 
or ⌫ reinsurance are met and to facilitate ⌦ the ⌫ monitoring of the conduct of 
such  business,  especially  with  regard  to  the  monitoring  of  ⌦ the ⌫  technical 
provisions,  (cid:214) the  Minimum  Capital  Requirement, 
the  Solvency  Capital 
Requirement   solvency  margins,  (cid:214) and  the  governance  system   administrative 
and accounting procedures and internal control mechanisms,; 

to impose penalties (cid:214) sanctions ,; 

in  administrative  appeals  against  decisions  of  the  competent  ⌦ supervisory ⌫ 
authorities,; or 

in court proceedings initiated under Article 53 or under special provisions provided 
for  in  this  Directive  and  other  Directives  adopted  in  the  field  of  insurance  and 
reinsurance undertakings. 

(cid:208) 2005/68/EC Art. 28 (adapted) 

Article 67 

Exchange of information with other authorities 

1. 

Articles 24 63 and 27 66 shall not preclude ⌦ any of the following: ⌫ 

(a) 

the  exchange  of  information  within  a  Member  State,  where  there  are  two  or 
more  competent  ⌦ between  several  supervisory ⌫  authorities  in  the  same 
Member State, ⌦ in the discharge of their supervisory functions; ⌫ 

(b)  or,  between  Member  States ⌦ the  exchange  of  information,  in  the  discharge 
of  their  supervisory  functions ⌫,  between  competent  ⌦ supervisory ⌫ 
authorities and ⌦ any of the following which are situated in the same Member 
State ⌫ : 

(ai)  authorities  responsible  for  the  official  supervision  of  credit  institutions 
and  other  financial  organisations  and  the  authorities  responsible  for  the 
supervision of financial markets,; 

(bii)  bodies 

involved 

insurance 
⌦ undertakings, ⌫  and  reinsurance  undertakings  and  in  other  similar 
procedures,; and 

liquidation  and  bankruptcy  of 

the 

in 

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(ciii)  persons  responsible  for  carrying  out  statutory  audits  of  the  accounts  of 
insurance  undertakings,  reinsurance  undertakings  and  other  financial 
institutions,; 

(c ) 

in  the  discharge  of  their  supervisory  functions,  or  the  disclosure  to  bodies 
which administer compulsory winding-up proceedings or guarantee schemes of 
information necessary to the performance of their duties. 

⌦ The  exchange  of  information  referred  to  in  point  (b)  of  the  first  subparagraph 
may also take place between different Member States. ⌫ 

The information received by those authorities, bodies and persons shall be subject to 
the conditions ⌦ obligation ⌫ of professional secrecy laid down in Article 24 63. 

2. 

Notwithstanding  Articles 24  63  to  27  66, ⌦ shall  not  preclude ⌫  Member  States 
may  authorise  ⌦ from  authorising ⌫  exchanges  of  information  between  the 
competent ⌦ supervisory ⌫ authorities and ⌦ any of the following ⌫ : 

(cid:208) 2005/68/EC Art. 28 (adapted) 

(a) 

(b) 

(c) 

the authorities responsible for overseeing the bodies involved in the liquidation 
and bankruptcy of insurance ⌦ undertakings, ⌫ or reinsurance undertakings 
and other similar procedures,; or 

the authorities responsible for overseeing the persons charged with carrying out 
insurance  ⌦ undertakings, ⌫  or 
statutory  audits  of 
reinsurance  undertakings,  credit  institutions,  investment  firms  and  other 
financial institutions,; or 

the  accounts  of 

insurance  ⌦ undertakings ⌫  or  reinsurance 
independent  actuaries  of 
undertakings  carrying  out  legal  supervision  of  those  undertakings  and  the 
bodies responsible for overseeing such actuaries. 

Member  States  which  have  recourse  to  the  option  provided  for  in ⌦ apply ⌫  the 
first subparagraph shall require at least that the following conditions are met: 

(a) 

this  exchange  of ⌦ the ⌫  information  shall ⌦ must ⌫  be  for  the  purpose 
of  carrying  out  the  overseeing  or  legal  supervision  referred  to  in  the  first 
subparagraph; 

(b)  ⌦ the ⌫ information received in this context shall ⌦ must ⌫ be subject to 
the  conditions  ⌦ obligation ⌫  of  professional  secrecy  imposed  ⌦ laid 
down ⌫ in Article 24 63; 

(c)  where  the  information  originates  in  another  Member  State,  it  may  not  be 
disclosed  without  the  express  agreement  of  the  competent ⌦ supervisory ⌫ 
authorities ⌦ from ⌫  which  have  disclosed  it  ⌦ originates ⌫  and,  where 
appropriate,  may  only  be  disclosed  ⌦ solely ⌫  for  the  purposes  for  which 
those authorities gave their agreement. 

Member  States  shall  communicate  to  the  Commission  and  to  the  other  Member 
States  the  names  of  the  authorities,  persons  and  bodies  which  may  receive 
information pursuant to this paragraph the first and second subparagraphs. 

3. 

Notwithstanding  Articles 24  63  to  27  66, ⌦ shall  not  preclude ⌫  Member  States 
may ⌦ from authorising ⌫ , with the aim of strengthening the stability, including 
the  ⌦ and ⌫  integrity,  of  the  financial  system,  authorise  the  exchange  of 

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information between the competent ⌦ supervisory ⌫ authorities and the authorities 
or bodies responsible under the law for the detection and investigation of breaches of 
company law. 

(cid:208) 2002/83/EC Art. 16(5), 
92/49/EEC Art. 16(5)(b) and 
2005/68/EC Art. 28(3) (adapted) 
(cid:214) new 

Member  States  which  have  recourse  to  the  option  provided  for  in ⌦ apply ⌫  the 
first subparagraph shall require ⌦ that ⌫ at least that the following conditions are 
met: 

(a) 

(b) 

the  information  shall  ⌦ must ⌫  be  ⌦ intended ⌫  for  the  purpose  of 
performing the task ⌦ detection and investigation as ⌫ referred to in the first 
subparagraph; 

information  received  in  this  context  shall  ⌦ must ⌫  be  subject  to  the 
conditions ⌦ obligation ⌫ of professional secrecy imposed ⌦ laid down ⌫ 
in Article 24 63; 

(c)  where  the  information  originates  in  another  Member  State,  it  may  not  be 
disclosed  without  the  express  agreement  of  the  competent ⌦ supervisory ⌫ 
authorities ⌦ from ⌫  which  have  disclosed  it  ⌦ originates ⌫  and,  where 
appropriate,  solely  for  the  purposes  for  which  those  authorities  gave  their 
agreement. 

Where,  in  a  Member  State,  the  authorities  or  bodies  referred  to  in  the  first 
subparagraph  perform  their  task  of  detection  or  investigation  with  the  aid  ⌦ of 
persons  appointed ⌫  ,  in  view  of  their  specific  competence,  of  persons  appointed 
for that purpose and not employed in the public sector, the possibility of exchanging 
information provided for in the first subparagraph may be extended to such persons 
under the conditions laid down ⌦ set out ⌫ in the second subparagraph. 

In order to implement point (c) of the second subparagraph, the authorities or bodies 
referred  to  in  the  first  subparagraph  shall  communicate  to  the  competent 
⌦ supervisory ⌫  authorities  ⌦ from ⌫  which  have  disclosed  the  information 
⌦ originates ⌫ the names and precise responsibilities of the persons to whom it is 
to be sent. 

4. 

Member  States  shall  communicate  to  the  Commission  and  to  the  other  Member 
States  the  names  of  the  authorities(cid:214) ,  persons   or  bodies  which  may  receive 
information pursuant to this paragraph 3. 

(cid:208) 2002/83/EC Art. 16(7) 
(adapted) 

Before 31 December 2000, the Commission shall draw up a report on the application of this 
paragraph. 

8. Paragraphs 1 to 7 shall not prevent a competent authority from transmitting: 

(cid:208) 2005/68/EC Art. 60(5)(b) 

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(a) 

(b) 

to  central  banks  and  other  bodies  with  a  similar  function  in  their  capacity  as 
monetary authorities, 

where  appropriate,  to  other  public  authorities  responsible  for  overseeing  payment 
systems, 

information intended for the performance of their task, nor shall it prevent such authorities or 
bodies from communicating to the competent authorities such information as they may need 
for  the  purposes  of  paragraph 4.  Information  received  in  this  context  shall  be  subject  to  the 
conditions of professional secrecy imposed in this Article. 

(cid:208) 2005/68/EC Art. 30 (adapted) 

Article 68 

Disclosure of information to government administrations responsible for financial legislation 

Notwithstanding  Articles 24  63  and  27  66,  ⌦ shall  not  preclude ⌫  Member  States  may 
⌦ from  authorising ⌫,  under  provisions  laid  down  by  law,  authorise  the  disclosure  of 
certain  information  to  other  departments  of  their  central  government  administrations 
responsible  for  legislation  on  the  supervision  of  credit  institutions,  financial  institutions, 
investment  services  and  insurance  or  reinsurance  undertakings  and  to  inspectors  acting  on 
behalf of those departments. 

However,  sSuch  disclosures  may  be  made  only  where  necessary  for  reasons  of  prudential 
control.  Member  States  shall,  however,  provide  that  information  received  under  Articles 25 
64  and  28  67  (1)  and  that  ⌦ information ⌫  obtained  by  means  of  the  on-the-spot 
verification ⌦ on-site verification ⌫ referred to in Article 16 32 may never ⌦ only ⌫ be 
disclosed  in  the  cases  referred  to  in  this  Article  except  with  the  express  consent  of  the 
competent⌦ supervisory ⌫  authorities  ⌦ from ⌫  which  disclosed  the  information 
⌦ originated ⌫ or of the competent ⌦ supervisory ⌫ authorities of the Member State in 
which on-the-spot verification ⌦ the on-site verification ⌫ was carried out. 

(cid:208) 2005/68/EC Art. 29 (adapted) 

Article 69 

Transmission of information to central banks and monetary authorities 

⌦ Without prejudice to ⌫ Tthis Section shall not prevent a competent ⌦ supervisory ⌫ 
authority from ⌦ may ⌫ transmitting ⌦ information intended for the performance of their 
tasks ⌫ to ⌦ the following: ⌫ 

(1) 

(2) 

central banks and other bodies with a similar function in their capacity as monetary 
authorities,; and 

where  appropriate,  to  other  public  authorities  responsible  for  overseeing  payment 
systems, information intended for the performance of their task. 

Nor  shall  it  prevent  sSuch  authorities  or  bodies  from  communicating  ⌦ may  also 
communicate ⌫  to  the  competent  ⌦ supervisory ⌫  authorities  such  information  as  they 
may  need  for  the  purposes  of  Article 2766.  Information  received  in  this  context  shall  be 
subject to the conditions ⌦ obligation ⌫ of professional secrecy imposed in this Section. 

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(cid:216) new 

Article 70  

 Supervisory convergence 

Member States shall ensure that the supervisory authorities participate in the activities of the 
Committee  of  European  Insurance  and  Occupational  Pensions  Supervisors  pursuant  to  the 
second paragraph of Article 2 of Commission Decision 2004/6/EC57. 

SECTION 4 6- DUTIES OF AUDITORS 

(cid:208) 2005/68/EC Art. 31 (adapted) 

Article 71 

Duties of auditors 

1. 

Member  States  shall  provide  at  least  that  any  person  ⌦ persons ⌫  authorised  in 
accordance  with  ⌦ within  the  meaning  of  Council ⌫  Directive  84/253/EEC58, 
⌦ who ⌫ performing in a ⌦ an insurance or ⌫ reinsurance undertaking the task 
described  ⌦ statutory  audit  referred  to ⌫  in  Article 51  of  Council  Directive 
78/660/EEC59, Article 37 of Council Directive 83/349/EEC or Article 31 of Directive 
85/611/EEC or any other statutory task, shall have a duty to report promptly to the 
competent  ⌦ supervisory ⌫  authorities  any  fact  or  decision  concerning  that 
undertaking of which he/she has ⌦ they have ⌫ become aware while carrying out 
that task ⌦ and ⌫ which is liable to ⌦ bring about any of the following ⌫ : 

(a) 

(b) 

(c) 

constitute  a  material  breach  of  the  laws,  regulations  or  administrative 
provisions  which  lay  down  the  conditions  governing  authorisation  or  which 
specifically  govern  pursuit  of  the  activities  of  insurance  or  ⌦ and ⌫ 
reinsurance undertakings,; or 

affect ⌦ the impairment of ⌫the continuous functioning of the ⌦ insurance 
or ⌫ reinsurance undertaking,; or 

lead  to  ⌦ the ⌫  refusal  to  certify  the  accounts  or  to  the  expression  of 
reservations.; 

(d) 

the non-compliance with the Solvency Capital Requirement; 

(e) 

the non-compliance with the Minimum Capital Requirement. 

(cid:216) new  

57 
58 
59 

OJ L 3, 7.1.2004, p. 30. 
OJ L 126, 12.5.1984, p. 20. 
OJ L 222, 14.8.1978, p. 11.  

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2. 

1. 

2. 

(cid:208) 2005/68/EC Art. 31 (adapted) 

That  person  ⌦ The  persons  referred  to  in  the  first  subparagraph ⌫  shall  also 
⌦ likewise ⌫  have  a  duty  to  report  any  facts  and  decisions  of  which  he/she 
⌦ they have ⌫ becomes aware in the course of carrying out a task as described in 
the  first  subparagraph  in  an  undertaking  having  ⌦ which  has ⌫  close  links 
resulting  from  a  control  relationship  with  the  ⌦ insurance  or ⌫  reinsurance 
undertaking within which he/she is ⌦ they are ⌫ carrying out the abovementioned 
⌦ that ⌫ task. 

(cid:208) 95/26/EC Art. 5 (adapted) 

The  disclosure  in  good  faith  to  the  competent  ⌦ supervisory ⌫  authorities,  by 
persons  authorised  within  the  meaning  of  Directive  84/253/EEC,  of  any  fact  or 
decision referred to in paragraph 1 shall not constitute a breach of any restriction on 
disclosure  of  information  imposed  by  contract  of  ⌦ or ⌫  by  any  legislative, 
regulatory or administrative provision and shall not involve such persons in liability 
of any kind. 

⌦ CHAPTER V - PURSUIT OF LIFE AND NON-LIFE 
INSURANCE ACTIVITY ⌫ 

(cid:208) 2002/83/EC Art. 18 (adapted) 

Article 72 

Pursuit of life assurance and non-life insurance activities ⌦ activity ⌫ 

Without  prejudice  to  paragraphs  3  and  7,  no  undertaking  may  be  authorised  both 
pursuant  to  this  Directive  and  pursuant  to  Directive  73/239/EEC.  ⌦ Insurance 
undertakings may not be authorised to carry on life and non-life insurance activities 
simultaneously. ⌫ 

By  way  of  derogation  from  paragraph  1,  Member  States  may  provide  that  ⌦ the 
following ⌫ : 

(a) 

undertakings authorised pursuant to this Directive ⌦ to carry on life insurance 
activity ⌫  may  also  obtain  authorisation,  in  accordance  with  Article  6  of 
Directive  73/239/EEC  ⌦ for  non-life  insurance  activities ⌫  for  the  risks 
listed in classes 1 and 2 in point A of the Annex to that Directive I;, 

(b)  undertakings authorised pursuant to  Article  6  of  Directive  73/239/EEC solely 
for the risks listed in classes 1 and 2 in point A of the Annex to that Directive I 
may  obtain  authorisation  pursuant  to  this  Directive  ⌦ to  carry  on  life 
insurance activity ⌫ . 

⌦ However,  each  activity  shall  be  separately  managed  in  accordance  with  Article 
73 ⌫ 

43. 

Member  States  may  provide  that  the  undertakings  referred  to  in  paragraph  2  shall 
comply  with  the  accounting  rules  governing  assurance  ⌦ life  insurance ⌫ 

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54. 

35. 

undertakings authorised pursuant to this Directive for all of their activities. Pending 
coordination  in  this  respect,  Member  States  may  also  provide  that,  with  regard  to 
rules on winding-up, activities relating to the risks listed in classes 1 and 2 in point A 
of  Annex  I  in  the  Annex  to  Directive  73/239/EEC  carried  on  by  the  ⌦ those ⌫ 
undertakings referred to in paragraph 2 shall be governed by the rules applicable to 
life assurance ⌦ insurance ⌫ activities. 

Where an ⌦ non-life insurance ⌫ undertaking carrying on the activities referred to 
in  the  Annex  to  Directive  73/239/EEC  has  financial,  commercial  or  administrative 
links  with  an  assurance ⌦ life  insurance ⌫  undertaking  carrying  on  the  activities 
covered  by  this  Directive,  the  competent  ⌦ supervisory ⌫  authorities  of  the 
⌦ home ⌫  Member  States  within  whose  territories  the  head  offices  of  those 
undertakings  are  situated  shall  ensure  that  the  accounts  of  the  undertakings  in 
question  ⌦ concerned ⌫  are  not  distorted  by  agreements  between 
these 
undertakings  or  by  any  arrangement  which  could  affect  the  apportionment  of 
expenses and income. 

Subject to paragraph 6, uUndertakings referred to in paragraph 2 and those which on 
⌦ the  following  dates  carried  on  simultaneously  both  life  and  non-life  insurance 
activities  covered  by  this  Directive  may  continue  to  carry  on  those  activities 
simultaneously, provided that each activity is separately managed in accordance with 
Article 73 ⌫ : 

(a) 

1 January 1981 for undertakings authorised in Greece,; 

(b)  1 January 1986 for undertakings authorised in Spain and Portugal,; 

(c) 

1 January 1995 for undertakings authorised in Austria, Finland and Sweden,; 

(cid:208) 2004/66/EC Art. 1 and Annex  

(cid:208) 2006/101/EC Art. 1 and Annex 
pt. 3(b) (adapted) 

(d)  1  May  2004  for  undertakings  authorised  in  the  Czech  Republic,  Estonia, 
Cyprus,  Latvia,  Lithuania,  Hungary,  Malta,  Poland,  Slovenia  and  Slovakia, 
⌦ and Slovenia; ⌫ 

(e) 

1 January 2007 for undertakings authorised in Bulgaria and Romania,; and 

(cid:208) 2006/101/EC Art. 1 and Annex 
pt. 3(c) (adapted) 

(cid:208) 2002/83/EC (adapted) 

(f) 

15 March 1979 for all other undertakings,. 

carried on simultaneously both the activities covered by this Directive and those covered by 
Directive 73/239/EEC may continue to carry on those activities simultaneously, provided that 
each activity is separately managed in accordance with Article 19 of this Directive. 

6.  Any  ⌦ The  home ⌫  Member  State  may  require  assurance  ⌦ insurance ⌫ 
undertakings whose head offices are situated in its territory to cease, within a period 

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to  be  determined  by  the  ⌦ that ⌫  Member  State  concerned,  the  simultaneous 
pursuit of ⌦ life and non-life insurance ⌫ activities in which they were engaged on 
the dates referred to in paragraph 3 the first subparagraph. 

7.  The  provisions  of  this  Article  shall  be  reviewed  on  the  basis  of  a  report  from  the 
Commission  to  the  Council  in  the  light  of  future  harmonisation  of  the  rules  on 
winding-up, and in any case before 31 December 1999. 

(cid:208) 2002/83/EC Art. 19 (adapted) 

Article 73 

Separation of life assurance and non-life insurance management 

1. 

The  separate  management  referred  to  in  Article  72  18(3)  must  ⌦ shall ⌫  be 
organised  in  such  a  way  that  the  activities  covered  by  this  Directive  are  ⌦ life 
insurance activity is ⌫ distinct from the activities covered by Directive 73/239/EEC 
in order that: ⌦ non-life insurance activity. ⌫ 

tThe  respective  interests  of  life  policy  holders  and  non-life  policyholders  are 
⌦ may ⌫  not  ⌦ be ⌫  prejudiced  and,  in  particular,  that  profits  from  life 
assurance ⌦ insurance shall ⌫ benefit life policyholders as if the assurance ⌦ life 
insurance ⌫  undertaking  only  carried  on 
life  assurance, 
⌦ insurance. ⌫ 

the  activity  of 

(cid:216) new 

2. 

Without prejudice to Articles 100 and 126, the insurance undertakings referred to in 
Article 72(2) and (5) shall calculate both of the following: 

(a) 

(b) 

a  notional  life  Minimum  Capital  Requirement  with  respect  to  their  life 
insurance  or  reinsurance  activity,  calculated  as  if  the  undertaking  concerned 
only carried on that activity, on the basis of the separate accounts referred to in 
paragraph 6;  

a notional non-life Minimum Capital Requirement with respect to their non-life 
insurance  or  reinsurance  activity,  calculated  as  if  the  undertaking  concerned 
only carried on that activity, on the basis of the separate accounts referred to in 
paragraph 6. 

3. 

As a minimum, the insurance undertakings referred to in Article 72(2) and (5) shall 
cover the following by an equivalent amount of eligible basic own fund items: 

(a) 

(b) 

the notional life Minimum Capital Requirement, in respect of the life activity;  

the notional non-life Minimum Capital Requirement, in respect of the non-life 
activity. 

tThe minimum financial obligations ⌦ referred to in the first subparagraph ⌫ , in 
particular solvency margins, in respect of one or other of the two activities, namely 

(cid:208) 2002/83/EC Art. 19 (adapted) 
(cid:214) new 

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4. 

5. 

56. 

37. 

an  activity  under  this  Directive  and  an  activity  under  Directive  73/239/EEC,  are 
⌦ the  life  insurance  activity  and  the  non-life  insurance  activity,  may ⌫  not 
⌦ be ⌫ borne by the other activity. 

However, aAs long as the minimum financial obligations ⌦ referred to in paragraph 
3 ⌫  are  fulfilled  under  the  conditions  laid  down  in  the  second  indent  of  the  first 
subparagraph and, provided the competent ⌦ supervisory ⌫ authority is informed, 
the undertaking may use (cid:214) to cover the Solvency Capital Requirement referred to in 
Article  100,   those  explicit  (cid:214) eligible  own  fund   items  of  the  solvency  margin 
which are still available for one or ⌦ the ⌫ other activity. 

The competent ⌦ supervisory ⌫ authorities shall analyse the results in both ⌦ life 
and  non-life  insurance ⌫  activities  so  as  to  ensure  that  the  provisions  of  this 
paragraphs 1 to 5 are ⌦ is ⌫ complied with. 

(a) Accounts shall be drawn up in such a manner ⌦ so ⌫ as to show the sources of 
the  results  for  each  of  the  two  activities,  life  assurance  and  non-life  insurance 
⌦ separately ⌫  .  To  this  end  aAll  income,  (in  particular  premiums,  payments  by 
re-insurers  and  investment  income),  and  expenditure,  (in  particular  insurance 
settlements,  additions  to  technical  provisions,  reinsurance  premiums,  ⌦ and ⌫ 
operating expenses in respect of insurance business), shall be broken down according 
to origin. Items common to both activities shall be entered ⌦ in the accounts ⌫ in 
accordance  with  methods  of  apportionment  to  be  accepted  by  the  competent 
⌦ supervisory ⌫ authority. 

(b) Assurance ⌦ Insurance ⌫ undertakings must ⌦ shall ⌫ , on the basis of the 
accounts,  prepare  a  statement  clearly  identifying  ⌦ in  which ⌫  the  (cid:214) eligible 
basic own fund  items making up each solvency margin (cid:214) covering each notional 
Minimum  Capital  Requirement  as  referred  to  in  paragraph  2   ⌦ are  clearly 
identified ⌫,  in  accordance  with  Article  27  of  this  Directive  and  Article  16(1)  of 
Directive 73/239/EEC98(5). 

If one of the solvency margins (cid:214) the amount of eligible basic own fund items with 
respect  to  one  of  the  activities   is  insufficient  (cid:214) to  cover  the  minimum  financial 
obligations  referred  to  in  first  subparagraph  of  paragraph  3 ,  the  competent 
⌦ supervisory ⌫  authorities  shall  apply  to  the  deficient  activity  the  measures 
provided  for  in  the  relevant ⌦ this ⌫  Directive,  whatever  the  results  in  the  other 
activity. 

By  way  of  derogation  from  the  second  indent  of  the  first  second  subparagraph  of 
paragraph  1  of  this  Article  3,  these  ⌦ those ⌫  measures  may  involve  the 
authorisation  of  a  transfer  (cid:214) of  explicit  eligible  basic  own  fund  items   from  one 
activity to the other. 

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(cid:216) new 

CHAPTER VI - RULES RELATING TO THE VALUATION OF 
ASSETS AND LIABILITIES, TECHNICAL PROVISIONS, 
OWN FUNDS, SOLVENCY CAPITAL REQUIREMENT, 
MINIMUM CAPITAL REQUIREMENT AND INVESTMENT 
RULES 

SECTION 1 - VALUATION OF ASSETS AND LIABILITIES 

Article 74 

Valuation of assets and liabilities 

1. 

Member States shall ensure that, unless otherwise stated, insurance and reinsurance 
undertakings value assets and liabilities as follows:  

(a) 

(b) 

assets  shall  be  valued  at  the  amount  for  which  they  could  be  exchanged 
between knowledgeable willing parties in an arm's length transaction; 

liabilities shall be valued at the amount for which they could be transferred, or 
settled, between knowledgeable willing parties in an arm's length transaction. 

When valuing liabilities, no adjustment to take account of the own credit standing of 
the insurance or reinsurance undertaking shall be made. 

2. 

The  Commission  shall  adopt,  implementing  measures  to  set  out  the  methods  and 
assumptions  to  be  used  in  the  valuation  of  assets  and  liabilities  as  laid  down  in 
paragraph 1. 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive,  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304(3). 

SECTION 2 - RULES RELATING TO TECHNICAL PROVISIONS 

Article 75 

General provisions 

1. 

2. 

3. 

Member  States  shall  ensure  that  insurance  and  reinsurance  undertakings  establish 
technical provisions with respect to all of their insurance and reinsurance obligations 
towards policyholders and beneficiaries of insurance or reinsurance contracts. 

The calculation of technical provisions shall be based on their current exit value. 

The  calculation  of  technical  provisions  shall  make  use  of  and  be  consistent  with 
information  provided  by  the  financial  markets  and  generally  available  data  on 
insurance and reinsurance technical risks (market consistency). 

4. 

Technical provisions shall be calculated in a prudent, reliable and objective manner. 

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1. 

2. 

3. 

4. 

5. 

Article 76 

Calculation of technical provisions 

The value of technical provisions shall be equal to the sum of a best estimate and a 
risk margin as set out in paragraphs 2 and 3. 

The best estimate shall be equal to the probability-weighted average of future cash-
flows, taking account of the time value of money (expected present value of future 
cash-flows), using the relevant risk-free interest rate term structure. 

The  calculation  of  the  best  estimate  shall  be  based  upon  current  and  credible 
information  and  realistic  assumptions  and  be  performed  using  adequate  actuarial 
methods and statistical techniques. 

The  cash-flow  projection  used  in  the  calculation  of  the  best  estimate  shall  take 
account  of  all  the  cash  in-  and  out-flows  required  to  settle  the  insurance  and 
reinsurance obligations over the lifetime thereof. 

The  best  estimate  shall  be  calculated  gross,  without  deduction  of  the  amounts 
recoverable from reinsurance contracts and special purpose vehicles. Those amounts 
shall be calculated separately, in accordance with Article 80.  

The risk margin shall be such as to ensure that the value of the technical provisions is 
equivalent to the amount insurance and reinsurance undertakings would be expected 
to require in order to take over and meet the insurance and reinsurance obligations. 

Insurance  and  reinsurance  undertakings  shall  value  the  best  estimate  and  the  risk 
margin separately. 

However,  where  the  future  cash  flows  associated  with  insurance  or  reinsurance 
obligations can be replicated using financial instruments for which a market value is 
directly observable, the value of technical provisions shall be determined on the basis 
of the market value of those financial instruments. In this case, separate calculations 
of the best estimate and the risk margin shall not be required. 

Where  insurance  and  reinsurance  undertakings  value  the  best  estimate  and  the  risk 
margin  separately,  the  risk  margin  shall  be  calculated  by  determining  the  cost  of 
providing  an  amount  of  eligible  own  funds  equal  to  the  Solvency  Capital 
Requirement necessary to support the insurance and reinsurance obligations over the 
lifetime thereof. 

The  rate  used  in  the  determination  of  the  cost  of  providing  that  amount  of  eligible 
own funds (Cost-of-Capital rate) shall be the same for all insurance and reinsurance 
undertakings. 

The Cost-of-Capital rate used shall be equal to the additional rate, above the relevant 
risk-free  interest  rate,  that  an  insurance  or  reinsurance  undertaking  holding  an 
amount of eligible own funds, as set out in Section 3, equal to the Solvency Capital 
Requirement would incur to hold those funds. 

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Article 77 

Other elements to be taken into account in the calculation of technical provisions 

In  addition  to  Article  76,  when  calculating  technical  provisions,  insurance  and  reinsurance 
undertakings shall take account of the following: 

(1) 

(2) 

(3) 

all expenses that will be incurred in servicing insurance and reinsurance obligations; 

inflation, including expenses and claims inflation;  

all  payments  to  policyholders  and  beneficiaries,  including  future  discretionary 
bonuses, which insurance and reinsurance undertakings expect to make, whether or 
not  these  payments  are  contractually  guaranteed,  unless  those  payments  fall  under 
Article 90. 

Article 78 

Valuation of financial guarantees and contractual options included in insurance  
and reinsurance contracts 

When  calculating  technical  provisions,  insurance  and  reinsurance  undertakings  shall  take 
account of the value of financial guarantees and any contractual options included in insurance 
and reinsurance policies. 

Any  assumptions  made  by  insurance  and  reinsurance  undertakings  with  respect  to  the 
likelihood  that  policyholders  will  exercise  contractual  options,  including  lapses  and 
surrenders, shall be realistic and based on current and credible information. The assumptions 
shall take account, either explicitly or implicitly, of the impact that future changes in financial 
and non-financial conditions may have on the exercise of those options. 

Article 79 

Segmentation 

Insurance  and  reinsurance  undertakings  shall  segment  their  insurance  and  reinsurance 
obligations  into  homogeneous  risk  groups,  and  as  a  minimum  by  lines  of  business,  when 
calculating their technical provisions. 

Article 80 

Recoverables from reinsurance contracts and special purpose vehicles  

The  calculation  by  insurance  and  reinsurance  undertakings  of  amounts  recoverable  from 
reinsurance contracts and special purpose vehicles shall comply with Articles 75 to 79. 

When  calculating  amounts  recoverable  from  reinsurance  contracts  and  special  purpose 
vehicles,  insurance  and  reinsurance  undertakings  shall  take  account  of  the  time  difference 
between recoveries and direct payments. 

The  result  from  that  calculation  shall  be  adjusted  to  take  account  of  expected  losses  due  to 
default  of  the  counterparty.  That  adjustment  shall  be  based  on  an  assessment  of  the 
probability of default of the counterparty and the average loss resulting therefrom (loss-given-
default).  

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Article 81  

Data quality and application of a case-by-case approach for technical provisions 

Member  States  shall  ensure  that  insurance  and  reinsurance  undertakings  have  internal 
processes and procedures in place to ensure the appropriateness, completeness and accuracy 
of the data used in the calculation of their technical provisions. 

If  insurance  and  reinsurance  undertakings  have  insufficient  data  of  appropriate  quality  to 
apply a reliable actuarial method to a subset of their insurance and reinsurance obligations, or 
amounts recoverable from reinsurance contracts and special purpose vehicles, a case-by-case 
approach may be taken with respect to the calculation of the best estimate. 

Article 82  

Comparison against experience 

Insurance  and  reinsurance  undertakings  shall  have  processes  and  procedures  in  place  to 
ensure that best estimates, and the assumptions underlying the calculation of best estimates, 
are regularly compared against experience. 

Where  the  comparison  identifies  systematic  deviation  between  experience  and  the  best 
estimate  calculations  of  insurance  or  reinsurance  undertakings,  the  undertaking  concerned 
shall  make  appropriate  adjustments  to  the  actuarial  methods  being  used  or  the  assumptions 
being made. 

Article 83 

Appropriateness of the level of technical provisions 

Upon request from the supervisory authorities, insurance and reinsurance undertakings shall 
demonstrate  the  appropriateness  of  the  level  of  their  technical  provisions,  as  well  as  the 
applicability  and  relevance  of  the  methods  applied,  and  the  adequacy  of  the  underlying 
statistical data used. 

Article 84 

Increase of technical provisions 

To  the  extent  that  the  calculation  of  technical  provisions  of  insurance  and  reinsurance 
undertakings does not comply with Articles 75 to 82, the supervisory authorities may require 
insurance and reinsurance undertakings to increase the amount of technical provisions so that 
they correspond to the level determined pursuant to those Articles. 

Article 85 

Implementing measures 

The Commission shall adopt implementing measures laying down the following:  

(a) 

actuarial methods and statistical techniques to calculate the best estimate referred to 
in Article 76(2); 

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(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

the  relevant  risk-free  interest  rate  term  structure  to  be  used  to  calculate  the  best 
estimate referred to in Article 76(2); 

the circumstances in which technical provisions shall be calculated as a whole, or as 
a sum of a best estimate and a risk margin, and the methods to be used in the case 
where technical provisions are calculated as a whole; 

the  methods  and  assumptions  to  be  used  in  the  calculation  of  the  risk  margin, 
including the determination of the amount of eligible own funds necessary to support 
the insurance and reinsurance obligations and the  calibration  of the Cost-of-Capital 
rate; 

the lines of business on the basis of which insurance and reinsurance obligations are 
to be segmented in order to calculate technical provisions; 

the  standards  to  be  met  with  respect  to  ensuring  the  appropriateness,  completeness 
and  accuracy  of  the  data  used  in  the  calculation  of  technical  provisions,  and  the 
situations  in  which  it  would  be  appropriate  to  use  a  case-by-case  approach  to 
calculate technical provisions;  

the methods to be used when calculating the counterparty default adjustment referred 
to  in  Article  80  designed  to  capture  expected  losses  due  to  default  of  the 
counterparty;  

where  necessary,  simplified  methods  and 
technical 
provisions, in order to ensure the actuarial methods and statistical techniques referred 
to  in  point  (a)  are  proportionate  to  the  nature,  scale  and  complexity  of  the  risks 
supported by insurance and reinsurance undertakings. 

to  calculate 

techniques 

Those  measures  designed 
this  Directive,  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny 
referred to in of Article 304 (3). 

to  amend  non-essential  elements  of 

SECTION 3 - OWN FUNDS 

SUBSECTION 1 - DETERMINATION OF OWN FUNDS 

Article 86 

Own funds 

Own funds shall comprise the sum of basic own funds, referred to in Article 87 and ancillary 
own funds referred to in Article 88. 

Article 87 

Basic own funds 

Basic own funds shall consist of the following items: 

(1) 

the excess of assets over liabilities, valued in accordance with Article 74 and Section 
2 ;  

(2) 

subordinated liabilities. 

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The  excess  amount  referred  to  in  point  (1)  shall  be  reduced  by  the  amount  of  own  shares 
directly held by the insurance or reinsurance undertaking. 

Article 88 

Ancillary own funds 

1. 

Ancillary own funds shall consist of items other than basic own funds which can be 
called up to absorb losses. 

Ancillary own funds may comprise the following items to the extent that they are not 
basic own fund items: 

(a) 

unpaid share capital or initial fund that has not been called up, as referred to in 
Article 91; 

(b) 

letters of credit; 

(c) 

any other commitments received by insurance and reinsurance undertakings. 

In  the  case  of  a  mutual  or  mutual-type  association  with  variable  contributions, 
ancillary own funds may also comprise any future claims which that association may 
have against its members by way of a call for supplementary contribution, within the 
financial year concerned. 

2. 

Where an ancillary own fund item has been paid in or called up, it shall be treated as 
an asset and cease to form part of ancillary own fund items. 

Article 89 

Supervisory approval of ancillary own funds 

1. 

2. 

The amounts of ancillary own fund items to be taken into account when determining 
own funds shall be subject to prior supervisory approval. 

For each ancillary own fund item, supervisory authorities shall base their approval on 
an assessment of the following: 

(a) 

(b) 

the  status  of  the  counterparties  concerned,  in  relation  to  their  ability  and 
willingness to pay; 

the recoverability of the funds, taking account of the legal form of the item, as 
well as any conditions which would prevent the item from being successfully 
called up;  

(c) 

any information on the outcome of past calls which insurance and reinsurance 
undertakings have made for such ancillary own funds. 

3. 

The  amount  of  each  ancillary  own  fund  item  shall  be  equal  to  its  nominal  value 
unless either of the following conditions are fulfilled: 

(a) 

the item does not have a nominal value or has a maximum nominal value;  

(b) 

the nominal value does not reflect the loss-absorbency of the item. 

In those cases, the amount of the item to be taken into account for the determination 
of ancillary own funds shall be based upon prudent and realistic assumptions. 

4. 

Supervisory authorities shall approve either of the following: 

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(a) 

(b) 

a monetary amount for each ancillary own fund item;  

a method to determine the amount of each ancillary own fund item, in which 
case  supervisory  approval  of  the  amount  determined  in  accordance  with  that 
method shall be granted for a specified period of time. 

Article 90 

Surplus funds 

In so far as authorised under national law, realised profits appearing as surplus funds in the 
statutory annual accounts shall  not be  considered as insurance  and reinsurance  liabilities, to 
the  extent  that  these  surplus  funds  may  be  used  to  cover  any  losses  which  may  arise  and 
where they have not been made available for distribution to policyholders and beneficiaries. 

Article 91 

Unpaid share capital or initial fund 

Where unpaid share capital or initial fund has been called up, it shall be treated as an asset.  

Where  unpaid  share  capital  or  initial  fund  has  not  been  called  up,  it  shall  be  treated  as  a 
commitment and shall fall under Article 88. 

Article 92 

Implementing measures 

1. 

The Commission shall adopt implementing measures specifying the following : 

(a) 

(b) 

the criteria for granting supervisory approval in accordance with Article 89;  

the treatment of participations, within the meaning of the third subparagraph of 
Article  210(2),  in  financial  and  credit  institutions  with  respect  to  the 
determination of own funds.  

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive,  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304(3). 

2. 

Participations  in  financial  and  credit  institutions  as  referred  to  in  point  (b)  of 
paragraph 1 shall comprise the following: 

(a) 

participations which insurance and reinsurance undertakings hold in: 

(i) 

(ii) 

credit  institutions  and  financial  institutions  within  the  meaning  of 
Article 4(1) and (5) of Directive 2006/48/EC, 

investment  firms  within  the  meaning  of  point  1  of  Article 4(1)  of 
Directive 2004/39/EC; 

(b) 

subordinated claims and instruments referred to in Article 63 and Article 64(3) 
of Directive 2006/48/EC which insurance and reinsurance undertakings hold in 
respect of the entities defined in point (a) of this paragraph in which they hold 
a participation. 

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SUBSECTION 2 - CLASSIFICATION OF OWN FUNDS 

Article 93 

Characteristics used to classify own funds into tiers 

Own fund items shall be classified into three tiers on the basis of the following characteristics: 

(1) 

(2) 

(3) 

(4) 

(5) 

1. 

2. 

in the case of winding-up, the repayment of the item is refused to its holder until all 
other  obligations, 
towards 
policyholders  and  beneficiaries  of  insurance  and  reinsurance  contracts,  have  been 
met (subordination); 

insurance  and  reinsurance  obligations 

including 

the total amount of the item, rather than only part of it, is available to absorb losses in 
the case of winding-up (loss-absorbency); 

the  item  is  available,  or  can  be  called  up  on  demand,  to  absorb  losses  on  a  going-
concern basis, as well as in the case of winding-up (permanence); 

the  item  is  not  dated,  or  has  a  duration  which  is  sufficient  taking  into  account  the 
duration  of 
the  undertaking 
insurance  and  reinsurance  obligations  of 
(perpetuality); 

the 

the  item  is  free  from  mandatory  fixed  charges  and  requirements  or  incentives  to 
redeem  the  nominal  sum,  and  is  clear  of any  encumbrances  (absence  of  mandatory 
servicing costs). 

Article 94 

Main criteria for the classification into tiers 

Basic  own  fund  items  shall  be  classified  in  Tier  1  where  they  possess  the 
characteristics  set  out  in  points  (1),  (2)  and  (3)  of  Article  93,  and,  to  a  substantial 
degree, those set out in points (4) and (5) thereof. 

Basic  own  fund  items  shall  be  classified  in  Tier  2  where  they  possess  the 
characteristics set out in points (1) and (2) of Article 93, and to a substantial degree 
those set out in points (4) and (5) thereof. 

Ancillary  own  fund  items  shall  be  classified  in  Tier  2  where  they  possess  the 
characteristics  set  out  in  points  (1),  (2)  and  (3)  of  Article  93,  and,  to  a  substantial 
degree those set out in (4) and (5) thereof. 

3. 

Any basic and ancillary own fund items, which do not fall under paragraphs 1 and 2 
shall be classified in Tier 3. 

Article 95 

Classification of own funds into tiers 

Member  States  shall  ensure  that  insurance  and  reinsurance  undertakings  classify  their  own 
fund items on the basis of the criteria laid down in Article 94. 

For that purpose, insurance and reinsurance undertakings shall refer to the list of own funds 
referred to in point (c) of Article 97(1), where applicable. 

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Where  an  own  fund  item  is  not  covered  by  that  list,  it  shall  be  assessed  and  classified  by 
insurance  and  reinsurance  undertakings,  in  accordance  with  the  first  paragraph.  This 
assessment shall be approved by the supervisory authority. 

Article 96 

Classification of specific insurance own fund items 

Without  prejudice  to  Article  95  and  point  (c)  of  Article  97(1),  for  the  purposes  of  this 
Directive the following classifications shall be applied: 

(1) 

(2) 

(3) 

surplus funds falling under Article 90 shall be classified in Tier 1; 

letters  of  credit  and  guarantees,  provided  by  credit  institutions  authorised  in 
accordance with Directive 2006/48/EC, and held in trust for the benefit of insurance 
creditors by an independent trustee shall be classified in Tier 2; 

any  future  claims  which  Protection  and  Indemnity  Associations  may  have  against 
their members by way of a call for supplementary contributions, within the financial 
year, shall be classified in Tier 2. 

Article 97 

Implementing measures 

1. 

The Commission shall adopt implementing measures laying down the following: 

(a)  where  it  is  necessary  to  ensure  the  overall  quality  of  own  funds  and  cross-

sectoral consistency, the division of tiers into sub-tiers; 

(b) 

(c) 

(d) 

the  criteria  used  to  classify  own  fund  items  into  the  sub-tiers  referred  to  in 
point (a) based on the characteristics set out in Article 93; 

a list of own fund items deemed to meet the criteria, set out in Article 94 and in 
point  (b)  of  this  paragraph,  which  contains  for  each  own  fund  item  a  precise 
description of the features which determined its classification; 

the  methods  to  be  used  by  supervisory  authorities,  when  approving  the 
assessment and classification of own fund items which are not covered by the 
list referred to in point (c). 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive,  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304 (3). 

2. 

The  Commission  shall  regularly  review  and,  where  appropriate,  update  the  list 
referred to in point (c) of paragraph 1 in the light of market developments.  

SUBSECTION 3 - ELIGIBILITY OF OWN FUNDS 

Article 98  

Eligibility and limits applicable to Tier 1, Tier 2 and Tier 3 

1. 

As far as the Solvency Capital Requirement is concerned, the amounts of Tier 2 and 
Tier 3 items shall be subject to the following limits: 

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(a) 

(b) 

in order to ensure that the proportion of Tier 1 items in the eligible own funds 
is higher than one third of the total eligible own funds, the eligible amount of 
Tier 2 together with the eligible amount of Tier 3 shall be limited to twice the 
total amount of Tier 1 items;  

in order to ensure that the proportion of Tier 3 items in the eligible own funds 
is less than one third of the total eligible own funds, the eligible amount of Tier 
3 shall be limited to half the total amount of Tier 1 and eligible amount of Tier 
2 items. 

As far as the Minimum Capital Requirement is concerned, in order to ensure that the 
proportion  of  Tier  1  items  in  the  eligible  basic  own  funds  shall  be  higher  than  one 
half of the total eligible basic own funds, the amount of basic own fund items eligible 
to  cover  the  Minimum  Capital  Requirement  which  are  classified  in  Tier  2  shall  be 
limited to the total amount of Tier 1 items. 

Where sub-tiers have been introduced, in accordance with point (a) of Article 97 (1), 
specific limits shall apply to the amount of own fund items classified in those sub-
tiers. 

The eligible amount of own funds to cover the Solvency Capital Requirement set out 
in Article 100 shall be equal to the sum of the amount of Tier 1, the eligible amount 
of Tier 2 and the eligible amount of Tier 3. 

The eligible amount of basic own funds to cover the Minimum Capital Requirement 
set out in Article 126 shall be equal to sum of the amount of Tier 1 and the eligible 
amount of basic own fund items classified in Tier 2. 

2. 

3. 

4. 

5. 

Article 99 

Implementing measures 

The  Commission  shall  adopt  implementing  measures  laying  down  the  specific  limits 
applicable to sub-tiers, where sub-tiers have been introduced,. 

Those  measures  designed 
this  Directive,  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny 
referred to in Article 304(3). 

to  amend  non-essential  elements  of 

SECTION 4 - SOLVENCY CAPITAL REQUIREMENT  

SUBSECTION 1 - GENERAL PROVISIONS FOR THE SOLVENCY CAPITAL 
REQUIREMENT USING THE STANDARD FORMULA OR AN INTERNAL MODEL 

Article 100 

General provisions  

Member  States  shall  ensure  that  insurance  and  reinsurance  undertakings  hold  eligible  own 
funds covering the Solvency Capital Requirement. 

The Solvency Capital Requirement shall be calculated, either in accordance with the standard 
formula in Subsection 2 or using an internal model, as set out in Subsection 3. 

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Article 101  

Calculation of the Solvency Capital Requirement 

1. 

2 

3. 

The Solvency Capital Requirement shall be calculated in accordance with paragraphs 
2 to 5: 

The  Solvency  Capital  Requirement  shall  be  calculated  on  the  presumption  that  the 
undertaking will carry on its business as a going concern. 

The  Solvency  Capital  Requirement  shall  be  calibrated  so  as  to  ensure  that  all 
quantifiable  risks  to  which  an  insurance  or  reinsurance  undertaking  is  exposed  are 
taken  into  account.  With  respect  to  existing  business,  it  shall  cover  unexpected 
losses. 

It  shall  correspond  to  the  Value-at-Risk  of  the  basic  own  funds  of  an  insurance  or 
reinsurance  undertaking  subject  to  a  confidence  level  of  99.5%  over  a  one-year 
period. 

4. 

The Solvency Capital Requirement shall cover at least the following risks: 

(a) 

non-life underwriting risk;  

(b) 

life underwriting risk; 

(c) 

health underwriting risk; 

(d)  market risk; 

(e) 

(f) 

credit risk;  

operational risk. 

5 

1. 

Operational risk as referred to in point (f) of the first subparagraph shall include legal 
risks, and exclude risks arising from strategic decisions, as well as reputation risks. 

When  calculating  the  Solvency  Capital  Requirement,  insurance  and  reinsurance 
undertakings shall take account of the effect of risk mitigation techniques, provided 
that credit risk and other risks arising from the use of such techniques are properly 
reflected in the Solvency Capital Requirement. 

Article 102 

Frequency of calculation 

Insurance  and  reinsurance  undertakings  shall  calculate  the  Solvency  Capital 
Requirement  at  least  once  a  year  and  report  the  result  of  that  calculation  to  the 
supervisory authorities. 

Insurance  and  reinsurance  undertakings  shall  ensure  that  they  hold  eligible  own 
funds which cover the last reported Solvency Capital Requirement. 

Insurance  and  reinsurance  undertakings  shall  monitor  the  amount  of  eligible  own 
funds and the Solvency Capital Requirement on an on-going basis. 

If  the  risk  profile  of  an  insurance  or  reinsurance  undertaking  deviates  significantly 
from the assumptions underlying the last reported Solvency Capital Requirement, the 
undertaking  concerned  shall  recalculate  the  Solvency  Capital  Requirement  without 
delay and report it to the supervisory authorities. 

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2. 

Where  there  is  evidence  to  suggest  that  the  risk  profile  of  the  insurance  or 
reinsurance  undertaking  has  altered  significantly  since  the  date  on  which  the 
Solvency  Capital  Requirement  was  last  reported,  the  supervisory  authorities  may 
require the undertaking concerned to recalculate the Solvency Capital Requirement. 

SUBSECTION 2 - SOLVENCY CAPITAL REQUIREMENT – STANDARD FORMULA 

Article 103 

Structure of the standard formula 

1. 

(a) 

(b) 

(c) 

2. 

The Solvency Capital Requirement shall be the sum of the following items: 

the Basic Solvency Capital Requirement, as laid down in Article 104; 

the capital requirement for operational risk, as laid down in Article 106;  

the  adjustment  for  the  loss-absorbing  capacity  of  technical  provisions  and  deferred 
taxes, as laid down in Article 107. 

For  the  purposes  of  the  calculation  of  the  Solvency  Capital  Requirement  the 
Commission  shall  adopt  implementing  measures  defining  a  standard  formula  in 
accordance with the principles set out in Articles 104 to 108. 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive,  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304 (3). 

Article 104 

Design of the Basic Solvency Capital Requirement 

1. 

The  Basic  Solvency  Capital  Requirement  shall  comprise  individual  risk  modules, 
which are aggregated in accordance with point 1 of Annex IV. 

It shall consist of at least the following risk modules: 

(a) 

non-life underwriting risk; 

(b) 

life underwriting risk; 

(c) 

special health underwriting risk; 

(d)  market risk,  

(e) 

counterparty default risk. 

2. 

3. 

4. 

For the purposes of points (a), (b) and (c) of paragraph 1, insurance or reinsurance 
operations  shall  be  allocated  to  the  underwriting  risk  module  that  best  reflects  the 
technical nature of the underlying risks. 

The  correlation  coefficients  for  the  aggregation  of  the  risk  modules  referred  to  in 
paragraph  1,  as  well  as  the  calibration  of  the  capital  requirements  for  each  risk 
module, shall result in an overall Solvency Capital Requirement which complies with 
the principles set out in Article 101. 

Each of the risk modules referred to in paragraph 1 shall be calibrated using a Value-
at-Risk measure, with a 99.5% confidence level, over a one year period. 

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5. 

6. 

7. 

1. 

2. 

Where appropriate, diversification effects shall be taken into account in the design of 
each risk module. 

The  same  design  and  specifications  for  the  risk  modules  shall  be  used  for  all 
insurance  and  reinsurance  undertakings,  both  with  respect  to  the  Basic  Solvency 
Capital Requirement and to any simplified calculations as laid down in Article 108. 

With  regard  to  risks  arising  from  catastrophes,  geographical  specifications  may, 
where appropriate, be used for the calculation of the life, non-life and special health 
underwriting risk modules. 

Subject  to  approval  by  the  supervisory  authorities,  insurance  and  reinsurance 
undertakings may, within the design of the standard formula, replace a subset of its 
parameters by parameters specific to the undertaking concerned when calculating the 
life, non-life and special health underwriting risk modules. 

Such  parameters  shall  be  calibrated  on  the  basis  of  the  internal  data  of  the 
undertaking concerned, or of data which is directly relevant for the operations of that 
undertaking using standardised methods. 

When  granting  supervisory  approval,  supervisory  authorities  shall  verify  the 
completeness, accuracy and appropriateness of the data used. 

Article 105  

Calculation of the Basic Solvency Capital Requirement 

The  Basic  Solvency  Capital  Requirement  shall  be  calculated  in  accordance  with 
paragraphs 2 to 6: 

The  non-life  underwriting  risk  module  shall  reflect  the  risk  arising  from  the 
underwriting of non-life insurance contracts, in relation to the perils covered and the 
processes used in the conduct of business. 

It  shall  take  account  of  the  uncertainty  in  the  results  of  insurance  and  reinsurance 
undertakings related to the existing insurance and reinsurance obligations. 

It shall be calculated, in accordance with point 2 of Annex IV, as a combination of 
the capital requirements for at least the following sub-modules:  

(a) 

(b) 

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities, 
resulting  from  fluctuations  in  the  timing,  frequency  and  severity  of  insured 
events,  and  in  the  timing  and  amount  of  claim  settlements  (non-life  premium 
and reserve risk);  

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities, 
resulting from significant uncertainty of pricing and provisioning assumptions 
related to extreme or exceptional events (non-life catastrophe risk). 

3. 

The life underwriting risk module shall reflect the risk arising from the underwriting 
of life insurance contracts, in relation to the perils covered and the processes used in 
the conduct of business. 

It shall be calculated, in accordance with point 3 of Annex IV, as a combination of 
the capital requirements for at least the following sub-modules:  

(a) 

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities, 
resulting from changes in the level, trend, or volatility of mortality rates, where 

EN 

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(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

an increase in the mortality rate leads to an increase in the value of insurance 
liabilities (mortality risk); 

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities, 
resulting from changes in the level, trend, or volatility of mortality rates, where 
a  decrease  in  the  mortality  rate  leads  to  an  increase  in  the  value  of  insurance 
liabilities (longevity risk); 

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities, 
resulting  from  changes  in  the  level,  trend  or  volatility  of  disability,  sickness 
and morbidity rates (disability – morbidity risk); 

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities, 
resulting from changes in the level, trend, or volatility of the expenses incurred 
in servicing insurance or reinsurance contracts (life expense risk); 

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities 
resulting from fluctuations in the level, trend, or volatility of the revision rates 
applied to annuities, due to changes in the legal environment or in the state of 
health of the person insured (revision risk); 

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities, 
resulting  from  changes  in  the  level  or  volatility  of  the  rates  of  policy  lapses, 
terminations, and surrenders (lapse risk);  

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities, 
resulting  from  the  significant  uncertainty  of  pricing  and  provisioning 
assumptions related to extreme or irregular events (life catastrophe risk). 

4. 

Where  health  insurance  is  pursued  on  a  similar  technical  basis  to  that  of  life 
insurance  as  referred  to  in  Article  204,  the  special  health  underwriting  risk  module 
shall  reflect  the  risk  arising  from  the  underwriting  of  health  insurance  contracts, 
following  from  both  the  perils  covered  and  the  processes  used  in  the  conduct  of 
business. 

It shall be calculated, in accordance with point 4 of Annex IV, as a combination of 
the capital requirements for at least the following sub-modules:  

(a) 

(b) 

(c) 

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities, 
resulting from changes in the level, trend, or volatility of the expenses incurred 
in servicing insurance or reinsurance contracts (health expense risk);  

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities, 
resulting  from  fluctuations  in  the  timing,  frequency  and  severity  of  insured 
events,  and  in  the  timing  and  amount  of  claim  settlements  at  the  time  of 
provisioning (health premium and reserve risk);  

the  risk  of  loss,  or  of  adverse  change  in  the  value  of  insurance  liabilities, 
resulting  from  the  significant  uncertainty  of  pricing  and  provisioning 
assumptions  related  to  outbreaks  of  major  epidemics,  as  well  as  the  unusual 
accumulation of risks under such extreme circumstances (health epidemic risk). 

5. 

The  market  risk  module  shall  reflect  the  risk  arising  from  the  level  or  volatility  of 
market  prices  of  financial  instruments  which  have  an  impact  upon  the  value  of  the 
assets  and  liabilities  of  the  undertaking.  It  shall  properly  reflect  the  structural 
mismatch  between  assets  and  liabilities,  in  particular  with  respect  to  the  duration 
thereof. 

EN 

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It shall be calculated, in accordance with point 5 of Annex IV, as a combination of 
the capital requirements for at least the following sub-modules:  

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

the  sensitivity  of  the  values  of  assets,  liabilities  and  financial  instruments  to 
changes  in  the  term  structure  of  interest  rates,  or  in  the  volatility  of  interest 
rates (interest rate risk);  

the  sensitivity  of  the  values  of  assets,  liabilities  and  financial  instruments  to 
changes  in  the  level  or  in  the  volatility  of  market  prices  of  equities  (equity 
risk);  

the  sensitivity  of  the  values  of  assets,  liabilities  and  financial  instruments  to 
changes in the level or in the volatility of market prices of real estate (property 
risk);  

the  sensitivity  of  the  values  of  assets,  liabilities  and  financial  instruments  to 
changes  in  the  level  or  in  the  volatility  of  credit  spreads  over  the  risk-free 
interest rate term structure (spread risk);  

the  sensitivity  of  the  values  of  assets,  liabilities  and  financial  instruments  to 
changes  in  the  level  or  in  the  volatility  of  currency  exchange  rates  (currency 
risk). 

additional  risks  to  an  insurance  or  reinsurance  undertaking  stemming,  either 
from  lack  of  diversification  in  the  asset  portfolio,  or  from  large  exposure  to 
default risk by a single issuer of securities or a group of related issuers (market 
risk concentrations). 

The counterparty default risk module shall reflect possible losses due to unexpected 
default,  or  deterioration  in  the  credit  standing,  of  the  counterparties  and  debtors  of 
insurance  and  reinsurance  undertakings  over  the  next  twelve  months.  The 
counterparty  default  risk  module  shall  cover  risk-mitigating  contracts,  such  as 
reinsurance  arrangements,  securitisations  and  derivatives,  and  receivables  from 
intermediaries,  as  well  as  any  other  credit  exposures  which  are  not  covered  in  the 
spread risk sub-module. 

For each counterparty, the counterparty default risk module shall take account of the 
overall  counterparty  risk  exposure  of  the  insurance  or  reinsurance  undertaking 
concerned  to  that  counterparty,  irrespective  of  the  legal  form  of  its  contractual 
obligations to that undertaking. 

Article 106 

Capital requirement for operational risk 

The  capital  requirement  for  operational  risk  shall  reflect  operational  risks  to  the 
extent  they  are  not  already  reflected  in  the  risk  modules  referred  to  in  Article  104. 
That requirement shall be calibrated in accordance with Article 101(3). 

With  respect  to  life  insurance  contracts  where  the  investment  risk  is  borne  by  the 
policyholders,  the  calculation  of  the  capital  requirement  for  operational  risk  shall 
take account of the amount of annual expenses incurred in respect of those insurance 
obligations. 

With respect to insurance and reinsurance operations other than those referred to in 
paragraph 2, the calculation of the capital requirement for operational risk shall take 

6. 

1. 

2. 

3. 

EN 

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account  of  the  volume  of  those  operations,  in  terms  of  earned  premiums  and 
technical  provisions  which  are  held  in  respect  of  those  insurance  and  reinsurance 
obligations. In this case, the capital requirement for operational risks shall not exceed 
30%  of  the  Basic  Solvency  Capital  Requirement  relating  to  those  insurance  and 
reinsurance operations. 

Article 107 

Adjustment for the loss-absorbing capacity of technical provisions and deferred taxes 

The  adjustment  referred  to  in  point  (c)  paragraph  1  of  Article  103  for  the  loss-absorbing 
capacity  of  technical  provisions  and  deferred  taxes  shall  reflect  potential  compensation  of 
unexpected losses through a simultaneous decrease in technical provisions and deferred taxes. 

That  adjustment  shall  take  account  of  the  risk  mitigating  effect  provided  by  future 
discretionary  benefits  of  life  insurance  contracts,  to  the  extent  insurance  and  reinsurance 
undertakings  can  establish  that  a  reduction  in  such  benefits  may  be  used  to  cover  any 
unexpected losses when they arise. The risk mitigating effect provided by future discretionary 
benefits shall be no higher than the sum of technical provisions and deferred taxes relating to 
these future discretionary benefits. 

For  the  purpose  of  the  second  paragraph,  the  value  of  future  discretionary  benefits  under 
adverse circumstances shall be compared to the value of such benefits under the underlying 
assumptions of the best-estimate calculation. 

Article 108 

Simplifications in the standard formula 

Insurance  and  reinsurance  undertakings  may  use  a  simplified  calculation  for  a  specific  sub-
module or risk module where the nature, scale and complexity of the risks they face justifies it 
and where it would be disproportionate to require all insurance and reinsurance undertakings 
to apply the standardised calculation. 

Simplified calculations shall be calibrated in accordance with Article 101(3). 

Article 109 

Implementing measures 

1. 

In order to ensure that the same treatment is applied to all insurance and reinsurance 
undertakings  calculating  the  Solvency  Capital  Requirement  on  the  basis  of  the 
standard formula, or to take account of market developments, the Commission shall 
adopt implementing measures laying down the following:  

(a) 

(b) 

any  sub-modules  necessary  for  covering  more  precisely  the  risks  which  fall 
under  the  respective  risk  modules  referred  to  in  Article  104  as  well  as  any 
subsequent updates; 

the methods, assumptions and standard parameters to be used, when calculating 
each  of  the  risk  modules  or  sub-modules  of  the  Basic  Solvency  Capital 
Requirement laid down in Articles 104 and 105; 

(c) 

the correlation parameters; 

EN 

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(d)  where  insurance  and  reinsurance  undertakings  use  risk  mitigation  techniques, 
the methods and assumptions to be used to assess the changes in the risk profile 
of the undertaking concerned and adjust the calculation of the Solvency Capital 
Requirement; 

(e) 

(f) 

(g) 

(h) 

(i) 

(j) 

the qualitative criteria that the risk mitigation techniques referred to in point (d) 
must meet in order to ensure that the risk has been effectively transferred to a 
third party; 

the methods and parameters to be used when assessing the capital requirement 
for operational risk set out in Article 106; 

the method to be used when calculating the adjustment for the loss-absorbing 
capacity of technical provisions, as laid down in Article 107; 

the  subset  of  standard  parameters  in  the  life,  non-life  and  special  health 
underwriting  risk  modules  that  may  be  replaced  by  undertaking-specific 
parameters as set out in Article 104(7); 

the  standardised  methods  to  be  used  by  the  insurance  or  reinsurance 
undertaking  to  calculate  the  undertaking-specific  parameters  referred  to  in 
point  (h),  and  any  criteria  with  respect  to  the  completeness,  accuracy,  and 
appropriateness of the data used that must be met before supervisory approval 
is given;  

the simplified calculations provided for specific sub-modules and risk modules, 
as  well  as  the  criteria  that  insurance  and  reinsurance  undertakings  shall  be 
required to meet in order to be entitled to use each of these simplifications, as 
set out in Article 108. 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive,  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304(3). 

2. 

The Commission may adopt implementing measures laying down quantitative limits 
and  asset  eligibility  criteria  in  order  to  address  risks  which  are  not  adequately 
covered  by  a  sub-module.  Such  implementing  measures  shall  apply  to  assets 
covering  technical  provisions,  excluding  assets  held  in  respect  of  life  insurance 
contracts where the investment risk is borne by the policyholders. 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive,  by 
supplementing it shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304(3). 

SUBSECTION 3 - SOLVENCY CAPITAL REQUIREMENT – FULL AND PARTIAL 
INTERNAL MODELS 

Article 110 

General provisions for the approval of full and partial internal models 

1. 

Member States shall ensure that insurance or reinsurance undertakings may calculate 
the Solvency Capital Requirement using a full or partial internal model as approved 
by the supervisory authorities. 

EN 

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2. 

Insurance  and  reinsurance  undertakings  may  use  partial  internal  models  for  the 
calculation of one or more of the following: 

3. 

4. 

5. 

6. 

7. 

1. 

(a) 

one  or  more  risk  modules,  or  sub-modules,  of  the  Basic  Solvency  Capital 
Requirement, as set out in Articles 104 and 105; 

(b) 

the capital requirement for operational risk as laid down in Article 106;  

(c) 

the adjustment referred to in Article 107.  

In addition, partial modelling may be applied to the whole business of insurance and 
reinsurance undertakings, or only to one or more major business units. 

In any application for approval, insurance and reinsurance undertakings shall submit, 
as a minimum, documentary evidence that the internal model meets the requirements 
set out in Articles 118 to 123. 

Where  the  application  for  that  approval  relates  to  a  partial  internal  model,  the 
requirements  set  out  in  Articles  118  to  123  shall  be  adapted  to  take  account  of  the 
limited scope of the application of the model. 

The  supervisory  authorities  shall  decide  on  the  application  within  six  months  from 
the receipt of the complete application. 

Supervisory  authorities  shall  give  approval  to  the  application  only  if  they  are 
satisfied that the systems of the insurance or reinsurance undertaking concerned for 
monitoring and managing risk are adequate and in particular, that the internal model 
complies with the requirements referred to in paragraph 3. 

Any decision by the supervisory authorities to reject the application for the use of an 
internal model shall be accompanied by the reasons therefore.  

For a period of two years after having received approval from supervisory authorities 
to  use  an  internal  model,  insurance  and  reinsurance  undertakings  shall  provide 
supervisory  authorities  with  an  estimate  of  the  Solvency  Capital  Requirement 
determined in accordance with the standard formula, as set out in Subsection 2. 

Article 111 

Specific provisions for the approval of partial internal models 

In  the  case  of  a  partial  internal  model,  supervisory  approval  shall  only  be  given  if 
that model complies with the requirements set out in Article 110 and the following 
additional conditions: 

(a) 

(b) 

(c) 

the reason for the limited scope of application of the model is properly justified 
by the undertaking; 

the resulting Solvency Capital Requirement reflects more appropriately the risk 
profile  of  the  undertaking  and  in  particular  meets  the  principles  set  out  in 
Subsection 1; 

its design is consistent with the principles set out in Subsection 1 so as to allow 
the  partial  internal  model  to  be  fully  integrated  into  the  Solvency  Capital 
Requirement Standard Formula. 

2. 

When  assessing  an  application  for  the  use  of  a  partial  internal  model  which  only 
covers certain sub-modules of a specific risk module, or some of the business units of 

EN 

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an  insurance  or  reinsurance  undertaking  with  respect  to  a  specific  risk  module,  or 
parts  of  both,  supervisory  authorities  may  require  the  insurance  and  reinsurance 
undertakings concerned to submit a realistic transitional plan to extend the scope of 
the model.  

The  transitional  plan  shall  set  out  the  manner  in  which  insurance  and  reinsurance 
undertakings plan to extend the scope of the model to other sub-modules or business 
units, in order to ensure that the model covers a predominant part of their insurance 
operations with respect to that specific risk module. 

Article 112  

Implementing measures 

The Commission shall adopt implementing measures setting out following: 

(1) 

(2) 

the procedure to be followed for the approval of an internal model;  

the adaptations to be made to the standards set out in Articles 118 to 123 in order to 
take account of the limited scope of the application of the partial internal model. 

this  Directive,  by 
Those  measures  designed 
supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny 
referred to in Article 304(3). 

to  amend  non-essential  elements  of 

Article 113 

Policy for changing the full and partial internal models 

As  part  of  the  initial  approval  process  of  their  internal  model,  insurance  and  reinsurance 
undertakings shall agree with the supervisory authorities on a policy for changing the model. 
Insurance and reinsurance undertakings may change their internal model in accordance with 
that policy 

The policy shall include a specification of minor and major changes to the internal model.  

Major changes to the internal model, as well as changes to the policy, shall always be subject 
to prior supervisory approval, as laid down in Article 110. 

Minor changes to the internal model shall not be subject to prior supervisory approval, insofar 
as they are developed in accordance with the policy. 

Article 114 

Responsibilities of the administrative and management bodies 

The administrative or management bodies of the insurance and reinsurance undertakings shall 
approve  the  application  to  the  supervisory  authorities  for  approval  of  the  internal  model 
referred  to  in  Article  110,  as  well  as  the  application  for  approval  of  any  subsequent  major 
changes made to that model. 

The administrative or management body shall have responsibility for putting in place systems 
which ensure that the internal model operates properly on a continuous basis. 

EN 

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Article 115 

Reversion to the standard formula 

After  having  received  approval  in  accordance  with  Article  110,  insurance  and  reinsurance 
undertakings shall not revert to calculating the Solvency Capital Requirement in accordance 
with the standard formula, as set out in Subsection 2, except in duly justified circumstances 
and subject to the approval of the supervisory authorities. 

Article 116 

Non-compliance of the internal model 

1. 

2. 

insurance  and  reinsurance  undertakings  cease 

If, after having received approval from the supervisory authorities to use an internal 
model, 
the 
requirements  set  out  in  Articles  118  to  123,  they  shall,  either  present  to  the 
supervisory  authorities  a  plan  to  restore  compliance  within  a  reasonable  period  of 
time, or demonstrate that the effect of non-compliance is immaterial. 

to  comply  with 

In the event that insurance and reinsurance undertakings fail to implement the plan 
referred  to  in  paragraph  1,  the  supervisory  authorities  may  require  insurance  and 
reinsurance  undertakings  to  revert  to  calculating  the  Solvency  Capital  Requirement 
in accordance with the standard formula, as set out in Subsection 2. 

Article 117 

Significant deviations from the assumptions underlying the Solvency Capital Requirement 

Where it is inappropriate to calculate the Solvency Capital Requirement in accordance with 
the standard formula, as set out in Subsection 2, because the risk profile of the insurance and 
reinsurance  undertakings  concerned  deviates  significantly  from  the  assumptions  underlying 
the Solvency Capital Requirement, the supervisory authorities may, by a decision stating the 
reasons, require the undertakings concerned to use an internal model to calculate the Solvency 
Capital Requirement, or the relevant risk modules of thereof.  

Article 118 

Use test 

Insurance  and  reinsurance  undertakings  shall  demonstrate  that  the  internal  model  is  widely 
used in and plays an important role in the following: 

(1) 

their system of governance, referred to in Articles 41 – 49, in particular 

(a) 

(b) 

their  risk-management  system  as  laid  down  in  Article  43  and  their  decision-
making processes; 

their  economic  and  solvency  capital  assessment  and  allocation  processes, 
including the assessment referred to in Article 44. 

In  addition,  insurance  and  reinsurance  undertakings  shall  demonstrate  that  the  frequency  of 
calculation of the Solvency Capital Requirement using the internal model is consistent with 
the frequency with which they use their internal model for the other purposes covered by the 
first paragraph. 

EN 

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The  administrative  or  management  body  shall  be  responsible  for  ensuring  the  on-going 
appropriateness of the design and operations of the internal model, and that the internal model 
continues  to  appropriately  reflect  the  risk  profile  of  the  insurance  and  reinsurance 
undertakings concerned. 

Article 119 

Statistical quality standards 

1. 

2. 

The  internal  model,  and  in  particular  the  calculation  of  the  probability  distribution 
forecast underlying it, shall comply with the criteria set out in paragraphs 2 to 9. 

The methods used to calculate the probability distribution forecast shall be based on 
adequate actuarial and statistical techniques and shall be consistent with the methods 
used to calculate technical provisions. 

The  methods  used  to  calculate  the  probability  distribution  forecast  shall  be  based 
upon current and credible information and realistic assumptions. 

Insurance  and  reinsurance  undertakings  shall  be  able  to  justify  the  assumptions 
underlying their internal model to the supervisory authorities. 

3. 

Data used for the internal model shall be accurate, complete and appropriate. 

Insurance  and  reinsurance  undertakings  shall  update  the  data  sets  used  in  the 
calculation of the probability distribution forecast at least once a year. 

4. 

No particular method for the calculation of the probability distribution forecast shall 
be prescribed.  

Regardless of the method of calculation chosen, the ability of the internal model to 
rank risk shall be sufficient to ensure that it is widely used in and plays an important 
role  in  the  system  of  governance  of  insurance  and  reinsurance  undertakings,  in 
particular their risk-management system and decision-making processes, and capital 
allocation in accordance with Article 118. 

The  internal  model  shall  cover  all  of  the  material  risks  to  which  insurance  and 
reinsurance  undertakings  are  exposed.  As  a  minimum,  full  internal  models  shall 
cover the risks set out in Article 101(4). 

As regards diversification effects, insurance and reinsurance undertakings may take 
account  in  their  internal  model  of  dependencies  within  risk  categories,  as  well  as 
across  risk  categories,  provided  that  supervisory  authorities  are  satisfied  that  the 
system used for measuring those diversification effects is adequate. 

Insurance  and  reinsurance  undertakings  may  take  full  account  of  the  effect  of  risk 
mitigation  techniques  in  their  internal  model,  as  long  as  credit  risk  and  other  risks 
arising  from  the  use  of  risk  mitigation  techniques  are  properly  reflected  in  the 
internal model. 

Insurance  and  reinsurance  undertakings  shall  accurately  assess  the  particular  risks 
associated  with  financial  guarantees  and  any  contractual  options  in  their  internal 
model,  where  material.  They  shall  also  assess  the  risks  associated  with  both 
policyholder  options  and  contractual  options  for  insurance  and  reinsurance 
undertakings.  For  this  purpose,  they  shall  take  account  of  the  impact  that  future 
changes in financial and non-financial conditions may have on the exercise of those 
options. 

5. 

6. 

7. 

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8. 

9. 

1. 

2. 

3. 

4. 

In their internal model, insurance and reinsurance undertakings may take account of 
future management actions that they would reasonably expect to carry out in specific 
circumstances.  

In  the  case  set  out  in  the  first  subparagraph,  the  undertaking  concerned  shall  make 
allowance for the time necessary to implement such actions. 

In their internal model, insurance and reinsurance undertakings shall take account of 
all payments to policy holders and beneficiaries which they expect to make, whether 
or not these payments are contractually guaranteed. 

Article 120 

Calibration standards 

Insurance  and  reinsurance  undertakings  may  use  a  different  time  period  or  risk 
measure than that set out in Article 101(3) for internal modelling purposes as long as 
the outputs of the internal model can be used by those undertakings to calculate the 
Solvency  Capital  Requirement  in  a  manner  that  provides  policyholders  and 
beneficiaries with a level of protection equivalent to that set out in Article 101. 

Where practicable, insurance and reinsurance undertakings shall derive the Solvency 
Capital Requirement directly from the probability distribution forecast generated by 
the internal model of those undertakings, using the Value-at-Risk measure set out in 
Article 101(3). 

Where  insurance  and  reinsurance  undertakings  cannot  derive  the  Solvency  Capital 
Requirement  directly  from  the  probability  distribution  forecast  generated  by  the 
internal  model, the supervisory authorities may allow approximations to be used in 
the  process  to  calculate  the  Solvency  Capital  Requirement,  as  long  as  those 
undertakings  can  demonstrate  to  the  supervisory  authorities  that  policyholders  are 
provided with a level of protection equivalent to that set out in Article 101. 

Supervisory  authorities  may  require  insurance  and  reinsurance  undertakings  to  run 
their internal model on relevant benchmark portfolios and using assumptions based 
on external rather than internal data in order to verify the calibration of the internal 
model  and  to  check  that  its  specification  is  in  line  with  generally  accepted  market 
practice. 

Article 121 

Profit and loss attribution 

Insurance and reinsurance undertakings shall review, at least annually, the causes and sources 
of profits and losses for each major business unit. 

They shall demonstrate how the categorisation of risk chosen in the internal model explains 
the  causes  and  sources  of  profits  and  losses.  The  categorisation  of  risk  and  attribution  of 
profits and losses shall reflect the risk profile of the insurance and reinsurance undertakings. 

EN 

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Article 122 

Validation standards 

Insurance and reinsurance undertakings shall have a regular cycle of model validation which 
includes  monitoring  the  performance  of  the  internal  model,  reviewing  the  on-going 
appropriateness of its specification, and testing its results against experience. 

The  model  validation  process  shall  include  an  effective  statistical  process  for  validating  the 
internal  model  which  enables  the  insurance  and  reinsurance  undertakings  to  demonstrate  to 
their supervisory authorities that the resulting capital requirements are appropriate. 

The  statistical  methods  applied  shall  not  only  test  the  appropriateness  of  the  probability 
distribution  forecast  compared  to  loss  experience,  but  also  to  all  new  data  and  information 
relating thereto. 

The model validation process shall include an analysis of the stability of the internal model 
and in particular the testing of the sensitivity of the results of the internal model to changes in 
key underlying assumptions. It shall also include an assessment of the accuracy, completeness 
and appropriateness of the data used by the internal model. 

Article 123 

Documentation standards 

Insurance and reinsurance undertakings shall document the design and operational details of 
their internal model. 

The documentation shall demonstrate compliance with Articles 118 to 122. 

The  documentation  shall  provide  a  detailed  outline  of  the  theory,  assumptions,  and 
mathematical and empirical basis underlying the internal model. 

The documentation shall indicate any circumstances under which the internal model does not 
work effectively. 

Insurance  and  reinsurance  undertakings  shall  document  all  major  changes  to  their  internal 
model, as set out in Article 113. 

Article 124 

External models and data 

The  use  of  a  model  or  data  obtained  from  a  third-party  shall  not  be  considered  to  be  a 
justification  for  exemption  from  any  of  the  requirements  for  the  internal  model  set  out  in 
Articles 118 to 123. 

EN 

120 

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Article 125 

Implementing measures 

The Commission shall, in order to ensure a harmonised approach to the use of internal models 
throughout  the  Community  and  to  enhance  the  better  assessment  of  the  risk  profile  and 
management of the business of insurance and reinsurance undertakings, adopt implementing 
measures with respect to Articles 118 to 124. 

this  Directive,  by 
Those  measures  designed 
supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny 
referred to in Article 304 (3). 

to  amend  non-essential  elements  of 

SECTION 5 - MINIMUM CAPITAL REQUIREMENT 

Article 126 

General provisions 

Member  States  shall  ensure  that  insurance  and  reinsurance  undertakings  hold  eligible  basic 
own funds, to cover the Minimum Capital Requirement. 

Article 127 

Calculation of the Minimum Capital Requirement 

1. 

The  Minimum  Capital  Requirement  shall  be  calculated  in  accordance  with  the 
following principles: 

(a) 

(b) 

(c) 

it  shall  be  calculated  in  a  clear  and  simple  manner,  and  in  such  a  way  as  to 
ensure that the calculation can be audited; 

the  Minimum  Capital  Requirement  shall  correspond  to  an  amount  of  eligible 
basic own funds below which policyholders and beneficiaries are exposed to an 
unacceptable  level  of  risk  if  insurance  and  reinsurance  undertakings  were 
allowed to continue their operations; 

the level of the Minimum Capital Requirement shall be calibrated to the Value-
at-Risk  of  the  basic  own  funds  of  an  insurance  or  reinsurance  undertaking 
subject  to  a  confidence  level  in  the  range  of  80%  to  90%  over  a  one-year 
period; 

(d) 

it  shall  have  an  absolute  floor  of  1  000  000  EUR  for  non-life  insurance  and 
reinsurance undertakings and 2 000 000 EUR for life insurance undertakings. 

2. 

Insurance  and  reinsurance  undertakings  shall  calculate  the  Minimum  Capital 
Requirement at least quarterly and report the results of that calculation to supervisory 
authorities. 

Article 128  

Implementing measures  

The  Commission  shall  adopt  implementing  measures  specifying  the  calculation  of  the 
Minimum Capital Requirement, referred to in Articles 126 and 127. 

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Those  measures  designed 
this  Directive,  by 
supplementing it shall be adopted in accordance with the regulatory procedure with scrutiny 
referred to in Article 304 (3). 

to  amend  non-essential  elements  of 

Article 129 

Transitional arrangements regarding compliance with the Minimum Capital Requirement 

By  way  of  derogation  from  Article  137,  where  insurance  and  reinsurance  undertakings 
comply with the Required Solvency Margin referred to in Article 28 of Directive 2002/83/EC, 
Article  16  a  of  Directive  73/239/EC  or  Articles  37,  38  or  39  of  Directive  2005/68/EC 
respectively on the date set out in Article 310(1) but do not hold sufficient eligible basic own 
funds to cover the Minimum Capital Requirement, the undertakings concerned shall comply 
with Article 126 within one year from the date as set out in Article 310(1). 

If the undertaking concerned fails to comply with Article 126 within the period set out in the 
first  paragraph,  the  authorisation  of  the  undertaking  shall  be  withdrawn,  subject  to  the 
applicable processes provided for in the national legislation. 

SECTION 6 - INVESTMENTS 

Article 130 

"Prudent person" principle 

1. 

2. 

Member  States  shall  ensure  that  insurance  and  reinsurance  undertakings  invest  all 
their  assets  in  accordance  with  the  "prudent  person"  principle,  as  specified  in 
paragraphs 2,3 and 4. 

With respect to the whole portfolio of assets, insurance and reinsurance undertakings 
shall only invest in assets and instruments whose risks the undertaking concerned can 
properly monitor, manage and control. 

All  assets,  in  particular  those  covering  the  Minimum  Capital  Requirement  and  the 
Solvency Capital Requirement,  shall be  invested  in  such  a manner  as to  ensure the 
security, quality, liquidity and profitability of the portfolio as a whole. 

Assets  held  to  cover  the  technical  provisions  shall  also  be  invested  in  a  manner 
appropriate  to  the  nature  and  duration  of  the  insurance  and  reinsurance  liabilities. 
Those assets shall be invested in the best interest of policyholders and beneficiaries; 

In  the  case  of  a  conflict  of  interest,  insurance  undertakings,  or  the  entity  which 
manages  their  asset  portfolio,  shall  ensure  that  the  investment  is  made  in  the  best 
interest of policyholders and beneficiaries. 

3. 

Without  prejudice  to  paragraph  2,  with  respect  to  assets  held  in  respect  of  life 
insurance  contracts  where  the  investment  risk  is  borne  by  the  policyholders,  the 
second, third and fourth subparagraphs of this paragraph shall apply. 

Where the benefits provided by a contract are directly linked to the value of units in 
an UCITS as defined in Directive 85/611/EEC, or to the value of assets contained in 
an  internal  fund  held  by  the  insurance  undertakings,  usually  divided  into  units,  the 
technical  provisions  in  respect  of  those  benefits  must  be  represented  as  closely  as 
possible by those units or, in the case where units are not established, by those assets. 

EN 

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Where  the  benefits  provided  by  a  contract  are  directly  linked  to  a  share  index  or 
some other reference value other than those referred to in the second subparagraph, 
the technical provisions in respect of those benefits must be represented as closely as 
possible  either  by  the  units  deemed  to  represent  the  reference  value  or,  in  the  case 
where  units  are  not  established,  by  assets  of  appropriate  security  and  marketability 
which correspond as closely as possible with those on which the particular reference 
value is based. 

Where  the  benefits  referred  to  in  the  second  and  third  subparagraphs  include  a 
guarantee  of  investment  performance  or  some  other  guaranteed  benefit,  the  assets 
held  to  cover  the  corresponding  additional  technical  provisions  shall  be  subject  to 
paragraph 4. 

4. 

Without prejudice to paragraph 2, with respect to other assets than those covered by 
paragraph 3, the second to fifth subparagraphs of this paragraph shall apply. 

The  use  of  derivative  instruments  shall  be  possible  insofar  as  they  contribute  to  a 
reduction of risks or facilitate efficient portfolio management. 

Investment  in  assets  which  are  not  admitted  to  trading  on  a  regulated  financial 
market shall be kept to prudent levels. 

Assets shall be properly diversified in such a way as to avoid excessive reliance on 
any  particular  asset,  issuer  or  group  of  undertakings,  or  geographical  area  and 
excessive accumulations of risk in the portfolio as a whole. 

Investments in assets issued by the same issuer, or by issuers belonging to the same 
group, shall not expose the insurance undertakings to excessive risk concentration. 

Article 131 

Freedom of investment 

1. 

2. 

1. 

Member States shall not require insurance and reinsurance undertakings to invest in 
particular categories of assets. 

Member  States  shall  not  subject  the  investment  decisions  of  an  insurance  or 
reinsurance undertaking or its investment  manager to any kind of prior approval or 
systematic notification requirements. 

Article 132 

Localisation of assets and prohibition of pledging of assets 

With  respect  to  insurance  risks  situated  in  the  Community,  Member  States  shall 
ensure that the assets held to cover the technical provisions related to those risks are 
localised  within  the  Community.  Member  States  shall  not  require  insurance 
undertakings to localise those assets in any particular Member States. 

to  recoverables  from  reinsurance  contracts  against 
However,  with  respect 
undertakings authorised in accordance with this Directive or having their head office 
in a third country whose solvency regime is deemed to be equivalent in accordance 
with  Article  170,  Member  States  shall  not  require  the  localisation  within  the 
Community of the assets representing those recoverables. 

EN 

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(cid:208) 2002/83/EC Art1(1) (adapted) 

⌦ The  requirement  concerning  the  localisation ⌫  «localisation  of  assets»  shall 
mean the existence of assets whether movable or immovable, within a Member State 
but ⌦ as referred to in the first paragraph ⌫ shall not be construed as involving a 
requirement that movable assets be deposited or that immovable assets be subjected 
to restrictive measures such as the registration of mortgages;. aAssets represented by 
claims against debtors shall be regarded as situated in the Member State where they 
are realisable. 

(cid:208) 2005/68/EC Art. 32(2) 
(adapted) 

2. 

Member  States  shall  not  retain  or  introduce  ⌦ for  the  establishment  of  technical 
provisions ⌫  a  system  with  gross  reserving  which  requires  pledging  of  assets  to 
cover  unearned  premiums  and  outstanding  claims  provisions  if  the  reinsurer 
⌦ reinsuring  undertaking ⌫  is  a  ⌦ an  insurance  or ⌫  reinsurance  undertaking 
authorised in accordance with this Directive or an insurance undertaking authorised 
in accordance with Directives 73/239/EEC or 2002/83/EC. 

(cid:216) new 

Article 133 

Implementing measures 

In  order  to  ensure  the  uniform  application  of  this  Directive,  the  Commission  may  adopt 
implementing measures specifying the following: 

(a) 

(b) 

the  identification,  measurement  and  control  of  risks  arising  from  investments  in 
relation to the first subparagraph of Article 130(2); 

the  identification,  measurement  and  control  of  risks  arising  from  investment  in 
derivative  instruments  and  assets  referred  to  in  the  second  subparagraph  of  Article 
130(4);  

Those measures designed to amend non-essential elements of this Directive by supplementing 
it  shall  be  adopted  in  accordance  with  the  regulatory  procedure  with  scrutiny  referred  to  in 
Article 304(3). 

EN 

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(cid:208) 2002/83/EC 

CHAPTER 2 

RULES RELATING TO TECHNICAL PROVISIONS AND THEIR 
REPRESENTATION 

(cid:208) 92/49/EEC Art. 17 

Article 15 

1.  The  home  Member  State  shall  require  every  insurance  undertaking  to  establish  adequate 
technical provisions in respect of its entire business. 

The amount of such technical provisions shall be determined in accordance with the rules laid 
down in Directive 91/674/EEC. 

(cid:208) 2005/68/EC Art. 57.3 

2. The home Member State shall require every insurance undertaking to cover the technical 
provisions and the equalisation reserve referred to in Article 15a of this Directive by matching 
assets  in  accordance  with  Article 6  of  Directive  88/357/EEC.  In  respect  of  risks  situated 
within the Community, those assets must be localised within the Community. Member States 
shall  not  require  insurance  undertakings  to  localise  their  assets  in  any  particular  Member 
State. The home Member State may, however, allow the rules on the localisation of assets to 
be relaxed. 

3. Member States shall not retain or introduce for the establishment of technical provisions a 
system of gross reserving which requires pledging of assets to cover unearned premiums and 
outstanding  claims  provisions  by  the  reinsurer,  when  the  reinsurer  is  a  reinsurance 
undertaking authorised in accordance with Directive 2005/68/EC or an insurance undertaking 
authorised in accordance with this Directive or Directive 2002/83/EC. 

When  the  home  Member  State  allows  any  technical  provisions  to  be  covered  by  claims 
against a reinsurer which is neither a reinsurance undertaking authorised in accordance with 
Directive  2005/68/EC  nor  an  insurance  undertaking  authorised  in  accordance  with  this 
Directive or Directive 2002/83/EC, it shall set the conditions for accepting such claims. 

(cid:208) 2002/83/EC 

CHAPTER 2 

RULES RELATING TO TECHNICAL PROVISIONS AND THEIR 
REPRESENTATION 

Article 20 

Establishment of technical provisions 

EN 

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1. The home  Member State  shall require every assurance undertaking to  establish sufficient 
technical provisions, including mathematical provisions, in respect of its entire business. 

The  amount  of  such  technical  provisions  shall  be  determined  according  to  the  following 
principles. 

(cid:208) 2002/83/EC 

A. 

(i) the amount of the technical life-assurance provisions shall be calculated by a 
sufficiently prudent prospective actuarial valuation, taking account of all future 
liabilities  as  determined  by  the  policy  conditions  for  each  existing  contract, 
including: 

– 

– 

– 

– 

all guaranteed benefits, including guaranteed surrender values, 

bonuses  to  which  policy  holders  are  already  either  collectively  or 
individually  entitled,  however  those  bonuses  are  described  —  vested, 
declared or allotted, 

all options available to the policy holder under the terms of the contract, 

expenses, including commissions, 

taking credit for future premiums due; 

(ii)  the  use  of  a  retrospective  method  is  allowed,  if  it  can  be  shown  that  the 
resulting  technical  provisions  are  not  lower  than  would  be  required  under  a 
sufficiently prudent prospective calculation or if a prospective method cannot 
be used for the type of contract involved; 

(iii) a prudent valuation is not a «best estimate» valuation, but shall include an 
appropriate margin for adverse deviation of the relevant factors; 

(iv)  the  method  of  valuation  for  the  technical  provisions  must  not  only  be 
prudent in itself, but must also be so having regard to the method of valuation 
for the assets covering those provisions; 

(v)  technical  provisions  shall  be  calculated  separately  for  each  contract.  The 
use  of  appropriate  approximations  or  generalisations  is  allowed,  however, 
where  they  are  likely  to  give  approximately  the  same  result  as  individual 
calculations. The principle of separate calculation shall in no way prevent the 
establishment  of  additional  provisions  for  general  risks  which  are  not 
individualised; 

(vi)  where  the  surrender  value  of  a  contract  is  guaranteed,  the  amount  of  the 
mathematical provisions for the contract at any time shall be at least as great as 
the value guaranteed at that time; 

B.  the  rate  of  interest  used  shall  be  chosen  prudently.  It  shall  be  determined  in 
accordance  with  the  rules  of  the  competent  authority  in  the  home  Member  State, 
applying the following principles: 

(a)  for  all  contracts,  the  competent  authority  of  the  assurance  undertaking's 
home  Member  State  shall  fix  one  or  more  maximum  rates  of  interest,  in 
particular in accordance with the following rules: 

EN 

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(i)  when  contracts  contain  an  interest  rate  guarantee,  the  competent 
authority in the home Member State shall set a single maximum rate of 
interest. It may differ according to the currency in which the contract is 
denominated, provided that it is not more than 60 % of the rate on bond 
issues by the State in whose currency the contract is denominated. 

to  set  a  maximum  rate  of 

If  a  Member  State  decides,  pursuant  to  the  second  sentence  of  the  first 
subparagraph, 
interest  for  contracts 
denominated in another Member State's currency, it shall first consult the 
competent authority of the Member State in whose currency the contract 
is denominated; 

(ii) however, when the assets of the assurance undertaking are not valued 
at  their  purchase  price,  a  Member  State  may  stipulate  that  one  or  more 
maximum  rates  may  be  calculated  taking  into  account  the  yield  on  the 
corresponding  assets  currently  held,  minus  a  prudential  margin  and,  in 
particular for contracts with periodic premiums, furthermore taking into 
account the anticipated yield on future assets. The prudential margin and 
the maximum rate or rates of interest applied to the anticipated yield on 
future  assets  shall  be  fixed  by  the  competent  authority  of  the  home 
Member State; 

(b)  the  establishment  of  a  maximum  rate  of  interest  shall  not  imply  that  the 
assurance undertaking is bound to use a rate as high as that; 

(c)  the  home  Member  State  may  decide  not  to  apply  paragraph  (a)  to  the 
following categories of contracts: 

– 

– 

– 

unit-linked contracts, 

single-premium contracts for a period of up to eight years, 

without-profits contracts, and annuity contracts with no surrender value. 

In  the  cases  referred  to  in  the  second  and  third  indents  of  the  first 
subparagraph, in choosing a prudent rate of interest, account may be taken of 
the  currency  in  which  the  contract  is  denominated  and  corresponding  assets 
currently  held  and  where  the  undertaking's  assets  are  valued  at  their  current 
value, the anticipated yield on future assets. 

Under no circumstances may the rate of interest used be higher than the yield 
on  assets  as  calculated  in  accordance  with  the  accounting  rules  in  the  home 
Member State, less an appropriate deduction; 

(d) the Member State shall require an assurance undertaking to set aside in its 
accounts a provision to meet interest-rate commitments vis-à-vis policy holders 
if the present or foreseeable yield on the undertaking's assets is insufficient to 
cover those commitments; 

(e) the Commission and the competent authorities of the Member States which 
so request shall be notified of the maximum rates of interest set under (a); 

C. the statistical elements of the valuation and the allowance for expenses used shall 
be chosen prudently, having regard to the State of the commitment, the type of policy 
and the administrative costs and commissions expected to be incurred; 

D.  in  the  case  of  participating  contracts,  the  method  of  calculation  for  technical 
provisions may take into account, either implicitly or explicitly, future bonuses of all 

EN 

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kinds,  in  a  manner  consistent  with  the  other  assumptions  on  future  experience  and 
with the current method of distribution of bonuses; 

E. allowance for future expenses may be made implicitly, for instance by the use of 
future  premiums  net  of  management  charges.  However,  the  overall  allowance, 
implicit  or  explicit,  shall  be  not  less  than  a  prudent  estimate  of  the  relevant  future 
expenses; 

F.  the  method  of  calculation  of  technical  provisions  shall  not  be  subject  to 
discontinuities from year to year arising from arbitrary changes to the method or the 
bases of calculation and shall be such as to recognise the distribution of profits in an 
appropriate way over the duration of each policy. 

2. Assurance undertakings shall make available to the public the bases and methods used in 
the calculation of the technical provisions, including provisions for bonuses. 

3. The home Member State shall require every assurance undertaking to cover the technical 
provisions in respect of its entire business by matching assets, in accordance with Article 26. 
In  respect  of  business  written  in  the  Community,  these  assets  must  be  localised  within  the 
Community. Member States shall not require assurance undertakings to localise their assets in 
a particular Member State. The home Member State may, however, permit relaxations in the 
rules on the localisation of assets. 

(cid:208) 2005/68/EC Art. 60.6 

4. Member States shall not retain or introduce for the establishment of technical provisions a 
system of gross reserving which requires pledging of assets to cover unearned premiums and 
outstanding  claims  provisions  by  the  reinsurer,  authorised  in  accordance  with  Directive 
2005/68/EC  when  the  reinsurer  is  a  reinsurance  undertaking  or  an  insurance  undertaking 
authorised in accordance with Directive 73/239/EEC or this Directive. 

When  the  home  Member  State  allows  any  technical  provisions  to  be  covered  by  claims 
against a reinsurer which is neither a reinsurance undertaking authorised in accordance with 
Directive 2005/68/EC nor an insurance undertaking authorised in accordance with Directive 
73/239/EEC or this Directive, it shall set the conditions for accepting such claims. 

(cid:208) 2005/68/EC Art. 60.6 

(cid:208) 92/49/EEC Art. 18 

Article 15a 

1.  Member  States  shall  require  every  insurance  undertaking  with  a  head  office  within  their 
territories which underwrites risks included in class 14 in point A of the Annex (hereinafter 
referred to as «credit insurance») to set up an equalization reserve for the purpose of offsetting 
any technical deficit or above-average claims ration arising in that class in any financial year. 

2. The equalization reserve shall be calculated in accordance with the rules laid down by the 
home  Member  State  in  accordance  with  one  of  the  four  methods  set  out  in  point  D  of  the 
Annex, which shall be regarded as equivalent. 

EN 

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3.  Up  to  the  amount  calculated  in  accordance  with  the  methods  set  out  in  point  D  of  the 
Annex,  the  equalization  reserve  shall  be  disregarded  for  the  purpose  of  calculating  the 
solvency margin. 

4.  Member  States  may  exempt  insurance  undertakings  with  head  offices  within  their 
territories  from  the  obligation  to  set  up  equalization  reserves  for  credit  insurance  business 
where the premiums or contributions receivable in respect of credit insurance are less than 4 
% of the total premiums or contributions receivable by them and less than ECU 2500000. 

(cid:208) 2002/83/EC 

Article 22 

Assets covering technical provisions 

The assets covering the technical provisions shall take account of the type of business carried 
on by an assurance undertaking in such a way as to secure the safety, yield and marketability 
of its investments, which the undertaking shall ensure are diversified and adequately spread. 

The assets covering the technical provisions shall take account of the type of business carried 
on  by  an  undertaking  in  such  a  way  as  to  secure  the  safety,  yield  and  marketability  of  its 
investments, which the undertaking shall ensure are diversified and adequately spread. 

(cid:208) 92/49/EEC Art. 20 

(cid:208) 2002/83/EC 

Article 23 

Categories of authorised assets 

1. The home Member State may not authorise assurance undertakings to cover their technical 
provisions with any but the following categories of assets: 

1. The home Member State may not authorise insurance undertakings to cover their technical 
provisions  and  equalisation  reserves  with  any  assets  other  than  those  in  the  following 
categories: 

(cid:208) 2005/68/EC Art. 58.3(a) 

(cid:208) 2002/83/EC and 92/49/EEC 
Art. 21 

A. investments 

(a) debt securities, bonds and other money- and capital-market instruments; 

(b) loans; 

(c) shares and other variable-yield participations; 

(d)  units  in  undertakings  for  collective  investment  in  transferable  securities 
(UCITS) and other investment funds; 

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(e) land, buildings and immovable-property rights; 

B. debts and claims 

(cid:208) 2005/68/EC Art. 58.3(b) and 
Art. 60.7(a) 

(f)  debts  owed  by  reinsurers,  including  reinsurers'  shares  of  technical 
provisions,  and  by  special  purpose  vehicles  referred  to  in  Article 46  of 
Directive 2005/68/EC; 

(g) deposits with and debts owed by ceding undertakings; 

(cid:208) 2002/83/EC and 92/49/EEC 
Art. 21 

(h)  debts  owed  by  policy  holders  and  intermediaries  arising  out  of  direct  and 
reassurance operations; 

(cid:208) 2002/83/EC 

(cid:208) 92/49/EEC Art. 21 

(h)  debts  owed  by  policyholders  and  intermediaries  arising  out  of  direct  and 
reinsurance operations; 

(i) claims arising out of salvage and subrogation; 

(i) advances against policies; 

(cid:208) 2002/83/EC 

(j) tax recoveries; 

(k) claims against guarantee funds; 

(cid:208) 2002/83/EC and 92/49/EEC 
Art. 21 

(cid:208) 2002/83/EC and 92/49/EEC 
Art. 21 

C. others 

(l) tangible fixed assets, other than land and buildings, valued on the basis of 
prudent amortisation; 

(m)  cash  at  bank  and  in  hand,  deposits  with  credit  institutions  and  any  other 
body authorised to receive deposits; 

(n) deferred acquisition costs; 

(o) accrued interest and rent, other accrued income and prepayments; 

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(p) reversionary interests. 

(cid:208) 2002/83/EC 

2.  In  the  case  of  the  association  of  underwriters  known  as  «Lloyd's»,  asset  categories  shall 
also include guarantees and letters of credit issued by credit institutions within the meaning of 
Directive  2000/12/EC  of  the  European  Parliament  and  of  the  Council60  or  by  assurance 
undertakings, together with verifiable sums arising out of life assurance policies, to the extent 
that they represent funds belonging to members. 

In  the  case  of  the  association  of  underwriters  know  as  Lloyd's,  asset  categories  shall  also 
include  guarantees  and  letters  of  credit  issued  by  credit  institutions  within  the  meaning  of 
Directive  77/780/EEC61  or  by  assurance  undertakings,  together  with  verifiable  sums  arising 
out of life assurance policies, to the extent that they represent funds belonging to members. 

(cid:208) 92/49/EEC 

(cid:208) 2005/68/EC Art. 58.3(c) and 
Art. 60.7(b) 

3. The inclusion of any asset or category of assets listed in paragraph 1 shall not mean that all 
these  assets  should  automatically  be  accepted  as  cover  for  technical  provisions.  The  home 
Member  State  shall  lay  down  more  detailed  rules  setting  the  conditions  for  the  use  of 
acceptable assets. 

(cid:208) 2002/83/EC and 92/49/EEC 
Art. 21 

In the determination and the application of the rules which it lays down, the home Member 
State shall, in particular, ensure that the following principles are complied with: 

(i) assets covering technical provisions shall be valued net of any debts arising out of 
their acquisition; 

(ii) all assets must be valued on a prudent basis, allowing for the risk of any amounts 
not being realisable. In particular, tangible fixed assets other than land and buildings 
may be accepted as cover for technical provisions only if they are valued on the basis 
of prudent amortisation; 

(iii) loans, whether to undertakings, to a State or international organisation, to local 
or regional authorities or to natural persons, may be accepted as cover for technical 
provisions  only  if  there  are  sufficient  guarantees  as  to  their  security,  whether  these 

(cid:208) 2002/83/EC 

60 

61 

OJ L 126, 26.5.2000, p. 1. Directive as amended by Directive 2000/28/EC (OJ L 275, 27.10.2000, p. 
37). 
OJ No L 322, 17. 12. 1977, p. 30. Last amended by Directive 89/646/EEC (OJ No L 386, 30. 12. 1989, 
p. 1). 

EN 

131 

   EN 

 
 
 
 
 
 
 
 
 
 
                                                 
are  based  on  the  status  of  the  borrower,  mortgages,  bank  guarantees  or  guarantees 
granted by assurance undertakings or other forms of security; 

(cid:208) 92/49/EEC Art. 21 

loans,  whether 

to  undertakings, 

(iii) 
international 
organizations, to local or regional authorities or to natural persons, may be accepted 
as  cover  for  technical  provisions  only  if  there  are  sufficient  guarantees  as  to  their 
security,  whether  these  are  based  on  the  status  of  the  borrower,  mortgages,  bank 
guarantees  or  guarantees  granted  by  insurance  undertakings  or  other  forms  of 
security; 

to  State  authorities  or 

(cid:208) 2002/83/EC and 92/49/EEC 
Art. 21 

(iv)  derivative  instruments  such  as  options,  futures  and  swaps  in  connection  with 
assets  covering  technical  provisions  may  be  used  in  so  far  as  they  contribute  to  a 
reduction of investment risks or facilitate efficient portfolio management. They must 
be valued on a prudent basis and may be taken into account in the valuation of the 
underlying assets; 

(cid:208) 2002/83/EC 

(v)  transferable  securities  which  are  not  dealt  in  on  a  regulated  market  may  be 
accepted  as  cover  for  technical  provisions  only  if  they  can  be  realised  in  the  short 
term  or if they are holdings  in  credit institutions, in  assurance undertakings, within 
the  limits  permitted  by  Article  6,  or  in  investment  undertakings  established  in  a 
Member State; 

(v)  transferable  securities  which  are  not  dealt  in  on  a  regulated  market  may  be 
accepted  as  cover  for  technical  provisions  only  if  they  can  be  realized  in  the  short 
term; 

(cid:208) 92/49/EEC Art. 21 

(cid:208) 2002/83/EC and 92/49/EEC 
Art. 21 

(vi)  debts  owed  by  and  claims  against  a  third  party  may  be  accepted  as  cover  for 
technical provisions only after deduction of all amounts owed to the same third party; 

(cid:208) 2002/83/EC 

(vii)  the  value  of  any  debts  and  claims  accepted  as  cover  for  technical  provisions 
must  be  calculated  on  a  prudent  basis,  with  due  allowance  for  the  risk  of  any 
amounts  not  being  realisable.  In  particular,  debts  owed  by  policy  holders  and 
intermediaries arising out of assurance and reassurance operations may be accepted 
only in so far as they have been outstanding for not more than three months; 

EN 

132 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
(cid:208) 92/49/EEC Art. 21 

(vii)  the  value  of  any  debts  and  claims  accepted  as  cover  for  technical  provisions 
must  be  calculated  on  a  prudent  basis,  with  due  allowance  for  the  risk  of  any 
amounts  not  being  realizable.  In  particular,  debts  owed  by  policyholders  and 
intermediaries arising out of  insurance and reinsurance operations may be accepted 
only in so far as they have been outstanding for not more than three months; 

(cid:208) 2002/83/EC 

(viii) where the assets held include an investment in a subsidiary undertaking which 
manages  all  or  part  of  the  assurance  undertaking's  investments  on  its  behalf,  the 
home Member State must, when applying the rules and principles laid down in this 
Article,  take  into  account  the  underlying  assets  held  by  the  subsidiary  undertaking; 
the home Member State may treat the assets of other subsidiaries in the same way; 

(cid:208) 92/49/EEC Art. 21 

(viii) where the assets held include an investment in a subsidiary undertaking which 
manages  all  or  part  of  the  insurance  undertaking's  investments  on  its  behalf,  the 
home Member State must, when applying the rules and principles laid down in this 
Article,  take  into  account  the  underlying  assets held  by  the  subsidiary  undertaking; 
the home Member State may treat the assets of other subsidiaries in the same way; 

(ix) deferred acquisition costs may be accepted as cover for technical provisions only 
to the extent that that is consistent with the calculation of the technical provision for 
unearned premiums. 

(cid:208) 2002/83/EC 

(ix) deferred acquisition costs may be accepted as cover for technical provisions only 
to  the  extent  that  this  is  consistent  with  the  calculation  of  the  mathematical 
provisions. 

4. Notwithstanding paragraphs 1, 2 and 3, in exceptional circumstances and at an assurance 
undertaking's  request,  the  home  Member  State  may,  temporarily  and  under  a  properly 
reasoned decision, accept other categories of assets as cover for technical provisions, subject 
to Article 22. 

2.  Notwithstanding  paragraph  1,  in  exceptional  circumstances  and  at  an  insurance 
undertaking's  request,  the  home  Member  State  may,  temporarily  and  under  a  properly 
reasoned decision, accept other categories of assets as cover for technical provisions, subject 
to Article 20. 

(cid:208) 92/49/EEC Art. 21 

EN 

133 

   EN 

 
 
 
 
 
 
 
 
 
 
 
(cid:208) 2002/83/EC 

Article 24 

Rules for investment diversification 

1. As regards the assets covering technical provisions, the home Member State shall require 
every assurance undertaking to invest no more than: 

1.  As  regards  the  assets  covering  technical  provisions  and  equalisation  reserves,  the  home 
Member State shall require every insurance undertaking to invest no more than: 

(cid:208) 2005/68/EC Art. 58.4 

(cid:208) 2002/83/EC and 92/49/EEC 
Art. 22 

(a) 10 % of its total gross technical provisions in any one piece of land or building, or 
a number of pieces of land or buildings close enough to each other to be considered 
effectively as one investment; 

(b) 5 % of its total gross technical provisions in shares and other negotiable securities 
treated  as  shares,  bonds,  debt  securities  and  other  money  and  capital  market 
instruments  from  the  same  undertaking,  or  in  loans  granted  to  the  same  borrower, 
taken together, the loans being loans other than those granted to a State, regional or 
local  authority  or  to  an  international  organization  of  which  one  or  more  Member 
States  are  members.  This  limit  may  be  raised  to  10  %  if  an  undertaking  does  not 
invest more than 40 % of its gross technical provisions in the loans or securities of 
issuing bodies and borrowers in each of which it invests more than 5 % of its assets; 

(cid:208) 2002/83/EC 

(c) 5 % of its total gross technical provisions in unsecured loans, including 1 % for 
any single unsecured  loan, other  than loans  granted to credit  institutions,  assurance 
undertakings  —  in  so  far  as  Article  6  allows  it  —  and  investment  undertakings 
established in a Member State. The limits may be raised to 8 % and 2 % respectively 
by a decision taken on a case-by-case basis by the competent authority of the home 
Member State; 

(cid:208) 92/49/EEC Art. 22 

(c) 5 % of its total gross technical provisions in unsecured loans, including 1 % for 
any single unsecured  loan, other  than loans  granted to credit  institutions,  assurance 
undertaking  -  in  so  far  as  Article  8  of  Directive  73/239/EEC  allows  it  -  and 
investment undertakings established in a Member State; 

EN 

134 

   EN 

 
 
 
 
 
 
 
 
 
 
(cid:208) 2002/83/EC and 92/49/EEC 
Art. 22 

(d) 3 % of its total gross technical provisions in the form of cash in hand; 

(e)  10 %  of  its  total  gross  technical  provisions  in  shares,  other  securities  treated  as 
shares and debt securities which are not dealt in on a regulated market. 

2.  The  absence  of  a  limit  in  paragraph  1  on  investment  in  any  particular  category  does  not 
imply that assets in that category should be accepted as cover for technical provisions without 
limit. The home Member State shall lay down more detailed rules fixing the conditions for the 
use of acceptable assets. In particular it shall ensure, in the determination and the application 
of those rules, that the following principles are complied with: 

(i) assets covering technical provisions must be diversified and spread in such a way 
as  to  ensure  that  there  is  no  excessive  reliance  on  any  particular  category  of  asset, 
investment market or investment; 

(ii)  investment  in  particular  types  of  asset  which  show  high  levels  of  risk,  whether 
because  of  the  nature  of  the  asset  or  the  quality  of  the  issuer,  must  be  restricted  to 
prudent levels; 

(iii) limitations on particular categories of asset must take account of the treatment of 
reassurance in the calculation of technical provisions; 

(cid:208) 2002/83/EC 

(iii) limitations on particular categories of asset must take account of the treatment of 
reinsurance in the calculation of technical provisions; 

(cid:208) 92/49/EEC Art. 22 

(cid:208) 2002/83/EC 

(iv)  where  the  assets  held  include  an  investment  in  a  subsidiary  undertaking  which 
manages  all  or  part  of  the  assurance  undertaking's  investments  on  its  behalf,  the 
home Member State must, when applying the rules and principles laid down in this 
Article,  take  into  account  the  underlying  assets  held  by  the  subsidiary  undertaking; 
the home Member State may treat the assets of other subsidiaries in the same way; 

(cid:208) 92/49/EEC Art. 22 

(iv)  where  the  assets  held  include  an  investment  in  a  subsidiary  undertaking  which 
manages  all  or  part  of  the  insurance  undertaking's  investments  on  its  behalf,  the 
home Member State must, when applying the rules and principles laid down in this 
Article,  take  into  account  the  underlying  assets  held  by  the  subsidiary  undertaking; 
the home Member State may treat the assets of other subsidiaries in the same way; 

EN 

135 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(cid:208) 2002/83/EC and 92/49/EEC 
Art. 22 

(v)  the  percentage  of  assets  covering  technical  provisions  which  are  the  subject  of 
non-liquid investments must be kept to a prudent level; 

(vi) where the assets held include loans to or debt securities issued by certain credit 
institutions,  the  home  Member  State  may,  when  applying  the  rules  and  principles 
contained in this Article, take into account the underlying assets held by such credit 
institutions.  This  treatment  may  be  applied  only  where  the  credit  institution  has  its 
head office in a Member State, is entirely owned by that Member State and/or that 
State's local authorities and its business, according to its memorandum and articles of 
association, consists of extending, through its intermediaries, loans to, or guaranteed 
by, States or local authorities or of loans to bodies closely linked to the State or to 
local authorities. 

3.  In  the  context  of  the  detailed  rules  laying  down  the  conditions  for  the  use  of  acceptable 
assets, the Member State shall give more limitative treatment to: 

– 

– 

– 

– 

– 

any  loan  unaccompanied  by  a  bank  guarantee,  a  guarantee  issued  by  an  assurance 
undertaking,  a  mortgage  or  any  other  form  of  security,  as  compared  with  loans 
accompanied by such collateral, 

(cid:208) 2002/83/EC 

any  loan  unaccompanied  by  a  bank  guarantee,  a  guarantee  issued  by  an  insurance 
undertaking,  a  mortgage  or  any  other  form  of  security,  as  compared  with  loans 
accompanied by such collateral, 

(cid:208) 92/49/EEC Art. 22 

(cid:208) 2002/83/EC and 92/49/EEC 
Art. 22 

UCITS  not  coordinated  within  the  meaning  of  Directive  85/611/EEC  and  other 
investment funds, as compared with UCITS coordinated within the meaning of that 
Directive, 

securities which are not dealt in on a regulated market, as compared with those which 
are, 

(cid:208) 2002/83/EC 

bonds, debt securities and other money- and capital-market instruments not issued by 
States, local or regional authorities or undertakings belonging to zone A as defined in 
Directive  2000/12/EC  or  the  issuers  of  which  are  international  organisations  not 
numbering  at  least  one  Community  Member  State  among  their  members,  as 
compared with the same financial instruments issued by such bodies. 

EN 

136 

   EN 

 
 
 
 
 
 
 
 
(cid:208) 92/49/EEC Art. 22 

– 

bonds, debt securities and other money and capitalmarket instruments not issued by 
States, local or regional authorities or undertakings belonging to Zone A as defined 
in Directive 89/647/EEC62, or the issuers of which are international organizations not 
numbering at least one Community Member State among their member, as compared 
with the same financial instruments issued by such bodies. 

(cid:208) 2002/83/EC and 92/49/EEC 
Art. 22 

4.  Member  States  may  raise  the  limit  laid  down  in  paragraph  1(b)  to  40 %  in  the  case  of 
certain debt securities when these are issued by a credit institution which has its head office in 
a Member State and is subject by law to special official supervision designed to protect the 
holders  of  those  debt  securities.  In  particular,  sums  deriving  from  the  issue  of  such  debt 
securities  must  be  invested  in  accordance  with  the  law  in  assets  which,  during  the  whole 
period  of  validity  of  the  debt  securities,  are  capable  of  covering  claims  attaching  to  debt 
securities and which, in the event of failure of the issuer, would be used on a priority basis for 
the reimbursement of the principal and payment of the accrued interest. 

5. Member States shall not require assurance undertakings to invest in particular categories of 
assets. 

(cid:208) 92/49/EEC Art. 1 

(cid:208) 92/49/EEC Art. 22 

5. Member States shall not require insurance undertakings to invest in particular categories of 
assets. 

6.  Notwithstanding  paragraph  1,  in  exceptional  circumstances  and  at  an  insurance 
undertaking's  request,  the  home  Member  State  may,  temporarily  and  under  a  properly 
reasoned decision, allow exceptions to the rules laid down in paragraph 1 (a) to (e), subject to 
Article 20. 

6.  Notwithstanding  paragraph  1,  in  exceptional  circumstances  and  at  the  assurance 
undertaking's  request,  the  home  Member  State  may,  temporarily  and  under  a  properly 
reasoned decision, allow exceptions to the rules laid down in paragraph 1(a) to (e), subject to 
Article 22. 

(cid:208) 2002/83/EC 

62 

OJ No L 386, 30. 12. 1989, p. 14. 

EN 

137 

   EN 

 
 
 
 
 
 
                                                 
CHAPTER 3 

RULES RELATING TO THE SOLVENCY MARGIN AND TO THE 
GUARANTEE FUND 

Article 27 

Available solvency margin 

1.  Each  Member  State  shall  require  of  every  assurance  undertaking  whose  head  office  is 
situated in its territory an adequate available solvency margin in respect of its entire business 
at all times which is at least equal to the requirements in this Directive. 

1.  Each  Member  State  shall  require  of  every  insurance  undertaking  whose  head  office  is 
situated in its territory an adequate available solvency margin in respect of its entire business 
at all times, which is at least equal to the requirements in this Directive. 

(cid:208) 2002/13/EC Art. 1.2 

2. The available solvency margin shall consist of the assets of the assurance undertaking free 
of any foreseeable liabilities, less any intangible items, including: 

(cid:208) 2002/83/EC 

(cid:208) 2002/13/EC Art. 1.2 

2. The available solvency margin shall consist of the assets of the insurance undertaking free 
of any foreseeable liabilities, less any intangible items, including: 

(a)  the  paid-up  share  capital  or,  in  the  case  of  a  mutual  insurance  undertaking,  the 
effective  initial  fund  plus  any  members'  accounts  which  meet  all  the  following 
criteria: 

(a)  the  paid-up  share  capital  or,  in  the  case  of  a  mutual  assurance  undertaking,  the 
effective  initial  fund  plus  any  members'  accounts  which  meet  all  the  following 
criteria: 

(cid:208) 2002/83/EC 

(cid:208) 2002/83/EC and 2002/13/EC 
Art. 1(2) 

(i)  the  memorandum  and  articles  of  association  must  stipulate  that  payments 
may be made from these accounts to members only in so far as this does not 
cause  the  available  solvency  margin  to  fall  below  the  required  level,  or,  after 
the dissolution of the undertaking, if all the undertaking's other debts have been 
settled; 

(ii) the memorandum and articles of association must stipulate, with respect to 
any  payments  referred  to  in  point  (i)  for  reasons  other  than  the  individual 

EN 

138 

   EN 

 
 
 
 
 
 
 
 
 
 
termination of membership, that the competent authorities must be notified at 
least one month in advance and can prohibit the payment within that period; 

(iii) the relevant provisions of the memorandum and articles of association may 
be amended only after the competent authorities have declared that they have 
no objection to the amendment, without prejudice to the criteria stated in points 
(i) and (ii); 

(b) reserves (statutory and free) not corresponding to underwriting liabilities; 

(cid:208) 2002/83/EC 

(b)  reserves  (statutory  and  free  reserves)  which  neither  correspond  to  underwriting 
liabilities nor are classified as equalisation reserves; 

(cid:208) 2005/68/EC Art. 57.4(a) 

(cid:208) 2002/83/EC and 2002/13/EC 
Art. 1(2) 

(c) the profit or loss brought forward after deduction of dividends to be paid; 

(cid:208) 2002/83/EC 

(d) in so far as authorised under national law, profit reserves appearing in the balance 
sheet where they may be used to cover any losses which may arise and where they 
have not been made available for distribution to policy holders. 

The available solvency margin shall be reduced by the amount of own shares directly held by 
the assurance undertaking. 

(cid:208) 2002/13/EC Art. 1.2 

The available solvency margin shall be reduced by the amount of own shares directly held by 
the insurance undertaking. 

For  those  insurance  undertakings  which  discount  or  reduce  their  technical  provisions  for 
claims outstanding to take account of investment income as permitted by Article 60(1)(g) of 
Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated 
accounts of insurance undertakings63, the available solvency margin shall be reduced by the 
difference  between  the  undiscounted  technical  provisions  or  technical  provisions  before 
deductions  as  disclosed  in  the  notes  on  the  accounts,  and  the  discounted  or  technical 
provisions after deductions. This adjustment shall be made for all risks listed in point A of the 
Annex,  except  for  risks  listed  under  classes  1  and  2.  For  classes  other  than  1  and  2,  no 
adjustment  need  be  made  in  respect  of  the  discounting  of  annuities  included  in  technical 
provisions. 

63 

OJ L 374, 31.12.1991, p. 7. 

EN 

139 

   EN 

 
 
 
 
 
 
 
 
 
 
                                                 
The available solvency margin shall also be reduced by the following items: 

(a) participations which the assurance undertaking holds, in: 

(cid:208) 2005/68/EC Art. 60.8 

– 

– 

– 

– 

– 

insurance  undertakings  within  the  meaning  of  Article 4  of  this  Directive, 
Article 6 of Directive 73/239/EEC, or Article 1(b) of Directive 98/78/EC of the 
European  Parliament  and  of  the  Council  of  27 October  1998  on  the 
supplementary supervision of insurance undertakings in an insurance group64, 

reinsurance  undertakings  within  the  meaning  of  Article 3  of  Directive 
2005/68/EC  or  a  non-member  country  reinsurance  undertakings  within  the 
meaning of Article 1(l) of Directive 98/78/EC, 

insurance  holding  companies  within  the  meaning  of  Article 1(i)  of  Directive 
98/78/EC, 

credit institutions and financial institutions within the meaning of Article 1(1) 
and (5) of Directive 2000/12/EC of the European Parliament and of the Council 
of 20 March 2000 relating to the taking up and pursuit of the business of credit 
institutions65, 

investment  firms  and  financial  institutions  within  the  meaning  of  Article 1(2) 
of Council Directive 93/22/EEC of 10 May 1993 on investment services in the 
securities field66 and of Articles 2(4) and 2(7)  of Council Directive 93/6/EEC 
of  15 March  1993  on  the  capital  adequacy  of  investments  firms  and  credit 
institutions67; 

(b) each of the following items which the assurance undertaking holds in respect of 
the entities defined in point (a) in which it holds a participation: 

– 

– 

– 

instruments referred to in paragraph 3, 

instruments referred to in Article 16(3) of Directive 73/239/EEC, 

subordinated claims and instruments referred to in Article 35 and Article 36(3) 
of Directive 2000/12/EC. 

Where shares in another credit institution, investment firm, financial institution, insurance or 
reinsurance undertaking or insurance holding company are held temporarily for the purposes 
of a financial assistance operation designed to reorganise and save that entity, the competent 
authority may waive the provisions on deduction referred to in points (a) and (b) of the third 
subparagraph. 

As  an  alternative  to  the  deduction  of  the  items  referred  to  in  (a)  and  (b)  of  the  third 
subparagraph  which  the  insurance  undertaking  holds  in  credit  institutions,  investment  firms 
and  financial  institutions,  Member  States  may  allow  their  insurance  undertakings  to  apply 
mutatis  mutandis  methods  1,  2,  or  3  of  Annex I  to  Directive  2002/87/EC  of  the  European 
Parliament  and  of  the  Council  of  16 December  2002  on  the  supplementary  supervision  of 

64 
65 
66 

67 

OJ L 330, 5.12.1998, p. 1. Directive as last amended by Directive 2005/1/EC (OJ L 79, 24.3.2005, p. 9). 
OJ L 126, 26.5.2000, p. 1. Directive as last amended by Directive 2005/1/EC. 
OJ  L 141,  11.6.1993,  p. 27.  Directive  as  last  amended  by  Directive  2002/87/EC  (OJ  L 35, 
11.2.2003,p. 1). 
OJ L 141, 11.6.1993, p. 1. Directive as last amended by Directive 2005/1/EC. 

EN 

140 

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credit institutions, insurance undertakings and investment firms in a financial conglomerate68. 
Method  1  (Accounting  consolidation)  shall  only  be  applied  if  the  competent  authority  is 
confident about the level of integrated management and internal control regarding the entities 
which would be included in the scope of consolidation. The method chosen shall be applied in 
a consistent manner over time. 

Member States may provide that, for the calculation of the solvency margin as provided for 
by this Directive, insurance undertakings subject to supplementary supervision in accordance 
with  Directive  98/78/EC  or  to  supplementary  supervision  in  accordance  with  Directive 
2002/87/EC, need not deduct the items referred to in (a) and (b) of the third subparagraph of 
this  Article  which  are  held  in  credit  institutions,  investment  firms,  financial  institutions, 
insurance or reinsurance undertakings or insurance holding companies which are included in 
the supplementary supervision. For the purposes of the deduction of participations referred to 
in this paragraph, participation shall mean a participation within the meaning of Article 1(f) of 
Directive 98/78/EC. 

The available solvency margin shall also be reduced by the following items: 

(a) participations which the insurance undertaking holds in: 

(cid:208) 2005/68/EC Art. 57.4(b) 

– 

– 

– 

– 

– 

insurance  undertakings  within  the  meaning  of  Article 6  of  this  Directive, 
Article 4 of Directive 2002/83/EC, or Article 1(b) of Directive 98/78/EC of the 
European Parliament and of the Council, 

reinsurance  undertakings  within  the  meaning  of  Article 3  of  Directive 
2005/68/EC  or  non-member  country  reinsurance  undertakings  within  the 
meaning of Article 1(l) of Directive 98/78/EC, 

insurance  holding  companies  within  the  meaning  of  Article 1(i)  of  Directive 
98/78/EC, 

credit institutions and financial institutions within the meaning of Article 1(1) 
and  (5)  of  Directive  2000/12/EC  of  the  European  Parliament  and  of  the 
Council, 

investment  firms  and  financial  institutions  within  the  meaning  of  Article 1(2) 
of  Council  Directive  93/22/EEC  and  of  Article 2(4)  and  (7)  of  Council 
Directive 93/6/EEC; 

(cid:208) 2002/87/EC Art. 22.2 

(b) each of the following items which the insurance undertaking holds in respect of 
the entities defined in (a) in which it holds a participation: 

– 

– 

– 

instruments referred to in paragraph 3, 

instruments referred to in Article 18(3) of Directive 79/267/EEC, 

subordinated claims and instruments referred to in Article 35 and Article 36(3) 
of Directive 2000/12/EC. 

68 

J L 35, 11.2.2003, p. 1. Directive as last amended by Directive 2005/1/EC. 

EN 

141 

   EN 

 
 
 
 
 
                                                 
Where shares in another credit institution, investment firm, financial institution, insurance or 
reinsurance undertaking or insurance holding company are held temporarily for the purposes 
of a financial assistance operation designed to reorganise and save that entity, the competent 
authority  may  waive  the  provisions  on  deduction  referred  to  under  (a)  and  (b)  of  the  fourth 
subparagraph. 

As  an  alternative  to  the  deduction  of  the  items  referred  to  in  (a)  and  (b)  of  the  fourth 
subparagraph  which  the  insurance  undertaking  holds  in  credit  institutions,  investment  firms 
and  financial  institutions,  Member  States  may  allow  their  insurance  undertakings  to  apply 
mutatis  mutandis  methods  1,  2,  or  3  of  Annex  I  to  Directive  2002/87/EC  of  the  European 
Parliament  and  of  the  Council  of  16  December  2002  on  the  supplementary  supervision  of 
credit institutions, insurance undertakings and investment firms in a financial conglomerate69. 
Method  1  (Accounting  consolidation)  shall  only  be  applied  if  the  competent  authority  is 
confident about the level of integrated management and internal control regarding the entities 
which would be included in the scope of consolidation. The method chosen shall be applied in 
a consistent manner overtime. 

Member States may provide that, for the calculation of the solvency margin as provided for 
by this Directive, insurance undertakings subject to supplementary supervision in accordance 
with  Directive  98/78/EC  or  to  supplementary  supervision  in  accordance  with  Directive 
2002/87/EC, need not deduct the items referred to in (a) and (b) of the fourth subparagraph 
which  are  held  in  credit  institutions,  investment  firms,  financial  institutions,  insurance  or 
reinsurance  undertakings  or  insurance  holding  companies  which  are  included  in  the 
supplementary supervision. 

For the purposes of the deduction of participations referred to in this paragraph, participation 
shall mean a participation within the meaning of Article 1(f) of Directive 98/78/EC. 

3. The available solvency margin may also consist of: 

(cid:208) 2002/83/EC 

(a) cumulative preferential share capital and subordinated loan capital up to 50 % of 
the  lesser  of  the  available  solvency  margin  and  the  required  solvency  margin,  no 
more than 25 % of which shall consist of subordinated loans with a fixed maturity, or 
fixed-term  cumulative  preferential  share  capital,  provided  that  binding  agreements 
exist  under  which,  in  the  event  of  the  bankruptcy  or  liquidation  of  the  assurance 
undertaking, the subordinated loan capital or preferential share capital ranks after the 
claims of all other creditors and is not to be repaid until all other debts outstanding at 
the time have been settled. 

Subordinated loan capital must also fulfil the following conditions: 

(i) only fully paid-up funds may be taken into account; 

(ii) for loans with a fixed maturity, the original maturity must be at least five 
years.  No  later  than  one  year  before  the  repayment  date,  the  assurance 
undertaking must submit to the competent authorities for their approval a plan 
showing  how  the  available  solvency  margin  will  be  kept  at  or  brought  to  the 
required  level  at  maturity,  unless  the  extent  to  which  the  loan  may  rank  as  a 
component  of  the  available  solvency  margin  is  gradually  reduced  during  at 

69 

OJ L 35, 11.2.2003.  

EN 

142 

   EN 

 
 
 
 
 
 
                                                 
least  the  last  five  years  before  the  repayment  date.  The  competent  authorities 
may authorise the early repayment of such loans provided application is made 
by the issuing assurance undertaking and its available solvency margin will not 
fall below the required level; 

(iii) loans the maturity of which is not fixed must be repayable only subject to 
five years' notice unless the loans are no longer considered as a component of 
the  available  solvency  margin  or  unless  the  prior  consent  of  the  competent 
authorities  is  specifically  required  for  early  repayment.  In  the  latter  event  the 
assurance undertaking must notify the competent authorities at least six months 
before  the  date  of  the  proposed  repayment,  specifying  the  available  solvency 
margin and the required solvency margin both before and after that repayment. 
The  competent  authorities  shall  authorise  repayment  only  if  the  assurance 
undertaking's available solvency margin will not fall below the required level; 

(iv) the loan agreement must not include any clause providing that in specified 
circumstances,  other  than  the  winding-up  of  the  assurance  undertaking,  the 
debt will become repayable before the agreed repayment dates; 

(v)  the  loan  agreement  may  be  amended  only  after  the  competent  authorities 
have declared that they have no objection to the amendment; 

(b)  securities  with  no  specified  maturity  date  and  other  instruments,  including 
cumulative preferential shares other than those mentioned in point (a), up to 50 % of 
the lesser of the available solvency margin and the required solvency margin for the 
total  of  such  securities  and  the  subordinated  loan  capital  referred  to  in  point  (a) 
provided they fulfil the following: 

(i)  they  may  not  be  repaid  on  the  initiative  of  the  bearer  or  without  the  prior 
consent of the competent authority; 

(ii)  the  contract  of  issue  must  enable  the  assurance  undertaking  to  defer  the 
payment of interest on the loan; 

(iii)  the  lender's  claims  on  the  assurance  undertaking  must  rank  entirely  after 
those of all non-subordinated creditors; 

(iv)  the  documents  governing  the  issue  of  the  securities  must  provide  for  the 
loss-absorption  capacity  of  the  debt  and  unpaid  interest,  while  enabling  the 
assurance undertaking to continue its business; 

(v) only fully paid-up amounts may be taken into account. 

3. The available solvency margin may also consist of: 

(cid:208) 2002/13/EC Art. 1.2 

(a) cumulative preferential share capital and subordinated loan capital up to 50 % of 
the  lesser  of  the  available  solvency  margin  and  the  required  solvency  margin,  no 
more than 25 % of which shall consist of subordinated loans with a fixed maturity, or 
fixed-term  cumulative  preferential  share  capital,  provided  in  the  event  of  the 
bankruptcy  or  liquidation  of  the  insurance  undertaking,  binding  agreements  exist 
under which the subordinated loan capital or preferential share capital ranks after the 
claims of all other creditors and is not to be repaid until all other debts outstanding at 
the time have been settled. 

EN 

143 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
Subordinated loan capital must also fulfil the following conditions: 

(i) only fully paid-up funds may be taken into account; 

(ii) for loans with a fixed maturity, the original maturity must be at least five 
years.  No  later  than  one  year  before  the  repayment  date  the  insurance 
undertaking must submit to the competent authorities for their approval a plan 
showing  how  the  available  solvency  margin  will  be  kept  at  or  brought  to  the 
required  level  at  maturity,  unless  the  extent  to  which  the  loan  may  rank  as  a 
component  of  the  available  solvency  margin  is  gradually  reduced  during  at 
least  the  last  five  years  before  the  repayment  date.  The  competent  authorities 
may authorise the early repayment of such loans provided application is made 
by the issuing insurance undertaking and its available solvency margin will not 
fall below the required level; 

(iii) loans the maturity of which is not fixed must be repayable only subject to 
five years' notice unless the loans are no longer considered as a component of 
the  available  solvency  margin  or  unless  the  prior  consent  of  the  competent 
authorities  is  specifically  required  for  early  repayment.  In  the  latter  event  the 
insurance undertaking must notify the competent authorities at least six months 
before  the  date  of  the  proposed  repayment,  specifying  the  available  solvency 
margin and the required solvency margin both before and after that repayment. 
The  competent  authorities  shall  authorise  repayment  only  if  the  insurance 
undertaking's available solvency margin will not fall below the required level; 

(iv) the loan agreement must not include any clause providing that in specified 
circumstances, other than the winding-up of the insurance undertaking, the debt 
will become repayable before the agreed repayment dates; 

(v)  the  loan  agreement  may  be  amended  only  after  the  competent  authorities 
have declared that they have no objection to the amendment; 

(b)  securities  with  no  specified  maturity  date  and  other  instruments,  including 
cumulative preferential shares other than those mentioned in point (a), up to 50 % of 
the lesser of the available solvency margin and the required solvency margin for the 
total  of  such  securities  and  the  subordinated  loan  capital  referred  to  in  point  (a) 
provided they fulfil the following: 

(i)  they  may  not  be  repaid  on  the  initiative  of  the  bearer  or  without  the  prior 
consent of the competent authority; 

(ii)  the  contract  of  issue  must  enable  the  insurance  undertaking  to  defer  the 
payment of interest on the loan; 

(iii)  the  lender's  claims  on  the  insurance  undertaking  must  rank  entirely  after 
those of all non-subordinated creditors; 

(iv)  the  documents  governing  the  issue  of  the  securities  must  provide  for  the 
loss-absorption  capacity  of  the  debt  and  unpaid  interest,  while  enabling  the 
insurance undertaking to continue its business; 

(v) only fully paid-up amounts may be taken into account. 

4. Upon application, with supporting evidence, by the undertaking to the competent authority 
of the home Member State and with the agreement of that competent authority, the available 
solvency margin may also consist of: 

EN 

144 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
(a) one half of the unpaid share capital or initial fund, once the paid-up part amounts 
to  25 %  of  that  share  capital  or  fund,  up  to  50 %  of  the  lesser  of  the  available 
solvency margin and the required solvency margin; 

(b) in the case of mutual or mutual-type association with variable contributions, any 
claim  which  it  has  against  its  members  by  way  of  a  call  for  supplementary 
contribution, within the financial year, up to one half of the difference between the 
maximum contributions and the contributions actually called in, and subject to a limit 
of  50 %  of  the  lesser  of  the  available  solvency  margin  and  the  required  solvency 
margin. The competent national authorities shall establish guidelines laying down the 
conditions under which supplementary contributions may be accepted; 

(c)  any  hidden  net  reserves  arising  out  of  the  valuation  of  assets,  in  so  far  as  such 
hidden net reserves are not of an exceptional nature. 

5.  Amendments  to  paragraphs  2,  3  and  4  to  take  into  account  developments  that  justify  a 
technical  adjustment  of  the  elements  eligible  for  the  available  solvency  margin,  shall  be 
adopted  in  accordance  with  the  procedure  laid  down  in  Article  2  of  Council  Directive 
91/675/EEC70. 

4. Upon application, with supporting evidence, by the undertaking to the competent authority 
of the home Member State and with the agreement of that competent authority, the available 
solvency margin may also consist of: 

(cid:208) 2002/83/EC 

(a)  until  31  December  2009  an  amount  equal  to  50 %  of  the  undertaking's  future 
profits, but not exceeding 25 % of the lesser of the available solvency margin and the 
required  solvency  margin.  The  amount  of  the  future  profits  shall  be  obtained  by 
multiplying  the  estimated  annual  profit  by  a  factor  which  represents  the  average 
period  left  to  run  on  policies.  The  factor  used  may  not  exceed  six.  The  estimated 
annual profit shall not exceed the arithmetical average of the profits made over the 
last five financial years in the activities listed in Article 2(1). 

Competent  authorities  may  only  agree  to  include  such  an  amount  for  the  available 
solvency margin: 

(i)  when  an  actuarial  report  is  submitted  to  the  competent  authorities 
substantiating the likelihood of emergence of these profits in the future; and 

(ii)  in  so  far  as  that  part  of  future  profits  emerging  from  hidden  net  reserves 
referred to in point (c) has not already been taken into account; 

(b)  where  Zillmerising  is  not  practised  or  where,  if  practised,  it  is  less  than  the 
loading for acquisition costs included in the premium, the difference between a non-
Zillmerised  or  partially  Zillmerised  mathematical  provision  and  a  mathematical 
provision Zillmerised at a rate equal to the loading for acquisition costs included in 
the  premium.  This  figure  may  not,  however,  exceed  3,5 %  of  the  sum  of  the 
differences  between  the  relevant  capital  sums  of  life  assurance  activities  and  the 
mathematical  provisions  for  all  policies  for  which  Zillmerising  is  possible.  The 
difference  shall  be  reduced  by  the  amount  of  any  undepreciated  acquisition  costs 
entered as an asset; 

70 

L 374, 31.12.1991, p. 32. 

EN 

145 

   EN 

 
 
 
 
 
 
 
 
 
 
                                                 
(c)  any  hidden  net  reserves  arising  out  of  the  valuation  of  assets,  in  so  far  as  such 
hidden net reserves are not of an exceptional nature; 

(d) one half of the unpaid share capital or initial fund, once the paid-up part amounts 
to  25 %  of  that  share  capital  or  fund,  up  to  50 %  of  the  lesser  of  the  available  and 
required solvency margin. 

5.  Amendments  to  paragraphs  2,  3  and  4  to  take  into  account  developments  that  justify  a 
technical  adjustment  of  the  elements  eligible  for  the  available  solvency  margin  shall  be 
adopted in accordance with the procedure laid down in Article 65(2). 

(cid:208) 2002/13/EC Art. 1.3 

Article 16a 

1. The required solvency margin shall be determined on the basis either of the annual amount 
of premiums or contributions, or of the average burden of claims for the past three financial 
years. 

In  the  case,  however,  of  insurance  undertakings  which  essentially  underwrite  only  one  or 
more of the risks of credit, storm, hail or frost, the last seven financial years shall be taken as 
the reference period for the average burden of claims. 

2.  Subject  to  Article  17,  the  amount  of  the  required  solvency  margin  shall  be  equal  to  the 
higher of the two results as set out in paragraphs 3 and 4. 

3.  The  premium  basis  shall  be  calculated  using  the  higher  of  gross  written  premiums  or 
contributions as calculated below, and gross earned premiums or contributions. 

Premiums  or  contributions  in  respect  of  the  classes  11,  12  and  13  listed  in  point  A  of  the 
Annex shall be increased by 50 %. 

The premiums or contributions (inclusive of charges ancillary to premiums or contributions) 
due in respect of direct business in the last financial year shall be aggregated. 

To this sum there shall be added the amount of premiums accepted for all reinsurance in the 
last financial year. 

From  this  sum  there  shall  then  be  deducted  the  total  amount  of  premiums  or  contributions 
cancelled in the last financial year, as well as the total amount of taxes and levies pertaining to 
the premiums or contributions entering into the aggregate. 

The amount so obtained shall be divided into two portions, the first portion extending up to 
EUR 50  million,  the  second  comprising  the  excess;  18 %  and  16 %  of  these  portions 
respectively shall be calculated and added together. 

(cid:208) 2005/68/EC Art. 57.5(a) 

The sum so obtained shall be multiplied by the ratio existing in respect of the sum of the last 
three financial years between the amount of claims remaining to be borne by the undertaking 
after  deduction  of  amounts  recoverable  under  reinsurance  and  the  gross  amount  of  claims; 
that ratio may in no case be less than 50 %. Upon application, with supporting evidence, by 
the insurance undertaking to the competent authority of the home Member State and with the 
agreement of that authority, amounts recoverable from special purpose vehicles referred to in 
Article 46 of Directive 2005/68/EC may be deducted as reinsurance. 

EN 

146 

   EN 

 
 
 
 
 
(cid:208) 2002/13/EC Art. 1.3 

With the approval of the competent authorities, statistical methods may be used to allocate the 
premiums or contributions in respect of the classes 11, 12 and 13. 

4. The claims basis shall be calculated, as follows, using in respect of the classes 11, 12 and 
13 listed in point A of the Annex, claims, provisions and recoveries increased by 50 %. 

The  amounts  of  claims  paid  in  respect  of  direct  business  (without  any  deduction  of  claims 
borne  by  reinsurers  and  retrocessionaires)  in  the  periods  specified  in  paragraph  1  shall  be 
aggregated. 

To  this  sum  there  shall  be  added  the  amount  of  claims  paid  in  respect  of  reinsurances  or 
retrocessions  accepted  during  the  same  periods  and  the  amount  of  provisions  for  claims 
outstanding  established  at  the  end  of  the  last  financial  year  both  for  direct  business  and  for 
reinsurance acceptances. 

From this sum there  shall  be deducted the amount of recoveries effected during  the periods 
specified in paragraph 1. 

From  the  sum  then  remaining,  there  shall  be  deducted  the  amount  of  provisions  for  claims 
outstanding established at the commencement of the second financial year preceding the last 
financial  year  for  which  there  are  accounts,  both  for  direct  business  and  for  reinsurance 
acceptances.  If  the  period  of  reference  established  in  paragraph  1  equals  seven  years,  the 
amount  of  provisions  for  claims  outstanding  established  at  the  commencement  of  the  sixth 
financial year preceding the last financial year for which there are accounts shall be deducted. 

One-third,  or  one-seventh,  of  the  amount  so  obtained,  according  to  the  period  of  reference 
established  in  paragraph  1,  shall  be  divided  into  two  portions,  the  first  extending  up  to 
EUR 35  million  and  the  second  comprising  the  excess;  26 %  and  23 %  of  these  portions 
respectively shall be calculated and added together. 

(cid:208) 2005/68/EC Art. 57.5(b) 

The sum so obtained shall be multiplied by the ratio existing in respect of the sum of the last 
three financial years between the amount of claims remaining to be borne by the undertaking 
after  deduction  of  amounts  recoverable  under  reinsurance  and  the  gross  amount  of  claims; 
that ratio may in no case be less than 50 %. Upon application, with supporting evidence, by 
the insurance undertaking to the competent authority of the home Member State and with the 
agreement of that authority, amounts recoverable from special purpose vehicles referred to in 
Article 46 of Directive 2005/68/EC may be deducted as reinsurance. 

(cid:208) 2002/13/EC Art. 1.3 

With the approval of the competent authorities, statistical methods may be used to allocate the 
claims,  provisions  and  recoveries  in  respect  of  the  classes  11,  12  and  13.  In  the  case  of  the 
risks  listed  under  class  18  in  point  A  of  the  Annex,  the  amount  of  claims  paid  used  to 
calculate the claims basis shall be the costs borne by the insurance undertaking in respect of 
assistance given. Such costs shall be calculated in accordance with the national provisions of 
the home Member State. 

5.  If  the  required  solvency  margin  as  calculated  in  paragraphs  2,  3  and  4  is  lower  than  the 
required  solvency  margin  of  the  year  before,  the  required  solvency  margin  shall  be  at  least 

EN 

147 

   EN 

 
 
 
 
equal to the required solvency margin of the year before multiplied by the ratio of the amount 
of the technical provisions for claims outstanding at the end of the last financial year and the 
amount of the technical provisions for claims outstanding at the beginning of the last financial 
year. In these calculations technical provisions shall be calculated net of reinsurance but the 
ratio may in no case be higher than 1. 

6. The fractions applicable to the portions referred to in the sixth subparagraph of paragraph 3 
and the sixth subparagraph of paragraph 4 shall each be reduced to a third in the case of health 
insurance practised on a similar technical basis to that of life assurance, if 

(a) the premiums paid are calculated on the basis of sickness tables according to the 
mathematical method applied in insurance; 

(b) a provision is set up for increasing age; 

(c)  an  additional  premium  is  collected  in  order  to  set  up  a  safety  margin  of  an 
appropriate amount; 

(d) the insurance undertaking may cancel the contract before the end of the third year 
of insurance at the latest; 

(e)  the  contract  provides  for  the  possibility  of  increasing  premiums  or  reducing 
payments even for current contracts. 

(cid:208) 2002/83/EC 

Article 28 

Required solvency margin 

1.  Subject  to  Article  29,  the  required  solvency  margin  shall  be  determined  as  laid  down  in 
paragraphs 2 to 7 according to the classes of assurance underwritten. 

2. For the kinds of assurance referred to in Article 2(1)(a) and (b) other than assurances linked 
to investment  funds and  for the operations referred to in Article 2(3), the required solvency 
margin shall be equal to the sum of the following two results: 

(cid:208) 2005/68/EC Art. 60.9(a) 

(a) first result: 

a  4 %  fraction  of  the  mathematical  provisions  relating  to  direct  business  and 
reinsurance  acceptances  gross  of  reinsurance  cessions  shall  be  multiplied  by  the 
ratio,  for  the  last  financial  year,  of  the  mathematical  provisions  net  of  reinsurance 
cessions to the gross total mathematical provisions. That ratio may in no case be less 
than 85 %. Upon application, with supporting evidence, by the insurance undertaking 
to  the  competent  authority  of  the  home  Member  State  and  with  agreement  of  that 
authority,  amounts  recoverable  from  the  special  purpose  vehicles  referred  to  in 
Article 46 of Directive 2005/68/EC may be deducted as reassurance; 

(b) second result: 

(cid:208) 2005/68/EC Art. 60.9(b) 

EN 

148 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
for policies on which the capital at risk is not a negative figure, a 0,3 % fraction of 
such  capital  underwritten  by  the  assurance  undertaking  shall  be  multiplied  by  the 
ratio,  for  the  last  financial  year,  of  the  total  capital  at  risk  retained  as  the 
undertaking's liability after reinsurance cessions and retrocessions to the total capital 
at  risk  gross  of  reinsurance;  that  ratio  may  in  no  case  be  less  than  50 %.  Upon 
application, with supporting evidence, by the insurance undertaking to the competent 
authority  of  the  home  Member  State  and  with  the  agreement  of  that  authority, 
amounts  recoverable  from  the  special  purpose  vehicles  referred  to  in  Article 46  of 
Directive 2005/68/EC may be deducted as reassurance. 

(cid:208) 2002/83/EC 

For  temporary  assurance  on  death  of  a  maximum  term  of  three  years  the  fraction 
shall be 0,1 %. For such assurance of a term of more than three years but not more 
than five years the above fraction shall be 0,15 %. 

3. For the supplementary insurance referred to in Article 2(1)(c) the required solvency margin 
shall  be  equal  to  the  required  solvency  margin  for  insurance  undertakings  as  laid  down  in 
Article 16a of Directive 73/239/EEC, excluding the provisions of Article 17 of that Directive. 

4. For permanent health insurance not subject to cancellation referred to in Article 2(1)(d), the 
required solvency margin shall be equal to: 

(a)  a  4 %  fraction  of  the  mathematical  provisions,  calculated  in  compliance  with 
paragraph 2(a) of this Article; plus 

(b) the required solvency margin for insurance undertakings as laid down in Article 
16a  of  Directive  73/239/EEC,  excluding  the  provisions  of  Article  17  of  that 
Directive.  However,  the  condition  contained  in  Article  16a(6)(b)  of  that  Directive 
that a provision be set up for increasing age may be replaced by a requirement that 
the business be conducted on a group basis. 

5.  For  capital  redemption  operations  referred  to  in  Article  2(2)(b),  the  required  solvency 
margin  shall  be  equal  to  a  4 %  fraction  of  the  mathematical  provisions  calculated  in 
compliance with paragraph 2(a) of this Article. 

6. For tontines, referred to in Article 2(2)(a), the required solvency margin shall be equal to 
1 % of their assets. 

7.  For  assurances  covered  by  Article  2(1)(a)  and  (b)  linked  to  investment  funds  and  for  the 
operations  referred  to  in  Article  2(2)(c),  (d)  and  (e),  the  required  solvency  margin  shall  be 
equal to the sum of the following: 

(a) in so far as the assurance undertaking bears an investment risk, a 4 % fraction of 
the technical provisions, calculated in compliance with paragraph 2(a) of this Article; 

(b) in so far as the undertaking bears no investment risk but the allocation to cover 
management  expenses  is  fixed  for  a  period  exceeding  five  years,  a  1 %  fraction  of 
the technical provisions, calculated in compliance with paragraph 2(a) of this Article; 

(c) in so far as the undertaking bears no investment risk and the allocation to cover 
management  expenses  is  not  fixed  for  a  period  exceeding  five  years,  an  amount 
equivalent to 25 % of the last financial year's net administrative expenses pertaining 
to such business; 

EN 

149 

   EN 

 
 
 
 
 
 
 
 
 
(d) in so far as the assurance undertaking covers a death risk, a 0,3 % fraction of the 
capital at risk calculated in compliance with paragraph 2(b) of this Article. 

(cid:208) 2005/68/EC Art. 60.10 

Article 28a 

Solvency margin for assurance undertakings conducting reinsurance activities 

1.  Each  Member  State  shall  apply  to  insurance  undertakings  whose  head  office  is  situated 
within its territory, the provisions of Articles 35 to 39 of Directive 2005/68/EC in respect of 
their reinsurance acceptance activities, where one of the following conditions is met: 

(a) the reinsurance premiums collected exceed 10 % of their total premium; 

(b) the reinsurance premiums collected exceed EUR 50000000; 

(c) the technical provisions resulting from their reinsurance acceptances exceed 10 % 
of their total technical provisions. 

2.  Each  Member  State  may  choose  to  apply  to  assurance  undertakings  referred  to  in 
paragraph 1 of this Article and whose head office is situated within its territory the provisions 
of  Article 34  of  Directive  2005/68/EC  in  respect  of  their  reinsurance  acceptance  activities, 
where one of the conditions laid down in the said paragraph 1 is met. 

In  that  case,  the  respective  Member  State  shall  require  that  all  assets  employed  by  the 
assurance  undertaking  to  cover  the  technical  provisions  corresponding  to  its  reinsurance 
acceptances shall be ring-fenced, managed and organised separately from the direct assurance 
activities of the assurance undertaking, without any possibility of transfer. In such a case, and 
only  as  far  as  their  reinsurance  acceptance  activities  are  concerned,  assurance  undertakings 
shall not be subject to Articles 22 to 26. 

Each  Member  State  shall  ensure  that  their  competent  authorities  verify  the  separation 
provided for in the second subparagraph. 

(cid:208) 2002/83/EC 

Article 29 

Guarantee fund 

1.  One  third  of  the  required  solvency  margin  as  specified  in  Article  28  shall  constitute  the 
guarantee fund. This fund shall consist of the items listed in Article 27(2), (3) and, with the 
agreement of the competent authority of the home Member State, (4)(c). 

1.  One  third  of  the  required  solvency  margin  as  specified  in  Article  16a  shall  constitute  the 
guarantee fund. This fund shall consist of the items listed in Article 16(2), (3) and, with the 
agreement of the competent authority of the home Member State, (4)(c). 

(cid:208) 2002/13/EC Art. 1.4 

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2. The guarantee fund may not be less than a minimum of EUR 3 million. 

(cid:208) 2002/83/EC 

(cid:208) 2002/13/EC Art. 1.4 

2. The guarantee fund may not be less than EUR 2 million. Where, however, all or some of 
the risks included in one of the classes 10 to 15 listed in point A of the Annex are covered, it 
shall be EUR 3 million. 

Any Member State may provide for a one-fourth reduction of the minimum guarantee fund in 
the case of mutual associations and mutual-type associations. 

Any Member State may provide for a one-fourth reduction of the minimum guarantee fund in 
the case of mutual associations and mutual-type associations and tontines. 

(cid:208) 2002/83/EC 

(cid:208) 2005/68/EC Art. 57.6 

Article 17b 

1.  Each  Member  State  shall  require  that  an  insurance  undertaking  whose  head  office  is 
situated within its territory and which conducts reinsurance activities establishes, in respect of 
its  entire  business,  a  minimum  guarantee  fund  in  accordance  with  Article 40  of  Directive 
2005/68/EC, where one of the following conditions is met: 

(a) the reinsurance premiums collected exceed 10 % of its total premium; 

(b) the reinsurance premiums collected exceed EUR 50000000; 

(c) the technical  provisions resulting from its reinsurance acceptances exceed 10 % 
of its total technical provisions. 

2. Each Member State may choose to apply to such insurance undertakings as are referred to 
in  paragraph 1  of  this  Article  and  whose  head  office  is  situated  within  its  territory  the 
provisions  of  Article 34  of  Directive  2005/68/EC  in  respect  of  their  reinsurance  acceptance 
activities, where one of the conditions laid down in the said paragraph 1 is met. 

In that case, the relevant Member State shall require that all assets employed by the insurance 
undertaking  to  cover  the  technical  provisions  corresponding  to  its  reinsurance  acceptances 
shall be ring-fenced, managed and organised separately from the direct insurance activities of 
the insurance undertaking, without any possibility of transfer. In such a case, and only as far 
as their reinsurance acceptance activities are concerned, insurance undertakings shall not  be 
subject  to  Articles 20,  21  and  22  of  Directive  92/49/EEC71  and  Annex I  to  Directive 
88/357/EEC. 

71 

Council  Directive  92/49/EEC  of  18 June  1992  on  the  coordination  of  laws,  regulations  and 
administrative provisions relating to direct insurance other than life assurance (third non-life insurance 
Directive) (OJ L 228, 11.8.1992, p. 1). Directive as last amended by Directive 2005/1/EC. 

EN 

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Each  Member  State  shall  ensure  that  their  competent  authorities  verify  the  separation 
provided for in the second subparagraph. 

3. If the Commission decides, pursuant to Article 56(c) of Directive 2005/68/EC to increase 
the  amounts  used  for  the  calculation  of  the  required  solvency  margin  provided  for  in 
Article 37(3)  and  (4)  of  that  Directive,  each  Member  State  shall  apply  to  such  insurance 
undertakings as are referred to in paragraph 1 of this Article the provisions of Articles 35 to 
39 of that Directive in respect of their reinsurance acceptance activities. 

(cid:208) 2002/83/EC 

Article 30 

Review of the amount of the guarantee fund 

1. The amount in euro as laid down in Article 29(2) shall be reviewed annually starting on 20 
September  2003,  in  order  to  take  account  of  changes  in  the  European  index  of  consumer 
prices comprising all Member States as published by Eurostat. 

1.  The  amounts  in  euro  as  laid  down  in  Article  16a  (3)  and  (4)  and  Article  17(2)  shall  be 
reviewed  annually  starting  20  September  2003  in  order  to  take  account  of  changes  in  the 
European index of consumer prices comprising all Member States as published by Eurostat. 

(cid:208) 2002/13/EC Art. 1.5 

The  amount  shall  be  adapted  automatically,  by  increasing  the  base  amount  in  euro  by  the 
percentage change in that index over the period between 20 March 2002 and the review date 
and rounded up to a multiple of EUR 100000. 

(cid:208) 2002/83/EC 

The  amounts  shall  be  adapted  automatically  by  increasing  the  base  amount  in  euro  by  the 
percentage change in that index over the period between the entry into force of this Directive 
and the review date and rounded up to a multiple of EUR 100000. 

(cid:208) 2002/13/EC Art. 1.5 

If  the  percentage  change  since  the  last  adaptation  is  less  than  5 %,  no  adaptation  shall  take 
place. 

(cid:208) 2002/83/EC 

If  the  percentage  change  since  the  last  adaptation  is  less  than  5 %,  no  adaptation  shall  take 
place. 

2.  The  Commission  shall  inform  annually  the  European  Parliament  and  the  Council  of  the 
review and the adapted amounts referred to in paragraph 1. 

(cid:208) 2002/13/EC Art. 1.5 

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2.  The  Commission  shall  inform  annually  the  European  Parliament  and  the  Council  of  the 
review and the adapted amount referred to in paragraph 1. 

(cid:208) 2002/83/EC 

(cid:208) 2002/83/EC 

Article 31 

Assets not used to cover technical provisions 

1. Member States shall not prescribe any rules as to the choice of the assets that need not be 
used as cover for the technical provisions referred to in Article 20. 

1. Member States shall not prescribe any rules as to the choice of the assets that need not be 
used as cover for the technical provisions referred to in Article 15. 

(cid:208) 92/49/EEC Art. 26 

2.  Subject  to  Article  20(3),  Article  37(1),  (2),  (3)  and  (5),  and  the  second  subparagraph  of 
Article  39(1),  Member  States  shall  not  restrain  the  free  disposal  of  those  assets,  whether 
movable or immovable, that form part of the assets of authorised assurance undertakings. 

(cid:208) 2002/83/EC 

(cid:208) 92/49/EEC Art. 26 

2. Subject to Article 15 (2), Article 20 (1), (2), (3) and (5) and the last subparagraph of Article 
22 (1), Member States shall not restrain the free disposal of those assets, whether movable or 
immovable, that form part of the assets of authorized insurance undertakings. 

3.  Paragraphs  1  and  2  shall  not  preclude  any  measures  which  Member  States,  while 
safeguarding the interests of the isured persons, are entitled to take as owners or members of 
or partners to the undertakings in question. 

3.  Paragraphs  1  and  2  shall  not  preclude  any  measures  which  Member  States,  while 
safeguarding the interests of the lives assured, are entitled to take as owners or members of or 
partners in the assurance undertakings in question. 

(cid:208) 2002/83/EC 

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CHAPTER 5 VII - ASSURANCE ⌦ INSURANCE AND 
REINSURANCE ⌫ UNDERTAKINGS IN DIFFICULTY OR IN 
AN IRREGULAR SITUATION 

(cid:208) 2002/83/EC (adapted) 

Assurance undertakings in difficulty  

(cid:208) 2002/83/EC Art. 37 (adapted) 

(cid:216) new 

Article 134 

Identification and notification of deteriorating financial conditions by the insurance and 
reinsurance undertaking 

Insurance  and  reinsurance  undertakings  shall  have  procedures  in  place  to  identify 
deteriorating  financial  conditions  and  notify  the  supervisory  authorities  when  such 
deterioration occurs. 

(cid:208) 2002/83/EC Art. 37 (adapted) 
(cid:214) new 

⌦ Article 135 

Non-Compliance with technical provisions ⌫ 

If an assurance ⌦ insurance or reinsurance ⌫ undertaking does not comply with Article 20 
Chapter  VI,  Section  2,  the  competent  authority  ⌦ supervisory  authorities ⌫  of  its  home 
Member  State  may  prohibit  the  free  disposal  of  its  assets  after  having  communicated  its 
⌦ their ⌫intention  ⌦ s ⌫  to  the  competent  ⌦ supervisory ⌫  authorities  of  the 
⌦ host ⌫  Member  States  of  commitment.  (cid:214) The  supervisory  authorities  of  the  home 
Member State shall designate the assets to be covered by such measures.  

(cid:216) new 

Article 136 

Non-Compliance with the Solvency Capital Requirement 

1. 

Insurance  and  reinsurance  undertakings  shall  inform  the  supervisory  authority  as 
soon  as  they  observe  that  the  Solvency  Capital  Requirement  is  no  longer  complied 
with, or where there is a risk of non-compliance in the following three months. 

EN 

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2. 

3. 

Within  two  months  from  the  observation  of  the  non-compliance  with  the  Solvency 
Capital  Requirement  the  insurance  or  reinsurance  undertaking  concerned  shall 
submit a realistic recovery plan for approval by the supervisory authority. 

The  supervisory  authority  shall  require  the  insurance  or  reinsurance  undertaking 
concerned  to  take  the  necessary  measures  to  achieve,  within  six  months  from  the 
observation  of  the  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  its  risk  profile  to  ensure  compliance  with  the 
Solvency Capital Requirement .  

The supervisory authority may, if appropriate, extend that period by three months. 

(cid:208) 2005/68/EC Art. 42 (adapted) 
(cid:214) new 

2.  For  the  purposes  of  restoring  the  financial  situation  of  a  reinsurance  undertaking  the 
solvency margin of which has fallen below the minimum required under Articles 37, 38 and 
39,  the  competent  authority  of  the  home  Member  State  shall  require  that  a  plan  for  the 
restoration of a sound financial situation be submitted for its approval. 

4. 

In exceptional circumstances, if the competent ⌦ supervisory ⌫ authority is of the 
opinion that the financial situation of the reinsurance undertaking ⌦ concerned ⌫ 
will  deteriorate  further,  it  may  also  restrict  or  prohibit  the  free  disposal  of  the 
reinsurance  undertaking's  assets ⌦ of  that  undertaking ⌫.  It ⌦ That  supervisory 
authority ⌫ shall inform the ⌦ supervisory ⌫ authorities of other ⌦ the host ⌫ 
Member States within the territories of which the reinsurance undertaking carries on 
business of any measures it has taken. and the latter ⌦ Those authorities ⌫ shall, at 
the  request  of  the  former  ⌦ supervisory  authority  of  the  home  Member  State ⌫, 
take  the  same  measures.  (cid:214) The  supervisory  authority  of  the  home  Member  State 
shall designate the assets to be covered by such measures.  

3.  If  the  solvency  margin  falls  below  the  guarantee  fund  as  defined  in  Article 40,  the 
competent  authority  of  the  home  Member  State  shall  require  the  reinsurance  undertaking  to 
submit a short-term finance scheme for its approval. 

(cid:216) new 

Article 137 

Non-Compliance with the Minimum Capital Requirement 

1. 

2. 

Insurance  and  reinsurance  undertakings  shall  inform  the  supervisory  authority  as 
soon as they observe that the Minimum Capital Requirement is no longer complied 
with, or where there is a risk of non-compliance in the coming three months. 

Within  one  month  from  the  observation  of  the  non-compliance  with  the  Minimum 
Capital  Requirement  the  insurance  or  reinsurance  undertaking  concerned  shall 
submit,  for  approval  by  the  supervisory  authority,  a  short-term  realistic  finance 
scheme to restore, within three months from that observation, the eligible basic own 
funds, at least to the level of the Minimum Capital Requirement or to reduce its risk 
profile to ensure compliance with the Minimum Capital Requirement.. 

EN 

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(cid:208) 2002/83/EC Art. 37 (adapted) 
(cid:214) new 

3. 

It⌦ The  supervisory  authority  of  the  home  Member  State ⌫  may  also  restrict  or 
prohibit the free disposal of the assurance undertaking's assets ⌦ of the insurance or 
reinsurance  undertaking ⌫.  It  shall  inform  the  ⌦ supervisory ⌫  authorities  of 
other  ⌦ the  host ⌫  Member  States  within  the  territories  of  which  the  assurance 
undertaking carries on business accordingly. and the latter ⌦ Those authorities ⌫ 
shall,  at  the  request  of  the  former  ⌦ supervisory  authority  of  the  home  Member 
State ⌫, take the same measures. (cid:214) The supervisory authority of the home Member 
State shall designate the assets to be covered by such measures.  

(cid:208) 2002/83/EC Art. 37 (adapted) 
(cid:214) new 

⌦ Article 138 

Prohibition of free disposal of assets located within the territory of a Member State ⌫ 

5  Each  Member  State  ⌦ States ⌫  shall  take  the  measures  necessary  to  be  able,  in 
accordance  with  its  national  law,  to  prohibit  the  free  disposal  of  assets  located  within  its 
⌦ their ⌫ territory at the request, in the cases provided for in Articles 135, 136, 137, 142 
(2) (cid:214) and 240(1)  paragraphs 1, 2 and 3, of the undertaking's home Member State, which 
shall designate the assets to be covered by such measures. 

(cid:208) 2002/83/EC Art. 37 (adapted) 

⌦ Article 139 

Supervisory powers in deteriorating financial conditions ⌫ 

4. 

The competent authorities may further take all measures necessary to safeguard the 
interests of assured persons in the cases provided for in paragraphs 1, 2 and 3.  

(cid:208) 2002/83/EC Art. 37  

(cid:216) new 

Nothwithstanding  Articles  136  and  137  if  the  solvency  position  of  the  undertaking 
continues to deteriorate, the supervisory authorities shall have the power to take all 
measures  necessary  to  safeguard  the  interests  of  policyholders  in  the  case  of 
insurance contracts, or the obligations arising out of reinsurance contracts. 

Those  measures  shall  reflect  the  level  and  duration  of  the  deterioration  of  the 
solvency position of the insurance or reinsurance undertaking concerned. 

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(cid:208) 2002/83/EC Art. 38 and 
2005/68/EC Art. 43 
(cid:214) new 

Article 140 

Recovery plan (cid:214) and finance scheme   

1.  Member  States  shall  ensure  that  the  competent  authorities  have  the  power  to  require  a 
financial recovery plan for those insurance undertakings where competent authorities consider 
that policy holders' rights are threatened. 

The  financial  recovery  plan  must  as  a  minimum  include  particulars  or  proof  concerning  for 
the next three financial years: 

1. 

The recovery plan referred to in Article 136(2) and the finance scheme referred to in 
Article  137(2)  shall,  at  least  include  particulars  or  evidence  concerning  the 
following: 

(cid:216) new 

(cid:208) 2002/83/EC Art. 38, 
2002/13/EC Art. 1(7) and 
2005/68/EC Art. 43 

(a) 

estimates of management expenses, in particular current general expenses and 
commissions; 

(b) 

a  plan  setting  out  detailed  estimates  of  income  and  expenditure  in  respect  of 
direct business, reinsurance acceptances and reinsurance cessions; 

(cid:208) 2002/83/EC Art. 38 

(cid:208) 2002/83/EC Art. 38, 
2002/13/EC Art. 1(7) and 
2005/68/EC Art. 43  
(cid:214) new 

(c) 

(d) 

a forecast balance sheet; 

estimates  of  the  financial  resources  intended  to  cover  the  (cid:214) technical 
provisions  underwriting liabilities and the (cid:214) Solvency Capital Requirement 
and the Minimum Capital Requirement  required solvency margin; . 

(e) 

the overall reinsurance policy. 

(cid:208) 2002/83/EC Art. 38 and 
2002/13/EC Art. 1(7) 2005/68/EC 
Art. 43(2)(e)  

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(cid:208) 2005/68/EC Art. 60(11) 

4. Member States shall ensure that the competent authorities have the power to decrease the 
reduction,  based  on  reinsurance,  to  the  solvency  margin  as  determined  in  accordance  with 
Article 28 where: 

(a) 

the nature or quality of reinsurance contracts has changed significantly since the last 
financial year; 

(b) 

there is no, or a limited, risk transfer under the reinsurance contracts. 

(cid:208) 2002/83/EC Art. 38 and 
2005/68/EC Art. 43  

2. 

Where  policy  holders'  rights  are  threatened  because  the  financial  position  of  the 
undertaking  is  deteriorating,  Member  States  shall  ensure  that  the  competent 
authorities have the power to oblige insurance undertakings to have a higher required 
solvency margin, in order to ensure that the insurance undertaking is able to fulfil the 
solvency requirements in the near future. The level of this higher required solvency 
margin shall be based on a financial recovery plan referred to in paragraph 1. 

(cid:208) 2002/83/EC Art. 38, 
2002/13/EC Art. 1(7) and 
2005/68/EC Art. 43 (adapted) 
(cid:214) new 

32. 

Member  States  shall  ensure  that  the  competent ⌦ supervisory ⌫  authorities  have 
the power to revalue downwards all (cid:214) own funds items eligible to cover  elements 
eligible  for  the  (cid:214) Solvency  Capital  Requirement   available  solvency  margin,  in 
particular,  where  there  has  been  a  significant  change  in  the  market  value  of  these 
elements since the end of the last financial year. 

4. 

Member  States  shall  ensure  that  the  competent  authorities  have  the  powers  to 
decrease the reduction, based on reinsurance, to the solvency margin as determined 
in accordance with Articles 28 where: 

(cid:208) 2002/83/EC Art. 38  

(a) 

the  nature  or  quality  of  reinsurance  contracts  has  changed  significantly  since 
the last financial year; 

(cid:208) 2002/83/EC Art. 38 and 
2005/68/EC Art. 57(7)  

(b) 

there is no, or a limited, risk transfer under the reinsurance contracts. 

(cid:208) 2005/68/EC Art. 57(7)  

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(cid:208) 2005/68/EC Art. 43 (adapted) 
(cid:214) new 

63. 

If  the  competent  ⌦ supervisory ⌫  authorities  have  required  a  financial  recovery 
plan  (cid:214) referred  to  in  Article  136(2)  or  a  finance  scheme  referred  to  in  Article 
137(2)   for  the  reinsurance  undertaking  in  accordance  with  paragraph 1  of  this 
Article, they shall refrain from issuing a certificate in accordance with Article 18, 39 
⌦ for⌫ as long as they consider that its ⌦ the rights of the policyholders, or the 
contractual ⌫ obligations arising out of ⌦ the ⌫ reinsurance ⌦ undertaking ⌫ 
contracts are threatened within the meaning of the said paragraph 1. 

(cid:216) new 

Article 141  

Implementing measures 

The Commission may adopt implementing measures laying down further specifications with 
respect to the recovery plan referred to in Article 136(2) and the finance scheme referred to in 
Article 137(2). 

Those  measures  designed 
this  Directive,  by 
supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny 
referred to in Article 304 (3). 

to  amend  non-essential  elements  of 

(cid:208) 73/239/EEC 

Article 21 

1.  Each  Member  State  shall  make  it  possible  for  an  undertaking  to  assign  all  or  part  of  its 
portfolio  of  policies  if  the  assignees  possess  the  necessary  solvency  margin,  due  account 
being taken of the assignment. 

The  supervisory  authorities  concerned  shall  consult  each  other  before  approving  such 
assignment. 

2.  Once  approved  by  the  competent  supervisory  authority,  such  assignment  shall  affect 
directly the policy-holders or insured concerned. 

(cid:208) 2002/83/EC Art. 39 (adapted) 
(cid:214) new 

Article 142 

Withdrawal of authorisation 

1. 

tThe  competent 
Authorisation  granted 
⌦ supervisory ⌫ authority of its ⌦ the ⌫ home Member State (cid:214) shall  may be 
withdrawn  by  that  authority  if  that  ⌦ an  authorisation  granted  to  an  insurance  or 
reinsurance ⌫ undertaking ⌦ in the following cases ⌫ : 

to  an  assurance  undertaking  by 

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(cid:208) 2002/83/EC Art. 39, 92/49/EEC 
Art. 14 and 2005/68/EC Art. 44 
(adapted) 

(a)  ⌦ the  undertaking  concerned ⌫  does  not  make  use  of  the  authorisation 
within  12  months,  expressly  renounces  it  or  ceases  to  carry  on  business  for 
more than six months, unless the Member State concerned has made provision 
for authorisation to lapse in such cases; 

(b)  ⌦ the  undertaking  concerned ⌫  no  longer  fulfils  the  conditions  for 

admission ⌦ authorisation ⌫ ; 

(cid:216) new 

(c) 

the undertaking does not comply with the Minimum Capital Requirement and 
the  supervisory  authority  considers  that  the  finance  scheme  submitted  is 
manifestly  inadequate  or,  the  undertaking  concerned  fails  to  comply  with  the 
approved  scheme  within  three  months  from  the  observation  of  the  non-
compliance with the Minimum Capital Requirement. 

has been unable, within the time allowed, to take the measures specified in the 

(c) 
restoration plan or finance scheme referred to in Article 37; 

(cid:208) 2002/83/EC Art. 39 

(cid:208) 2002/83/EC Art. 39, 92/49/EEC 
Art. 14 and 2005/68/EC Art. 44 
(adapted) 

(d)  ⌦ the  undertaking  concerned ⌫  fails  seriously  in  its  obligations  under  the 

regulations to which it is subject. 

(cid:208) 92/49/EEC Art. 14 (adapted) 

2. 

the  event  of 

the  withdrawal  or 

In 
the  competent 
⌦ supervisory ⌫  authority  of  the  home  Member  State  shall  notify  the  competent 
⌦ supervisory ⌫  authorities  of  the  other  Member  States  accordingly,  and  they 
⌦ those authorities ⌫ shall take appropriate measures to prevent the ⌦ insurance 
or  reinsurance ⌫  undertaking  from  commencing  new  operations  within  their 
territories, under either the right of establishment or the freedom to provide services. 

lapse  of  authorisation, 

The  home  Member  State's  competent ⌦ supervisory ⌫  authority ⌦ of  the  home 
Member  State ⌫  shall,  in  conjunction  ⌦ together ⌫  with  those  authorities,  take 
all measures necessary to safeguard the interests of insured persons and, in particular, 
shall  restrict  the  free  disposal  of  the  undertaking's  assets  ⌦ of  the  insurance 
undertaking ⌫  in  accordance  with  Article  13820  (1),  (2),  second  subparagraph,  or 
(3), second subparagraph.  

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23. 

Any decision to withdraw authorisation shall ⌦ contain ⌫ be supported by precise 
⌦ detailed ⌫  reasons  and  ⌦ be ⌫  communicated  to  the  ⌦ insurance  or 
reinsurance ⌫ undertaking in question ⌦ concerned ⌫ . 

TITLE IV CHAPTER VIII - PROVISIONS RELATING TO 
RIGHT OF ESTABLISHMENT AND FREEDOM TO PROVIDE 
SERVICES 

(cid:208) 2002/83/EC Art. 40 (adapted) 

⌦ SECTION1 - ESTABLISHMENT BY INSURANCE UNDERTAKINGS ⌫ 

Article 143 

Conditions for branch establishment 

1. 

⌦ Member States shall ensure that ⌫ Aan assurance ⌦ insurance ⌫ undertaking 
that  ⌦ which ⌫  proposes  to  establish  a  branch  within  the  territory  of  another 
Member  State  shall  notify  ⌦ notifies ⌫  the  competent  ⌦ supervisory ⌫ 
authorities of its home Member State. 

(cid:208) 88/357/EEC Art. 3 (adapted) 

For  the  purposes  of  the  first  Directive  and  of  this  Directive,  aAny  permanent 
presence of an undertaking in the territory of a Member State shall be treated in the 
same way as an agency or branch, even if that presence does not take the form of a 
branch or agency, but consists merely of an office managed by the undertaking's own 
staff ⌦ of the undertaking ⌫ or by a person who is independent but has permanent 
authority to act for the undertaking as an agency would. 

2. 

The  Member  States  shall  require  every  insurance  undertaking  that  proposes  to 
establish  a  branch  within  the  territory  of  another  Member  State  to  provide  the 
following information when effecting the notification provided for in paragraph 1: 

(cid:208) 92/49/EEC Art. 32 (adapted) 

(cid:208) 2002/83/EC Art. 40 and 
92/49/EEC Art. 32 
(cid:214) new 

(a) 

(b) 

the  Member  State  within  the  territory  of  which  it  proposes  to  establish  a 
branch; 

a  scheme  of  operations  setting  out,  inter  alia  (cid:214) at  least   ,  the  types  of 
business envisaged and the structural organisation of the branch; 

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(cid:208) 2002/83/EC Art. 40 (adapted) 

(dc)  the name of the branch's authorised agent, ⌦ a person ⌫ who  must possess 
⌦ possesses ⌫  sufficient  powers  to  bind,  the  assurance  undertaking  in 
relation to third parties, and to represent it in relations with the authorities and 
courts  of  the  Member  State  of  the  branch.  With  regard  to  ⌦ the  insurance 
undertaking or, in the case of ⌫ Lloyd's, in the event of any litigation in the 
Member  State  of  the  branch  arising  out  of  underwritten  commitments,  the 
assured  persons  must  not  be  treated  less  favourably  than  if  the  litigation  had 
been  brought  against  businesses  of  a  conventional  type.  The  authorised  agent 
must, therefore, possess sufficient powers for proceedings to be taken against 
him  and  must  in  that  capacity  be  able  to  bind  the  Lloyd's  underwriters 
concerned ⌦ and to represent it or them in relations with the authorities and 
courts of the host Member State ( hereinafter “authorised agent”); ⌫ . 

(cid:208) 2002/83/EC Art. 40 and 
92/49/EEC Art. 32 (adapted) 
(cid:214) new 

(cd)  the  address  in  the ⌦ host ⌫ Member  State  of  the  branch  from  which 
documents  may  be  obtained  and  to  which  they  may  be  delivered,  it  being 
understood  that  that  address  shall  be  the  one  to  which  (cid:214) including   all 
communications to the authorised agent are sent; 

(cid:208) 92/49/EEC Art. 32 (adapted) 

the  name  of  the  branch's  authorized  agent,  who  must  possess  sufficient  powers  to 
bind  the undertaking in relation to third parties and to represent it in  relations with 
the  authorities  and  courts  of  the  Member  State  of  the  branch.  Wwith  regard  to 
Lloyd's, in the event of any litigation in the ⌦ host ⌫ Member State of the branch 
arising out of underwritten commitments, the insured persons must not be treated less 
favourably  than  if  the  litigation  had  been  brought  against  businesses  of  a 
conventional  type.  The  authorized  agent  must,  therefore,  possess  sufficient  powers 
for proceedings to be taken against him and must in that capacity be able to bind the 
Lloyd's underwriters concerned. 

Where the ⌦ a non-life insurance ⌫ undertaking intends its branch to cover risks 
in  class  10  of  in  point  A  of  the  Annex  I,  not  including  carrier's  liability,  it  must 
produce  a  declaration  that  it  has  become  a  member  of  the  national  bureau  and  the 
national guarantee fund of the ⌦ host ⌫ Member State of the branch. 

(cid:208) 92/49/EEC Art. 32 (adapted) 

In the event of a change in any of the particulars communicated under points (b), (c) 
or  (d)  of  paragraph  2  (b),  (c)  or  (d),  an  insurance  undertaking  shall  give  written 
notice  of  the  change  to  the  competent⌦ supervisory ⌫  authorities  of  the  home 
Member  State  and  of  the  Member  State  of  the  branch  ⌦ where  that  branch  is 
situated ⌫  at 
the 
competent⌦ supervisory ⌫  authorities  of  the  home  Member  State  and  the 

least  one  month  before  making 

the  change  so 

that 

3. 

64. 

EN 

162 

   EN 

 
 
 
 
 
competent⌦ supervisory ⌫ authorities of the Member State of the branch⌦ where 
that  branch  is  situated ⌫  may  fulfil  their  respective  roles  under  paragraphs  3  and 
4⌦ Article 144 (1), (2) and subparagraph 1 of paragraph (3) ⌫. 

(cid:208) 2002/83/EC Art. 40 

Article 144 

Communication of information 

(cid:208) 92/49/EEC Art. 32 and 
2002/83/EC Art.40 (adapted) 
(cid:214) new 

Unless the competent⌦ supervisory ⌫ authorities of the home Member State have 
reason to doubt the adequacy of the administrative structure (cid:214) governance system  
or  the  financial  situation  of  the  insurance  undertaking  or  the  good  repute  and 
professional  qualifications  or  experience  of  the  directors  or  managers  or  the 
authorised  agent,  taking  into  account  the  business  planned,  they  shall,  within  three 
months  of  receiving  all  the  information  referred  to  in  paragraph  2  Article  143(2), 
communicate that information to the competent⌦ supervisory ⌫ authorities of the 
⌦ host ⌫  Member  State  of  the  branch  and  shall  inform  the  ⌦ insurance ⌫ 
undertaking concerned accordingly ⌦ thereof ⌫. 

The  competent⌦ supervisory ⌫  authorities  of  the  home  Member  State  shall  also 
attest that the insurance undertaking has the minimum solvency margin (cid:214) covers the 
Solvency  Capital  Requirement  and  the  Minimum  Capital  Requirement calculated 
in accordance with Articles 16 (cid:214) 100 and (cid:214) 127  17. 

Where  the  competent⌦ supervisory ⌫  authorities  of  the  home  Member  State 
refuse  to  communicate  the  information  referred  to  in  paragraph  2  Article  143(2)  to 
the competent⌦ supervisory ⌫ authorities of the ⌦ host ⌫ Member State of the 
branch  they  shall  give  the  reasons  for  their  refusal  to  the  ⌦ insurance ⌫ 
undertaking  concerned  within  three  months  of  receiving  all  the  information  in 
question. 

That refusal or failure to  act  may be subject to a right to apply to the courts in the 
home Member State. 

the  branch  of  an 

insurance  undertaking 

Before 
the 
competent⌦ supervisory ⌫  authorities  of  the  ⌦ host ⌫  Member  State  of  the 
branch  shall,  ⌦ where  applicable, ⌫  within  two  months  of  receiving  the 
information  referred  to  in  paragraph  31,  inform  the  competent⌦ supervisory ⌫ 
authority of the home Member State, if appropriate, of the conditions under which, in 
the interest of the general good, that business must be carried on in the ⌦ host ⌫ 
Member State of the branch. (cid:214) The supervisory authority of the home Member State 
shall communicate this information to the insurance undertaking concerned.  

starts  business, 

31. 

2. 

43. 

EN 

163 

   EN 

 
 
 
 
(cid:208) 2002/83/EC Art.40 and 
92/49/EEC Art. 32 (adapted) 

5. On receiving a communication from ⌦ The insurance undertaking may establish 
the  branch  and  start  business  as  from  the  date  upon  which ⌫  the  competent 
authorities  ⌦ supervisory  authority ⌫  of  the  ⌦ home ⌫  Member  State  of  the 
branch  ⌦ has  received  such  a  communication ⌫  or,  if  no  communication  is 
received from them, on expiry of the period provided for in the first subparagraph 4, 
the branch may be established and start business. 

SECTION 2 - FREEDOM TO PROVIDE SERVICES: ⌦ BY INSURANCE 
UNDERTAKINGS ⌫ 

(cid:208) 2002/83/EC Art. 41 and 
92/49/EEC Art. 34 (adapted) 

⌦ SUBSECTION 1 - GENERAL PROVISIONS ⌫ 

Article 145 

pPrior notification to the home Member State 

Any  assurance  ⌦ insurance ⌫  undertaking  that  intends  to  carry  on  business  for  the  first 
time in one or more Member States under the freedom to provide services shall first inform 
⌦ notify ⌫  the  competent⌦ supervisory ⌫  authorities  of  the  home  Member  State, 
indicating the nature of the ⌦ risks or ⌫ commitments it proposes to cover. 

(cid:208) 2002/83/EC Article 42 and 
92/49/EEC Art.35 (adapted) 
(cid:214) new 

Article 146 

Freedom to provide services: nNotification by the home Member State 

1. 

Within  one  month  of  the  notification  provided  for  in  Article  41145,  the  competent 
⌦ supervisory ⌫ authorities of the home Member State shall communicate ⌦ the 
following ⌫  to  the  Member  State  or  Member  States  within  the  territory 
⌦ territories ⌫ of which the assurance ⌦ an insurance ⌫ undertaking intends to 
carry on business by way of ⌦ under ⌫ the freedom to provide services: 

(a) 

a certificate attesting that the assurance ⌦ insurance ⌫ undertaking (cid:214) covers 
the  Solvency  Capital  Requirement  and  Minimum  Capital  Requirement   has 
the  minimum  solvency  margin  calculated  in  accordance  with  Articles  (cid:214) 100 
and 127  28 and 29; 

(b) 

the  classes  ⌦ of 
undertaking has been authorised to offer; 

insurance ⌫  which 

the  assurance  ⌦ insurance ⌫ 

EN 

164 

   EN 

 
 
 
 
 
 
(c) 

the  nature  of  the  ⌦ risks  or ⌫  commitments  which  the  ⌦ insurance ⌫ 
assurance  undertaking  proposes  to  cover  in  the  ⌦ host ⌫  Member  State  of 
the provision of services. 

At the same time, they ⌦ the supervisory authorities of the home Member State ⌫ 
shall  inform  the  assurance  ⌦ insurance ⌫  undertaking  concerned  accordingly 
⌦ of that communication ⌫ . 

(cid:208) 92/49/EEC Art.35 (adapted) 

2. 

Each  Member  State  ⌦ States ⌫  within  the  territory  of  which  an  ⌦ non-life 
insurance ⌫  undertaking  intends,  under  the  freedom  to  provide  services,  to  cover 
risks  in  class  10  of  in  point  A  of  the  Annex  I  to  Directive  73/239/EEC  other  than 
carrier's liability may require that the ⌦ insurance ⌫ undertaking ⌦ to submit the 
following ⌫ : 

(a) 

communicate the name and address of the representative referred to in point (h) 
of Article 12a (4) 18(1)of this Directive, 

(b)  produce a declaration that the undertaking ⌦ it ⌫ has become a member of 
the  national  bureau  and  national  guarantee  fund  of  the  ⌦ host ⌫  Member 
State of the provision of services. 

23. 

Where  the  competent⌦ supervisory ⌫  authorities  of  the  home  Member  State  do 
not  communicate  the  information  referred  to  in  paragraph  1  within  the  period  laid 
down  ⌦ therein ⌫  ,  they  shall  give  the  reasons  for  their  refusal  to  the 
⌦ insurance ⌫ undertaking within that same period. 

That refusal ⌦ or failure to act ⌫ shall be subject to a right to apply to the courts in 
the home Member State. 

34. 

The ⌦ insurance ⌫ undertaking may start business on ⌦ as from ⌫ the certified 
date  on  which  it  is  informed  of  the  communication  provided  for  in  the  first 
subparagraph of paragraph 1. 

(cid:208) 2002/83/EC Article 43 and 
92/49/EEC Art.36 (adapted) 

Article 147 

Freedom to provide services: cChanges in the nature of ⌦ the risks or ⌫ commitments 

Any  change  which  an  assurance  ⌦ insurance ⌫  undertaking  intends  to  make  to  the 
information  referred  to  in  Article  41  145  shall  be  subject  to  the  procedure  provided  for  in 
Articles 41 145 and 42 146. 

EN 

165 

   EN 

 
 
 
 
⌦ SUBSECTION 2 - THIRD PARTY MOTOR VEHICLE LIABILITY ⌫ 

(cid:208) 90/618/EEC Art. 6 (adapted) 

Article 148 

⌦ Compulsory insurance on third party motor vehicle liability ⌫ 

This Article shall apply wWhere an ⌦ non-life insurance ⌫ undertaking, through 
an  establishment  situated  in  a  ⌦ one ⌫  Member  State,  covers  a  risk,  other  than 
carrier's liability, classified under class 10 of in point A of the Annex I to Directive 
73/239/EEC which is situated in another Member State., 

2.  Tthe  ⌦ host ⌫  Member  State  of  provision  of  services  shall  require  the 
⌦ that ⌫ undertaking to become a member of and participate in the financing of its 
national bureau and its national guarantee fund. 

The  undertaking  shall  not,  however,  be  required  to  make  any  payment  or 
⌦ financial ⌫  contribution  to  the  bureau  and  fund  of  the  Member  State  of 
provision of services ⌦ referred to in paragraph 1 shall only be made ⌫ in respect 
of  ⌦ relation  to ⌫  risks  covered  by  way  of  provision  of  services  other  than  one 
calculated on the same basis as for undertakings covering risks, other than carrier's 
liability, in class 10 ⌦ point A of Annex I covered by way of provision of services. 
That  contribution  shall  be  calculated  on  the  same  basis  as  for  non-life  insurance 
undertakings  covering  those  risks, ⌫  through  an  establishment  situated  in  that 
Member State,. 

⌦ The  calculation  shall  be  made ⌫  by  reference  to  its  ⌦ the  insurance 
undertakings’ ⌫  premium  income  from  that  class  in  that ⌦ the  host ⌫  Member 
State or the number of risks in that class covered there. 

This  Directive  shall  not  prevent  an ⌦ The  host  Member  State  may  require  an ⌫ 
insurance  undertaking  providing  services  from  being  required  to  comply  with  the 
rules in the ⌦ that ⌫ Member State of provision of services concerning the cover 
of  aggravated  risks,  insofar  as  they  apply  to  established  ⌦ non-life  insurance ⌫ 
undertakings ⌦ established in that State ⌫ . 

1. 

2. 

3. 

Article 149 

⌦ Non-discrimination of persons pursuing claims ⌫ 

4.  The  ⌦ host ⌫  Member  State  of  provision  of  services  shall  require  the  ⌦ non-life 
insurance ⌫  undertaking  to  ensure  that  persons  pursuing  claims  arising  out  of  events 
occurring in its territory are not placed in a less favourable situation as a result of the fact that 
the undertaking is covering a risk, other than carrier's liability, in class 10 in point A of Annex 
I by way of provision of services rather than through an establishment ⌦ branch ⌫ situated 
in that State. 

EN 

166 

   EN 

 
 
 
 
Article 150 

⌦ Representative ⌫ 

1. 

2. 

3. 

4. 

For  this  purpose  ⌦ the  purposes  referred  to  in  Article  149 ⌫,  the  ⌦ host ⌫ 
Member  State  of  provision  of  services  shall  require  the  ⌦ non-life  insurance ⌫ 
undertaking  to  appoint  a  representative  resident  or  established  in  its  territory  who 
shall  collect  all  necessary  information  in  relation  to  claims,  and  shall  possess 
sufficient powers to represent the undertaking in relation to persons suffering damage 
who could pursue claims, including the payment of such claims, and to represent it 
or, where necessary, to have it represented before the courts and  authorities  of  that 
Member State in relation to these claims. 

The  representative  may  also  be  required  to  represent  the ⌦ non-life  insurance ⌫ 
undertaking  before  the  competent  ⌦ supervisory ⌫  authorities  of  the  ⌦ host 
Member ⌫ State of provision of services with regard to checking the existence and 
validity of motor vehicle liability insurance policies. 

The  ⌦ host ⌫  Member  State  of  provision  of  services  may  not  require  that 
appointee ⌦ representative ⌫  to  undertake  activities  on  behalf  of  the ⌦ non-life 
insurance ⌫ undertaking which appointed him other than those set out in the second 
and third subparagraphs 1. 

The appointment of the representative shall not in itself constitute the opening of a 
branch or agency for the purpose of Article 6 (2) (b) of Directive 73/239/EEC 143 
and the representative shall not be an establishment within the meaning of Article 2 
(c) of this Directive. 

(cid:208) 2000/26/EC Art. 9 (adapted) 

If tThe insurance undertaking has failed to appoint a representative, ⌦ may, subject 
to  the  approval  of  the  home ⌫  Member  States  may  give  their  approval  to 
⌦ appoint ⌫ the claims representative appointed ⌦ referred to ⌫ in accordance 
with  Article  4  of  Directive  2000/26/EC  of  the  European  Parliament  and  of  the 
Council72  assuming  ⌦ to  assume ⌫  the  function  of  the  representative  appointed 
according to ⌦ referred to in ⌫ to this paragraph 1. 

72 

OJ L 181, 20.7.2000, p. 65. 

EN 

167 

   EN 

 
 
 
                                                 
⌦ SECTION 3 - COMPETENCIES OF THE SUPERVISORY AUTHORITIES OF THE 
HOST MEMBER STATE ⌫ 

(cid:208) 2002/83/EC Article 44 
(adapted) 

⌦ SUBSECTION 1 - INSURANCE ⌫ 

Article 151 

Language 

The competent ⌦ supervisory ⌫ authorities of the ⌦ host ⌫ Member State of the branch 
or the Member State of the provision of services may require that the information which they 
are  authorised  under  this  Directive  to  request  with  regard  to  the  business  of  assurance 
⌦ insurance ⌫  undertakings  operating  in  the  territory  of  that  ⌦ Member ⌫  State  shall 
⌦ to ⌫ be supplied to them in the official language or languages of that State. 

(cid:208) 92/49/EEC Art. 39 (adapted) 

Article 152 

⌦ Prior notification and prior approval ⌫ 

2.1 

2. 

3. 

The ⌦ host ⌫ Member State of the branch or of the provision of services shall not 
adopt  provisions  requiring  the  prior  approval  or  systematic  notification  of  general 
and  special  policy  conditions,  scales  of  premiums,  ⌦ or,  in  the  case  of  life 
insurance,  the  technical  bases  used  in  particular  for  calculating  scales  of  premiums 
and technical provisions, ⌫ or ⌦ the ⌫ forms and other printed documents which 
an ⌦ insurance ⌫ undertaking intends to use in its dealings with policyholders. 

It ⌦ The host Member State ⌫ may only require an ⌦ insurance ⌫ undertaking 
that  proposes  to  carry  on  insurance  business  within  its  territory,  under  the  right  of 
establishment  or  the  freedom  to  provide  services,  to  effect  non-systematic 
notification  of  those  policy  conditions  and  other  documents  for  the  purpose  of 
verifying compliance with its national provisions concerning insurance contracts, and 
that  requirement  may  not  constitute  a  prior  condition  for  an  ⌦ insurance ⌫ 
undertaking's ⌦ to ⌫ carrying on its business. 

The ⌦ host ⌫ Member State of the branch or of the provision of services may not 
retain  or  introduce  prior  notification  or  approval  of  proposed  increases  in  premium 
rates except as part of general price-control systems. 

EN 

168 

   EN 

 
 
 
 
 
(cid:208) 2002/83/EC Art. 46 (adapted) 
(cid:206)1 2005/1/EC Art. 8.1 
(cid:214) new 

Article 153 

Assurance ⌦ Insurance ⌫ undertakings not complying with the legal provisions 

If the competent ⌦ supervisory ⌫ authorities of a Member State establish that an 
assurance ⌦ insurance ⌫ undertaking with a branch or carrying on business under 
the  freedom  to  provide  services  in  its  territory  is  not  complying  with  the  legal 
provisions  applicable  to  it  in  that  ⌦ Member ⌫  State,  they  shall  require  the 
assurance ⌦ insurance ⌫ undertaking concerned to remedy that irregular situation. 

If the assurance ⌦ insurance ⌫ undertaking in question ⌦ concerned ⌫ fails to 
take  the  necessary  action,  the  competent  ⌦ supervisory ⌫  authorities  of  the 
Member  State  concerned  shall  inform  the  competent ⌦ supervisory ⌫  authorities 
of the home Member State accordingly. 

The latter ⌦ supervisory ⌫ authorities ⌦ of the home Member State ⌫ shall, at 
the  earliest  opportunity,  take  all  appropriate  measures  to  ensure  that  the  assurance 
⌦ insurance ⌫ undertaking concerned remedies that irregular situation. 

those  measures  shall  be  communicated 

the  competent 
The  nature  of 
⌦ supervisory ⌫ authorities of the ⌦ home ⌫ Member State concerned ⌦ shall 
inform  the  supervisory  authorities  of  the  host  Member  State  of  the  measures 
taken ⌫ . 

to 

If, despite the measures taken by the home Member State or because those measures 
prove  inadequate  or  are  lacking  in  that  State,  the  assurance  ⌦ insurance ⌫ 
undertaking  persists  in  violating  the  legal  provisions  in  force  in  the  ⌦ host ⌫ 
Member  State  concerned  ⌦ or  because  those  measures  prove  inadequate ⌫,  the 
latter ⌦ supervisory authorities of the host Member State ⌫ may, after informing 
the  competent  ⌦ supervisory ⌫  authorities  of  the  home  Member  State,  take 
appropriate measures to prevent or penalise further irregularities, including, in so far 
as is strictly necessary, preventing that undertaking from continuing to conclude new 
assurance  ⌦ insurance ⌫  contracts  within  its  territory  ⌦ of  the  host  Member 
State ⌫ . 

Member  States  shall  ensure  that  in  their  territories  it  is  possible  to  serve  the  legal 
documents necessary for such measures on assurance ⌦ insurance ⌫ undertakings. 

Paragraphs 21, 32 and 43 shall not affect the emergency power of the Member States 
concerned  to  take  appropriate  ⌦ emergency ⌫  measures  to  prevent  or  penalise 
irregularities committed within their territories. This ⌦ That power ⌫ shall include 
the  possibility  of  preventing  assurance  ⌦ insurance ⌫  undertakings  from 
continuing  to  conclude  new  assurance  ⌦ insurance ⌫  contracts  within  their 
territories. 

Paragraphs 21, 32 and 43 shall not affect the power of the Member States to penalise 
infringements within their territories. 

If an assurance ⌦ insurance ⌫ undertaking which has committed an infringement 
has  an  establishment  ⌦ branch ⌫  or  possesses  property  in  the  Member  State 

21. 

32. 

43. 

54. 

65. 

76. 

EN 

169 

   EN 

 
 
 
87. 

18. 

concerned,  the  competent  ⌦ supervisory ⌫  authorities  of  the  latter  ⌦ that 
Member  State ⌫  may,  in  accordance  with  national  law,  apply  the ⌦ national ⌫ 
administrative  penalties  (cid:214) sanctions   prescribed  for  that  infringement  by  way  of 
enforcement against that establishment ⌦ branch ⌫ or property. 

Any measure adopted under paragraphs 32 to 76 involving penalties (cid:214) sanctions  
or  restrictions  on  the  conduct  of  assurance⌦ insurance ⌫  business  must  be 
properly  reasoned  and  communicated  to  the  assurance⌦ insurance ⌫ undertaking 
concerned. 

Any assurance undertaking carrying on business under the right of establishment or 
the  freedom  to  provide  services  ⌦ Insurance  undertakings ⌫  shall  submit  to  the 
competent⌦ supervisory ⌫  authorities  of  the  ⌦ host ⌫  Member  State  of  the 
branch and/or of the Member State of the provision of services (cid:214) at their request  
all documents requested of it⌦them ⌫ for the purposes of this Article paragraphs 1 
to 7 in so far as assurance ⌦ to the extent that insurance ⌫ undertakings the head 
office of which is in those ⌦that ⌫Member States are also obliged to do so. 

9. 

⌦ Member  States  shall  inform  the  Commission  of  the  number  and  types  of  cases 
which led to refusals under Articles 144 and 146 in which measures have been taken 
under paragraph 4. ⌫ 

Every two years, ⌦ On the basis of that information ⌫ (cid:206)1 the Commission shall 
inform the European Insurance and Occupational Pensions Committee of  cases in 
which, in each Member State, authorisation has been refused pursuant to Articles 40 
or 42 or measures have been taken under paragraph 4 of this Article. Member States 
shall  cooperate  with  the  Commission  by  providing  it  with  the  information  required 
for that report ⌦ , every two years ⌫ . 

(cid:208) 2002/83/EC Art. 47 (adapted) 

Article 154 

Advertising 

Nothing  in  this  Directive  shall  prevent  assurance  ⌦ Insurance ⌫  undertakings  with  head 
offices in other Member States from advertising ⌦ may advertise ⌫ their services, through 
all  available  means  of  communication,  in  the  ⌦ host ⌫  Member  State  of  the  branch  or 
Member State of the provision of services, subject to any ⌦ the ⌫ rules governing the form 
and content of such advertising adopted in the interest of the general good. 

(cid:208) 2002/83/EC Art. 50 (adapted) 

Article 155 

Taxes on premiums 

1. 

EN 

prejudice 

Without 
every 
assurance⌦ insurance ⌫ contract shall be subject exclusively to the indirect taxes 
and parafiscal charges on assurance⌦ insurance ⌫ premiums in the Member State 
of ⌦ in which the risk is situated or ⌫ the commitment ⌦ is covered ⌫,. 

harmonisation, 

subsequent 

any 

to 

170 

   EN 

 
 
 
 
 
(cid:208) 92/49/EEC Art. 46 (adapted) 

In derogation from the first indent of Article 2 (d) of Directive 88/357/EEC, and fFor 
the purposes of this the first subparagraph, moveable property contained in a building 
situated  within  the  territory  of  a  Member  State,  except  for  goods  in  commercial 
transit, shall be ⌦ considered as ⌫ a risk situated in that Member State, even if the 
building and its contents are not covered by the same insurance policy. 

(cid:208) 2002/83/EC Art. 50 (adapted) 

and also, with regard to ⌦ In the case of ⌫ Spain, ⌦ an insurance contract shall 
also  be  subject ⌫  to  the  surcharges  legally  established  in  favour  of  the  Spanish 
«Consorcio  de  Compensación  de  Seguros»  for  the  performance  of  its  functions 
relating to the compensation of losses arising from extraordinary events occurring in 
that Member State. 

The  law  applicable  to  the  contract  pursuant  to ⌦ under ⌫  Articles  32176  to  182 
and 184 to 187 shall not affect the fiscal arrangements applicable. 

to 

Pending future harmonisation, eEach Member State shall apply ⌦ its own national 
those  assurance⌦ insurance ⌫  undertakings  which  cover 
provisions ⌫ 
⌦ risks or ⌫ commitments situated within its territory its own national provisions 
for  measures  to  ensure  the  collection  of  indirect  taxes  and  parafiscal  charges  due 
under paragraph 1. 

(cid:208) 2005/68/EC Art. 47 (adapted) 
(cid:214) new 

⌦ SUBSECTION 2 - REINSURANCE ⌫ 

Article 156 

Reinsurance undertakings not complying with the legal provisions 

If  the  competent⌦ supervisory ⌫  authorities  of  the  host  ⌦ a ⌫  Member  State 
establish that a reinsurance undertaking with a branch or carrying on business under 
the  freedom  to  provide  services  within  its  territory  is  not  complying  with  the  legal 
provisions  applicable  to  it  in  that  ⌦ Member ⌫  State,  they  shall  require  the 
reinsurance  undertaking  concerned  to  remedy  that  irregular  situation.  At  the  same 
time, they shall refer those findings to the competent⌦ supervisory ⌫ authority of 
the home Member State. 

If, despite the measures taken by the competent authority of the home Member State 
or because such measures prove inadequate, the reinsurance undertaking persists in 
infringing ⌦ violating ⌫ the  legal provisions applicable  to it  in  the host  Member 
State ⌦ or because such measures prove inadequate ⌫ , the latter ⌦ supervisory 
authorities  of 
the 
competent⌦ supervisory ⌫ authority of the home Member State, take appropriate 
measures  to  prevent  or  penalise  further  infringements  ⌦ irregularities ⌫ 
, 
including,  insofar  as  is  strictly  necessary,  preventing  that  reinsurance  undertaking 

the  host  Member  State ⌫  may, 

informing 

after 

2. 

3. 

1. 

2. 

EN 

171 

   EN 

 
 
 
 
 
from continuing to conclude new reinsurance contracts within its ⌦ the ⌫ territory 
⌦ of the host Member State ⌫ . 

Member States shall ensure that within their territories it is possible to serve the legal 
documents necessary for such measures on reinsurance undertakings. 

23. 

Any  measure  adopted  under  paragraphs  1  and  2  involving  penalties  (cid:214) sanctions  
or restrictions on the conduct of reinsurance business shall be properly reasoned and 
communicated to the reinsurance undertaking concerned. 

⌦ SECTION 4 - STATISTICAL INFORMATION ⌫ 

(cid:208) 2002/83/EC Art. 49 (adapted) 

Article 157 

Statistical information on cross-border activities 

(cid:208) 92/49/EEC Art. 44 (adapted) 

2. Every insurance undertaking shall inform the competent ⌦ supervisory ⌫authority of its 
home  Member  State,  separately  in  respect  of  transactions  carried  out  under  the  right  of 
establishment and those carried out under the freedom to provide services, of the amount of 
the premiums, claims and commissions, without deduction of reinsurance, by Member State 
and ⌦ as follows: ⌫ 

⌦ (a) 

for  non-life  insurance ⌫  by  group  of  classes,  ⌦ as  set  out  in  point  B  of  Annex 
I; ⌫ 

⌦ (b)  for life insurance by each of classes I to IX, as set out in Annex II. ⌫ 

and  also  aAs  regards  class  10  of  in  point  A  of  the  Annex  I  to  Directive  73/239/EEC,  not 
including carrier's liability, ⌦ the undertaking concerned shall also inform that supervisory 
authority of ⌫ the frequency and average cost of claims. 

The  competent⌦ supervisory ⌫  authority  of  the  home  Member  State  shall  forward  that 
⌦ the ⌫  information  ⌦ referred  to  in  the  first  and  second  subparagraphs ⌫  within  a 
reasonable time and in aggregate form to the competent⌦ supervisory ⌫ authorities of each 
of the Member States concerned which so ⌦ upon their ⌫ request. 

⌦ SECTION 5 - TREATMENT OF CONTRACTS OF BRANCHES IN WINDING-UP 
PROCEEDINGS ⌫ 

(cid:208) 2002/83/EC Art. 48 (adapted) 

Article 158 

Winding-up ⌦ of insurance undertakings ⌫ 

Should  ⌦ Where ⌫  an  assurance⌦ insurance ⌫  undertaking  be  ⌦ is ⌫  wound  up, 
commitments arising out of contracts underwritten through a branch or under the freedom to 
provide  services  shall  be  met  in  the  same  way  as  those  arising  out  of  that  undertaking's 

EN 

172 

   EN 

 
 
 
 
 
 
⌦ the ⌫  other  assurance⌦ insurance ⌫  contracts  ⌦ of  that  undertaking ⌫  ,  without 
distinction  as  to  nationality  as  far  as  the  lives  assured  ⌦ persons  insured ⌫  and  the 
beneficiaries are concerned. 

(cid:208) 2005/68/EC Art. 48 (adapted) 

Article 159 

Winding-up ⌦ of reinsurance undertakings ⌫ 

In  the  event  of  ⌦ Where ⌫  a  reinsurance  undertaking'  is  being  wound  up,  commitments 
arising  out  of  contracts  underwritten  through  a  branch  or  under  the  freedom  to  provide 
services  shall  be  met  in  the  same  way  as  those  arising  out  of  that  undertaking's  ⌦ the ⌫ 
other reinsurance contracts ⌦ of that undertaking ⌫ . 

(cid:208) 2002/83/EC Art. 51 (adapted) 

TITLE V CHAPTER IX 

RULES APPLICABLE TO AGENCIES ORBRANCHES 
ESTABLISHED WITHIN THE COMMUNITY AND 
BELONGING TO ⌦ INSURANCE OR REINSURANCE ⌫ 
UNDERTAKINGS WHOSE HEAD OFFICES ARE OUTSIDE 
THE COMMUNITY 

⌦ SECTION 1 – TAKING UP OF BUSINESS ⌫ 

Article 160 

Principles and conditions of authorisation ⌦ and conditions ⌫ 

1. 

Each Member State ⌦ States ⌫ shall make access to the activities ⌦ business ⌫ 
referred to in the first subparagraph of Article 2(1) by any undertaking whose head 
office is outside the Community subject to an official authorisation. 

2. 

A  Member  State  may  grant  an  authorisation  if  the  undertaking  fulfils  at  least  the 
following conditions: 

(cid:208) 2002/83/EC Art. 51 and 
73/239/EEC Art. 23 

(a) 

it is entitled to undertake⌦ carry on ⌫ insurance business under its national 
law; 

(cid:208) 73/239/EEC Art. 23 (adapted) 

EN 

173 

   EN 

 
 
 
 
 
 
 
(b) 

it establishes an agency or branch in the territory of such Member State; 

(cid:208) 2002/83/EC Art. 51 and 
73/239/EEC Art. 23 (adapted) 

(cid:208) 73/239/EEC Art. 23 (adapted) 

(c) 

it  undertakes  to  establish  ⌦ set  up ⌫  at  the  place  of  management  of  the 
agency  or  branch  accounts  specific  to  the  business  which  it  undertakes 
⌦ carries on ⌫ there, and to keep there all the records relating to the business 
transacted; 

(d) 

it  designates  an  authorized  agent  ⌦ a  general  representative ⌫,  to  be 
approved by the competent⌦ supervisory ⌫ authorities; 

(cid:208) 2002/83/EC Art. 51 (adapted) 
(cid:214) new 

(d) 

(e) 

it  designates  a  general  representative,  to  be  approved  by  the  competent 
authorities; 

it  possesses  in  the  Member  State  where  it  carries  on  an  activity  ⌦ its 
business ⌫  assets  of  an  amount  equal  in  value  to  at  least  one  half  of  the 
(cid:214) absolute  floor   minimum  amount  prescribed  in  point  (d)  of  Article 
127(1)29(2),  first  subparagraph,  in  respect  of  the  (cid:214) Minimum  Capital 
Requirement   guarantee  fund  and  deposits  one  quarter ⌦ fourth ⌫  of  the 
minimum amount (cid:214) that absolute floor  as security; 

(cid:208) 73/239/EEC Art. 23 
(cid:214) new 

(f) 

it undertakes to (cid:214) cover the Solvency Capital Requirement and the Minimum 
Capital  Requirement   keep  a  margin  of  solvency  in  accordance  with  the 
requirements referred to in Articles 25 (cid:214) 100 and 126 ; 

(cid:208) 2000/26/EC Art. 8.b 

(hg)  it communicates the name and address of the claims representative appointed 
in each Member State other than the Member State in which the authorisation 
is sought if the risks to be covered are classified in class 10 of point A of the in 
Annex I, other than carrier's liability. 

(gh)  it  submits  a  scheme  of  operations  in  accordance  with  the  provisions  of  in 

Article 11 (1) and (2) 161; 

(cid:208) 73/239/EEC Art. 23 

EN 

174 

   EN 

 
 
 
 
 
 
 
(i) 

it fulfills the governance requirements laid down in Chapter IV, Section 2. 

(cid:216) new 

(cid:208) 2002/83/EC Art 51(1) and 
73/239/EEC Art 23 (adapted) 
(cid:214) new 

13. 

Each(cid:214) For the purposes of this Chapter “branch" means any permanent presence in 
the territorry of  a  Member State shall make access to the business referred to in 
Article 1 by (cid:214) of  any (cid:214) insurance  undertaking (cid:214) referred to in paragraph 1,  
whose  head  office  is  outside  the  Community  subject  to  an  official  (cid:214) which 
receives   authorisation  (cid:214) in  that  Member  State  and  which  carries  out  insurance 
business . 

(cid:208) 2002/83/EC (adapted) 

Article 161 

⌦ Scheme of operations of the branch ⌫ 

31. 

The scheme of operations of the agency or branch referred to in paragraph 2(g) point 
(h) of Article 160(2) shall contain the following particulars or evidence of: 

(a) 

the nature of the ⌦ risks or ⌫ commitments which the undertaking proposes 
to cover; 

(b) 

the guiding principles as to reinsurance; 

(cid:216) new 

(c) 

(d) 

estimates of the future Solvency Capital Requirement, as laid down in Chapter 
VI, Section 4, on the basis of a forecast balance sheet, as well as the method of 
calculation used to derive those estimates;  

estimates of the future Minimum Capital Requirement, as laid down in Chapter 
VI, Section 5 , on the basis of a forecast balance sheet, as well as the method of 
calculation used to derive those estimates;  

(cid:208) 2002/83/EC (adapted) 
(cid:214) new 

(ce) 

the  state  of  the  undertaking's  (cid:214) eligible  own  funds  and  eligible  basic  own 
funds   solvency  margin  and  guarantee  fund  ⌦ of  the  undertaking ⌫ 
(cid:214) with  respect  to  the  Solvency  Capital  Requirement  and  Minimum  Capital 
Requirement as  referred to in Articles 55 Chapter VI, Sections 4 and 5; 

(df)  estimates relating to ⌦ of ⌫ the cost of setting up the administrative services 
and the organisation for securing business, and the financial resources intended 
to meet those costs ⌦ and, if the risks to be covered are classified in class 18 

EN 

175 

   EN 

 
 
 
 
 
 
 
in  point  A  of  Annex  I,  the  resources  available  for  the  provision  of  the 
assistance ⌫ ; 

(g) 

information on the structure of the governance system.  

(cid:216) new 

(cid:208) 2002/83/EC (adapted) 
(cid:214) new 

and, 2. 

iIn  addition  ⌦ to  the  requirements  set  out  in  paragraph  1,  the  scheme  of 
operations ⌫ shall include ⌦ the following ⌫ , for the first three financial years: 

(e)  a  plan  setting  out  detailed  estimates  of  income  and  expenditure  in  respect  of 
direct business, reinsurance acceptances and reinsurance cessions; 

(fa)  a forecast balance sheet; 

(gb)  estimates  relating  to  ⌦ of ⌫  the  financial  resources  intended  to  cover 
underwriting 
the  Minimum  Capital 
Requirement  and the (cid:214) Solvency Capital Requirement  solvency margin, 

liabilities  (cid:214) technical  provisions, 

(c)  ⌦ for non-life insurance also the following: ⌫ 

⌦ (i)  estimates  of  management  expenses  other  than  installation  costs,  in 

particular current general expenses and commissions; ⌫ 

⌦ (ii) estimates of premiums or contributions and claims; ⌫ 

(d)  ⌦ for life insurance, also a plan setting out detailed estimates of income and 
expenditure  in  respect  of  direct  business,  reinsurance  acceptances  and 
reinsurance cessions. ⌫ 

43. 

A  Member  State  ⌦ States ⌫  may  require  ⌦ life  insurance  undertakings  to 
submit ⌫ systematic notification of the technical bases used for calculating scales of 
premiums  and  technical  provisions,  without  that  requirement  constituting  a  prior 
condition for an assurance ⌦ that ⌫ undertaking to carry on its business. 

(cid:208) 2002/83/EC Art. 53 (adapted) 
(cid:214) new 

Article 162 

Transfer of portfolio 

1. 

Under  the  conditions  laid  down  by  national  law,  each  Member  State ⌦ States ⌫ 
shall  authorise  agencies  and  branches  set  up  within  its  ⌦ their ⌫  territory  and 
covered by this Title Chapter to transfer all or part of their portfolios of contracts to 
an  accepting  office ⌦ undertaking ⌫established  in  the  same  Member  State  if  the 
competent⌦ supervisory ⌫  authorities  of  that  Member  State  or,  if  ⌦ where ⌫ 
appropriate, those of the Member State referred to in Article 56 165, certify that after 
taking the transfer into account the accepting office ⌦ undertaking ⌫possesses the 
necessary (cid:214) eligible own funds to cover the Solvency Capital Requirement referred 
to in Article 100 subparagraph 1solvency margin. 

EN 

176 

   EN 

 
 
 
 
 
 
2. 

3. 

4. 

5. 

6. 

(cid:208) 92/49/EEC Art. 53 (adapted) 
(cid:214) new 

Under  the  conditions  laid  down  by  national  law,  each  Member  State ⌦ States ⌫ 
shall  authorise  agencies  and  branches  set  up  within  its  ⌦ their ⌫  territory  and 
covered by this Title Chapter to transfer all or part of their portfolios of contracts to 
an  insurance  undertaking  with  a  head  office  in  another  Member  State  if  the 
competent  ⌦ supervisory ⌫  authorities  of  that  Member  State  certify  that  after 
taking the transfer into account the accepting office ⌦ undertaking ⌫ possesses the 
necessary (cid:214) eligible own funds to cover the Solvency Capital Requirement referred 
to in Article 100 subparagraph 1solvency margin. 

If  under  the  conditions  laid  down  by  national  law  a  Member  State  authorises 
agencies and branches set up within its territory and covered by this Title Chapter to 
transfer all or part of their portfolios of contracts to an agency or branch covered by 
this  Title  Chapter  and  set  up  within  the  territory  of  another  Member  State,  it  shall 
ensure that the competent⌦ supervisory ⌫ authorities of the Member State of the 
accepting office ⌦ undertaking ⌫ or, if appropriate, of the Member State referred 
to in Article 26 165 certify ⌦ the following: ⌫ 

(a) 

taking 

that  after 
the  accepting  office 
⌦ undertaking ⌫ possesses the necessary (cid:214) eligible own funds to cover the 
Solvency Capital Requirement solvency margin,; 

into  account 

transfer 

the 

(b) 

that  the  law  of  the  Member  State  of  the  accepting  office  ⌦ undertaking ⌫ 
permits such a transfer; 

(c) 

and that that ⌦ Member ⌫ State has agreed to the transfer. 

In the circumstances referred to in paragraphs 1, 2 and 3, the Member State in which 
the  transferring  agency  or  branch  is  situated  shall  authorise  the  transfer  after 
obtaining  the  agreement  of  the  competent⌦ supervisory ⌫  authorities  of  the 
Member  State  in  which  the  risks  are  situated,  ⌦ or  the  Member  State  of  the 
commitment, ⌫  where  different  from  the  Member  State  in  which  the  transferring 
agency or branch is situated. 

The  competent⌦ supervisory ⌫  authorities  of  the  Member  States  consulted  shall 
give  their  opinion  or  consent  to  the  competent⌦ supervisory ⌫  authorities  of  the 
home Member State of the transferring insurance undertaking within three months of 
receiving  a  request.;  tThe  absence  of  any  response  from  the  authorities  consulted 
within  that  period  shall  be  considered  equivalent  to  a  favourable  opinion  or  tacit 
consent. 

A  transfer  authorised  in  accordance  with  this  Article  paragraphs  1  to  5  shall  be 
published  as  laid  down  by  national  law  in  the  Member  State  in  which  the  risk  is 
situated ⌦ or the Member State of the commitment ⌫ . 

Such transfers shall automatically be valid against policyholders, insured persons and 
any other persons having rights or obligations arising out of the contracts transferred. 

EN 

177 

   EN 

 
 
(cid:208) 2002/83/EC and 92/49/EEC 
Art. 53 (adapted) 

This  provision  The  first  and  second  subparagraphs  shall  not  affect  the  Member 
States'  right  ⌦ of  the  Member  States ⌫  to  give  policyholders  the  option  of 
cancelling contracts within a fixed period after a transfer. 

(cid:208) 2002/83/EC Art. 54 (adapted) 
(cid:214) new 

Article 163 

Technical provisions 

Member  States  shall  require  undertakings  to  establish ⌦ adequate  technical ⌫  provisions, 
referred  to  in  Article  20,  adequate  to  cover  the  underwriting  liabilities  (cid:214) insurance  and 
reinsurance  obligations   assumed  in  their  territories  ⌦ calculated  in  accordance  with 
Chapter VI, Section 2. Member States shall require undertakings to value assets and liabilities 
in  accordance  with  Chapter  VI,  Section  1  and  determine  own  funds  in  accordance  with 
Chapter  VI,  Section  3 ⌫.Member  States  shall  see  that  the  agency  or  branch  covers  such 
provisions by means of assets which are equivalent to such provisions and matching assets in 
accordance with Annex II. 

The  law  of  the  Member  States  shall  be  applicable  to  the  calculation  of  such  provisions,  the 
determination of categories of investment and the valuation of assets, and where appropriate, 
the determination of the extent to which these assets may be used for the purpose of covering 
such provisions. 

The Member State in question shall require that the assets covering these provisions, shall be 
localised in its territory. Article 20(4) shall, however, apply. 

(cid:208) 2002/83/EC Art. 55 (adapted) 
(cid:214) new 

Article 164 

Solvency margin (cid:214) Solvency Capital Requirement  and (cid:214) Minimum Capital 
Requirement  guarantee fund 

1. 

Each  Member  State  shall  require  of  agencies  or  ⌦ for ⌫  branches  ⌦ which 
are ⌫ set up in its territory an (cid:214) amount of eligible own funds  solvency margin 
consisting of the items listed ⌦ referred to ⌫ in Article 27 (cid:214) 98(4)  . 

The minimum solvency margin (cid:214) Solvency Capital Requirement and the Minimum 
Capital  Requirement   shall  be  calculated  in  accordance  with  ⌦ the  provisions 
of ⌫ (cid:214) Chapter VI, Sections 4 and 5  Article 28. 

However,  for  the  purpose  of  calculating  this  margin  (cid:214) the  Solvency  Capital 
Requirement and the Minimum Capital Requirement, account shall be taken ⌦ of 
the following: ⌫ 

EN 

178 

   EN 

 
 
 
 
 
 
⌦ (a) 

for  non-life  insurance,  only  of  the  business  carried  on  by  the  branch 

concerned; ⌫ 

(b)  ⌦ for  life  insurance, ⌫  only  of  the  operations  effected  by  the  agency  or 

branch concerned. 

2. 

One third of the minimum solvency margin shall constitute the guarantee fund. 

However,  the  amount  of  this  fund  may  not  be  less  than  one  half  of  the  minimum 
required  under  Article  29(2)  first  subparagraph.  The  initial  deposit  lodged  in 
accordance with Article 51(2)(e) shall be counted towards such guarantee fund. 

The  (cid:214) eligible  amount  of  basic  own  funds  required  to  cover  the  Minimum  Capital 
Requirement   guarantee  fund  and  the  (cid:214) absolute  floor   minimum  of  such 
⌦ that ⌫  fund  (cid:214) Minimum  Capital  Requirement   shall  be  constituted  in 
accordance with (cid:214) Article 98(5)  Article 29. 

(cid:208) 73/239/EEC Art. 25 (adapted) 
(cid:214) new 

2.3. 

One-third of the solvency margin shall constitute the guarantee fund. The guarantee 
fund (cid:214) eligible amount of basic own funds  may not be less than one-half of the 
minimum (cid:214) absolute floor  required under point (d) of Article 17 (2) 127(1). 

The  initial  deposit  lodged  in  accordance  with  point  (e)  of  Article  23  (2)  (e)  160(2) 
shall  be  counted  towards  such  guarantee  fund  (cid:214) eligible  basic  own  funds  to  cover 
the Minimum Capital Requirement  . 

(cid:208) 2002/83/EC Art. 55 (adapted) 
(cid:214) new 

3.4. 

The assets representing the minimum (cid:214) Solvency Capital Requirement  solvency 
margin must be kept within the Member State where ⌦ the ⌫ activities are carried 
on up to the amount of the guarantee fund (cid:214) Minimum Capital Requirement  and 
the excess within the Community. 

(cid:208) 2002/83/EC Art. 56 and 
84/641/EEC Art. 12 

Article 165 

Advantages to undertakings authorised in more than one Member State 

1. 

Any undertaking which has requested or obtained authorisation from more than one 
Member  State  may  apply  for  the  following  advantages  which  may  be  granted  only 
jointly: 

(a) 

the solvency margin (cid:214) Solvency Capital Requirement  referred to in Article 
55 164 shall be calculated in relation to the entire business which it carries on 

(cid:208) 2002/83/EC Art. 56 (adapted) 
(cid:214) new 

EN 

179 

   EN 

 
 
 
 
 
 
within  the  Community;  in  such  case,  account  shall  be  taken  only  of  the 
operations  effected  by  all  the  agencies  or  branches  established  within  the 
Community for the purposes of this calculation; 

(b) 

(c) 

the deposit required under point (e) of Article 51(2)(e) 160(2) shall be lodged 
in only one of those Member States; 

the assets representing the guarantee fund (cid:214) Minimum Capital Requirement  
shall  be  localised  ⌦ ,  in  accordance  with  Article  132, ⌫  in  any  one  of  the 
Member States in which it carries on its activities. 

⌦ In  the  cases  referred  to  in  point  (a)  of  the  first  subparagraph,  account  shall  be 
taken  only  of  the  operations  effected  by  all  the  branches  established  within  the 
Community for the purposes of this calculation. ⌫ 

Application to benefit from the advantages provided for in paragraph 1 shall be made 
to the competent⌦ supervisory ⌫ authorities of the Member States concerned. The 
application  shall  state  the  authority  of  the  Member  State  which  in  future  is  to 
supervise the solvency of the entire business of the agencies or branches established 
within the Community. Reasons must be given for the choice of authority made by 
the undertaking. 

The deposit ⌦ referred to in point (e) of Article 160(2) ⌫ shall be lodged with that 
Member State. 

2. 

(cid:208) 84/641/EEC Art. 12 (adapted) 

3. 

The  advantages  provided  for  in  paragraph  1  may  only  be  granted  if  the 
competent⌦ supervisory ⌫  authorities  of  all  Member  States  in  which  an 
application has been made agree to them. 

They shall take effect from the time when the selected supervisory authority informs 
the  other  supervisory  authorities  that  it  will  supervise  the  state  of  solvency  of  the 
entire business of the agencies or branches within the Community. 

The  supervisory  authority  selected  shall  obtain  from  the  other  Member  States  the 
information necessary for the supervision of the overall solvency of the agencies and 
branches established in their territory. 

4. 

At  the  request  of  one  or  more  of  the  Member  States  concerned,  the  advantages 
granted under this Article paragraphs 1, 2 and 3 shall be withdrawn simultaneously 
by all Member States concerned. 

(cid:208) 2002/83/EC Art. 52 (adapted) 

Article 166 

Rules applicable to branches of third-country undertakings ⌦ Accounting, prudential 
and statistical information and undertakings in difficulty ⌫ 

2.  ⌦ For  the  purposes  of  this  Section ⌫  Articles  13  and  37  33,  34,  137(3),  138  and  139 
shall apply mutatis mutandis to agencies and branches referred to in this title. 

EN 

180 

   EN 

 
 
 
 
For the purposes of applying Article 37, the competent authority which supervises the overall 
solvency of agencies or branches shall be treated in the same way as the competent authority 
of the head-office Member State. 

(cid:208) 84/641/EEC Art. 13 (adapted) 

As regards the application of Articles 20 135, 136 and 137, where an undertaking qualifies for 
the  advantages  provided  for  in  Article  26  (1)  165(1),  (2)  and  (3),  the  ⌦ supervisory ⌫ 
authority responsible for verifying the solvency of agencies or branches established within the 
Community  with  respect  to  their  entire  business  shall  be  treated  in  the  same  way  as  the 
⌦ supervisory ⌫  authority  of  the ⌦ Member ⌫  State  in  the  territory  of  which  the  head 
office of a Community undertaking is situated. 

(cid:208) 2002/83/EC Art. 52 (adapted) 

Article 167 

⌦ Separation of non-life and life business ⌫ 

1. 

(b)2. 

(a) Subject to point (b), agencies and bBranches referred to in this Title Section may 
not simultaneously carry on ⌦ life and non-life insurance activities ⌫ in a ⌦ the 
same ⌫  Member  State  the  activities  referred  to  in  the  Annex  to  Directive 
73/239/EEC and those covered by this Directive. 

Subject to point (c), ⌦ By way of derogation from paragraph 1 ⌫ Member States 
may provide that agencies and branches referred to in this Title Section which, on the 
relevant date referred to in the first subparagraph  of Article 18(3) 72(5), carried  on 
both  activities  simultaneously  in  a  Member  State  may  continue  to  do  so  there 
provided that each activity is separately managed in accordance with Article 1973. 

(c)3.  Any  Member  State  which  under  the  second  subparagraph  of  Article  18(6)  72(5) 
requires undertakings established in its territory to cease the simultaneous pursuit of 
the activities in which they were engaged on the relevant date referred to in the first 
subparagraph of Article 18(3) 72(5) must also impose this requirement on agencies 
and branches referred to in this Title Section which are established in its territory and 
simultaneously carry on both activities there. 

(d) Member States may provide that agencies and branches referred to in this Title 
Section whose head office simultaneously carries on both activities and which on the 
dates  referred  to  in  the  first  subparagraph  of  Article  18(3)  72(5)  carried  on  in  the 
territory of a Member State solely the ⌦ life insurance ⌫ activity covered by this 
Directive may continue their activity there. If the undertaking wishes to carry on the 
⌦ non-life  insurance ⌫  activity  referred  to  in  Directive  73/239/EEC  in  that 
territory  it  may  only  carry  on  the  ⌦ life  insurance ⌫  activity  covered  by  this 
Directive through a subsidiary. 

EN 

181 

   EN 

 
 
 
 
Article 168 

⌦ Withdrawal of authorisation for undertakings authorised in more than one Member 
State ⌫ 

(cid:208) 73/239/EEC Art. 28 (adapted) 

In  the  case  of  a  withdrawal  of  authorisation  by  the  authority  referred  to  in  Article  26  (2) 
165(2)  this ⌦ that ⌫  authority  shall  notify  the ⌦ supervisory ⌫  authorities  of  the  other 
Member  States  where  the  undertaking  operates  and  the  latter  supervisory  ⌦ those ⌫ 
authorities shall take the appropriate measures. 

If  the  reason  for  the  ⌦ that ⌫  withdrawal  of  the  authorization  is  the  inadequacy  of  the 
overall state of solvency as fixed by the Member States which agreed to the request referred 
to in Article 26 165, the Member States which gave their approval shall also withdraw their 
authorisations. 

(cid:208) 2002/83/EC Art. 57 

Article 169 

Agreements with third countries 

(cid:208) 73/239/EEC Art. 29 and 
2002/83/EC Art. 57 (adapted) 

The Community may, by means of agreements concluded pursuant to the Treaty with one or 
more third countries, agree to the application of provisions different to those provided for in 
this  Title  Section,  for  the  purpose  of  ensuring,  under  conditions  of  reciprocity,  adequate 
protection for ⌦ policyholders and ⌫ insured persons in the Member States. 

(cid:216) new 

SECTION 2 – REINSURANCE 

Article 170 

Equivalence 

1. 

2. 

The  Commission  shall,  in  accordance  with  the  advisory  procedure  referred  to  in 
Article 304(2), adopt decisions, as to whether the solvency regime of a third-country 
applied to re-insurance activities of undertakings with their head office in that third-
country is equivalent to that laid down in this Directive. 

Those Decisions shall be regularly reviewed. 

Where  in  accordance  with  paragraph  1  the  solvency  regime  of  a  third  country  has 
been deemed to be equivalent to this Directive, reinsurance contracts concluded with 
undertakings having their head office in those third countries shall be treated in the 

EN 

182 

   EN 

 
 
 
 
 
 
 
 
same  manner  as  reinsurance  contracts  concluded  with  an  undertaking  which  is 
authorised in accordance with this Directive. 

(cid:208) 2005/68/EC Art. 32 (adapted) 
(cid:214) new 

Article 171 

⌦Prohibition of pledging of assets⌫ 

2.  Member  States  shall  not  retain  or  introduce  ⌦ for  the  establishment  of  technical 
provisions ⌫  a  system  with  gross  reserving  which  requires  pledging  of  assets  to  cover 
unearned  premiums  and  outstanding  claims  provisions  if  the  reinsurer  ⌦ reinsuring 
undertaking ⌫ is a ⌦ an insurance or ⌫ reinsurance undertaking authorised in accordance 
with  this  Directive  or  an  insurance  undertaking  authorised  in  accordance  with  Directives 
73/239/EEC  or  2002/83/EC  (cid:214) having  its  head  office  in  a  third  country  whose  solvency 
regime  is  deemed  to  be  equivalent  to  that  laid  down  in  this  Directive  in  accordance  with 
Article 170  . 

(cid:208) 2005/68/EC Art. 49 (adapted) 

Article 172 

Principle and conditions for conducting reinsurance business ⌦ activity ⌫ 

A Member State shall not apply to ⌦ third country ⌫ reinsurance undertakings having their 
head  offices  outside  the  Community  and  commencing  ⌦ taking  up ⌫  or  carrying  out 
⌦ on ⌫  reinsurance  activities  ⌦ activity ⌫  in  its  territory  provisions  which  result  in  a 
treatment more favourable ⌦ treatment ⌫ than that accorded ⌦ granted ⌫ to reinsurance 
undertakings having ⌦ which have ⌫ their head office in that Member State. 

(cid:208) 2005/68/EC Art. 50 (adapted) 

Article 173 

Agreements with third countries 

1. 

The  Commission  may  submit  proposals  to  the  Council  for  the  negotiation  of 
agreements  with  one  or  more  third  countries  regarding  the  means  of  exercising 
supervision over ⌦ the following ⌫ : 

(a)  ⌦ third  country ⌫  reinsurance  undertakings  which  have  their  head  offices 
situated  in  a  third  country,  and  conduct  reinsurance  business  in  the 
Community,; 

(b)  ⌦ Community ⌫ reinsurance undertakings which have their head offices in 
the  Community  and  conduct  reinsurance  business  in  the  territory  of  a  third 
country. 

EN 

183 

   EN 

 
 
 
 
 
 
 
2. 

The  agreements  referred  to  in  paragraph 1  shall  in  particular  seek  to  ensure,  under 
conditions  of  equivalence  of  prudential  regulation,  effective  market  access  for 
reinsurance  undertakings  in  the  territory  of  each  contracting  party  and  provide  for 
mutual recognition of supervisory rules and practices on reinsurance. They shall also 
seek to ensure that ⌦ the following ⌫ : 

(a)  ⌦ that ⌫ the competent ⌦ supervisory ⌫ authorities of the Member States 
are able to obtain the information necessary for the supervision of reinsurance 
undertakings  which  have  their  head  offices  situated  in  the  Community  and 
conduct business in the territory of third countries concerned; 

(b)  ⌦ that ⌫ the competent ⌦ supervisory ⌫ authorities of third countries are 
able  to  obtain  the  information  necessary  for  the  supervision  of  reinsurance 
undertakings which have their head offices situated within their territories and 
conduct business in the Community. 

3. 

Without prejudice to Article 300(1) and (2) of the Treaty, the Commission shall with 
the  assistance  of  the  European  Insurance  and  Occupational  Pensions  Committee 
examine the outcome of the negotiations referred to in paragraph 1 of this Article and 
the resulting situation. 

(cid:208) 2002/83/EC (adapted) 

TITLE VI CHAPTER X 

RULES APPLICABLE TO SUBSIDIARIES OF PARENT 
⌦ INSURANCE AND REINSURANCE ⌫ UNDERTAKINGS 
GOVERNED BY THE LAWS OF A THIRD COUNTRY AND 
TO THE ACQUISITIONS OF HOLDINGS BY SUCH PARENT 
UNDERTAKINGS 

(cid:208) 2005/1/EC Art. 8(2) (adapted) 

Article 174 

Information from Member States to the Commission 

The  competent  ⌦ supervisory ⌫  authorities  of  the  Member  States  shall  inform  the 
Commission  and  the  competent  ⌦ supervisory ⌫  authorities  of  the  other  Member  States: 
(a)  of  any  authorisation  of  a  direct  or  indirect  subsidiary,  one  or  more  of  whose  parent 
undertakings are governed by the laws of a third country;.  

⌦ That  information  shall  also  contain  an  indication  of  the  structure  of  the  group 
concerned. ⌫  

(b)  wWhenever  such  a  parent  ⌦ an ⌫  undertaking  ⌦ governed  by  the  law  of  a  third 
country ⌫ acquires a holding in a Community assurance⌦ an insurance or reinsurance ⌫ 
undertaking  ⌦ authorised  in  the  Community ⌫  which  would  turn  the  latter  ⌦ that 
insurance or reinsurance undertaking ⌫ into its ⌦ a ⌫ subsidiary ⌦ of that third country 

EN 

184 

   EN 

 
 
 
 
undertaking  the  supervisory  authorities  of  the  home  Member  State  shall  inform  the 
Commission and the supervisory authorities of the other Member States ⌫ . 

When the authorisation referred to in point (a) is granted to the direct or indirect subsidiary of 
one or more parent undertakings governed by the law of third countries, the structure of the 
group  shall  be  specified  in  the  notification  which  the  competent  authorities  shall  address  to 
the Commission and to the other competent authorities. 

(cid:208) 2005/68/EC Art. 52 (adapted) 

Article 175 

1. 

2. 

Third-country treatment of Community⌦ insurance and ⌫ reinsurance undertakings 

Member States shall inform the Commission of any general difficulties encountered 
by their ⌦ insurance or ⌫ reinsurance undertakings in establishing themselves and 
operating in a third country or carrying on activities in a third country. 

The  Commission  shall,  periodically,  draw  up  ⌦ submit ⌫  a  report  ⌦ to  the 
Council ⌫  examining 
treatment  accorded, 
to  Community  reinsurance 
undertakings  in  third  countries,  ⌦ to  insurance  or  reinsurance  undertakings 
authorised in the Community ⌫ in the terms referred to in paragraph 3, as regards 
⌦ the following: ⌫ 

the 

(a) 

(b) 

(c) 

(d) 

the  establishment  of  Community  reinsurance  undertakings  in  third  countries 
⌦ of insurance or reinsurance undertakings authorised in the Community ⌫,; 

the  acquisition  of  holdings  in  third-country  ⌦ insurance  or ⌫  reinsurance 
undertakings,; 

the  carrying  on  of  ⌦ insurance  or ⌫  reinsurance  activities  by  such 
established undertakings; 

and  the  cross-border  provision  of  ⌦ insurance  or ⌫  reinsurance  activities 
from the Community to third countries. 

The  Commission  shall  submit  those  reports  to  the  Council,  together  with  any 
appropriate proposals or recommendations. 

(cid:208) 90/618/EEC Art. 4 

3.  Whenever  it  appears  to  the  Commission,  either  on  the  basis  of  the  reports  referred  to  in 
paragraph 2 or on the basis of other information, that a third country is not granting 
Community  insurance  undertakings  effective  market  access  comparable  to  that 
granted  by  the  Community  to  insurance  undertakings  from  that  third  country,  the 
Commission  may  submit  proposals  to  the  Council  for  the  appropriate  mandate  for 
negotiation  with  a  view  to  obtaining  comparable  competitive  opportunities  for 
Community  insurance  undertakings.  The  Council  shall  decide  by  a  qualified 
majority. 

EN 

185 

   EN 

 
 
 
 
(cid:208) 2002/83/EC 

3.  Whenever  it  appears  to  the  Commission,  either  on  the  basis  of  the  reports  referred  to  in 
paragraph 2 or on the basis of other information, that a third country is not granting 
Community  assurance  undertakings  effective  market  access  comparable  to  that 
granted  by  the  Community  to  insurance  undertakings  from  that  third  country,  the 
Commission  may  submit  proposals  to  the  Council  for  the  appropriate  mandate  for 
negotiation  with  a  view  to  obtaining  comparable  competitive  opportunities  for 
Community  assurance  undertakings.  The  Council  shall  decide  by  a  qualified 
majority. 

(cid:208) 2005/68/EC Art. 52 

3.  Whenever  it  appears  to  the  Commission,  either  on  the  basis  of  the  reports  referred  to  in 
paragraph 2 or on the basis of other information, that a third country is not granting 
Community reinsurance undertakings effective market access, the Commission may 
submit recommendations to the Council for the appropriate mandate for negotiation 
with  a  view  to  obtaining  improved  market  access  for  Community  reinsurance 
undertakings. 

(cid:208) 2002/83/EC 

4.  Whenever  it  appears  to  the  Commission,  either  on  the  basis  of  the  reports  referred  to  in 
paragraph  2  or  on  the  basis  of  other  information,  that  Community  assurance 
undertakings in a third country are not receiving national treatment offering the same 
competitive  opportunities  as  are  available  to  domestic  insurance  undertakings  and 
that the conditions of effective market access are not being fulfilled, the Commission 
may initiate negotiations in order to remedy the situation. 

(cid:208) 90/618/EEC Art. 4 

4.  Whenever  it  appears  to  the  Commission,  either  on  the  basis  of  the  reports  referred  to  in 
paragraph  2  or  on  the  basis  of  other  information,  that  Community  insurance 
undertakings in a third country are not receiving national treatment offering the same 
competitive  opportunities  as  are  available  to  domestic  insurance  undertakings  and 
that the conditions of effective market access are not being fulfilled, the Commission 
may initiate negotiations in order to remedy the situation. 

(cid:208) 2005/1/EC Art. 4(2) 

In the circumstances described in the first subparagraph, it may also be decided at any time, 
and  in  addition  to  initiating  negotiations,  in  accordance  with  the  procedure  referred  to  in 
Article 5 of Decision 1999/468/EC73 and in compliance with Article 7(3) and Article 8 thereof 
that  the  competent  authorities  of  the  Member  States  must  limit  or  suspend  their  decisions 
regarding the following: 

73 

OJ L 184, 17.7.1999, p. 23. 

EN 

186 

   EN 

 
 
 
 
 
 
                                                 
(cid:208) 2002/83/EC 

In the circumstances described in the first subparagraph, it may also be decided at any time, 
and  in  addition  to  initiating  negotiations,  in  accordance  with  the  procedure  laid  down  in 
Article 65(2), that the competent authorities of the Member States must limit or suspend their 
decisions: 

– 

regarding  requests  pending  at  the  moment  of  the  decision  or  future  requests  for 
authorisations, and 

(cid:208) 2005/1/EC Art. 4(2) 

(a)  requests  for  authorisation,  whether  pending  at  the  moment  of  the  decision  or 
submitted thereafter; 

(b) the acquisition of holdings by direct or indirect parent undertakings governed by 
the law of the third country in question. 

– 

regarding  the  acquisition  of  holdings  by  direct  or  indirect  parent  undertakings 
governed by the laws of the third country in question. 

(cid:208) 2002/83/EC 

(cid:208) 2002/83/EC and 90/618/EEC 
Art. 4 

The duration of the measures referred to may not exceed three months. 

Before the end of that three-month period, and in the light of the results of the negotiations, 
the Council may, acting on a proposal from the Commission, decide by a qualified majority 
whether the measures shall be continued. 

(cid:208) 2002/83/EC 

(cid:208) 90/618/EEC Art. 4 

Before the end of that three-month period, and in the light of the results of the negotiations, 
the Council may, acting on a proposal from the Commission, decide by a qualified majority 
that the measures shall be continued. 

Such  limitations  or  suspension  may  not  apply  to  the  setting  up  of  subsidiaries  by  insurance 
undertakings or their subsidiaries duly authorized in the Community, or to the acquisition of 
holdings in Community insurance undertakings by such undertakings or subsidiaries. 

Such  limitations  or  suspension  may  not  apply  to  the  setting  up  of  subsidiaries  by  assurance 
undertakings or their subsidiaries duly authorised in the Community, or to the acquisition of 
holdings in Community assurance undertakings by such undertakings or subsidiaries. 

(cid:208) 2002/83/EC 

EN 

187 

   EN 

 
 
 
 
 
 
 
 
 
 
(cid:208) 2002/83/EC and 90/618/EEC 
Art. 4 

5. Whenever it appears to the Commission that one of the situations described in paragraphs 3 
and 4 has arisen, the Member States shall inform it at its request: 

(a) of any request for the authorisation of a direct or indirect subsidiary one or more 
parent  undertakings  of  which  are  governed  by  the  laws  of  the  third  country  in 
question; 

(b)  of  any  plans  for  such  an  undertaking  to  acquire  a  holding  in  a  Community 
assurance undertaking such that the latter would become the subsidiary of the former. 

(cid:208) 2002/83/EC 

(cid:208) 90/618/EEC Art. 4 

(b)  of  any  plans  for  such  an  undertaking  to  acquire  a  holding  in  a  Community 
insurance undertaking such that the latter would become the subsidiary of the former. 

This  obligation  to  provide  information  shall  lapse  once  an  agreement  is  concluded  with  the 
third country referred to in paragraph 3 or 4 or when the measures referred to in the second 
and third subparagraphs of paragraph 4 cease to apply. 

6.  Measures  taken  under  this  Article  shall  comply  with  the  Community's  obligations  under 
any international agreements, bilateral or multilateral, governing the taking-up and pursuit of 
the business of insurance undertakings. 

This obligation to provide information shall lapse whenever an agreement is reached with the 
third country referred to in paragraph 3 or 4 when the measures referred to in the second and 
third subparagraphs of paragraph 4 cease to apply. 

(cid:208) 2002/83/EC 

(cid:208) 2005/68/EC Art. 51 

The  competent  authorities  of  the  Member  States  shall  inform  the  Commission  and  the 
competent authorities of the other Member States: 

(a)  of  any  authorisation  of  a  direct  or  indirect  subsidiary,  one  or  more  parent 
undertakings of which are governed by the laws of a third country; 

(b)  whenever  such  a  parent  undertaking  acquires  a  holding  in  a  Community 
reinsurance undertaking which would turn the latter into its subsidiary. 

When an authorisation as referred to in point (a) is granted to the direct or indirect subsidiary 
of one or more parent undertakings governed by the laws of a third country, the structure of 
the group shall be specified in the notification which the competent authorities shall address 
to the Commission. 

EN 

188 

   EN 

 
 
 
 
 
 
 
 
 
 
 
6.  Measures  taken  under  this  Article  shall  comply  with  the  Community's  obligations  under 
any international agreements, bilateral or multilateral, governing the taking up and pursuit of 
the business of insurance undertakings. 

(cid:208) 2002/83/EC 

4.  Measures  taken  under  this  Article  shall  comply  with  the  Community's  obligations  under 
any international agreements, in particular in the World Trade Organisation. 

(cid:208) 2005/68/EC Art. 52 

(cid:208) 90/618/EEC Art. 4 (adapted) 

6.  Measures  taken  under  this  Article  shall  comply  with  the  Community's  obligations  under 
any international agreements, bilateral or multilateral, governing the taking-up and pursuit of 
the business of insurance undertakings. 

TITLE II - ⌦ SPECIFIC PROVISIONS FOR INSURANCE AND 
REINSURANCE ⌫ 

⌦ CHAPTER I - APPLICABLE LAW AND CONDITIONS OF 
DIRECT INSURANCE CONTRACTS ⌫ 

⌦ SECTION 1 - APPLICABLE LAW ⌫ 

(cid:216) new 

Article 176 

Applicable Law  

Any  Member  State  not  subject  to  the  application  of  Regulation  [Rome  I]  shall  apply  the 
provisions of that Regulation in order to determine the law applicable to insurance contracts 
Regulation. 
falling 

Article 

within 

scope 

that 

the 

of 

of 

7 

EN 

189 

   EN 

 
 
 
 
 
 
 
 
(cid:208) 88/357/EEC Art. 7  

Article 7 

1. 

The law applicable to contracts of insurance referred to by this Directive and covering 

risks situated within the Member States is determined in accordance with the following 
provisions:  

(a)Where  a  policy-holder  has  his  habitual  residence  or  central  administration  within  the 
territory of the Member State in which the risk is situated, the law applicable to the 
insurance contract shall be the law of that Member State. However, where the law of 
that Member State so allows, the parties may choose the law of another country. 

(b) 

Where a policy-holder does not have his habitual residence or central administration 
in  the  Member  State  in  which  the  risk  is  situated,  the  parties  to  the  contract  of 
insurance may choose to apply either the law of the Member State in which the risk 
is  situated  or  the  law  of  the  country  in  which  the  policy-holder  has  his  habitual 
residence or central administration. 

(c)Where  a  policy-holder  pursues  a  commercial  or  industrial  activity  or  a  liberal  profession 
and  where  the  contract  covers  two  or  more  risks  relating  to  these  activities  and 
situated in different Member States, the freedom of choice of the law applicable to 
the  contract  shall  extend  to the  laws  of  those  Member  States  and  of  the  country  in 
which the policy-holder has his habitual residence or central administration. 

(d)Notwithstanding subparagraphs (b) and (c), where the Member States referred to in those 
subparagraphs grant greater freedom of choice of the law applicable to the contract, 
the parties may take advantage of this freedom. 

(e) 

Notwithstanding  subparagraphs  (a),  (b)  and  (c),  when  the  risks  covered  by  the 
contract are limited to events occurring in one Member State other than the Member 
State  where  the  risk  is  situated,  as  defined  in  Article  2  (d),  the  parties  may  always 
choose the law of the former State. 

(f) 

In  the  case  of  the  risks  referred  to  in  Article  5  (d)  of  Directive  73/239/EEC,  the 
parties to the contract may choose any law. 

(cid:208) 92/49/EEC Art. 27  

(cid:208) 88/357/EEC Art. 5 
(cid:206)90/618/EEC Art. 2 

(d) «large risks» means : 

(i) 

risks classified under classes 4, 5, 6, 7, 11 and 12 of point A of the Annex; 

(ii) 

risks  classified  under  classes  14  and  15  of  point  A  of  the  Annex,  where  the 
policy-holder is engaged professionally in an industrial or commercial activity 
or in one of the liberal professions, and the risks relate to such activity; 

(iii)  risks classified under classes 3, 8, 9, 10, 13 and 16 of point A of the Annex in 
so  far  as  the  policy-holder  exceeds  the  limits  of  at  least  two  of  the  following 
three criteria: 

EN 

190 

   EN 

 
 
 
 
 
first stage: until 31 December 1992: 

- 

- 

- 

balance-sheet total: 12,4 million ECU, 

net turnover: 24 million ECU, 

average number of employees during the financial year: 500. 

second stage: from 1 January 1993: 

- 

- 

- 

balance-sheet total: 6,2 million ECU  

net turnover: 12,8 million ECU  

average number of employees during the financial year: 250. 

If  the  policy-holder  belongs  to  a  group  of  undertakings  for  which  consolidated  accounts 
within the meaning of Directive 83/349/EEC (7) are drawn up, the criteria mentioned above 
shall be applied on the basis of the consolidated accounts. 

Each  Member  State  may  add  to  the  category  mentioned  under  (iii)  risks  insured  by 
professional associations, joint ventures or temporary groupings. 

(cid:208) 88/357/EEC Article 7  

(g) The fact that, in the cases referred to in subparagraph (a) or (f), the parties have chosen a 
law shall not, where all the other elements relevant to the situation at the time of the choice 
are connected with one Member State only, prejudice the application of the mandatory rules 
of the law of that Member State, which means the rules from which the law of that Member 
State allows no derogation by means of a contract. 

(h) The choice referred to in the preceding subparagraphs must be expressed or demonstrated 
with reasonable certainty by the terms of the contract or the circumstances of the case. 

If this is not so, or if no choice has been made, the contract shall be governed by the law of 
the country, from amongst those considered in the relevant subparagraphs above, with which 
it is most closely connected. Nevertheless, a severable part of the contract which has a closer 
connection  with  another  country,  from  amongst 
the  relevant 
subparagraphs, may by way of exception be governed by the law of that other country. The 
contract shall be rebuttably presumed to be most closely connected with the Member State in 
which the risk is situated. 

those  considered 

in 

(i)  Where  a  State  includes  several  territorial  units,  each  of  which  has  its  own  rules  of  law 
concerning contractual obligations, each unit shall be considered as a country for the purposes 
of identifying the law applicable under this Directive. 

A  Member  State  in  which  various  territorial  units  have  their  own  rules  of  law  concerning 
contractual obligations shall not be bound to apply the provisions of this Directive to conflicts 
which arise between the laws of those units. 

2. Nothing in this Article shall restrict the application of the rules of the law of the forum in a 
situation  where  they  are  mandatory,  irrespective  of  the  law  otherwise  applicable  to  the 
contract. 

If  the  law  of  a  Member  State  so  stipulates,  the  mandatory  rules  of  the  law  of  the  Member 
State in which the risk is situated or of the Member State imposing the obligation to take out 
insurance may be applied if and in so far as, under the law of those States, those rules must be 
applied whatever the law applicable to the contract. 

EN 

191 

   EN 

 
 
 
 
Where  the  contract  covers  risks  situated  in  more  than  one  Member  State,  the  contract  is 
considered for the purposes of applying this paragraph as constituting several contracts each 
relating to only one Member State. 

3.  Subject  to  the  preceding  paragraphs,  the  Member  States  shall  apply  to  the  insurance 
contracts  referred  to  by  this  Directive  their  general  rules  of  private  international  law 
concerning contractual obligations. 

(cid:208) 88/357/EEC Art. 8  

Article 8 

3. 

4. 

When, in the  case  of compulsory  insurance,  the  law  of  the  Member  State  in  which 
the risk is situated and the law of the Member State imposing the obligation to take 
out insurance contradict each other, the latter shall prevail. 

(a)  Subject  to  subparagraph  (c),  the  third  subparagraph  of  Article  7  (2)  shall  apply 
where the insurance contract provides cover in two or more Member States, at least 
one of which makes insurance compulsory.  

(cid:208) 92/49/EEC Art. 30(1) 

(c) A Member State may, by way of derogation from Article 7, lay down that the law 
applicable to a compulsory insurance contract is the law of the State which imposes 
the obligation to take out insurance. 

(cid:208) 88/357/EEC Art. 8 

⌦ SECTION 2 – COMPULSORY INSURANCE ⌫ 

(cid:208) 88/357/EEC (adapted) 

CONTRACT LAW AND CONDITIONS OF ASSURANCE 

Article 177 

 ⌦ Related Obligations ⌫  

(cid:208) 88/357/EEC Art. 8 (adapted) 

1. 

2. 

Under the conditions set out in this Article, ⌦ Non-life ⌫ insurance undertakings 
may offer and conclude compulsory insurance contracts in accordance with the rules 
of  this  Directive  and  of  the  first  Directive  ⌦ under  the  conditions  set  out  in  this 
Article ⌫ . 

When  a  Member  State  imposes  an  obligation  to  take  out  insurance,  the  ⌦ an 
insurance ⌫contract shall not satisfy that obligation unless it is in accordance with 

EN 

192 

   EN 

 
 
 
 
 
 
 
 
⌦ complies with ⌫ the specific provisions relating to that insurance laid down by 
that Member State. 

3(d) Where a Member State imposes compulsory insurance and the insurer must ⌦ insurance 
undertaking is required to ⌫ notify the competent⌦ supervisory ⌫ authorities of 
any  cessation  of  cover,  such  cessation  may  be  invoked  against  injured  third  parties 
only  in  the  circumstances  laid  down  in  the  legislation  of  ⌦ by ⌫  that 
⌦ Member ⌫ State. 

4. 

(a) Each Member State shall communicate to the Commission the risks against which 
insurance is compulsory under its legislation, stating ⌦ the following ⌫ : 

(a) 

(b) 

the specific legal provisions relating to that insurance,; 

the particulars which must be given in the certificate which an insurer ⌦ non 
life  insurance  undertaking ⌫  must  issue  to  an  insured  person  where  that 
⌦ Member ⌫  State  requires  proof  that  the  obligation  to  take  out  insurance 
has been complied with., A ⌦ including, if the ⌫ Member State may require 
that  those  particulars  include  ⌦ so  requires, ⌫  a  declaration  by  the  insurer 
⌦ insurance undertaking ⌫ to the effect that the contract complies with the 
specific provisions relating to that insurance. 

(b) The Commission shall publish the particulars referred to in the first subparagraph 
(a) in the Official Journal of the European Communities Union. 

5. (c)  A Member State ⌦ States ⌫ shall accept, as proof that the insurance obligation has 
been fulfilled, a ⌦ the ⌫ certificate, the content of which is ⌦ referred to ⌫ in 
conformity with the second indent of point (b) of subparagraph (a)4. 

(cid:208) 2002/83/EC Art. 32  

CHAPTER 4  

CONTRACT LAW AND CONDITIONS OF ASSURANCE 

Article 32 

Law applicable 

1. 

2. 

3. 

The law applicable to contracts relating to the activities referred to in this Directive 
shall be the law of the Member State of the commitment. 

However, where the law of that State so allows, the parties may choose the law of 
another country. 

Where  the  policy  holder  is  a  natural  person  and  has  his/her  habitual  residence  in  a 
Member State other than that of which he/she is a national, the parties may choose 
the law of the Member State of which he/she is a national. 

Where  a  State  includes  several  territorial  units,  each  of  which  has  its  own  rules  of 
law  concerning  contractual  obligations,  each  unit  shall  be  considered  a  country  for 
the purposes of identifying the law applicable under this Directive. 

EN 

193 

   EN 

 
 
 
A  Member  State  in  which  various  territorial  units  have  their  own  rules  of  law 
concerning contractual obligations shall not be bound to apply the provisions of this 
Directive to conflicts which arise between the laws of those units. 

Nothing  in  this  Article  shall  restrict  the  application  of  the  rules  of  the  law  of  the 
forum  in  a  situation  where  they  are  mandatory,  irrespective  of  the  law  otherwise 
applicable to the contract. 

If  the  law  of  a  Member  State  so  stipulates,  the  mandatory  rules  of  the  law  of  the 
Member State of the commitment may be applied if and in so far as, under the law of 
that  Member  State,  those  rules  must  be  applied  whatever  the  law  applicable  to  the 
contract. 

Subject  to  paragraphs  1  to  4,  the  Member  States  shall  apply  to  the  assurance 
contracts referred to in this Directive their general rules of private international law 
concerning contractual obligations. 

4. 

5. 

⌦ SECTION 3 - GENERAL GOOD ⌫ 

(cid:208) 2002/83/EC Art. 33 (adapted) 

Article 178 

General good 

The ⌦ Member State in which a risk is situated, or the ⌫ Member State of the commitment 
shall  not  prevent  a  policyholder  from  concluding  a  contract  with  an  assurance 
⌦ insurance ⌫ undertaking authorised under the conditions of Article 14 4 as long as that 
⌦ conclusion  of  contract ⌫  does  not  conflict  with  legal  provisions  protecting  the  general 
good ⌦ in the Member State in which the risk is situated, or ⌫ in the Member State of the 
commitment. 

⌦ SECTION 4 - CONDITIONS OF INSURANCE CONTRACTS AND SCALES OF 
PREMIUMS ⌫ 

(cid:208) 92/49/EEC Art. 29 (adapted) 

⌦ Article 179 

Non-life insurance ⌫ 

1. 

Member States shall not adopt provisions requiring ⌦ require ⌫ the prior approval 
or  systematic  notification  of  general  and  special  policy  conditions,  scales  of 
premiums,  or  forms  and  other  printed  documents  which  an  insurance  undertaking 
intends to use in its dealings with policyholders. 

They  ⌦ Member  States ⌫  may  only  require  non-systematic  notification  of  those 
policy conditions and other documents for the purpose of verifying compliance with 
national provisions concerning insurance contracts,. and that requirement ⌦ Those 
requirements ⌫  may  not  constitute  a  prior  condition  for  an  ⌦ insurance ⌫ 
undertaking's ⌦ to ⌫ carrying on its business. 

EN 

194 

   EN 

 
 
 
 
 
2. 

3. 

(cid:208) 92/49/EEC Art. 30 (adapted) 

Notwithstanding  any  provision  to  the  contrary,  aA  Member  State  which  makes 
insurance  compulsory  may  require  that ⌦ insurance  undertakings  communicate  to 
its  supervisory  authority ⌫  the  general  and  special  conditions  of  the  compulsory 
⌦ such ⌫  insurance  be  communicated  to  its  competent  authority  before  being 
circulated ⌦ circulating them ⌫ . 

Member States may not retain or introduce ⌦ an obligation of ⌫ prior notification 
or approval of proposed increases in premium rates except as part of general price-
control systems. 

(cid:208) 92/49/EEC Art. 29 (adapted) 

(cid:208) 2002/83/EC Art. 34 (adapted) 

Article 180 

Rules relating to conditions of assurance and scales of premiums ⌦ Life insurance ⌫ 

Member  States  shall  not  adopt  provisions  requiring  ⌦ require ⌫  the  prior  approval  or 
systematic notification of general and special policy conditions, scales of premiums, technical 
bases used in particular for calculating scales of premiums and technical provisions or forms 
and other printed documents which an assurance ⌦ life insurance ⌫ undertaking intends to 
use in its dealings with policyholders. 

Notwithstanding  the  first  subparagraph ⌦ However,  the  home  Member  State  may ⌫  ,  for 
the  sole  purpose  of  verifying  compliance  with  national  provisions  concerning  actuarial 
principles,  the  home  Member  State  may  require  systematic  communication  of  the  technical 
bases used in particular for calculating scales of premiums and technical provisions., without 
that  requirement  constituting  a  prior  condition  for  an  assurance  undertaking  to  carry  on  its 
business.  ⌦ Those  requirements  may  not  constitute  a  prior  condition  for  an  insurance 
undertaking to carry on business. ⌫ 

Not  later  than  1  July  1999  the  Commission  shall  submit  a  report  to  the  Council  on  the 
implementation of those provisions. 

⌦ SECTION 5 - INFORMATION FOR POLICYHOLDERS ⌫ 

(cid:208) 92/49/EEC Art 31 (adapted) 

⌦ SUBSECTION 1 - NON-LIFE INSURANCE ⌫ 

⌦ Article 181 

General Information for policyholders ⌫ 

1. 

Before  an  ⌦ non-life ⌫  insurance  contract  is  concluded  the  ⌦ non-life ⌫ 
insurance undertaking shall inform the policyholder of ⌦ the following ⌫ : 

EN 

195 

   EN 

 
 
 
 
 
 
 
(a) 

the law applicable to the contract, where the parties do not have a free choice,; 

(b)  or the fact that the parties are free to choose the law applicable and, in the latter 

case, the law the insurer proposes to choose,. 

⌦ The  insurance  undertaking  shall  also  inform  the  policyholder  of ⌫  the 
arrangements  for  handling  policyholders'  complaints  ⌦ of  policyholders ⌫ 
concerning  contracts  including,  where  appropriate,  the  existence  of  a  complaints 
body, without prejudice to the policyholders's right ⌦ of the policyholder ⌫ to take 
legal proceedings. 

2. 

3. 

The obligations referred to in paragraph 1 shall apply only where the policyholder is 
a natural person. 

The ⌦ detailed ⌫ rules for implementing this Article paragraphs 1 and 2 shall be 
determined in accordance with the law of ⌦ laid down by ⌫ the Member State in 
which the risk is situated. 

(cid:208) 92/49/EEC Art. 43 (adapted) 

⌦ Article 182 

Additional information in the case of non-life insurance offered under the right of 
establishment or the freedom to provide services ⌫ 

21. 

Where  ⌦ non-life ⌫  insurance  is  offered  under  the  right  of  establishment  or  the 
freedom  to  provide  services,  the  policyholder  shall,  before  any  commitment  is 
entered  into,  be  informed  of  the  Member  State  in  which  the  head  office  or,  where 
appropriate, the branch with which the contract is to be concluded is situated. 

Any documents issued to the policyholder must convey the information referred to in 
the first subparagraph. 

The obligations imposed in the first two and second subparagraphs of this paragraph 
shall  not  apply  to  the  ⌦ large ⌫  risks  referred  to  in  Article  7  (2)  of  Regulation 
[ROME I] 5 (d) of Directive 73/239/EEC. 

32. 

The  contract  or  any  other  document  granting  cover,  together  with  the  insurance 
proposal  where  it  is  binding  upon  the  policyholder,  must  ⌦ shall ⌫  state  the 
address of the head office, or, where appropriate, of the branch of the ⌦ non-life ⌫ 
insurance undertaking which grants the cover. 

Each ⌦ The ⌫ Member State ⌦ States ⌫ may require that the name and address 
of the representative of the ⌦ non-life ⌫ insurance undertaking referred to in point 
(a) of Article 146(2) 12 a (4) of Directive 88/357/EEC also appear in the documents 
referred to in the first subparagraph of this paragraph. 

EN 

196 

   EN 

 
 
 
(cid:208) 2002/83/EC Art. 36 (adapted) 
(cid:214) new 

⌦ SUBSECTION 2 - LIFE INSURANCE ⌫ 

Article 183 

Information for policyholders 

1. 

Before  the  assurance  ⌦ life  insurance ⌫  contract  is  concluded,  at  least  the 
information  listed  in  Annex  III(A)  set  out  in  paragraphs  2  and  3  shall  be 
communicated to the policyholder.: 

(cid:208) 2002/83/EC Annex III (adapted) 

A. BEFORE CONCLUDING THE CONTRACT 

2. 

⌦ The  following ⌫  Iinformation  about  the  ⌦ life  insurance ⌫  assurance 
undertaking ⌦ shall be communicated: ⌫ 

(a) 

1 Tthe name of the undertaking and its legal form; 

(ab)  2  Tthe  name  of  the  Member  State  in  which  the  head  office  and,  where 

appropriate, the agency or branch concluding the contract is situated; 

(ac)  3  Tthe  address  of  the  head  office  and,  where  appropriate,  of  the  agency  or 

branch concluding the contract. 

3. 

⌦ The 
communicated: ⌫ 

following ⌫ 

Iinformation  about 

the  commitment  ⌦ shall  be 

(aa)  4 Definition of each benefit and each option; 

(ab)  5 Term of the contract; 

(ac)  6 Means of terminating the contract; 

(ad)  7 Means of payment of premiums and duration of payments; 

(ae)  8 Means of calculation and distribution of bonuses; 

(af)  9 Indication of surrender and paid-up values and the extent to which they are 

guaranteed; 

(ag)  10  Information  on  the  premiums  for  each  benefit,  both  main  benefits  and 

supplementary benefits, where appropriate; 

(ah)  11  For  unit-linked  policies,  definition  of  the  units  to  which  the  benefits  are 

linked; 

(ai)  12 Indication of the nature of the underlying assets for unit-linked policies; 

(aj)  13 Arrangements for application of the cooling-off period; 

(ak)  14  General  information  on  the  tax  arrangements  applicable  to  the  type  of 

policy; 

EN 

197 

   EN 

 
 
 
 
(al)  15  The  arrangements  for  handling  complaints  concerning  contracts  by 
policyholders,  lives  assured  or  beneficiaries  under  contracts  including,  where 
appropriate, the existence of a complaints body, without prejudice to the right 
to take legal proceedings; 

(am)  16 Law applicable to the contract where the parties do not have a free choice 
or, where the parties are free to choose the law applicable, the law the assurer 
proposes to choose. 

24. 

The policyholder shall be kept informed throughout the term of the contract of any 
change concerning the ⌦ following ⌫ information: listed in Annex III(B). 

(cid:208) 2002/83/EC Art. 36 (adapted) 

(cid:208) 2002/83/EC Annex III (adapted) 

ANNEX III 

Information for policy holders 

B. DURING THE TERM OF THE CONTRACT 

(a) 

In addition to the policy conditions, both general and special,; the policy-holder 
must receive the following information throughout the term of the contract. 

Information about the assurance undertaking 

(b)1  Aany  change  in  the  name  of  the  ⌦ life  insurance ⌫  undertaking,  its  legal 
form or the address of its head office and, where appropriate, of the agency or 
branch which concluded the contract; 

Information about the commitment 

(bc)2 Aall the information listed in points (d) to (j) of paragraph 3 (a)(4) to (a)(12) of 
A  in the event of a change in the policy conditions or amendment of the law 
applicable to the contract; 

(bd)3 Eevery year, information on the state of bonuses. 

The following information, which is to be communicated to the policy holder before 
the contract is concluded (A) or during the term of the contract (B), must ⌦ referred 
to in paragraphs 2, 3 and 4 shall ⌫ be provided in a clear and accurate manner, in 
writing, in an official language of the Member State of the commitment. 

However,  such  information  may  be  in  another  language  if  the  policyholder  so 
requests  and  the  law  of  the  Member  State  so  permits  or  the  policyholder  is  free  to 
choose the law applicable. 

(cid:208) 2002/83/EC Art. 36 (adapted) 

The  Member  State  of  the  commitment  may  require  assurance ⌦ life  insurance ⌫ 
undertakings to furnish information in addition to that listed in paragraphs 2, 3 and 4 
in Annex III only if it is necessary for a proper understanding by the policyholder of 
the essential elements of the commitment. 

5. 

6. 

EN 

198 

   EN 

 
 
 
 
47.. 

The  detailed  rules  for  implementing  this  Article  paragraphs  1  to  6  and  Annex  III 
shall be laid down by the Member State of the commitment. 

(cid:208) 2002/83/EC Art. 35 (adapted) 

Article 184 

Cancellation period 

1. 

Each  Member  State  ⌦ States ⌫  shall  prescribe 
that  a  policy  holder 
⌦ policyholders ⌫  who  concludes  an  individual  life-assurance  contract  ⌦ life 
insurance contracts ⌫ shall have a period of between 14 and 30 days from the time 
when  he/she  was  ⌦ they  were ⌫  informed  that  the  contract  had  been  concluded 
within which to cancel the contract. 

The giving of notice of cancellation by the policy holder ⌦ policyholders ⌫ shall 
have the effect of releasing him/her ⌦ them ⌫ from any future obligation arising 
from the contract. 

The other legal effects and the conditions of cancellation shall be determined by the 
law  applicable  to  the  contract  as  defined  in  Article  32,  notably  as  regards  the 
arrangements for informing the policyholder that the contract has been concluded. 

2. 

The Member States need ⌦ may choose ⌫ not ⌦ to ⌫ apply paragraph 1 ⌦ in 
the following cases: ⌫ 

⌦ (a) 

where  a ⌫  to  contracts ⌦ has  a  duration ⌫  of  six  months'  duration 

or less,; 

(b)  nor  where,  because  of  the  status  of  the  policyholder  or  the  circumstances  in 
which  the  contract  is  concluded,  the  policyholder  does  not  need  this  special 
protection. 

⌦ Where ⌫  Member  States  ⌦ make  use  of  the  option  set  out  in  the  first 
subparagraph they ⌫ shall specify ⌦ that fact ⌫ in their ⌦ law ⌫ rules where 
paragraph 1 is not applied.  

⌦ CHAPTER II - PROVISIONS SPECIFIC TO NON-LIFE 
INSURANCE ⌫ 

(cid:208) 88/357/EEC Art. 4 (adapted) 

⌦ SECTION 1 - GENERAL PROVISIONS ⌫ 

Article 185 

⌦ Policy Conditions ⌫ 

For  the  purposes  of  this  Directive  and  the  first  Directive,  gGeneral  and  special  policy 
conditions shall not include specific ⌦ any ⌫ conditions intended to meet, in an individual 
case, the particular circumstances of the risk to be covered. 

EN 

199 

   EN 

 
 
 
 
 
(cid:208) 92/49/EEC Art. 3 (adapted) 

Article 186 

⌦ Abolition of monopolies ⌫ 

Notwithstanding Article 2 (2), Member States shall take every step to ensure that monopolies 
in respect of the taking up of the business of certain classes of insurance, granted to bodies 
established within their territories and referred to in Article 8 4 of Directive 73/239/EEC, are 
abolished by 1 July 1994. 

(cid:208) 92/49/EEC Art. 45 (adapted) 

Article 187 

⌦Participation in national guarantee schemes ⌫ 

2. Nothing in this Directive shall affect the ⌦ Host ⌫ Member States' right to ⌦ may ⌫ 
require  ⌦ non-life  insurance ⌫  undertakings  carrying  on  business  within  their  territories 
under the right of establishment or the freedom to provide services to join and participate, on 
the  same  terms  as  ⌦ non-life  insurance ⌫  undertakings  authorised  there  ⌦ in  their 
territories ⌫  ,  in  any  scheme  designed  to  guarantee  the  payment  of  insurance  claims  to 
insured persons and injured third parties. 

⌦ SECTION 2 - COMMUNITY CO-INSURANCE ⌫ 

(cid:208) 78/473/EEC Art. 1 (adapted) 

Article 188 

⌦ Community co-insurance operations ⌫ 

1. 

This Directive Section shall apply to Community co-insurance operations referred to 
in Article 2 which relate to risks classified under point A. 4, 5, 6, 7, 8, 9, 11, 12, 13 
and  16  of  the  Annex  to  the  First  Council  Directive  of  24  July  1973  on  the 
coordination of laws, regulations and administrative provisions relating to the taking-
up  and  pursuit  of  the  business  of  direct  insurance  other  than  life  assurance74, 
hereinafter called the «first Coordination Directive». 

2.  This  Directive  shall  apply  to  risks  referred  to  in  the  first  subparagraph  of 
paragraph  1  which  by  reason  of  their  nature  or  size  call  for  the  participation  of 
several insured for their coverage. 

Any  difficulties  which  may  arise  in  implementing  this  principle  shall  be  examined 
pursuant to Article 8. 

74 

OJ No L 228, 16. 8. 1973, p. 3. 

EN 

200 

   EN 

 
 
 
 
 
 
 
                                                 
(cid:208) 78/473/EEC Art. 2 (adapted) 

1. This Directive shall apply only to those Community co-insurance operations ⌦which shall 
be  those  co-insurance  operations  which  relate  to  one  or  more  risks  classified  in 
classes 3 to 16 of point A of Annex I and ⌫ which satisfy the following conditions: 

⌦ (a) 

the  risk  is  a  large  risk  as  referred  to  in  Article  7  (2)  of  Regulation 

[ROME I]; ⌫ 

(ab)  the risk, within the meaning of Article 1 (1), is covered by a single contract at 
an  overall  premium  and  for  the  same  period  by  two  or  more  insurance 
undertakings,  hereinafter  referred  to  as  «co-insurers»,  each  for  its  own  part;, 
⌦ as  'co-insurers', ⌫  one  of  these  undertakings  shall  be  ⌦ them  being ⌫ 
the leading insurer ⌦ insurance undertaking ⌫ ; 

(bc)  the risk is situated within the Community; 

(cd)  for  the  purpose  of  covering  this  ⌦ the ⌫  risk,  the  leading  insurer  is 
authorized  in  accordance  with  the  conditions  laid  down  in  the  First 
Coordination Directive, i.e. he ⌦ insurance undertaking ⌫ is treated as if he 
⌦ it ⌫  were  the  insurer  ⌦ insurance  undertaking ⌫  covering  the  whole 
risk; 

(de)  at  least  one  of  the  co-insurers  participates  in  the  contract  by  means  of 
⌦ through ⌫  a  head  office,  agency  or  a  branch  established  in  a  Member 
State other than that of the leading insurer ⌦ insurance undertaking ⌫ ; 

(ef) 

the leading insurer ⌦ insurance undertaking ⌫ fully assumes the leader's role 
in co-insurance practice and in particular determines the terms and conditions 
of insurance and rating. 

(cid:208) 78/473/EEC Art. 1(1) (adapted) 

⌦ 2.  This section ⌫ It shall not apply, however, to Community co-insurance operations 
covering  ⌦ those ⌫  risks  classified  under  in  class  13  in  point  A.  13  of  Annex  I 
which concern damage arising from nuclear sources or from medicinal products. The 
exclusion  of  insurance  against  damage  arising  from  medicinal  products  shall  be 
examined by the Council within five years of the notification of this Directive. 

3. 

Articles 145 to 150 shall apply only to the leading insurance undertaking. 

(cid:216) new 

(cid:208) 78/473/EEC Art. 2 (adapted) 
(cid:214) new 

2 4. 

Those  cCo-insurance  operations  which  do  not  satisfy  the  conditions  set  out  in 
paragraph 1 or which cover risks other than those specified in Article 1 shall remain 
subject  to  the  national  laws  operative  at  the  time  when  ⌦ provisions  of ⌫  this 
Directive comes into force (cid:214) except those of this Section . 

EN 

201 

   EN 

 
 
 
 
 
(cid:208) 78/473/EEC Art. 3 (adapted) 

Article 189 

⌦ Participation in Community co-insurance ⌫ 

The right  of ⌦ insurance ⌫ undertakings which have  their head office  in  a Member State 
and which are subject to and satisfy the requirements of the First  Coordination Directive to 
participate  in  Community  co-insurance  may  ⌦ shall ⌫  not  be  made  subject  to  any 
provisions other than those of this Directive Section. 

(cid:208) 78/473/EEC Art. 4 (adapted) 
(cid:214) new 

Article 190 

⌦ Technical provisions ⌫ 

The amount of the technical reserves ⌦ provisions ⌫ shall be determined by the different 
co-insurers according to the rules fixed by the ⌦ their  home ⌫ Member State  where  they 
are established or, in the absence of such rules, according to customary practice in that State. 

However, the reserve for outstanding claims (cid:214) technical provisions  shall be at least equal 
to that ⌦ those ⌫ determined by the leading insurer according to the rules or practice of the 
⌦ its home Member ⌫ State where such insurer is established. 

2. 

The technical reserves established by the different co-insurers shall be represented by 
matching assets. 

However,  relaxation  of  tThe  matching  assets  rule  may  be  granted  by  the  Member 
States  in  which  the  co-insurers  are  established  in  order  to  take  account  of  the 
requirements of sound management of insurance undertakings. 

Such assets shall be localizsed either in the Member States in which the co-insurers 
are  established  or  in  the  Member  State  in  which  the  leading  insurer  is  established, 
whichever the insurer chooses . 

(cid:208) 78/473/EEC Art. 5 (adapted) 

Article 191 

⌦ Statistical data ⌫ 

The  ⌦ Home ⌫  Member  States  shall  ensure  that  co-insurers  established  in  their  territory 
keep statistical data showing the extent of Community co-insurance operations ⌦ in which 
they participate ⌫ and the countries ⌦ Member States ⌫ concerned. 

EN 

202 

   EN 

 
 
 
 
 
 
 
(cid:208) 78/473/EEC Art. 7 (adapted) 

Article 192 

⌦ Treatment of co-insurance contracts in winding up proceedings ⌫ 

In the event of an insurance undertaking being wound up, liabilities arising from participation 
in  Community  co-insurance  contracts  shall  be  met  in  the  same  way  as  those  arising  under 
⌦ the ⌫  that  undertaking's  other  insurance  contracts  ⌦ of  that  undertaking ⌫  without 
distinction as to the nationality of the insured and of the beneficiaries. 

(cid:208) 78/473/EEC Art. 6 (adapted) 

Article 193 

⌦ Exchange of information between supervisory authorities ⌫ 

⌦ For the purposes of the implementation of this Section ⌫Tthe supervisory authorities of 
the Member States  shall  cooperate  closely in the implementation of this Directive  and shall 
⌦ ,  in  the  framework  of  the  cooperation  referred  to  in  Title  I,  Chapter  IV,  Section  5, ⌫ 
provide each other with all the information necessary to this end. 

(cid:208) 78/473/EEC Art. 8 (adapted) 

Article 194 

⌦ Cooperation on implementation ⌫ 

The Commission and the competent⌦ supervisory ⌫ authorities of the Member States shall 
cooperate  closely  for  the  purposes  of  examining  any  difficulties  which  might  arise  in 
implementing this Directive Section. 

In the course of this cooperation they shall examine in particular any practices which might 
indicate that the purpose of the provisions of this Directive and in particular of Article 1 (2) 
and  Article  2  are  being  misused  either  in  that  the  leading  insurer  ⌦ insurance 
undertaking ⌫ does not assume the leader's role ⌦ of the leader ⌫ in co-insurance practice 
or  that  the  risks  clearly  do  not  require  the  participation  of  two  or  more  insurers  for  their 
coverage. 

EN 

203 

   EN 

 
 
 
 
 
 
 
(cid:208) 84/641/EEC Art. 15 (adapted) 

⌦ SECTION 3 - ASSISTANCE ⌫ 

Article 195 

⌦ Activities similar to tourist assistance ⌫ 

Any  Member  State  ⌦ States ⌫  may,  in  its  territory,  make  the  provision  of  assistance  to 
persons who get into difficulties in circumstances other than those referred to in Article 1 2 
(2) subject to the arrangements introduced by the First this Directive. 

If  a  Member  State  makes  use  of  this  possibility  it  shall,  for  the  purposes  of  applying  these 
arrangements, treat such activity as if it were ⌦ classified ⌫ listed in class 18 in point A of 
the Annex I to the First Directive without prejudice to point C thereof. 

The  preceding  ⌦ second ⌫  paragraph  shall  in  no  way  affect  the  possibilities  for 
classification  laid  down  in  the  Annex  I  to  the  First  Directive  for  activities  which  obviously 
come under other classes. 

It shall not be possible to refuse authorization to an agency or branch solely on the grounds 
that  the  activity  covered  by  this  Article  is  classified  differently  in  the  Member  State  in  the 
territory of which the head office of the undertaking is situated. 

⌦ SECTION 4 – LEGAL EXPENSES INSURANCE ⌫ 

(cid:208) 87/344/EEC (adapted) 

Article 1 

The purpose of this Directive is to coordinate the provisions laid down by law, regulation or 
administrative  action  concerning  legal  expenses  insurance  as  referred  to  in  paragraph  17  of 
point  A  of  the  Annex  to  Council  Directive  73/239/EEC  in  order  to  facilitate  the  effective 
exercise of freedom of establishment and preclude as far as possible any conflict of interest 
arising in particular out of the fact that the insurer is covering another person or is covering a 
person in respect of both legal expenses and any other class in that Annex and, should such a 
conflict arise, to enable it to be resolved.  

(cid:208) 87/344/EEC Art. 2 (adapted) 

Article 196 

⌦ Scope of this Section ⌫ 

1. 

This  Directive  Section  shall  apply  to  legal  expenses  insurance.  Such  consists  in 
⌦ referred  to  in  class  17  in  point  A  of  Annex  I  whereby  an  insurance ⌫ 
undertaking ⌦ promises ⌫, against the payment of a premium, to bear the costs of 
legal proceedings and to provide other services directly linked to insurance cover, in 
particular with a view to ⌦ the following ⌫ : 

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(a) 

securing  compensation  for  the  loss,  damage  or  injury  suffered  by  the  insured 
person, by settlement out of court or through civil or criminal proceedings,; 

(b)  defending  or  representing  the  insured  person  in  civil,  criminal,  administrative 
or  other  proceedings  or  in  respect  of  any  claim  made  against  him  ⌦ that 
person ⌫ . 

2. 

This Directive Section shall not, however, apply to ⌦ any of the following ⌫ : 

(a) 

(b) 

legal  expenses  insurance  where  such  insurance  concerns  disputes  or  risks 
arising out of, or in connection with, the use of sea-going vessels,; 

the activity pursued by the insurer ⌦ an insurance undertaking ⌫ providing 
civil  liability  cover  for  the  purpose  of  defending  or  representing  the  insured 
person in any inquiry or proceedings if that activity is at the same time pursued 
in  the  insurer's  ⌦ the ⌫  own  interest  ⌦of  that  insurance  undertaking ⌫ 
under such cover,; 

(c)  where  a  Member  State  so  chooses,  the  activity  of  legal  expenses  insurance 
undertaken  by  an  assistance  insurer  where  ⌦ which  complies  with  the 
following conditions: ⌫ 

(i) 

this ⌦ the ⌫  activity  is  carried  out  in  a  Member  State  other  than  the 
one  in  which  ⌦ the  habitual  residence  of ⌫  the  insured  person 
normally resides, ⌦ is situated; ⌫ 

(ii)  where it ⌦ the activity ⌫ forms part of a contract covering solely the 
assistance provided for persons who fall into difficulties while travelling, 
their  permanent 
while  away  from  home  or  while  away  from 
⌦ habitual ⌫ residence. 

In  this  event  ⌦ the  case  referred  to  in  point  (c)  of  the  first  subparagraph ⌫  the 
contract must ⌦ shall ⌫ clearly state that the cover in question ⌦ concerned ⌫ 
is limited to the circumstances referred to in the foregoing sentence ⌦ that point ⌫ 
and is ancillary to the assistance. 

(cid:208) 87/344/EEC Art. 3 (adapted) 

Article 197 

⌦ Separate contracts ⌫ 

Legal  expenses  cover  shall  be  the  subject  of  a contract  separate  from  that  drawn  up  for  the 
other  classes  of  insurance  or  shall  be  dealt  with  in  a  separate  section  of  a  single  policy  in 
which  the  nature  of  the  legal  expenses  cover  and,  should  the  Member  State  so  request,  the 
amount of the relevant premium are specified. 

Article 198 

⌦ Management of claims ⌫ 

21. 

Each  ⌦ The  home ⌫  Member  State  shall  take  the  necessary  measures  to  ensure 
that  the  ⌦ insurance ⌫  undertakings  established  within  its  territory  adopt,  in 
accordance with the option imposed ⌦ chosen ⌫ by the Member State, or at their 

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. 

(a)2 

own  choice,  if  the  Member  State  so  agrees,  at  least  one  of  the  following  solutions, 
which  are  alternatives:  ⌦ methods  for  the  management  of  claims  set  out  in 
paragraphs 2, 3 and 4. ⌫ 

Whichever  solution  is  adopted,  the  interest  of  persons  having  legal  expenses  cover 
shall  be  regarded  as  safeguarded  in  an  equivalent  manner  under  this  Directive 
Section. 

the  undertaking  ⌦ Insurance  undertakings ⌫  shall  ensure  that  no  member  of  the 
staff who is concerned with the management of legal expenses claims or with legal 
advice  in  respect  thereof  carries  on  at  the  same  time  a  similar  activity  -  if  the 
undertaking  is  a  composite  one,  for  another  class  transacted  by  it,  -  irrespective  of 
whether  the  undertaking  is  a  composite  or  a  specialized  one,  in  another 
⌦ undertaking ⌫  having  financial,  commercial  or  administrative  links  with  the 
first ⌦ insurance ⌫ undertaking and carrying on one or more of the other classes 
of insurance set out in Directive 73/239/EEC Annex I;. 

⌦ Composite insurance undertakings shall ensure that no member of the staff who 
is concerned with the management of legal expenses claims or with legal advice in 
respect  thereof  carries  on  at  the  same  time  a  similar  activity  for  another  class 
transacted by them. ⌫ 

(b)3. 

tThe ⌦ insurance ⌫ undertaking shall entrust the management of claims in respect 
of legal expenses insurance to an undertaking having separate legal personality. That 
undertaking shall be mentioned in the separate contract or separate section referred to 
in paragraph 1⌦ Article 197 ⌫. 

legal  personality  has 

the  undertaking  having  separate 

If 
links  with  an 
⌦ insurance ⌫  undertaking  which  carries  on  one  or  more  of  the  other  classes  of 
insurance referred to in point A of the Annex to Directive 73/239/EEC I, members of 
the  staff  of  the  undertaking  ⌦ having  separate  legal  personality ⌫  who  are 
concerned  with  the  processing  ⌦ management ⌫  of  claims  or  with  legal  advice 
connected  with  such  processing ⌦ management ⌫  may  not  pursue  the  same  or  a 
similar  activity  in  the  other  ⌦ insurance ⌫  undertaking  at  the  same  time.  In 
addition, Member States may impose the same requirements on the members of the 
⌦ administrative or ⌫ management body.; 

(c)4. 

the  undertaking  shall,  iIn  the  contract,  afford  ⌦ the  insurance  undertaking  shall 
grant ⌫  the  insured  person  ⌦ persons ⌫  the  right  to  entrust  the  defence  of  his 
⌦ their ⌫  interests,  from  the  moment  that  he  ⌦ they  have ⌫  has  the  right  to 
claim from his ⌦ their ⌫ insurer under the policy, to a lawyer of his ⌦ their ⌫ 
choice or, to the extent that national law so permits, any other appropriately qualified 
person. 

(cid:208) 87/344/EEC Art. 4 (adapted) 

Article 199 

⌦ Free choice of lawyer ⌫ 

1. 

Any contract of legal expenses insurance shall expressly recognize that ⌦ provide 
the following ⌫ : 

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(a)  ⌦ that, ⌫  where  recourse  is  had  to  a  lawyer  or  other  person  appropriately 
qualified  according  to  national  law  in  order  to  defend,  represent  or  serve  the 
interests  of  the  insured  person  in  any  inquiry  or  proceedings,  that  insured 
person shall be free to choose such lawyer or other person; 

(b)  ⌦ that ⌫ the insured person ⌦ persons ⌫ shall be free to choose a lawyer 
or, if he ⌦ they ⌫ so prefers and to the extent that national law so permits, 
any  other  appropriately  qualified  person,  to  serve  his  ⌦ their ⌫  interests 
whenever a conflict of interests arises. 

2. 

⌦ For  the  purposes  of  this  Section ⌫  "Llawyer"  means  any  person  entitled  to 
pursue  his  professional  activities  under  one  of  the  denominations  laid  down  in 
Council Directive 77/249/EEC75 of 22 March 1977 to facilitate the effective exercise 
by lawyers of freedom to provide services. 

(cid:208) 87/344/EEC Art. 5 (adapted) 

Article 200 

⌦ Exception to the free choice of lawyer ⌫ 

1. 

Each  Member  State  ⌦ States ⌫  may  provide  exemption  from  the  application  of 
Article 199(1) 4 (1) for legal expenses insurance if all the following conditions are 
fulfilled: 

(a) 

(b) 

(c) 

the  insurance  is  limited  to  cases  arising  from  the  use  of  road  vehicles  in  the 
territory of the Member State concerned; 

the  insurance  is  connected  to  a  contract  to  provide  assistance  in  the  event  of 
accident or breakdown involving a road vehicle; 

neither  the  legal  expenses  insurer  ⌦ insurance  undertaking ⌫  nor  the 
assistance insurer carries out any class of liability insurance; 

(d)  measures are taken so that the legal counsel and representation of each of the 
parties to a dispute is effected by completely independent lawyers when these 
parties  are  insured  for  legal  expenses  by  the  same  insurer  ⌦ insurance 
undertaking ⌫. 

2. 

The ⌦ An ⌫ exemption granted by a Member State to an undertaking pursuant to 
paragraph 1 shall not affect the application of Article 198 3 (2). 

(cid:208) 87/344/EEC Art. 6 (adapted) 

Article 201 

⌦ Arbitration ⌫ 

Member  States  shall  adopt  all  appropriate  measures  to  ensure  that, ⌦ for  the  settlement  of 
any dispute between the legal expenses insurance undertaking and the insured and ⌫ without 

75 

OJ L 78, 26.3.1977, p. 17. 

EN 

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prejudice  to any  right of appeal to a judicial  body  which  might  be  provided  for  by  national 
law, ⌦ provide  for ⌫  an  arbitration  or  other  procedure  offering  comparable  guarantees  of 
objectivity  is  provided  for  whereby,  in  the  event  of  a  difference  of  opinion  between  a  legal 
expenses insurer and his insured, a decision can be taken on the attitude to be adopted in order 
to settle the dispute. 

The insurance contract must mention ⌦ shall provide for ⌫ the right of the insured person 
to have recourse to such a procedure. 

(cid:208) 87/344/EEC Art. 7 (adapted) 

Article 202 

⌦ Conflict of interest ⌫ 

Whenever  a  conflict  of  interests  arises  or  there  is  disagreement  over  the  settlement  of  the 
dispute,  the  legal  expenses  insurer  or,  where  appropriate,  the  claims  settlement  office  shall 
inform  the  person  insured  of  the  right  referred  to  in  Article  4  199  (1)  ⌦ and ⌫  the 
possibility of having recourse to the procedure referred to in Article 6 201. 

(cid:208) 87/344/EEC Art. 8 (adapted) 

Article 203 

⌦ Abolition of specialisation of legal expenses insurance ⌫ 

Member  States  shall  abolish  all  provisions  which  prohibit  an  insurer  ⌦ insurance 
undertaking ⌫  from  carrying  out  ⌦ on ⌫  within  their  territory  legal  expenses  insurance 
and other classes of insurance at the same time. 

⌦ SECTION 5 - HEALTH INSURANCE ⌫ 

(cid:208) 92/49/EEC Art. 54 (adapted) 

Article 204 

⌦ Health insurance as an alternative to social security ⌫ 

1. 

Notwithstanding  any  provision  to  the  contrary,  a  Member  State  ⌦ States ⌫  in 
which contracts covering the risks in class 2 of in point A of the Annex to Directive 
73/239/EEC I may serve as a partial or complete alternative to health cover provided 
by the statutory social security system may require ⌦ the following: ⌫ 

(a) 

(b) 

that those contracts comply with the specific legal provisions adopted by that 
Member State to protect the general good in that class of insurance,; 

and that the general and special conditions of that insurance be communicated 
to  the  competent⌦ supervisory ⌫  authorities  of  that  Member  State  before 
use. 

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2. 

Member States may require that the health insurance system referred to in paragraph 
1 be operated on a technical basis similar to that of life assurance ⌦ insurance ⌫ 
where: ⌦ all the following conditions are fulfilled: ⌫ 

(a) 

the  premiums  paid  are  calculated  on  the  basis  of  sickness  tables  and  other 
statistical  data  relevant  to  the  Member  State  in  which  the  risk  is  situated  in 
accordance with the mathematical methods used in insurance,; 

(b) 

a reserve is set up for increasing age,; 

(c) 

(d) 

(e) 

the  insurer  may  cancel  the  contract  only  within  a  fixed  period  determined  by 
the Member State in which the risk is situated,; 

the  contract  provides  that  premiums  may  be  increased  or  payments  reduced, 
even for current contracts,; 

the  contract  provides  that  the  policyholder  ⌦ policyholders ⌫  may  change 
his⌦ their ⌫ existing contract into a new contract complying with paragraph 
1,  offered  by  the  same  insurance  undertaking  or  the  same  branch  and  taking 
account of his ⌦ their ⌫ acquired rights. 

In  particular  ⌦ the  case  referred  to  in  point  (e)  of  the  first  subparagraph ⌫  , 
account  must  ⌦ shall ⌫  be  taken  of  the  reserve  for  increasing  age  and  a  new 
medical examination may be required only for increased cover. 

In  that  event,  tThe  competent⌦ supervisory ⌫  authorities  of  the  Member  State 
concerned shall publish the sickness tables and other relevant statistical data referred 
to 
the 
transmit 
competent⌦ supervisory ⌫ authorities of the home Member State. 

first  subparagraph  and 

in  point 

(a)  of 

them 

the 

to 

The  premiums  must  be  sufficient,  on  reasonable  actuarial  assumptions,  for 
⌦ insurance ⌫  undertakings  to  be  able  to  meet  all  their  commitments  having 
regard to all aspects of their financial situation. The home Member State shall require 
that the technical basis for the calculation of premiums ⌦ to ⌫ be communicated 
to its competent ⌦ supervisory ⌫ authorities before the product is circulated. 

This The third and fourth subparagraphs shall also apply where existing contracts are 
modified. 

⌦ SECTION 6 – INSURANCE AGAINST ACCIDENTS AT WORK ⌫ 

(cid:208) 92/49/EEC Art. 55 (adapted) 

Article 205 

⌦ Compulsory insurance against accidents at work ⌫ 

Member  States  may  require  that  any  insurance  undertaking  offering,  at  its  own  risk, 
compulsory  insurance  against  accidents  at  work  within  their  territories  comply  with  the 
specific provisions of their national law concerning such insurance, except for the provisions 
concerning  financial  supervision,  which  shall  be  the  exclusive  responsibility  of  the  home 
Member State. 

EN 

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⌦ CHAPTER III - PROVISIONS SPECIFIC TO LIFE 
INSURANCE ⌫ 

(cid:208) 2002/83/EC Art. 12 (adapted) 

Article 206 

Prohibition on compulsory ceding of part of underwriting 

Member States may ⌦ shall ⌫ not require assurance ⌦ life insurance ⌫ undertakings to 
cede  part  of  their  underwriting  of  activities  listed  in  Article  2  to  an  organisation  or 
organisations designated by national regulations ⌦ law ⌫ . 

(cid:208) 2002/83/EC Art. 21 (adapted) 

Article 207 

Premiums for new business 

Premiums for new business shall be sufficient, on reasonable actuarial assumptions, to enable 
assurance ⌦ life insurance ⌫ undertakings to meet all their commitments and, in particular, 
to establish adequate technical provisions. 

For  ⌦ that ⌫  this  purpose,  all  aspects  of  the  financial  situation  of  an  assurance  ⌦ life 
insurance ⌫ undertaking may be taken into account, without the input from resources other 
than premiums and income earned thereon being systematic and permanent in such a way that 
it may jeopardise the undertaking's solvency ⌦ of the undertaking concerned ⌫ in the long 
term. 

(cid:208) 2002/83/EC 

Article 25 

Contracts linked to UCITS or share index 

1. 

2. 

Where the benefits provided by a contract are directly linked to the value of units in 
an  UCITS  or  to  the  value  of  assets  contained  in  an  internal  fund  held  by  the 
insurance undertaking, usually divided into units, the technical provisions in respect 
of those benefits must be represented as closely as possible by those units or, in the 
case where units are not established, by those assets. 

Where  the  benefits  provided  by  a  contract  are  directly  linked  to  a  share  index  or 
some other reference value other than those referred to in paragraph 1, the technical 
provisions  in  respect  of  those  benefits  must  be  represented  as  closely  as  possible 
either by the units deemed to represent the reference value or, in the case where units 
are  not  established,  by  assets  of  appropriate  security  and  marketability  which 
correspond as closely as possible with those on which the particular reference value 
is based. 

EN 

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3. 

Articles 22 and 24 shall not apply to assets held to match liabilities which are directly 
linked to the benefits referred to in paragraphs 1 and 2 of this Article. Rreferences to 
the technical provisions in Article 24 shall be to the technical provisions excluding 
those in respect of such liabilities. 

4.  Where  the  benefits  referred  to  in  paragraphs  1  and  2  of  this  Article  include  a 
guarantee  of  investment  performance  or  some  other  guaranteed  benefit,  the 
corresponding additional technical provisions shall be subject to Articles 22, 23, and 
24. 

Article 26 

Matching rules 

1. For the purposes of Articles 20(3) and 54, Member States shall comply with Annex II as 
regards the matching rules. 

2. This Article the first paragraph shall not apply to the commitments referred to in Article 25. 

CHAPTER 2 IV - Rules relating ⌦ specific ⌫ to technical 
provisions ⌦ reinsurance ⌫ 

(cid:208) 2005/68/EC (adapted) 
(cid:214) new 

Article 32 

Establishment of technical provisions 

1. The home Member State shall require every reinsurance undertaking to establish adequate 
technical provisions in respect of its entire business. 

The amount of such technical provisions shall be determined in accordance with the rules laid 
down  in  Directive  91/674/EEC.  Where  applicable,  the  home  Member  State  may  lay  down 
more specific rules in accordance with Article 20 of Directive 2002/83/EC. 

2. Member States shall not retain or introduce a system with gross reserving which requires 
pledging  of  assets  to  cover  unearned  premiums  and  outstanding  claims  provisions  if  the 
reinsurer  is  a  reinsurance  undertaking  authorised  in  accordance  with  this  Directive  or  an 
insurance undertaking authorised in accordance with Directives 73/239/EEC or 2002/83/EC. 

3.  When  the  home  Member  State  allows  any  technical  provisions  to  be  covered  by  claims 
against  reinsurers  who  are  not  authorised  in  accordance  with  this  Directive  or  insurance 
undertakings  which  are  not  authorised  in  accordance  with  Directives  73/239/EEC  or 
2002/83/EC, it shall set the conditions for accepting such claims. 

Article 33 

Equalisation reserves 

1. The home Member State shall require every reinsurance undertaking which reinsures risks 
included  in  class  14  listed  in  point  A  of  the  Annex  to  Directive  73/239/EEC  to  set  up  an 
equalisation  reserve  for  the  purpose  of  offsetting  any  technical  deficit  or  above-average 
claims ratio arising in that class in any financial year. 

EN 

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2. The equalisation  reserve for  credit  reinsurance shall be calculated in accordance with the 
rules laid down by the home Member State in accordance with one of the four methods set out 
in point D of the Annex to Directive 73/239/EEC, which shall be regarded as equivalent. 

3. The home Member State may exempt reinsurance undertakings from the obligation to set 
up equalisation reserves for reinsurance of credit insurance business where the premiums or 
contributions receivable in respect of reinsurance of credit insurance are less than 4 % of the 
total premiums or contributions receivable by them and less than EUR 2500000. 

4. The home Member State may require every reinsurance undertaking to set up equalisation 
reserves for classes of risks other than credit reinsurance. The equalisation reserves shall be 
calculated according to the rules laid down by the home Member State. 

Article 34 

Assets covering technical provisions 

1.  The  home  Member  State  shall  require  every  reinsurance  undertaking  to  invest  the  assets 
covering  the  technical  provisions  and  the  equalisation  reserve  referred  to  in  Article 33  in 
accordance with the following rules: 

(a) the assets shall take account of the type of business carried out by a reinsurance 
undertaking,  in  particular  the  nature,  amount  and  duration  of  the  expected  claims 
payments,  in  such  a  way  as  to  secure  the  sufficiency,  liquidity,  security,  quality, 
profitability and matching of its investments; 

(b)  the  reinsurance  undertaking  shall  ensure  that  the  assets  are  diversified  and 
adequately  spread  and  allow  the  undertaking  to  respond  adequately  to  changing 
economic circumstances, in particular developments in the financial markets and real 
estate markets or major catastrophic events. The undertaking shall assess the impact 
of irregular market circumstances on its assets and shall diversify the assets in such a 
way as to reduce such impact; 

(c)  investment  in  assets  which  are  not  admitted  to  trading  on  a  regulated  financial 
market shall in any event be kept to prudent levels; 

(d) investment in derivative instruments shall be possible insofar as they contribute 
to a reduction of investment risks or facilitate efficient portfolio management. They 
shall  be  valued  on  a  prudent  basis,  taking  into  account  the  underlying  assets,  and 
included  in  the  valuation  of  the  institution's  assets.  The  institution  shall  also  avoid 
excessive risk exposure to a single counterparty and to other derivative operations; 

(e)  the  assets  shall  be  properly  diversified  in  such  a  way  as  to  avoid  excessive 
reliance  on  any  one  particular  asset,  issuer  or  group  of  undertakings  and 
accumulations of risk in the portfolio as a whole. Investments in assets issued by the 
same  issuer  or  by  issuers  belonging  to  the  same  group  shall  not  expose  the 
undertaking to excessive risk concentration. 

Member States may decide not to apply the requirements referred to in point (e) to investment 
in government bonds. 

2. Member States shall not require reinsurance undertakings situated in their territory to invest 
in particular categories of assets. 

3.  Member  States  shall  not  subject  the  investment  decisions  of  a  reinsurance  undertaking 
situated in their territory or its investment manager to any kind of prior approval or systematic 
notification requirements. 

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4.  Notwithstanding  paragraphs 1  to  3,  the  home  Member  State  may,  for  every  reinsurance 
undertaking whose head office is situated in its territory, lay down the following quantitative 
rules, provided that they are prudentially justified: 

(a) investments of gross technical provisions in currencies other than those in which 
technical provisions are set should be limited to 30 %; 

(b) investments of gross technical provisions in shares and other negotiable securities 
treated  as  shares,  bonds  and  debt  securities  which  are  not  admitted  to  trading  on  a 
regulated market should be limited to 30 %; 

(c) the home Member State may require every reinsurance undertaking to invest no 
more  than  5 %  of  its  gross  technical  provisions  in  shares  and  other  negotiable 
securities  treated  as  shares,  bonds,  debt  securities  and  other  money  and  capital 
market  instruments  from  the  same  undertaking,  and  no  more  than  10 %  of  its  total 
gross technical provisions in shares and other negotiable securities treated as shares, 
bonds,  debt  securities  and  other  money  and  capital  market  instruments  from 
undertakings which are members of the same group. 

5.  Furthermore,  the  home  Member  State  shall  lay  down  more  detailed  rules  setting  the 
conditions  for  the  use  of  amounts  outstanding  from  a  special  purpose  vehicle  as  assets 
covering technical provisions pursuant to this Article. 

CHAPTER 3 

RULES RELATING TO THE SOLVENCY MARGIN AND TO THE GUARANTEE FUND 

SECTION 1 

AVAILABLE SOLVENCY MARGIN 

Article 35 

General rule 

Each  Member  State  shall  require  of  every  reinsurance  undertaking  whose  head  office  is 
situated in its territory an adequate available solvency margin in respect of its entire business 
at all times, which is at least equal to the requirements of this Directive. 

Article 36 

Eligible items 

1.  The  available  solvency  margin  shall  consist  of  the  assets  of  the  reinsurance  undertaking 
free of any foreseeable liabilities, less any intangible items, including: 

(a) the paid-up share capital or, in the case of a mutual reinsurance undertaking, the 
effective  initial  fund  plus  any  members'  accounts  which  meet  all  the  following 
criteria: 

(i)  the  memorandum  and  articles  of  association  shall  stipulate  that  payments 
may be made from those accounts to members only in so far as this does not 
cause  the  available  solvency  margin  to  fall  below  the  required  level,  or,  after 

EN 

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the dissolution of the undertaking, if all the undertaking's other debts have been 
settled; 

(ii) the memorandum and articles of association shall stipulate, with respect to 
any  payments  referred  to  in  point  (i)  for  reasons  other  than  the  individual 
termination of membership, that the competent authorities must be notified at 
least one month in advance and can prohibit the payment within that period; 

(iii) the relevant provisions of the memorandum and articles of association may 
be amended only after the competent authorities have declared that they have 
no objection to the amendment, without prejudice to the criteria stated in points 
(i) and (ii); 

(b)  statutory  and  free  reserves  which  neither  correspond  to  underwriting  liabilities 
nor are classified as equalisation reserves; 

(c) the profit or loss brought forward after deduction of dividends to be paid. 

2. The available solvency margin shall be reduced by the amount of own shares directly held 
by the reinsurance undertaking. 

For  those  reinsurance  undertakings  which  discount  or  reduce  their  non-life  technical 
provisions  for  claims  outstanding  to  take  account  of  investment  income  as  permitted  by 
Article 60(1)(g) of Directive 91/674/EEC, the available solvency margin shall be reduced by 
the  difference  between  the  undiscounted  technical  provisions  or  technical  provisions  before 
deductions  as  disclosed  in  the  notes  on  the  accounts,  and  the  discounted  or  technical 
provisions after deductions. This adjustment shall be made for all risks listed in point A of the 
Annex  to  Directive  73/239/EEC,  except  for  risks  listed  under  classes  1  and  2  of  point  A  of 
that Annex. For classes other than 1 and 2 listed in point A of that Annex, no adjustment need 
be made in respect of the discounting of annuities included in technical provisions. 

In  addition  to  the  deductions  in  the  first  and  second  subparagraphs,  the  available  solvency 
margin shall be reduced by the following items: 

(a) participations which the reinsurance undertaking holds in the following entities: 

(i)  insurance  undertakings  within  the  meaning  of  Article 6  of  Directive 
73/239/EEC,  Article 4  of  Directive  2002/83/EC,  or  Article 1(b)  of  Directive 
98/78/EC, 

(ii) reinsurance undertakings within the meaning of Article 3 of this Directive 
or  non-member  country  reinsurance  undertakings  within  the  meaning  of 
Article 1(l) of Directive 98/78/EC, 

(iii)  insurance  holding  companies  within  the  meaning  of  Article 1(i)  of 
Directive 98/78/EC, 

(iv)  credit  institutions  and  financial  institutions  within  the  meaning  of 
Article 1(1) and (5) of Directive 2000/12/EC, 

(v)  investment  firms  and  financial  institutions  within  the  meaning  of 
Article 1(2) of Directive 93/22/EEC76 and of Article 2(4) and (7) of Directive 
93/6/EEC77; 

76 

Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field (OJ L 141, 
11.6.1993, p. 27). Directive as last amended by Directive 2002/87/EC of the European Parliament and 
of the Council (OJ L 35, 11.2.2003, p. 1). 

EN 

214 

   EN 

 
 
 
 
 
 
 
 
 
 
 
                                                 
(b) each of the following items which the reinsurance undertaking holds in respect of 
the entities defined in (a) in which it holds a participation: 

(i) instruments referred to in paragraph 4, 

(ii) instruments referred to in Article 27(3) of Directive 2002/83/EC, 

(iii)  subordinated  claims  and  instruments  referred  to  in  Article 35  and 
Article 36(3) of Directive 2000/12/EC. 

Where shares in another credit institution, investment firm, financial institution, insurance or 
reinsurance undertaking or insurance holding company are held temporarily for the purposes 
of a financial assistance operation designed to reorganise and save that entity, the competent 
authority  may  waive  the  provisions  on  deduction  referred  to  under  (a)  and  (b)  of  the  third 
subparagraph. 

As  an  alternative  to  the  deduction  of  the  items  referred  to  in  (a)  and  (b)  of  the  third 
subparagraph which the reinsurance undertaking holds in credit institutions, investment firms 
and financial institutions, Member States  may  allow their reinsurance undertakings to apply 
mutatis  mutandis  methods  1,  2,  or  3  of  Annex I  to  Directive  2002/87/EC.  Method  1 
(Accounting consolidation) shall only be applied if the competent authority is confident about 
the level of integrated management and internal control regarding the entities which would be 
included  in  the  scope  of  consolidation.  The  method  chosen  shall  be  applied  in  a  consistent 
manner over time. 

Member States may provide that, for the calculation of the solvency margin as provided for 
by  this  Directive,  reinsurance  undertakings  subject  to  supplementary  supervision  in 
accordance  with  Directive  98/78/EC  or  to  supplementary  supervision  in  accordance  with 
Directive  2002/87/EC  need  not  deduct  the  items  referred  to  in  (a)  and  (b)  of  the  third 
subparagraph  which  are  held  in  credit  institutions,  investment  firms,  financial  institutions, 
insurance or reinsurance undertakings or insurance holding companies which are included in 
the supplementary supervision. 

For the purposes of the deduction of participations referred to in this paragraph, participation 
shall mean a participation within the meaning of Article 1(f) of Directive 98/78/EC. 

3. The available solvency margin may also consist of: 

(a) cumulative preferential share capital and subordinated loan capital up to 50 % of 
the  available  solvency  margin  or  the  required  solvency  margin,  whichever  is  the 
smaller, no more than 25 % of which shall consist of subordinated loans with a fixed 
maturity,  or  fixed-term  cumulative  preferential  share  capital,  provided  that,  in  the 
event  of  the  bankruptcy  or  liquidation  of  the  reinsurance  undertaking,  binding 
agreements  exist  under  which  the  subordinated  loan  capital  or  preferential  share 
capital  ranks  after  the  claims  of  all  other  creditors  and  is  not  to  be  repaid  until  all 
other debts outstanding at the time have been settled. 

Subordinated loan capital shall also fulfil the following conditions: 

(i) only fully paid-up funds may be taken into account; 

(ii) for loans with a fixed maturity, the original maturity shall be at least five 
years.  No  later  than  one  year  before  the  repayment  date  the  reinsurance 

77 

Directive  93/6/EEC  of  15 March  1993  on  the  capital  adequacy  of  investments  firms  and  credit 
institutions (OJ L 141, 11.6.1993, p. 1). Directive as last amended by Directive 2005/1/EC. 

EN 

215 

   EN 

 
 
 
 
 
 
 
 
 
                                                                                                                                                         
undertaking shall submit to the competent authorities for their approval a plan 
showing  how  the  available  solvency  margin  will  be  kept  at  or  brought  to  the 
required  level  at  maturity,  unless  the  extent  to  which  the  loan  may  rank  as  a 
component  of  the  available  solvency  margin  is  gradually  reduced  during  at 
least  the  last  five  years  before  the  repayment  date.  The  competent  authorities 
may  authorise  the  early  repayment  of  such  loans  provided  that  application  is 
made  by  the  issuing  reinsurance  undertaking  and  that  its  available  solvency 
margin will not fall below the required level; 

(iii) loans the maturity of which is not fixed shall be repayable only subject to 
five years' notice unless the loans are no longer considered as a component of 
the  available  solvency  margin  or  unless  the  prior  consent  of  the  competent 
authorities  is  specifically  required  for  early  repayment.  In  the  latter  event  the 
reinsurance  undertaking  shall  notify  the  competent  authorities  at  least  six 
months  before  the  date  of  the  proposed  repayment,  specifying  the  available 
solvency  margin  and  the  required  solvency  margin  both  before  and  after  that 
repayment.  The  competent  authorities  shall  authorise  repayment  only  if  the 
reinsurance  undertaking's  available  solvency  margin  will  not  fall  below  the 
required level; 

(iv) the loan agreement shall not include any clause providing that in specified 
circumstances,  other  than  the  winding-up  of  the  reinsurance  undertaking,  the 
debt will become repayable before the agreed repayment dates; 

(v)  the  loan  agreement  may  be  amended  only  after  the  competent  authorities 
have declared that they have no objection to the amendment; 

(b)  securities  with  no  specified  maturity  date  and  other  instruments,  including 
cumulative preferential shares other than those referred to in point (a), up to 50 % of 
the  available  solvency  margin  or  the  required  solvency  margin,  whichever  is  the 
smaller, for the total of such securities and the subordinated loan capital referred to in 
point (a) provided that they fulfil the following: 

(i)  they  may  not  be  repaid  on  the  initiative  of  the  bearer  or  without  the  prior 
consent of the competent authority; 

(ii)  the  contract  of  issue  shall  enable  the  reinsurance  undertaking  to  defer  the 
payment of interest on the loan; 

(iii) the lender's claims on the reinsurance undertaking shall rank entirely after 
those of all non-subordinated creditors; 

(iv)  the  documents  governing  the  issue  of  the  securities  shall  provide  for  the 
loss-absorption  capacity  of  the  debt  and  unpaid  interest,  while  enabling  the 
reinsurance undertaking to continue its business; 

(v) only fully paid-up amounts may be taken into account. 

4.  Upon  application,  with  supporting  evidence,  by  the  reinsurance  undertaking  to  the 
competent  authority  of  the  home  Member  State  and  with  the  agreement  of  that  competent 
authority, the available solvency margin may also consist of: 

(a) one half of the unpaid share capital or initial fund, once the paid-up part amounts 
to 25 % of that share capital or fund, up to 50 % of the available solvency margin or 
the required solvency margin, whichever is the smaller; 

EN 

216 

   EN 

 
 
 
 
 
 
 
 
 
 
 
(b)  in  the  case  of  a  non-life  mutual  or  mutual-type  association  with  variable 
contributions,  any  claim  which  it  has  against  its  members  by  way  of  a  call  for 
supplementary contribution, within the financial year, up to one half of the difference 
between  the  maximum  contributions  and  the  contributions  actually  called  in,  and 
subject to a limit of 50 % of the available solvency margin or the required solvency 
margin, whichever is the smaller. The competent national authorities shall establish 
guidelines laying down the conditions under which supplementary contributions may 
be accepted; 

(c)  any  hidden  net  reserves  arising  out  of  the  valuation  of  assets,  in  so  far  as  such 
hidden net reserves are not of an exceptional nature. 

5. In addition, with respect to life reassurance activities, the available solvency margin may, 
upon application, with supporting evidence, by the reinsurance undertaking to the competent 
authority  of  the  home  Member  State  and  with  the  agreement  of  that  competent  authority, 
consist of: 

(a)  until  31 December  2009,  an  amount  equal  to  50 %  of  the  undertaking's  future 
profits,  but  not  exceeding  25 %  of  the  available  solvency  margin  or  the  required 
solvency margin, whichever is the smaller; the amount of the future profits shall be 
obtained by multiplying the estimated annual profit by a factor which represents the 
average  period  left  to  run  on  policies;  the  factor  used  may  not  exceed  six;  the 
estimated annual profit shall not exceed the arithmetical average of the profits made 
over  the  last  five  financial  years  in  the  activities  listed  in  Article 2(1)  of  Directive 
2002/83/EC. 

Competent  authorities  may  only  agree  to  include  such  an  amount  for  the  available 
solvency margin: 

(i)  when  an  actuarial  report  is  submitted  to  the  competent  authorities 
substantiating the likelihood of emergence of these profits in the future; and 

(ii)  insofar  as  that  part  of  future  profits  emerging  from  hidden  net  reserves 
referred to in paragraph 4(c) has not already been taken into account; 

(b)  where  Zillmerising  is  not  practised  or  where,  if  practised,  it  is  less  than  the 
loading for acquisition costs included in the premium, the difference between a non-
Zillmerised  or  partially  Zillmerised  mathematical  provision  and  a  mathematical 
provision Zillmerised at a rate equal to the loading for acquisition costs included in 
the  premium;  this  figure  may  not,  however,  exceed  3,5 %  of  the  sum  of  the 
differences  between  the  relevant  capital  sums  of  life  reassurance  activities  and  the 
mathematical  provisions  for  all  policies  for  which  Zillmerising  is  possible;  the 
difference  shall  be  reduced  by  the  amount  of  any  undepreciated  acquisition  costs 
entered as an asset. 

6.  Amendments  to  paragraphs 1  to  5  of  this  Article  to  take  into  account  developments  that 
justify a technical adjustment of the elements eligible for the available solvency margin shall 
be adopted in accordance with the procedure laid down in Article 55(2). 

EN 

217 

   EN 

 
 
 
 
 
 
 
 
SECTION 2 

REQUIRED SOLVENCY MARGIN 

Article 37 

Required solvency margin for non-life reinsurance activities 

1. The required solvency margin shall be determined on the basis either of the annual amount 
of premiums or contributions, or of the average burden of claims for the past three financial 
years. 

However,  in  the  case  of  reinsurance  undertakings  which  essentially  underwrite  only  one  or 
more of the risks of credit, storm, hail or frost, the last seven financial years shall be taken as 
the reference period for the average burden of claims. 

2.  Subject  to  Article 40,  the  amount  of  the  required  solvency  margin  shall  be  equal  to  the 
higher of the two results as set out in paragraphs 3 and 4 of this Article. 

3.  The  premium  basis  shall  be  calculated  using  the  higher  of  gross  written  premiums  or 
contributions as calculated below, and gross earned premiums or contributions. 

Premiums  or  contributions  in  respect  of  the  classes  11,  12  and  13  listed  in  point  A  of  the 
Annex to Directive 73/239/EEC shall be increased by 50 %. 

Premiums or contributions in respect of classes other than classes 11, 12 and 13 listed in point 
A  of  the  Annex  to  Directive  73/239/EEC  may  be  increased  by  up  to  50 %,  for  specific 
reinsurance activities  or  contract  types,  in  order  to  take  account  of  the  specificities  of  these 
activities  or  contracts,  in  accordance  with  the  procedure  referred  to  in  Article 55(2)  of  this 
Directive.  The  premiums  or  contributions,  inclusive  of  charges  ancillary  to  premiums  or 
contributions,  due  in  respect  of  reinsurance  business  in  the  last  financial  year  shall  be 
aggregated. 

From  that  sum  there  shall  then  be  deducted  the  total  amount  of  premiums  or  contributions 
cancelled in the last financial year, as well as the total amount of taxes and levies pertaining to 
the premiums or contributions entering into the aggregate. 

The amount so obtained shall be divided into two portions, the first portion extending up to 
EUR  50000000,  the  second  comprising  the  excess;  18 %  and  16 %  of  these  portions 
respectively shall be calculated and added together. 

The sum so obtained shall be multiplied by the ratio existing in respect of the sum of the last 
three financial years between the amount of claims remaining to be borne by the reinsurance 
undertaking after deduction of amounts recoverable under retrocession and the gross amount 
of  claims;  that  ratio  may  in  no  case  be  less  than  50 %.  Upon  application,  with  supporting 
evidence,  by  the  reinsurance  undertaking  to  the  competent  authority  of  the  home  Member 
State  and  with  the  agreement  of  that  authority,  amounts  recoverable  from  special  purpose 
vehicles as referred to in Article 46 may also be deducted as retrocession. 

With the approval of the competent authorities, statistical methods may be used to allocate the 
premiums or contributions. 

4. The claims basis shall be calculated, as follows, using in respect of the classes 11, 12 and 
13 listed in point A of the Annex to Directive 73/239/EEC, claims, provisions and recoveries 
increased by 50 %. 

EN 

218 

   EN 

 
Claims, provisions and recoveries in respect of classes other than classes 11, 12 and 13 listed 
in  point  A  of  the  Annex  to  Directive  73/239/EEC,  may  be  increased  by  up  to  50 %,  for 
specific reinsurance activities or contract types, in order to take account of the specificities of 
those activities or contracts, in accordance with the procedure referred to in Article 55(2) of 
this Directive. 

The amounts of  claims paid, without  any deduction  of claims  borne by retrocessionaires, in 
the periods specified in paragraph 1 shall be aggregated. 

To that sum there shall be added the amount of provisions for claims outstanding established 
at the end of the last financial year. 

From that sum there shall be deducted the amount of recoveries effected during the periods 
specified in paragraph 1. 

From  the  sum  then  remaining,  there  shall  be  deducted  the  amount  of  provisions  for  claims 
outstanding established at the commencement of the second financial year preceding the last 
financial year for which there are accounts. If the reference period established in paragraph 1 
equals  seven  years,  the  amount  of  provisions  for  claims  outstanding  established  at  the 
commencement of the sixth financial year preceding the last financial year for which there are 
accounts shall be deducted. 

One  third,  or  one  seventh,  of  the  amount  so  obtained,  according  to  the  reference  period 
established in paragraph 1, shall be divided into two portions, the first extending up to EUR 
35000000  and  the  second  comprising  the  excess;  26 %  and  23 %  of  these  portions 
respectively shall be calculated and added together. 

The sum so obtained shall be multiplied by the ratio existing in respect of the sum of the last 
three financial years between the amount of claims remaining to be borne by the undertaking 
after  deduction  of  amounts  recoverable  under  retrocession  and  the  gross  amount  of  claims; 
that ratio may in no case be less than 50 %. Upon application, with supporting evidence, by 
the reinsurance  undertaking to the competent authority of the home  Member State and  with 
the agreement of that authority, amounts recoverable from special purpose vehicles as referred 
to in Article 46 may also be deducted as retrocession. 

With  the  approval  of  the  competent  authorities,  statistical  methods  may  be  used  to  allocate 
claims, provisions and recoveries. 

5.  If  the  required  solvency  margin  as  calculated  in  paragraphs 2,  3  and  4  is  lower  than  the 
required  solvency  margin  of  the  year  before,  the  required  solvency  margin  shall  be  at  least 
equal to the required solvency margin of the year before multiplied by the ratio between the 
amount of the technical provisions for claims outstanding at the end of the last financial year 
and the amount of the technical provisions for claims outstanding at the beginning of the last 
financial year. In these calculations technical provisions shall be calculated net of retrocession 
but the ratio may in no case be higher than 1. 

6. The fractions applicable to the portions referred to in the fifth subparagraph of paragraph 3 
and the seventh subparagraph of  paragraph 4 shall each be reduced to a third in the case of 
reinsurance of health insurance practised on a similar technical basis to that of life assurance, 
if: 

(a) the premiums paid are calculated on the basis of sickness tables according to the 
mathematical method applied in insurance; 

(b) a provision is set up for increasing age; 

EN 

219 

   EN 

 
 
 
(c)  an  additional  premium  is  collected  in  order  to  set  up  a  safety  margin  of  an 
appropriate amount; 

(d) the insurance undertaking may cancel the contract before the end of the third year 
of insurance at the latest; 

(e)  the  contract  provides  for  the  possibility  of  increasing  premiums  or  reducing 
payments even for current contracts. 

Article 38 

Required solvency margin for life reassurance activities 

1.  The  required  solvency  margin  for  life  reassurance  activities  shall  be  determined  in 
accordance with Article 37. 

2. Notwithstanding paragraph 1 of this Article, the home Member State may provide that for 
reinsurance classes of assurance business covered by Article 2(1)(a) of Directive 2002/83/EC 
linked  to  investment  funds  or  participating  contracts  and  for  the  operations  referred  to  in 
Article 2(1)(b),  2(2)(b),  (c),  (d)  and  (e)  of  Directive  2002/83/EC,  the  required  solvency 
margin is to be determined in accordance with Article 28 of Directive 2002/83/EC. 

Article 39 

Required solvency margin for a reinsurance undertaking simultaneously conducting 
non-life and life reinsurance 

1. The home Member State shall require every reinsurance undertaking conducting both non-
life and life reinsurance business to have an available solvency margin to cover the total sum 
of required solvency margins in respect of both non-life and life reinsurance activities which 
shall be determined in accordance with Articles 37 and 38 respectively. 

2.  If  the  available  solvency  margin  does  not  reach  the  level  required  in  paragraph 1  of  this 
Article, the competent authorities shall apply the measures provided for in Articles 42 and 43. 

SECTION 3 

GUARANTEE FUND 

Article 40 

Amount of the guarantee fund 

1.  One  third  of  the  required  solvency  margin  as  specified  in  Articles 37,  38  and  39  shall 
constitute the guarantee fund. This fund shall consist of the items listed in Article 36(1), (2) 
and  (3)  and,  with  the  agreement  of  the  competent  authority  of  the  home  Member  State,  in 
Article 36(4)(c). 

2. The guarantee fund shall not be less than a minimum of EUR 3000000. 

Any  Member  State  may  provide  that  as  regards  captive  reinsurance  undertakings,  the 
minimum guarantee fund shall not be not less than EUR 1000000. 

Article 41 

Review of the amount of the guarantee fund 

EN 

220 

   EN 

 
 
 
 
1.  The  amounts  in  euro  as  laid  down  in  Article 40(2)  shall  be  reviewed  annually  as  from 
10 December  2007  in  order  to  take  account  of  changes  in  the  European  index  of  consumer 
prices comprising all Member States as published by Eurostat. 

The  amounts  shall  be  adapted  automatically  by  increasing  the  base  amount  in  euro  by  the 
percentage change in that index over the period between the entry into force of this Directive 
and the review date and rounded up to a multiple of EUR 100000. 

If  the  percentage  change  since  the  last  adaptation  is  less  than  5 %,  no  adaptation  shall  take 
place. 

2.  The  Commission  shall  inform  the  European  Parliament  and  the  Council  annually  of  the 
review and the adapted amounts referred to in paragraph 1. 

(cid:208) 2005/68/EC Art. 45 

Article 208 

Finite reinsurance 

(cid:216) new 

1. 

2. 

Member  States  shall  ensure  that  insurance  and  reinsurance  undertakings  which 
conclude finite reinsurance contracts or carry on finite reinsurance activities are able 
to properly monitor, manage, control and report the risks arising from those contracts 
or activities. 

In  order  to  ensure  that  a  harmonised  approach  is  adopted  with  respect  to  finite 
reinsurance activities, the Commission may adopt implementing measures specifying 
the  provisions  of  paragraph  1  with  respect  to  the  monitoring,  management  and 
control of risks arising from finite reinsurance activities. 

Those  implementing  measures  designed  to  amend  non-essential  elements  of  this 
Directive  inter  alia  by  supplementing  it,  shall  be  adopted  in  accordance  with  the 
regulatory procedure with scrutiny referred to in Article 304 (3).  

1. 

The home Member State may lay down specific provisions concerning the pursuit of 
finite reinsurance activities regarding: 

(cid:208) 2005/68/EC Art. 45 

mandatory conditions for inclusion in all contracts issued; 

sound  administrative  and  accounting  procedures,  adequate 
mechanisms and risk management requirements; 

internal  control 

accounting, prudential and statistical information requirements; 

the  establishment  of  technical  provisions  to  ensure  that  they  are  adequate,  reliable 
and objective; 

investment  of  assets  covering technical  provisions  in  order to  ensure  that  they  take 
account  of  the  type  of  business  carried  on  by  the  reinsurance  undertaking,  in 
particular the nature, amount and duration of the expected claims payments, in such a 

EN 

221 

   EN 

 
 
 
 
 
way as to secure the sufficiency, liquidity, security, profitability and matching of its 
assets; 

rules  relating  to  the  available  solvency  margin,  required  solvency  margin  and  the 
minimum  guarantee  fund  that  the  reinsurance  undertaking  shall  maintain  in  respect 
of finite reinsurance activities. 

(cid:208) 2005/68/EC Art. 2(1)(q) 
(adapted) 

(q)3.  ⌦ For  the  purposes  of  paragraphs  1  and  2 ⌫  «finite  reinsurance»  means 
reinsurance  under  which  the  explicit  maximum  loss  potential,  expressed  as  the 
maximum  economic  risk  transferred,  arising  both  from  a  significant  underwriting 
risk and timing risk transfer, exceeds the premium over the lifetime of the contract by 
a  limited  but  significant  amount,  together  with  at  least  one  of  the  following  two 
features: 

(ia)  explicit and material consideration of the time value of money,; 

(iib)  contractual  provisions  to  moderate  the  balance  of  economic  experience 

between the parties over time to achieve the target risk transfer. 

2. 

In  the  interests  of  transparency,  Member  States  shall  communicate  the  text  of  any 
measures  laid  down  by  their  national  law  for  the  purposes  of  paragraph 1  to  the 
Commission without delay. 

(cid:208) 2005/68/EC Art. 45 

(cid:208) 2005/68/EC Art. 46 (adapted) 
(cid:214) new 

Article 209 

Special purpose vehicles 

1. 

2. 

Where  a  Member  State  ⌦ States ⌫  decides  to(cid:214) shall   allow  the  establishment 
within its ⌦ their ⌫ territory of special purpose vehicles within the meaning of this 
Directive,  (cid:214) subject  to it  shall  require  prior  (cid:214) supervisory  approval official 
authorisation thereof. 

The  Member  State  where  the  special  purpose  vehicle  is  established  shall  lay  down 
the conditions under which the activities of such an undertaking shall be carried on. 
In particular, that Member State shall lay down rules regarding: 

(cid:214) 2. 

In  order  to  ensure  that  a  harmonised  approach  is  adopted  with  respect  to  special 
purpose  vehicles,  the  Commission  may  adopt  implementing  measures  laying  down 
the following:  

(a) 

scope of authorisation; 

(b)  mandatory  conditions  for  inclusion  ⌦ to  be  included ⌫  in  all  contracts 

issued; 

EN 

222 

   EN 

 
 
 
 
 
(c) 

(d) 

(e) 

the  (cid:214) fit  and  proper  requirements  as  referred  to  in  Article  42   good  repute 
and  appropriate  professional  qualifications  of  ⌦ the ⌫  persons  running  the 
special purpose vehicle; 

fit  and  proper  requirements  for  shareholders  or  members  having  a  qualifying 
holding in the special purpose vehicle; 

sound  administrative  and  accounting  procedures,  adequate  internal  control 
mechanisms and risk management requirements; 

(f) 

accounting, prudential and statistical information requirements; 

(g) 

the solvency requirements of special purpose vehicles. 

Those  implementing  measures  designed  to  amend  non-essential  elements  of  this 
Directive  inter  alia  by  supplementing  it,  shall  be  adopted  in  accordance  with  the 
regulatory procedure with scrutiny referred to in Article 304(3). 

3. 

In  the  interests  of  transparency,  Member  States  shall  communicate  the  text  of  any 
measures  laid  down  by  their  national  law  for  the  purposes  of  paragraph 2,  to  the 
Commission without delay.  

(cid:208) 2005/68/EC Art. 46 

(cid:208) 98/78/EC 

Article 1 

Definitions 

For the purposes of this Directive: 

(a)insurance  undertaking  means  an  undertaking  which  has  received  official 
authorisation  in  accordance  with  Article  6 of  Directive  73/239/EEC  or  Article  6  of 
Directive 79/267/EEC; 

(b)non-member-country  insurance  undertaking  means  an  undertaking  which  would 
require authorisation in accordance with Article 6 of Directive 73/239/EEC or Article 
6 of Directive 79/267/EEC if it had its registered office in the Community; 

(c)reinsurance  undertaking  means  an  undertaking,  which  has  received  official 
authorisation in accordance with Article 3 of Directive 2005/68/EC of the European 
Parliament and of the Council of 16 November 2005 on reinsurance78; 

(cid:208) 2005/68/EC Art. 59.2(a) 

(d)parent undertaking means a parent undertaking within the meaning of Article 1 of 
Directive 83/349/EEC79 and any undertaking which, in the opinion of the competent 
authorities, effectively exercises a dominant influence over another undertaking; 

(cid:208) 98/78/EC 

78 

OJ L 323, 9.12.2005, p. 1. 

EN 

223 

   EN 

 
 
 
 
 
 
 
 
 
                                                 
(e)subsidiary  undertaking  means  a  subsidiary  undertaking  within  the  meaning  of 
Article 1 of Directive 83/349/EEC and any undertaking over which, in the opinion of 
the  competent  authorities,  a  parent  undertaking  effectively  exercises  a  dominant 
influence.  All  subsidiaries  of  subsidiary  undertakings  shall  also  be  considered 
subsidiaries of the parent undertaking which is at the head of those undertakings; 

(f)participation means participation within the meaning of Article 17, first sentence, 
of Directive 78/660/EEC80 or the holding, directly or indirectly, of 20 % or more of 
the voting rights or capital of an undertaking; 

(cid:208) 2002/87/EC Art. 28.1 

(g)participating  undertaking  shall  mean  an  undertaking  which  is  either  a  parent 
undertaking  or  other  undertaking  which  holds  a  participation,  or  an  undertaking 
linked with another undertaking by a relationship within the meaning of Article 12(1) 
of Directive 83/349/EEC; 

(h)related undertaking shall mean either a subsidiary or other undertaking in which a 
participation  is  held,  or  an  undertaking  linked  with  another  undertaking  by  a 
relationship within the meaning of Article 12(1) of Directive 83/349/EEC; 

(cid:208) 2005/68/EC Art. 59.2(a) 

(i)insurance  holding  company  means  a  parent  undertaking,  the  main  business  of 
which  is  to  acquire  and  hold  participations  in  subsidiary  undertakings,  where  those 
subsidiary  undertakings  are  exclusively  or  mainly 
insurance  undertakings, 
reinsurance  undertakings  or  non-member  country  insurance  undertakings  or  non-
member  country  reinsurance  undertakings,  at  least  one  of  such  subsidiary 
undertakings being an insurance undertaking, or a reinsurance undertaking and which 
is  not  a  mixed  financial  holding  company  within  the  meaning  of  Directive 
2002/87/EC of the European Parliament and of the Council of 16 December 2002 on 
the  supplementary  supervision  of  credit  institutions,  insurance  undertakings  and 
investment firms in a financial conglomerate81; 

insurance  undertaking,  a  non-member  country 

(j)mixed-activity insurance holding company means a parent undertaking, other than 
insurance  undertaking,  a 
an 
reinsurance  undertaking,  a  non-member  country  reinsurance  undertaking,  an 
insurance  holding  company  or  a  mixed  financial  holding  company  within  the 
meaning of Directive 2002/87/EC, which includes at least one insurance undertaking 
or a reinsurance undertaking among its subsidiary undertakings; 

(k)competent authorities means the national authorities which are empowered by law 
or regulation to supervise insurance undertakings or reinsurance undertakings; 

79 

80 

81 

Seventh  Council  Directive  83/349/EEC  of  13  June  1983  based  on  Article  54(3)(g)  of  the  Treaty  on 
consolidated  accounts  (OJ  L  193,  18.7.1983,  p.  1).  Directive  as  last  amended  by  the  1994  Act  of 
Accession. 
Fourth Council Directive 78/660/EEC of 25 July 1978 based on Article 54(3)(g) of the Treaty on the 
annual accounts of certain types of companies (OJ L 222, 14.8.1978, p. 11). Directive as last amended 
by the 1994 Act of Accession. 
OJ L 35, 11.2.2003, p. 1. Directive as amended by Directive 2005/1/EC (OJ L 79, 24.3.2005, p. 9). 

EN 

224 

   EN 

 
 
 
 
 
 
 
 
 
 
                                                                                                                                                         
(l)non-member country reinsurance undertaking means an undertaking which would 
require authorisation in accordance with Article 3 of Directive 2005/68/EC if it had 
its head office in the Community. 

(cid:208) 2005/68/EC Art. 59.2(b) 

(cid:208) 2005/68/EC Art. 59.3 

Article 2 

Cases of application of supplementary supervision of insurance undertakings and 
reinsurance undertakings 

1.  In  addition  to  the  provisions  of  Directive  73/239/EEC,  Directive  2002/83/EC  of  the 
European Parliament and of the Council of 5 November 2002 concerning life assurance82 and 
Directive 2005/68/EC, which lay down the rules for the supervision of insurance undertakings 
and  reinsurance  undertakings,  Member  States  shall  provide  supervision  of  any  insurance 
undertaking  or  any  reinsurance  undertaking,  which  is  a  participating  undertaking  in  at  least 
insurance 
one 
undertaking  or  non-member  country  reinsurance  undertaking,  shall  be  supplemented  in  the 
manner prescribed in Articles 5, 6, 8 and 9 of this Directive. 

reinsurance  undertaking,  non-member-country 

insurance  undertaking, 

2. Every insurance undertaking or reinsurance undertaking the parent undertaking of which is 
an  insurance  holding  company,  a  non-member  country  insurance  or  a  non-member  country 
reinsurance  undertaking  shall  be  subject  to  supplementary  supervision  in  the  manner 
prescribed in Articles 5(2), 6, 8 and 10. 

3. Every insurance undertaking or reinsurance undertaking the parent undertaking of which is 
a mixed-activity insurance holding company shall be subject to supplementary supervision in 
the manner prescribed in Articles 5(2), 6 and 8. 

Article 3 

Scope of supplementary supervision 

1.  The  exercise  of  supplementary  supervision  in  accordance  with  Article 2  shall  in  no  way 
imply that the competent authorities are required to play a supervisory role in relation to the 
non-member  country 
reinsurance 
undertaking, insurance holding company or mixed-activity insurance holding company taken 
individually. 

the  non-member  country 

insurance  undertaking, 

2. The supplementary supervision shall take into account the following undertakings referred 
to in Articles 5, 6, 8, 9 and 10: 

– 

– 

– 

82 

related undertakings of the insurance undertaking or of the reinsurance undertaking, 

participating  undertakings  in  the  insurance  undertaking  or  in  the  reinsurance 
undertaking, 

related undertakings of a participating undertaking in the insurance undertaking or in 
the reinsurance undertaking. 

OJ L 345, 19.12.2002, p. 1. Directive as last amended by Directive 2005/1/EC. 

EN 

225 

   EN 

 
 
 
 
                                                 
3.  Member  States  may  decide  not  to  take  into  account  in  the  supplementary  supervision 
referred to in Article 2 undertakings having their registered office in a non-member country 
where  there  are  legal  impediments  to  the  transfer  of  the  necessary  information,  without 
prejudice to the provisions of Annex I, point 2.5, and of Annex II, point 4. 

Furthermore, the competent authorities responsible for exercising supplementary supervision 
may in the cases listed below decide on a case-by-case basis not to take an undertaking into 
account in the supplementary supervision referred to in Article 2: 

– 

– 

if the undertaking which should be included is of negligible interest with respect to 
the  objectives  of  the  supplementary  supervision  of  insurance  undertakings  or 
reinsurance undertakings; 

if the inclusion of the financial situation of the undertaking would be inappropriate or 
misleading  with  respect  to  the  objectives  of  the  supplementary  supervision  of 
insurance undertakings or reinsurance undertakings. 

Article 4 

Competent authorities for exercising supplementary supervision 

1. Supplementary supervision shall be exercised by the competent authorities of the Member 
State in which the insurance undertaking or the reinsurance undertaking has received official 
authorisation under Article 6 of  Directive  73/239/EEC or  Article 4 of Directive 2002/83/EC 
or Article 3 of Directive 2005/68/EC. 

2.  Where  insurance  undertakings  or  reinsurance  undertakings  authorised  in  two  or  more 
Member  States  have  as  their  parent  undertaking  the  same  insurance  holding  company,  non-
member  country  insurance  undertaking,  non-member  country  reinsurance  undertaking  or 
mixed-activity  insurance  holding  company,  the  competent  authorities  of  the  Member  States 
concerned  may  reach  agreement  as  to  which  of  them  will  be  responsible  for  exercising 
supplementary supervision. 

3.  Where  a  Member  State  has  more  than  one  competent  authority  for  the  prudential 
supervision of insurance undertakings and reinsurance undertakings, such Member State shall 
take the requisite measures to organise coordination between those authorities. 

(cid:208) 98/78/EC 

Article 5 

Availability and quality of information 

1.  Member  States  shall  prescribe  that  the  competent  authorities  are  to  require  that  every 
insurance undertaking or reinsurance undertaking subject to supplementary supervision shall 
have  adequate  internal  control  mechanisms  in  place  for  the  production  of  any  data  and 
information relevant for the purposes of such supplementary supervision. 

(cid:208) 2005/68/EC Art. 59.4 

EN 

226 

   EN 

 
 
 
(cid:208) 98/78/EC 

2.  Member  States  shall  take  the  appropriate  steps  to  ensure  that  there  are  no  legal 
impediments  within  their  jurisdiction  preventing  the  undertakings  that  are  subject  to  the 
supplementary supervision and their related undertakings and participating undertakings from 
exchanging  among  themselves  any  information  relevant  for  the  purposes  of  such 
supplementary supervision. 

(cid:208) 2005/68/EC Art. 59.5 

Article 6 

Access to information 

1.  Member  States  shall  provide  that  their  competent  authorities  responsible  for  exercising 
supplementary supervision are to have access to any information which would be relevant for 
the purpose of supervision of an insurance undertaking or a reinsurance undertaking subject to 
such supplementary supervision. The competent authorities may address themselves directly 
to  the  relevant  undertakings  referred  to  in  Article 3(2)  to  obtain  the  necessary  information 
only if such information has been requested from the insurance undertaking or the reinsurance 
undertaking and has not been supplied by it. 

2.  Member  States  shall  provide  that  their  competent  authorities  may  carry  out  within  their 
territory,  themselves  or  through  the  intermediary  of  persons  whom  they  appoint  for  that 
purpose, on-the-spot verification of the information referred to in paragraph 1 at: 

– 

– 

– 

– 

– 

– 

– 

– 

the insurance undertaking subject to supplementary supervision, 

the reinsurance undertaking subject to supplementary supervision, 

subsidiary undertakings of that insurance undertaking, 

subsidiary undertakings of that reinsurance undertaking, 

parent undertakings of that insurance undertaking, 

parent undertakings of that reinsurance undertaking, 

subsidiary undertakings of a parent undertaking of that insurance undertaking. 

subsidiary undertakings of a parent undertaking of that reinsurance undertaking. 

3.  Where,  in  applying  this  Article,  the  competent  authorities  of  one  Member  State  wish  in 
specific cases to verify important information concerning an undertaking situated in another 
Member State which is a related insurance undertaking, a related reinsurance undertaking, a 
subsidiary  undertaking,  a  parent  undertaking  or  a  subsidiary  of  a  parent  undertaking  of  the 
insurance undertaking or of the reinsurance undertaking subject to supplementary supervision, 
they must ask the competent authorities of that other Member State to have that verification 
carried  out.  The  authorities  which  receive  such  a  request  must  act  on  it  within  the  limits  of 
their  jurisdiction  by  carrying  out  the  verification  themselves,  by  allowing  the  authorities 
making the request to carry it out or by allowing an auditor or expert to carry it out. 

The  competent  authority  which  made  the  request  may,  if  it  so  wishes,  participate  in  the 
verification when it does not carry out the verification itself. 

EN 

227 

   EN 

 
 
 
Article 7 

Cooperation between competent authorities 

1. Where insurance undertakings or reinsurance undertakings established in different Member 
States  are  directly  or  indirectly  related  or  have  a  common  participating  undertaking,  the 
competent authorities of each Member State shall communicate to one another on request all 
relevant information which may allow or facilitate the exercise of supervision pursuant to this 
Directive  and  shall  communicate  on  their  own  initiative  any  information  which  appears  to 
them to be essential for the other competent authorities. 

2. Where an insurance undertaking or a reinsurance undertaking and either a credit institution 
as  defined  in  Directive  2000/12/EC  of  the  European  Parliament  and  of  the  Council  of  20 
March 2000 relating to the taking up and pursuit of the business of credit institutions83 or an 
investment  firm  as  defined  in  Council  Directive  93/22/EEC  of  10 May  1993  on  investment 
services in the securities field84, or both, are directly or indirectly related or have a common 
participating  undertaking,  the  competent  authorities  and  the  authorities  with  public 
responsibility for the supervision of those other undertakings shall cooperate closely. Without 
prejudice to their respective responsibilities, those authorities shall provide one another with 
any  information  likely  to  simplify  their  task,  in  particular  within  the  framework  of  this 
Directive. 

3.  Information  received  pursuant  to  this  Directive  and,  in  particular,  any  exchange  of 
information  between  competent  authorities  which  is  provided  for  in  this  Directive  shall  be 
subject  to  the  obligation  of  professional  secrecy  defined  in  Article 16  of  Council  Directive 
92/49/EEC  of  18 June  1992  on  the  coordination  of  laws,  regulations  and  administrative 
provisions  relating  to  direct  insurance  other  than  life  assurance  (third  non-life  insurance 
Directive)85  and  Article 16  of  Directive  2002/83/EC  and  Articles 24  to  30  of  Directive 
2005/68/EC. 

Article 8 

Intra-group transactions 

1.  Member  States  shall  provide  that  the  competent  authorities  exercise  general  supervision 
over transactions between: 

(a) an insurance undertaking or a reinsurance undertaking and: 

(i)  a  related  undertaking  of  the  insurance  undertaking  or  of  the  reinsurance 
undertaking; 

(ii)  a  participating  undertaking  in  the  insurance  undertaking  or  in  the 
reinsurance undertaking; 

(iii)  a  related  undertaking  of  a  participating  undertaking  in  the  insurance 
undertaking or in the reinsurance undertaking; 

(b) an insurance undertaking or a reinsurance undertaking and a natural person who 
holds a participation in: 

83 
84 
85 

OJ L 126, 26.5.2000, p. 1. Directive as last amended by Directive 2005/1/EC. 
OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive 2002/87/EC. 
OJ L 228, 11.8.1992, p. 1. Directive as last amended by Directive 2005/1/EC. 

EN 

228 

   EN 

 
 
 
 
 
 
                                                 
(i) the insurance undertaking, the reinsurance undertaking or any of its related 
undertakings; 

(ii)  a  participating  undertaking  in  the  insurance  undertaking  or  in  the 
reinsurance undertaking; 

(iii)  a  related  undertaking  of  a  participating  undertaking  in  the  insurance 
undertaking or in the reinsurance undertaking. 

These transactions concern in particular: 

– 

– 

– 

– 

– 

– 

loans, 

guarantees and off-balance-sheet transactions, 

elements eligible for the solvency margin, 

investments, 

reinsurance and retrocession operations, 

agreements to share costs. 

2. Member States shall require insurance undertakings and reinsurance undertakings to have 
in  place  adequate  risk  management  processes  and  internal  control  mechanisms,  including 
sound reporting and accounting procedures, in order to identify, measure, monitor and control 
transactions as provided for in paragraph 1 appropriately. Member States shall also require at 
least  annual  reporting  by  insurance  undertakings  and  reinsurance  undertakings  to  the 
competent  authorities  of  significant  transactions.  These  processes  and  mechanisms  shall  be 
subject to overview by the competent authorities. 

If, on the basis of this information, it appears that the solvency of the insurance undertaking or 
the  reinsurance  undertaking  is,  or  may  be,  jeopardised,  the  competent  authority  shall  take 
appropriate  measures  at  the  level  of  the  insurance  undertaking  or  of  the  reinsurance 
undertaking. 

(cid:208) 98/78/EC 

Article 9 

Adjusted solvency requirement 

1. In the case referred to in Article 2(1), Member States shall require that an adjusted solvency 
calculation be carried out in accordance with Annex I. 

2. Any related undertaking, participating undertaking or related undertaking of a participating 
undertaking shall be included in the calculation referred to in paragraph 1. 

3.  If  the  calculation  referred  to  in  paragraph 1  demonstrates  that  the  adjusted  solvency  is 
negative,  the  competent  authorities  shall  take  appropriate  measures  at  the  level  of  the 
insurance undertaking or the reinsurance undertaking in question. 

(cid:208) 2005/68/EC Art. 59.6 

EN 

229 

   EN 

 
 
 
 
 
 
(cid:208) 98/78/EC 

Article 10 

Insurance holding companies, non-member country insurance undertakings and non-
member country reinsurance undertakings 

(cid:208) 2005/68/EC Art. 59.7(a) 

1.  In  the  case  referred  to  in  Article  2(2),  Member  States  shall  require  the  method  of 
supplementary supervision to be applied in accordance with Annex II. 

(cid:208) 98/78/EC 

(cid:208) 2005/68/EC Art. 59.7(b) 

2. In the case referred to in Article 2(2), the calculation shall include all related undertakings 
of the insurance holding company, the non-member country insurance undertaking or the non-
member country reinsurance undertaking, in the manner provided for in Annex II. 

3. If, on the basis of that calculation, the competent authorities conclude that the solvency of a 
subsidiary  insurance  undertaking  or  a  reinsurance  undertaking  of  the  insurance  holding 
company,  the  non-member  country  insurance  undertaking  or  the  non-member  country 
reinsurance undertaking is, or may be, jeopardised, they shall take appropriate measures at the 
level of that insurance undertaking or reinsurance undertaking. 

(cid:208) 2002/87/EC Art. 28.4 

Article 10a 

Cooperation with third countries' competent authorities 

1. The Commission may submit proposals to the Council, either at the request of a Member 
State  or  on  its  own  initiative,  for  the  negotiation  of  agreements  with  one  or  more  third 
countries regarding the means of exercising supplementary supervision over: 

(a)  insurance  undertakings  which  have,  as  participating  undertakings,  undertakings 
within  the  meaning  of  Article  2  which  have  their  head  office  situated  in  a  third 
country; and 

(cid:208) 2005/68/EC Art. 59.8(a) 

(b) reinsurance undertakings which have, as participating undertakings, undertakings 
within  the  meaning  of  Article 2  which  have  their  head  office  situated  in  a  third 
country; 

(c) non-member country insurance undertakings or non-member country reinsurance 
undertakings  which  have,  as  participating  undertakings,  undertakings  within  the 
meaning of Article 2 which have their head office in the Community. 

EN 

230 

   EN 

 
 
 
 
 
 
 
 
 
 
2. The agreements referred to in paragraph 1 shall in particular seek to ensure both: 

(cid:208) 2005/68/EC Art. 59.8(b) 

(a)  that  the  competent  authorities  of  the  Member  States  are  able  to  obtain  the 
information  necessary  for  the  supplementary  supervision  of  insurance  undertakings 
and  reinsurance  undertakings  which  have  their  head  office  in  the  Community  and 
which  have  subsidiaries  or  hold  participations  in  undertakings  outside  the 
Community; and 

(b) that the competent authorities of third countries are able to obtain the information 
necessary  for  the  supplementary  supervision  of  insurance  undertakings  and 
reinsurance undertakings which have their head office in their territories and which 
have  subsidiaries  or  hold  participations  in  undertakings  in  one  or  more  Member 
States. 

3. Without prejudice to Article 300(1) and (2) of the Treaty, the Commission shall, with the 
assistance  of  the  European  Insurance  and  Occupational  Pensions  Committee,  examine  the 
outcome of the negotiations referred to in paragraph 1 and the resulting situation. 

(cid:208) 2005/1/EC Art. 7.1 

(cid:208) 2002/87/EC Art. 28.4 

Article 10b 

The  Member  States  shall  require  that  persons  who  effectively  direct  the  business  of  an 
insurance holding company are of sufficiently good repute and have sufficient experience to 
perform these duties. 

(cid:216) new 

TITLE III 

SUPERVISION OF INSURANCE AND REINSURANCE 
UNDERTAKINGS IN A GROUP 

CHAPTER I – GROUP SUPERVISION: DEFINITIONS, CASES 
OF APPLICATION, SCOPE AND LEVELS 

SECTION 1 - DEFINITIONS 

Article 210 

Definitions 

1. 

For the purposes of this Title, the following definitions shall apply: 

EN 

231 

   EN 

 
 
 
 
 
 
 
 
(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

"participating  undertaking"  means  an  undertaking  which  is  either  a  parent 
undertaking or other undertaking which holds a participation, or an undertaking 
linked with another undertaking by a relationship as set out in Article 12(1) of 
Directive 83/349/EEC; 

"related undertaking" means either a subsidiary or other undertaking in which a 
participation  is  held,  or  an  undertaking  linked  with  another  undertaking  by  a 
relationship as set out in Article 12(1) of Directive 83/349/EEC; 

"group"  means  a  group  of  undertakings,  which  consists  of  a  participating 
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  12(1)  of 
Directive 83/349/EEC;  

"group  supervisor"  means  the  supervisory  authority  responsible  for  group 
supervision, determined in accordance with Article 251; 

"insurance holding company" means a parent undertaking, the main business of 
which  is  to  acquire  and  hold  participations  in  subsidiary  undertakings,  where 
those  subsidiary  undertakings  are  exclusively  or  mainly  insurance  or 
reinsurance 
reinsurance  undertakings,  or 
undertakings,  at  least  one  of  such  subsidiary  undertakings  being  an  insurance 
or  reinsurance  undertaking,  and  which  is  not  a  mixed  financial  holding 
company within the meaning of Directive 2002/87/EC; 

insurance  or 

third-country 

"mixed-activity insurance holding company" means a parent undertaking, other 
than  an  insurance  undertaking,  a  third-country  insurance  undertaking,  a 
reinsurance undertaking, a third-country reinsurance undertaking, an insurance 
holding company or a mixed financial holding company within the meaning of 
Directive 2002/87/EC,  which  includes  at  least  one  insurance  or  reinsurance 
undertaking among its subsidiary undertakings. 

2. 

For  the  purposes  of  this  Title,  the  supervisory  authorities  shall  also  consider  as  a 
parent  undertaking  any  undertaking  which,  in  the  opinion  of  the  supervisory 
authorities, effectively exercises a dominant influence over another undertaking. 

They shall also consider as a subsidiary undertaking any undertaking over which, in 
the opinion of the supervisory authorities, a parent undertaking effectively exercises 
a dominant influence. 

They shall also consider as participation the holding, directly or indirectly, of voting 
rights  or  capital  in  an  undertaking  over  which,  in  the  opinion  of  the  supervisory 
authorities, a significant influence is effectively exercised. 

SECTION 2 - CASES OF APPLICATION AND SCOPE 

Article 211 

Cases of application of group supervision  

1. 

Member States shall provide for supervision, at the level of the group, of insurance 
and reinsurance undertakings which are part of a group, in accordance with this Title.  

EN 

232 

   EN 

 
 
The  provisions  of  this  Directive,  which  lay  down  the  rules  for  the  supervision  of 
insurance and reinsurance undertakings taken individually, shall continue to apply to 
such undertakings, except where otherwise provided under this Title. 

2.  Member States shall ensure that supervision at the level of the group applies as follows: 

(a) 

(b) 

(c) 

to insurance or reinsurance undertakings, which are a participating undertaking 
in  at  least  one  insurance  undertaking,  reinsurance  undertaking,  third-country 
insurance undertaking or third-country reinsurance undertaking, in accordance 
with Articles 216 to 262; 

to insurance or reinsurance undertakings, the parent undertaking of which is an 
insurance  holding  company  which  has  its  head  office  in  the  Community,  in 
accordance with Articles 216 to 262; 

to insurance or reinsurance undertakings, the parent undertaking of which is an 
insurance holding company having its head office outside the Community or a 
third-country insurance or reinsurance undertaking, in accordance with Articles 
263, 264 and 265; 

(d) 

to insurance or reinsurance undertakings, the parent undertaking of which is a 
mixed-activity insurance holding company, in accordance with Article 267. 

In the cases referred to in points (a) and (b) of paragraph 2, where the participating 
insurance or reinsurance undertaking or the insurance holding company which has its 
head  office  in  the  Community  is  a  related  undertaking  of  a  regulated  entity  or  a 
mixed  financial  holding  company  which  is  subject  to  supplementary  supervision  in 
accordance  with  Article  5(2)  of  Directive  2002/87/EC,  the  group  supervisor  may, 
after  consultation  with  the  other  supervisory  authorities  concerned,  decide  not  to 
carry out at the level of that participating insurance or reinsurance undertaking or that 
insurance  holding  company  the  supervision  of  risk  concentration  referred  to  in 
Article 248 or the supervision of intra-group transactions referred to in Article 249 or 
both. 

Article 212 

Scope of group supervision 

The exercise of group supervision in accordance with Article 211 shall not imply that 
the  supervisory  authorities  are  required  to  play  a  supervisory  role  in  relation  to  the 
third-country  insurance  undertaking,  the  third-country  reinsurance  undertaking,  the 
insurance holding company or the mixed-activity insurance holding company taken 
individually, without prejudice to Article 261 as far as insurance holding companies 
are concerned. 

In the following cases, the group supervisor may decide on a case-by-case basis not 
to include an undertaking in the group supervision referred to in Article 211: 

(a) 

(b) 

(c) 

if  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 Article 227; 

if  the  undertaking  which  should  be  included  is  of  negligible  interest  with 
respect to the objectives of group supervision; 

if the inclusion of the undertaking would be inappropriate or misleading with 
respect to the objectives of the group supervision. 

3. 

1. 

2. 

EN 

233 

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However, where several undertakings of the same group, taken individually, may be 
excluded  pursuant  to  point  (b)  of  the  first  subparagraph,  they  must  nevertheless  be 
included where, collectively, they are of non-negligible interest. 

In  the  case  mentioned  in  point  (c)  of  the  first  subparagraph,  the  group  supervisor 
shall, except in cases of urgency, consult the other supervisory authorities concerned 
before taking a decision. 

Where the group supervisor does not include an insurance or reinsurance undertaking 
in the group supervision under one of the cases provided for in points (b) and (c) of 
the first subparagraph, the supervisory authorities of the Member State in which that 
undertaking is situated may ask the undertaking which is at the head of the group for 
any  information  which  may  facilitate  their  supervision  of  the  insurance  or 
reinsurance undertaking concerned. 

SECTION 3 - LEVELS 

Article 213 

1. 

2. 

1. 

Ultimate participating undertaking at Community level 

Where  the  participating  insurance  or  reinsurance  undertaking  or  the  insurance 
holding company referred to in points (a) and (b) of Article 211(2) is itself a related 
undertaking  of  another  participating  insurance  or  reinsurance  undertaking  or  of 
another  parent  insurance  holding  company  which  has  its  head  office  in  the 
Community,  Articles  216  to  262  shall  apply  only  at  the  level  of  the  ultimate 
participating  insurance  or  reinsurance  undertaking  or  insurance  holding  company 
which has its head office in the Community. 

Where  the  ultimate  participating  insurance  or  reinsurance  undertaking  or  insurance 
holding  company  which  has  its  head  office  in  the  Community,  referred  to  in 
paragraph  1,  is  a  related  undertaking  of  an  undertaking  which  is  subject  to 
supplementary supervision in accordance with Article 5(2) of Directive 2002/87/EC, 
the  group  supervisor  may,  after  consultation  with  the  other  supervisory  authorities 
concerned,  decide  not  to  carry  out  at  the  level  of  that  ultimate  participating 
undertaking  the  supervision  of  risk  concentration  referred  to  in  Article  248  or  the 
supervision of intra-group transactions referred to in Article 249 or both. 

Article 214 

Ultimate participating undertaking at national level 

Where  the  participating  insurance  or  reinsurance  undertaking  or  the  insurance 
holding company which has its head office in the Community, referred to in points 
(a) and (b) of Article 211(2), does not have its head office in the same Member State 
as  the  ultimate  participating  undertaking  at  Community  level  referred  to  in  Article 
213,  Member  States  may  allow  their  supervisory  authorities  to  decide,  after 
consultation with the group supervisor and that ultimate participating undertaking at 
Community level, to subject to group supervision the ultimate participating insurance 
or reinsurance undertaking or insurance holding company at national level. 

In such a case, the supervisory authority shall explain its decision to both the group 
supervisor and the ultimate participating undertaking at Community level.  

EN 

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2. 

3. 

4. 

5. 

6. 

7. 

Articles 216 to 262 shall apply mutatis mutandis, subject to the provisions set out in 
paragraphs 2 to 6. 

The supervisory authority may restrict group supervision of the ultimate participating 
undertaking at national level to one or several sections of Chapter II. 

Where  the  supervisory  authority  decides  to  apply  to  the  ultimate  participating 
undertaking  at  national  level  Chapter  II,  Section  1,  the  choice  of  method  made  in 
accordance  with  Article  218  by  the  group  supervisor  in  respect  of  the  ultimate 
participating  undertaking  at  Community  level  referred  to  in  Article  213  shall  be 
recognised as determinative and applied by the supervisory authority in the Member 
State concerned. 

Where  the  supervisory  authority  decides  to  apply  to  the  ultimate  participating 
undertaking  at  national  level  Chapter  II,  Section  1,  and  where  the  ultimate 
participating undertaking at Community level referred to in Article 213 has obtained, 
in  accordance  with  Articles  229  or  231(5),  the  permission  to  calculate  the  group 
Solvency  Capital  Requirement,  as  well  as  the  Solvency  Capital  Requirement  of 
insurance  and  reinsurance  undertakings  in  the  group,  on  the  basis  of  an  internal 
model,  that  decision  shall  be  recognised  as  determinative  and  applied  by  the 
supervisory authority in the Member State concerned. 

In such a situation, where the supervisory authority considers that the risk profile of 
the ultimate participating undertaking at national level deviates significantly from the 
internal  model  approved  at  Community  level,  and  as  long  as  that  undertaking  does 
not  properly  address  the  concerns  of  the  supervisory  authority,  that  supervisory 
authority  may  decide  to  impose  a  capital  add-on  to  the  group  Solvency  Capital 
Requirement of that undertaking resulting from the application of such model, or, in 
exceptional  circumstances  where  such  capital  add-on  would  not  be  appropriate,  to 
require that undertaking to calculate its group Solvency Capital Requirement on the 
basis of the standard formula. 

The  supervisory  authority  shall  explain  such  decisions  to  both  the  undertaking  and 
the group supervisor. 

Where  the  supervisory  authority  decides  to  apply  to  the  ultimate  participating 
undertaking  at  national  level  Chapter  II,  Section  1,  that  undertaking  shall  not  be 
allowed  to  introduce,  in  accordance  with  Articles  234  or  247,  an  application  for 
permission to subject any of its subsidiaries to Articles 236 to 241. 

Where  Member  States  allow  their  supervisory  authorities  to  make  the  decision 
referred to in paragraph 1, they shall provide that no such decisions can be made or 
maintained  where  the  ultimate  participating  undertaking  at  national  level  is  a 
subsidiary of the ultimate participating undertaking at Community level referred to in 
Article  213  and  the  latter  has  obtained  in  accordance  with  Articles  235  or  247 
permission for that subsidiary to be subject to Articles 236 to 241. 

The  Commission  may  adopt  implementing  measures  specifying  the  circumstances 
under which the decision referred to in paragraph 1 can be made. 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive  by 
supplementing it shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304(3). 

EN 

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Article 215 

Participating undertaking covering several Member States 

Where  Member  States  allow  their  supervisory  authorities  to  make  the  decision 
referred  to  in  Article  214,  they  shall  also  allow  them  to  decide  to  conclude  an 
agreement with supervisory authorities in other Member States where another related 
ultimate participating undertaking at national level is present, with a view to carrying 
out group supervision at the level of a subgroup covering several Member States. 

Where  the  supervisory  authorities  concerned  have  concluded  an  agreement  as 
referred to in the first subparagraph of this paragraph, group supervision shall not be 
carried out at the level of any ultimate participating undertaking referred to in Article 
214  present  in  Member  States  other  than  the  Member  State  where  the  subgroup 
referred to in the first subparagraph of this paragraph is located. 

The provisions set out in Article 214(2) to (6) shall apply mutatis mutandis. 

The  Commission  shall  adopt  implementing  measures  specifying  the  circumstances 
under which the decision referred to in paragraph 1 can be made. 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive  by 
supplementing it shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304(3). 

CHAPTER II - FINANCIAL POSITION 

SECTION 1 - GROUP SOLVENCY 

SUBSECTION 1 - GENERAL PROVISIONS 

Article 216 

Supervision of group solvency 

Supervision of the group solvency shall be exercised in accordance with paragraphs 
2 and 3, Article 250 and Chapter III. 

In the case referred to in point (a) of Article 211(2), Member States shall require the 
participating insurance or reinsurance undertakings to ensure that eligible own funds 
are  available  in  the  group  which  are  always  at  least  equal  to  the  group  Solvency 
Capital Requirement as calculated in accordance with Subsections 2, 3 and 4.  

In  the  case  referred  to  in  point  (b)  of  Article  211(2),  Member  States  shall  require 
insurance and reinsurance undertakings in a group to ensure that eligible own funds 
are  available  in  the  group  which  are  always  at  least  equal  to  the  group  Solvency 
Capital Requirement as calculated in accordance with Subsection 5.  

The  requirements  referred  to  in  paragraphs  2  and  3  shall  be  subject  to  supervisory 
review  by  the  group  supervisor  in  accordance  with  Chapter  III.  The  provisions  set 
out in Article 134 and in paragraphs 1, 2 and 3 of Article 136 shall apply by analogy. 

1. 

2. 

3. 

1. 

2. 

3. 

4. 

EN 

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1. 

2. 

1. 

2. 

Article 217 

Frequency of calculation 

The group supervisor shall ensure that the calculations referred to in Article 216(2) 
and  (3)  are  carried  out  at  least  once  a  year,  either  by  the  insurance  or  reinsurance 
undertakings or by the insurance holding company. 

The  relevant  data  for  and  the  results  of  that  calculation  shall  be  submitted  to  the 
group supervisor by the participating insurance or reinsurance undertaking, or, where 
the group is not headed by an insurance or reinsurance undertaking, by the insurance 
holding  company  or  by  the  undertaking  in  the  group  identified  by  the  group 
supervisor  after  consultation  with  the  other  supervisory  authorities  concerned  and 
with the group itself.  

Insurance  and  reinsurance  undertakings  and  insurance  holding  companies  shall 
monitor  the  group  Solvency  Capital  Requirement  on  an  on-going  basis.  If  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. 

Where  there  is  evidence  to  suggest  that  the  risk  profile  of  the  group  has  altered 
significantly  since  the  date  on  which  the  group  Solvency  Capital  Requirement  was 
last reported, the group supervisor may require a recalculation of the group Solvency 
Capital Requirement. 

Subsection 2 – Choice of calculation method and general principles 

Article 218 

Choice of method 

The  calculation  of  the  solvency  at  the  level  of  the  group  of  the  insurance  and 
reinsurance undertakings referred to in point (a) of Article 211(2) shall be carried out 
in accordance with the technical principles and one of the methods set out in Articles 
219 to 231. 

Member States shall provide that the calculation of the solvency at the level of the 
group  of  insurance  and  reinsurance  undertakings  referred  to  in  point  (a)  of  Article 
211(2) shall be carried out according to method 1 described in Subsection 4.  

However,  Member  States  shall  allow  their  supervisory  authorities,  where  they 
assume the role of group supervisor with regard to a particular group, to decide, after 
consultation with the other supervisory authorities concerned and the group itself, to 
apply to that group method 2 described in Subsection 4 or a combination of methods 
1 and 2, where the exclusive application of method 1 would not be appropriate. 

Article 219 

Proportionality 

1. 

The  calculation  of  the  group  solvency  shall  take  account  of  the  proportional  share 
held by the participating undertaking in its related undertakings. 

EN 

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For  the  purposes  of  the  first  subparagraph,  the  proportional  share  shall  comprise 
either of the following: 

(a)  where  method  1  is  used,  the  percentages  used  for  the  establishment  of  the 

consolidated accounts; 

(b)  where  method  2  is  used,  the  proportion  of  the  subscribed  capital  that  is  held, 

directly or indirectly, by the participating undertaking. 

However,  regardless  of  the  method  used,  where  the  related  undertaking  is  a 
subsidiary  undertaking  and  does  not  have  sufficient  eligible  own  funds  to  cover  its 
Solvency  Capital  Requirement,  the  total  solvency  deficit  of  the  subsidiary  shall  be 
taken into account. 

Where in the opinion of the supervisory authorities, the responsibility of the parent 
undertaking  owning  a  share  of  the  capital  is  strictly  limited  to  that  share  of  the 
capital, the group supervisor may nevertheless allow for the solvency deficit of the 
subsidiary undertaking to be taken into account on a proportional basis. 

2. 

The  group  supervisor  shall  determine,  after  consultation  with  the  other  supervisory 
authorities  concerned  and  the  group  itself,  the  proportional  share  which  shall  be 
taken into account in the following cases: 

(a)  where there are no capital ties between some of the undertakings in a group; 

(b)  where  a  supervisory  authority  has  determined  that  the  holding,  directly  or 
indirectly,  of  voting  rights  or  capital  in  an  undertaking  qualifies  as  a 
participation  because,  in  its  opinion,  a  significant  influence  is  effectively 
exercised over that undertaking. 

Article 220 

Elimination of double use of eligible own funds 

1. 

The double use of own funds eligible for the Solvency Capital Requirement among 
the  different  insurance  or  reinsurance  undertakings  taken  into  account  in  that 
calculation shall not be allowed. 

For  that  purpose,  when  calculating  the  group  solvency  and  where  the  methods 
described  in  Subsection  4  do  not  provide  for  it,  the  following  amounts  shall  be 
excluded: 

(a) 

(b) 

(c) 

the value of any asset of the participating insurance or reinsurance undertaking 
which represents the financing of own funds eligible for the Solvency Capital 
Requirement of one of its related insurance or reinsurance undertakings; 

the value of any asset of a related insurance or reinsurance undertaking of the 
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; 

the value of any asset of a related insurance or reinsurance undertaking of the 
participating  insurance  or  reinsurance  undertaking  which  represents  the 
financing of own funds eligible for the Solvency Capital Requirements of any 
other  related  insurance  or  reinsurance  undertaking  of  that  participating 
insurance or reinsurance undertaking. 

EN 

238 

   EN 

 
 
2. 

Without  prejudice  to  paragraph  1,  the  following  may  only  be  included  in  the 
calculation  in  so  far  as  they  are  eligible  for  covering  the  Solvency  Capital 
Requirement of the related undertaking concerned: 

(a) 

(b) 

profit  reserves  and  future  profits  arising  in  a  related  life  insurance  or 
insurance  or  reinsurance 
the  participating 
reinsurance  undertaking  of 
undertaking for which the group solvency is calculated;  

any  subscribed  but  not  paid-up  capital  of  a  related  insurance  or  reinsurance 
undertaking of the participating insurance or reinsurance undertaking for which 
the group solvency is calculated. 

However, the following shall in any case be excluded from the calculation: 

(a) 

(b) 

(c) 

any subscribed but not paid-up capital which represents a potential obligation 
on the part of the participating undertaking; 

any  subscribed  but  not  paid-up  capital  of  the  participating  insurance  or 
reinsurance undertaking which represents a potential obligation on the part of a 
related insurance or reinsurance undertaking; 

any  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 or reinsurance undertaking. 

If  the  supervisory  authorities  consider  that  certain  own  funds  eligible  for  the 
Solvency  Capital  Requirement  of  a  related  insurance  or  reinsurance  undertaking 
other  than  those  referred  to  in  paragraph  2  cannot  effectively  be  made  available  to 
cover the Solvency Capital Requirement of the participating insurance or reinsurance 
undertaking  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 the related undertaking. 

The  sum  of  the  own  funds  referred  to  in  paragraphs  2  and  3  may  not  exceed  the 
Solvency Capital Requirement of the related insurance or reinsurance undertaking. 

Any  eligible  own  funds  of  a  related  insurance  or  reinsurance  undertaking  of  the 
participating  insurance  or  reinsurance  undertaking  for  which  the  group  solvency  is 
calculated  that  are  subject  to  prior  authorisation  from  the  supervisory  authority  in 
accordance with Article 89 may only be included in the calculation in so far as they 
have  been  duly  authorised  by  the  supervisory  authority  responsible  for  the 
supervision of that related undertaking. 

Article 221 

Elimination of the intra-group creation of capital 

When  calculating  group  solvency,  no  account  shall  be  taken  of  any  own  funds 
eligible  for  the  solvency  capital  requirement  arising  out  of  reciprocal  financing 
between  the  participating  insurance  or  reinsurance  undertaking  and  any  of  the 
following: 

(a) 

a related undertaking; 

(b) 

a participating undertaking; 

3. 

4. 

5. 

1. 

EN 

239 

   EN 

 
 
2. 

3. 

(c) 

another related undertaking of any of its participating undertakings. 

When  calculating  group  solvency,  no  account  shall  be  taken  of  any  own  funds 
eligible for the Solvency Capital Requirement of a related insurance or reinsurance 
undertaking of the participating insurance or reinsurance undertaking for which the 
group solvency is calculated when the own funds concerned arise out of reciprocal 
financing  with  any  other  related  undertaking  of  that  participating  insurance  or 
reinsurance undertaking. 

Reciprocal  financing  shall  be  deemed  to  exist  at  least  when  an  insurance  or 
reinsurance undertaking, or any of its related undertakings, holds shares in, or makes 
loans to, another undertaking which, directly or indirectly, holds own funds eligible 
for the Solvency Capital Requirement of the first undertakings. 

Article 222 

Valuation 

The value of the assets and liabilities shall be assessed in accordance with Article 74. 

SUBSECTION 3 – APPLICATION OF THE CALCULATION METHODS 

Article 223 

Related insurance and reinsurance undertakings 

Where  the  insurance  or  reinsurance  undertaking  has  more  than  one  related  insurance  or 
reinsurance undertaking, the group solvency calculation shall be carried out by including each 
of these related insurance or reinsurance undertakings. 

Member States may provide that where the related insurance or reinsurance undertaking has 
its head office in a Member State other than that of the insurance or reinsurance undertaking 
for  which  the  group  solvency  calculation  is  carried  out,  the  calculation  takes  account,  in 
respect  of  the  related  undertaking,  of  the  Solvency  Capital  Requirement  and  the  own  funds 
eligible to satisfy that requirement as laid down in that other Member State. 

Article 224 

Intermediate insurance holding companies 

1. 

When  calculating  the  group  solvency  of  an  insurance  or  reinsurance  undertaking 
which holds a participation in a related insurance undertaking, a related reinsurance 
undertaking,  a  third-country  insurance  undertaking  or  a  third-country  reinsurance 
undertaking,  through  an  insurance  holding  company,  the  situation  of  such  an 
insurance holding company shall be taken into account. 

For the sole purpose of that calculation, the intermediate insurance holding company 
shall be treated as if it  were an  insurance  or reinsurance undertaking  subject to the 
rules laid down in Title I, Chapter VI, Section 4, Subsections 1, 2 and 3 in respect of 
the Solvency Capital Requirement and were subject to the same conditions as are laid 
down  in  Title  I,  Chapter  VI,  Section  3,  Subsections  1,  2  and  3,  in  respect  of  own 
funds eligible for the Solvency Capital Requirement. 

EN 

240 

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2. 

1. 

2. 

3. 

4. 

In cases where an intermediate insurance holding company holds subordinated debt 
or other eligible own funds subject to limitation in accordance with Article 98, they 
shall be recognised as eligible own funds up to the amounts calculated by application 
of the limits set out in Article 98 to the total eligible own funds outstanding at group 
level as compared to the Solvency Capital Requirement at group level. 

Any eligible own funds of an intermediate insurance holding company, which would 
require prior authorisation from the supervisory authority in accordance with Article 
89  if  they  were  held  by  an  insurance  or  reinsurance  undertaking,  may  only  be 
included  in  the  calculation  of  the  group  solvency  in  so  far  as  they  have  been  duly 
authorised by the group supervisor. 

Article 225 

Related third-country insurance and reinsurance undertakings 

When  calculating  the  group  solvency  of  an  insurance  or  reinsurance  undertaking 
which  is  a  participating  undertaking  in  a  third-country  insurance  or  reinsurance 
undertaking, the latter shall be treated solely for the purposes of the calculation as a 
related insurance or reinsurance undertaking. 

However,  where  the  third-country  in  which  that  undertaking  has  its  head  office 
makes  it  subject  to  authorisation  and  imposes  on  it  a  solvency  regime  at  least 
equivalent to that laid down in Title I, Chapter VI, Member States may provide that 
the  calculation  shall  take  into  account,  as  regards  that  undertaking,  the  Solvency 
Capital  Requirement  and  the  own  funds  eligible  to  satisfy  that  requirement  as  laid 
down by the third-country concerned. 

The  verification  of  whether  the  third-country  regime  is  at  least  equivalent  shall  be 
carried out by the group supervisor, at the request of the participating undertaking or 
on its own initiative. 

The group supervisor shall consult the other supervisory authorities concerned, and 
the  Committee  of  European  Insurance  and  Occupational  Pensions  Supervisors, 
before taking a decision on equivalence.  

The  Commission  shall  adopt,  after  consultation  of  the  European  Insurance  and 
Occupational Pensions Committee and in accordance with the procedure referred to 
in Article 304(2), a decision as to whether the solvency regime in a third country is 
equivalent to that laid down in Title I, Chapter VI. 

These decisions shall be regularly reviewed to take into account any changes to the 
solvency regime laid down in Title I, Chapter VI, and to the solvency regime in the 
third country.  

When  a  decision  adopted  by  the  Commission  in  accordance  with  paragraph  3 
concludes as to the equivalence of the solvency regime in a third country, paragraph 
2 shall not apply. 

When  a  decision  adopted  by  the  Commission  in  accordance  with  paragraph  3 
concludes  that  the  solvency  regime  in  a  third  country  is  not  equivalent,  the  option 
referred  to  in  the  second  subparagraph  of  paragraph  1  to  take  into  account  the 
Solvency  Capital  Requirement  and  eligible  own  funds  as  laid  down  by  the  third 
country  concerned  shall  not  be  applicable  and  the  third-country  insurance  or 

EN 

241 

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reinsurance  undertaking  shall  be  treated  exclusively  in  accordance  with  the  first 
subparagraph of paragraph 1. 

Article 226 

Related credit institutions, investment firms and financial institutions 

When  calculating the group solvency of  an  insurance or reinsurance undertaking which is a 
participating  undertaking  in  a  credit  institution,  investment  firm  or  financial  institution, 
Member States shall allow their participating insurance and reinsurance undertakings to apply 
mutatis  mutandis  methods  1  or  2  set  out  in  Annex  I  to  Directive  2002/87/EC.  However, 
method 1 set out in that Annex shall be applied only if the group supervisor is satisfied as to 
the level of integrated management and internal control regarding the entities which would be 
included  in  the  scope  of  consolidation.  The  method  chosen  shall  be  applied  in  a  consistent 
manner over time. 

Member States shall however allow their supervisory authorities, where they assume the role 
of  group  supervisor  with  regard  to  a  particular  group,  to  decide,  at  the  request  of  the 
participating undertaking or on their own initiative, to deduct any participation as referred to 
in the first paragraph from the own funds eligible for the group solvency of the participating 
undertaking. 

Article 227 

Non-availability of the necessary information 

Where  the  information  necessary  for  calculating  the  group  solvency  of  an  insurance  or 
reinsurance undertaking, concerning a related  undertaking with its head office in a Member 
State  or  a  third-country,  is  not  available  to  the  supervisory  authorities  concerned,  the  book 
value  of  that  undertaking  in  the  participating  insurance  or  reinsurance  undertaking  shall  be 
deducted from the own funds eligible for the group solvency. 

In that case, the unrealised gains connected with such participation shall not be recognised as 
own funds eligible for the group solvency. 

SUBSECTION 4 – CALCULATION METHODS 

Article 228 

Method 1 (Default method): Accounting consolidation-based method 

1. 

The  calculation  of  the  group  solvency  of  the  participating  insurance  or  reinsurance 
undertaking shall be carried out on the basis of the consolidated accounts. 

The group solvency of the participating insurance or reinsurance undertaking is the 
difference between the following: 

(a) 

(b) 

the own funds eligible to cover the Solvency Capital Requirement, calculated 
on the basis of consolidated data; 

the  Solvency  Capital  Requirement  at  group  level  calculated  on  the  basis  of 
consolidated data. 

The rules laid down in Title I, Chapter VI, Section 3, Subsections 1, 2 and 3 and in 
Title I, Chapter VI, Section 4, Subsections 1, 2 and 3 shall apply for the calculation 

EN 

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of the own funds eligible for the Solvency Capital Requirement and of the Solvency 
Capital Requirement at group level based on consolidated data. 

2. 

The  Solvency  Capital  Requirement  at  group  level  based  on  consolidated  data 
(consolidated group Solvency Capital Requirement) shall be calculated on the basis 
of either the standard formula or an approved internal model, in a manner consistent 
with the general principles contained in Title I, Chapter VI, Section 4, Subsections 1 
and 2 and Title I, Chapter VI, Section 4, Subsections 1 and 3. 

The consolidated group Solvency Capital Requirement shall have as a minimum the 
sum of the following: 

(a) 

(b) 

the minimum capital requirement (Minimum Capital Requirement) as referred 
to in Article 127 of the participating insurance or reinsurance undertaking;  

the  proportional  share  of  the  Minimum  Capital  Requirement  of  the  related 
insurance or reinsurance undertakings. 

That minimum shall be covered by eligible own funds as determined in Article 98(5).  

For the purposes of determining whether such eligible own funds qualify to cover the 
minimum consolidated group Solvency Capital Requirement, the principles set out in 
Articles  219  to  227  shall  apply  mutatis  mutandis.  The  provisions  set  out  in 
paragraphs 1 and 2 of Article 137 shall apply by analogy. 

Article 229 

Group internal model 

1. 

2. 

3. 

In  the  case  of  an  application  for  permission  to  calculate  the  consolidated  group 
Solvency  Capital  Requirement,  as  well  as  the  Solvency  Capital  Requirement  of 
insurance  and  reinsurance  undertakings  in  the  group,  on  the  basis  of  an  internal 
model,  submitted  by  an  insurance  or  reinsurance  undertaking  and  its  related 
undertakings,  or  jointly  by  the  related  undertakings  of  an  insurance  holding 
company, the supervisory authorities concerned shall cooperate to decide whether or 
not  to  grant  that  permission  and  to  determine  the  terms  and  conditions,  if  any,  to 
which such permission should be subject. 

An application as referred to in the first subparagraph shall be submitted only to the 
group supervisor. 

The  group  supervisor shall  inform  the  other  supervisory  authorities  concerned 
without delay. 

The  supervisory  authorities  concerned  shall  do  everything  within  their  power  to 
reach a joint decision on the application within six months from the date of receipt of 
the complete application by the group supervisor. 

The group supervisor shall forward the complete application to the other supervisory 
authorities concerned without delay.  

During  the  period  referred  to  in  paragraph  2,  the  group  supervisor  shall,  at  the 
request of the participating undertaking, or of any of the other supervisory authorities 
concerned, consult the Committee of European Insurance and Occupational Pensions 
Supervisors. The group supervisor may consult the Committee on its own initiative.  

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When  the  Committee  is  consulted,  the  period  referred  to  in  paragraph  2  shall  be 
extended by two months. 

4. 

Where the Committee of European Insurance and Occupational Pensions Supervisors 
has  been  consulted,  the  supervisory  authorities  concerned  shall  duly  consider  such 
advice before taking their joint decision. 

The group supervisor shall provide to the applicant the joint decision referred to in 
paragraph 2 in a document containing the fully reasoned decision and an explanation 
of  any  significant  deviation  from  the  positions  adopted  by  the  Committee  of 
European Insurance and Occupational Pensions Supervisors. 

That  joint  decision  shall  be  recognised  as  determinative  and  applied  by  the 
supervisory authorities concerned. 

5. 

In  the  absence  of  a  joint  decision  within  the  periods  set  out  in  paragraphs  2  and  3 
respectively, the group supervisor shall make its own decision on the application. 

In  making  its  decision,  the  group  supervisor  shall  duly  take  into  account  the 
following: 

(a) 

any  views  and  reservations  of  the  other  supervisory  authorities  concerned 
expressed during the applicable period; 

(b)  where  the  Committee  of  European  Insurance  and  Occupational  Pensions 

Supervisors has been consulted, the advice of that Committee. 

The  decision  shall  be  set  out  in  a  document  containing  the  fully  reasoned  decision 
and  an  explanation  of  any  significant  deviation  from  the  positions  adopted  by  the 
Committee of European Insurance and Occupational Pensions Supervisors. 

The  group  supervisor  shall  transmit  the  decision  to  the  applicant  and  the  other 
supervisory authorities concerned. 

That  decision  shall  be  recognised  as  determinative  and  applied  by  the  supervisory 
authorities concerned. 

Where any of the supervisory authorities concerned considers that the risk profile of 
an  insurance or reinsurance undertaking under its supervision deviates significantly 
from the internal model approved at group level, and as long as that undertaking has 
not properly addressed the concerns of the supervisory authority, that authority may, 
in  accordance  with  Article  37,  impose  a  capital  add-on  to  the  Solvency  Capital 
Requirement  of  that  insurance  or  reinsurance  undertaking  resulting  from  the 
application of such internal model. 

In  exceptional  circumstances,  where  such  capital  add-on  would  not  be  appropriate, 
the  supervisory  authority  may  require  the  undertaking  concerned  to  calculate  its 
Solvency  Capital  Requirement  on  the  basis  of  the  standard  formula  referred  to  in 
Title I, Chapter VI, Section 4, Subsections 1 and 2. 

The  supervisory  authority  shall  explain  any  decision  referred  to  in  the  first  and 
second subparagraphs to both the insurance or reinsurance undertaking and the group 
supervisor. 

6. 

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Article 230 

Group capital add-on 

In  determining  whether  the  consolidated  group  Solvency  Capital  Requirement  appropriately 
reflects the risk profile of the group, the group supervisor shall pay particular attention to the 
following: 

(a) 

(b) 

any specific risks existing at group level which would not be sufficiently covered by 
the  standard  formula  or  the  internal  model  used,  because  they  are  difficult  to 
quantify; 

any capital add-on to the Solvency Capital Requirement of the related insurance or 
reinsurance  undertakings  imposed  by  the  supervisory  authorities  concerned,  in 
accordance with Articles 37 and 229(6). 

If the risk profile of the group is not adequately reflected, a capital add-on to the consolidated 
group Solvency Capital Requirement may be imposed. 

The  consolidated  group  Solvency  Capital  Requirement  including  the  capital  add-on  shall 
replace the inadequate consolidated group Solvency Capital Requirement for the purposes of 
determining whether on compliance with the group Solvency Capital Requirement occurs. 

Article 231 

Method 2 (Alternative method): Deduction and aggregation method 

1. 

The group solvency of the participating insurance or reinsurance undertaking shall be 
the difference between the following: 

(a) 

(b) 

the aggregated group eligible own funds, as provided for in paragraph 2; 

the  value  in  the  participating  insurance  or  reinsurance  undertaking  of  the 
related  insurance  or  reinsurance  undertakings  and  the  aggregated  group 
Solvency Capital Requirement, as provided for in paragraph 3. 

2. 

The aggregated group eligible own funds are the sum of the following: 

(a) 

(b) 

the  own  funds  eligible  for  the  Solvency  Capital  Requirement  of  the 
participating insurance or reinsurance undertaking;  

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) 

(b) 

the Solvency Capital Requirement of the participating insurance or reinsurance 
undertaking; 

the  proportional  share  of  the  Solvency  Capital  Requirement  of  the  related 
insurance or reinsurance undertakings. 

4. 

Where the participation in the related insurance or reinsurance undertakings consists, 
wholly or in part, of an indirect ownership, the value in the participating insurance or 
reinsurance  undertaking  of  the  related  insurance  or  reinsurance  undertakings  shall 
incorporate  the  value  of  such  indirect  ownership,  taking  into  account  the  relevant 
successive  interests,  and  the  items  referred  to  in  points  (b)  of  the  second  and  third 

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5. 

6. 

paragraphs  shall  include  the  corresponding  proportional  shares  of  the  own  funds 
eligible for the Solvency Capital Requirement of the related insurance or reinsurance 
undertakings  and  of  the  Solvency  Capital  Requirement  of  the  related  insurance  or 
reinsurance undertakings, respectively. 

In  the  case  of  an  application  for  permission  to  calculate  the  Solvency  Capital 
Requirement of insurance and reinsurance undertakings in the group on the basis of 
an  internal  model,  submitted  by  an  insurance  or  reinsurance  undertaking  and  its 
related  undertakings,  or  jointly  by  the  related  undertakings  of  an  insurance  holding 
company, Article 229 shall apply mutatis mutandis. 

In  determining  whether  the  aggregated  group  Solvency  Capital  Requirement, 
calculated  as  set  out  in  paragraph  3,  appropriately  reflects  the  risk  profile  of  the 
group,  the  supervisory  authorities  concerned  shall  pay  particular  attention  to  any 
specific  risks  existing  at  group  level  which  would  not  be  sufficiently  covered, 
because they are difficult to quantify. 

If the risk profile of the group deviates significantly from the assumptions underlying 
the  aggregated  group  Solvency  Capital  Requirement,  a  capital  add-on  to  the 
aggregated group Solvency Capital Requirement may be imposed.  

The  aggregated  group  Solvency  Capital  Requirement  including  the  capital  add-on 
shall replace the inadequate aggregated group Solvency Capital Requirement for the 
purposes  of  determining  whether  non  compliance  with  the  group  Solvency  Capital 
Requirement occurs. 

Article 232 

Implementing measures 

The  Commission  may  adopt  implementing  measures  specifying  the  technical  principles  and 
methods  set  out  in  Articles  218  to  227  and  the  application  of  Articles  228  to  231  to  ensure 
uniform application within the Community. 

Those measures designed to amend non-essential elements of this directive by supplementing 
it  shall  be  adopted  in  accordance  with  the  regulatory  procedure  with  scrutiny  referred  to  in 
Article 304(3). 

SUBSECTION 5 – SUPERVISION OF GROUP SOLVENCY FOR INSURANCE AND 
REINSURANCE UNDERTAKINGS THAT ARE SUBSIDIARIES OF AN INSURANCE 
HOLDING COMPANY 

Article 233 

Group solvency of an insurance holding company 

Where  insurance  and  reinsurance  undertakings  are  subsidiaries  of  an  insurance  holding 
company, the group supervisor shall ensure that the calculation of the solvency of the group is 
carried out at the level of the insurance holding company applying Articles 218(2) to 231. 

For  the  purpose  of  that  calculation,  the  parent  undertaking  shall  be  treated  as  if  it  were  an 
insurance  or  reinsurance  undertaking  subject  to  the  rules  laid  down  in  Title  I,  Chapter  VI, 
Section 4, Subsections 1, 2 and 3 as regards the Solvency Capital Requirement and subject to 

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the same conditions as laid down in Title I, Chapter VI, Section 3, Subsections 1, 2 and 3 as 
regards the own funds eligible for the Solvency Capital Requirement. 

SUBSECTION 6 – GROUP SUPPORT 

Article 234 

Subsidiaries of an insurance or reinsurance undertaking: conditions 

Member States shall provide that the rules laid down in Articles 236 to 241 shall apply to any 
insurance  or  reinsurance  undertaking  which  is  the  subsidiary  of  an  insurance  or  reinsurance 
undertaking, on request of the latter, where all of the following conditions are satisfied: 

(a) 

(b) 

(c) 

(d) 

1. 

2. 

the subsidiary, in relation to which the group supervisor has not made any decision 
under  Article  212(2),  is  included  in  the  group  supervision  carried  out  by  the  group 
supervisor at the level of the parent undertaking in accordance with this Title; 

the  risk  management  processes  and  internal  control  mechanisms  of  the  parent 
undertaking cover the subsidiary and the parent undertaking satisfies the supervisory 
authorities concerned regarding the prudent management of the subsidiary; 

the  parent  undertaking  has  declared,  in  writing  and  in  a  legally  binding  document 
accepted by the group supervisor in accordance with Article 237, that it guarantees 
that own funds eligible under Article 98(5) will be transferred where necessary and 
up to the limit resulting from the application of Article 237; 

an application for permission to be subject to Articles 236 to 241 has been introduced 
by  the  parent  undertaking  and  a  favourable  decision  has  been  made  on  such 
application in accordance with the procedure set out in Article 235. 

Article 235 

Subsidiaries of an insurance or reinsurance undertaking: decision on the application 

In  the  case  of  applications  for  permission  to  be  subject  to  the  rules  laid  down  in 
Articles 236 to 241, the supervisory authorities concerned shall work together, in full 
consultation,  to  decide  whether  or  not  to  grant  the  permission  sought  and  to 
determine the other terms and conditions, if any, to which such permission should be 
subject. 

An application as referred to in the first subparagraph shall be submitted only to the 
group supervisor. The group supervisor shall inform the other supervisory authorities 
concerned without delay. 

The  supervisory  authorities  concerned  shall  do  everything  within  their  power  to 
reach a joint decision on the application within six months from the date of receipt of 
the complete application by the group supervisor. 

The group supervisor shall forward the complete application to the other supervisory 
authorities concerned without delay. 

The  joint  decision  shall  be  set  out  in  a  document  containing  the  fully  reasoned 
decision  which  shall  be  transmitted  to  the  applicant  by  the  group  supervisor.  The 
joint decision referred to above shall be recognised as determinative and applied by 
the supervisory authorities in the Member States concerned. 

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3. 

1. 

2. 

3. 

4. 

In  the  absence  of  a  joint  decision  between  the  supervisory  authorities  concerned 
within  six  months,  the  group  supervisor  shall  make  its  own  decision  on  the 
application. The decision shall be set out in a document containing the fully reasoned 
decision  and  shall  take  into  account  the  views  and  reservations  of  the  other 
supervisory authorities concerned expressed within a six months period. The decision 
shall be provided to the applicant and the other supervisory authorities concerned by 
the group supervisor. That decision shall be recognised as determinative and applied 
by the supervisory authorities concerned. 

Article 236 

Subsidiaries of an insurance or reinsurance undertaking: determination of the Solvency 
Capital Requirement 

By way of derogation from Articles 37 and 229, the Solvency Capital Requirement 
of the subsidiary shall be calculated as set out in paragraphs 2, 3 and 4. 

Where the Solvency Capital Requirement of the subsidiary is calculated on the basis 
of an internal model approved at group level in accordance with Article 229 and the 
supervisory authority having authorised the subsidiary considers that its risk profile 
deviates significantly from this internal model, and as long as that undertaking does 
not properly address the concerns of the supervisory authority, that authority may, in 
the  cases  referred  to  in  Article  37,  propose  to  the  group  supervisor  to  impose  a 
capital add-on to the Solvency Capital Requirement of that subsidiary resulting from 
the  application  of  such  model,  or,  in  exceptional  circumstances  where  such  capital 
add-on would not be appropriate, to require that undertaking to calculate its Solvency 
Capital Requirement on the basis of the standard formula. The supervisory authority 
shall  communicate  the  grounds  for  such  proposals  to  both  the  subsidiary  and  the 
group supervisor. 

Where the Solvency Capital Requirement of the subsidiary is calculated on the basis 
of  the  standard  formula  and  the  supervisory  authority  having  authorised  the 
subsidiary considers that its risk profile deviates significantly from the assumptions 
underlying  the  standard  formula,  and  as  long  as  that  undertaking  does  not  properly 
address  the  concerns  of  the  supervisory  authority,  that  authority  may,  in  the  cases 
referred to in Article 37, propose to the group supervisor to impose a capital add-on 
to the Solvency Capital Requirement of that subsidiary. 

The supervisory authority shall communicate the grounds for such proposal to both 
the subsidiary and the group supervisor. 

Where the supervisory authority and the group supervisor disagree, or in the absence 
of a decision from the group supervisor within one month from the proposal of the 
supervisory authority, the matter shall be referred for consultation to the Committee 
of European Insurance and Occupational Pensions Supervisors, which shall give its 
advice within two months. 

The group supervisor shall duly consider such advice before taking its final decision. 
The decision shall be submitted to the subsidiary and the supervisory authority by the 
group supervisor. 

In the absence of a final decision from the group supervisor within one month from 
the  date  of  the  advice  of  the  Committee  of  European  Insurance  and  Occupational 

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Pensions Supervisors, the proposal from the supervisory authority shall be deemed to 
have been accepted. 

Article 237 

Subsidiaries of an insurance or reinsurance undertaking: coverage of the Solvency Capital 
Requirement 

1. 

2. 

3. 

By  way  of  derogation  from  Article  98(4),  any  difference  between  the  Solvency 
Capital Requirement and the minimum capital requirement of the subsidiary shall be 
covered  by  either  own  funds  eligible  under  Article  98(4)  or  group  support,  or  any 
combination thereof. 

The group support shall, for the purposes of the classification of own funds into tiers 
in accordance with Articles 93 to 96, be treated as ancillary own funds. 

The  group  support  shall  take  the  form  of  a  declaration  to  the  group  supervisor, 
expressed in a legally binding document and constituting a commitment to transfer 
own funds eligible under Article 98(5). 

Before  accepting  the  declaration  referred  to  in  paragraph  2,  the  group  supervisor 
shall verify the following: 

(a) 

(b) 

(c) 

that the group has sufficient eligible own funds to cover its consolidated group 
Solvency Capital Requirement; 

that there is no current or foreseeable material practical or legal impediment to 
the prompt transfer of the eligible own funds referred to in paragraph 2; 

that  the  document  containing  the  declaration  of  group  support  meets  all 
requirements existing under the law of the parent undertaking to be recognised 
as a legal commitment, and that any recourse before a legal or administrative 
body shall not have suspensive effect. 

Article 238 

Subsidiaries of an insurance or reinsurance undertaking: monitoring of the Solvency Capital 
Requirement 

1. 

2. 

By way of derogation from Article 136, the supervisory authority having authorised 
the  subsidiary  shall  not  be  responsible  for  enforcing  its  Solvency  Capital 
Requirement by taking measures at the level of the subsidiary. 

That  supervisory  authority  shall  however  continue  to  monitor  the  Solvency  Capital 
Requirement of the subsidiary as set out in paragraphs 2 and 3. 

Where  the  Solvency  Capital  Requirement  is  no  longer  fully  covered  by  the 
combination  of  own  funds  eligible  under  Article  98(4)  and  the  amount  of  group 
support  declared  in  accordance  with  Article  237,  but  the  own  funds  eligible  under 
Article  98(5)  are  sufficient  to  cover  the  minimum  capital  requirement,  the 
supervisory  authority  may  call  on  the  parent  undertaking  to  provide  a  new 
declaration  bringing  the  group  support  to  the  amount  necessary  to  ensure  that  the 
Solvency Capital Requirement is again fully covered. 

3. 

Where  the  Solvency  Capital  Requirement  is  no  longer  fully  covered  by  the 
combination  of  own  funds  eligible  under  Article  98(4)  and  the  amount  of  group 

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support  declared  in  accordance  with  Article  237,  and  the  own  funds  eligible  under 
Article  98(5)  are  not  sufficient  to  cover  the  minimum  capital  requirement,  the 
supervisory  authority  may  call  on  the  parent  undertaking  to  transfer  own  funds 
eligible  under  Article  98(5)  to  the  extent  necessary  to  ensure  that  the  minimum 
capital requirement is again covered, and to provide a new declaration bringing the 
group  support  to  the  amount  necessary  to  ensure  that  the  Solvency  Capital 
Requirement is again fully covered. 

4. 

Before  accepting  any  new  declaration  referred  to  in  paragraphs  2  or  3,  the  group 
supervisor shall verify that the conditions laid down in Article 237 are met. 

Where  the  parent  undertaking  does  not  provide  the  new  declaration  requested,  or 
where the new declaration provided is not accepted, the derogations provided for in 
Articles 236 and 237 and in paragraph 1 shall cease to apply. 

The  supervisory  authority  having  authorised  the  subsidiary  shall  regain  full 
responsibility  for  setting  the  Solvency  Capital  Requirement  of  the  subsidiary  and 
taking appropriate measures to ensure that it is adequately met by own funds eligible 
under Article 98(4). The parent undertaking shall however not be released from the 
commitment resulting from the most recent declaration accepted. 

Article 239 

Subsidiaries of an insurance or reinsurance undertaking: winding-up 

When the subsidiary is being wound up and found to be insolvent, the supervisory authority 
having  authorised  the  subsidiary  shall,  on  its  own  initiative  or  at  the  request  of  any  other 
authority  competent  for  the  winding-up  procedure  by  application  of  TITLE  IV,  call  on  the 
parent  undertaking  to  transfer  eligible  own  funds  to  the  subsidiary,  in  so  far  as  they  are 
necessary to meet policyholder liabilities, up to the limit of the group support resulting from 
the most recent declaration accepted. 

Article 240 

1. 

2. 

Subsidiaries of an insurance or reinsurance undertaking: transfer of own funds 

In  the  cases  referred  to  in  Articles  238  and  239,  the  supervisory  authority  shall 
address  its  request  to  the  parent  undertaking  and  immediately  inform  the  group 
supervisor. 

Where  the  parent  undertaking  does  not  rapidly  transfer  eligible  own  funds  to  the 
subsidiary, the group supervisor shall use all powers available, including the power 
available under Article 142, to ensure that the group provides the requested transfer 
as soon as is practicable. 

Group  support  may  be  provided  from  eligible  own  funds  present  in  the  parent 
undertaking or in any subsidiary, subject to that subsidiary, where it is an insurance 
or  reinsurance  undertaking,  having  eligible  own  funds  in  excess  of  its  minimum 
capital requirement. The supervisory authority having authorised that subsidiary shall 
not prevent the transfer of such excess eligible own funds.  

However,  where  such  transfer  would  lead  to  the  Solvency  Capital  Requirement  of 
that subsidiary being no longer complied with, it shall be subject to a declaration by 

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3. 

the parent undertaking of the necessary level of group support and acceptance by the 
group supervisor. 

Before  accepting  any  new  declaration  made  in  accordance  with  paragraph  2,  the 
group  supervisor  shall  verify  that  the  conditions  laid  down  in  Article  237  are  met. 
However, where any transfer is carried out in accordance with paragraph 1, the group 
supervisor shall verify that the group continues to have sufficient eligible own funds 
to  cover  its  group  Solvency  Capital  Requirement.  Where  this  requirement  is  no 
longer satisfied, the group supervisor shall take appropriate measures to ensure that 
the necessary actions are taken by the group within an acceptable period of time. 

Article 241 

Subsidiaries of an insurance or reinsurance undertaking: disclosure 

The  existence  of  declarations  of  group  support,  and  any  use  thereof,  shall  be  publicly 
disclosed by both the parent undertaking and the subsidiary concerned. 

Article 242 

Subsidiaries of an insurance or reinsurance undertaking: end of derogations for a subsidiary 

1. 

The derogations provided for in Articles 236, 237 and 238 shall cease to apply in the 
following cases: 

(a) 

(b) 

the condition referred to in Article 234(a) is no longer complied with; 

the condition referred to in Article 234(b) is no longer complied with and the 
group does not restore compliance with this condition in an appropriate period 
of time. 

In  the  case  referred  to  in  point  (a)  of  the  first  subparagraph,  where  the  group 
supervisor  decides  no  longer  to  include  the  subsidiary  in  the  group  supervision  it 
carries out, it shall immediately inform the supervisory authority concerned. 

For the purposes of point (b) of the first subparagraph, the parent undertaking shall 
be responsible for ensuring that the condition is complied with on an on-going basis. 
In  the  event  of  non-compliance,  it  shall  inform  the  group  supervisor  and  the 
supervisor  of  the  subsidiary  concerned  without  delay.  The  parent  undertaking  shall 
present a plan to restore compliance within an appropriate period of time. 

Without prejudice to the third subparagraph, the group supervisor shall verify at least 
once  a  year,  on  its  own  initiative,  that  the  condition  referred  to  in  Article  234(b) 
continues  to  be  complied  with.  The  group  supervisor  shall  also  perform  such 
verification upon request from the supervisory authority concerned, where the latter 
has  significant  concerns  related  to  the  ongoing  compliance  with  this  condition. 
Where  the  verification  performed  identifies  weaknesses,  the  group  supervisor  shall 
require  the  parent  undertaking  to  present  a  plan  to  restore  compliance  within  an 
appropriate period of time. 

If  the  group  supervisor  determines  that  the  plan  referred  to  in  the  third  or  fourth 
subparagraph is insufficient or subsequently that it is not being implemented within 
the  agreed  period  of  time,  the  group  supervisor  shall  conclude  that  the  condition 
referred  to  in  Article  234(b)  is  no  longer  complied  with  and  it  shall  immediately 
inform the supervisory authority concerned. 

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2. 

When the derogations provided for in Articles 236, 237 and 238 cease to apply, the 
supervisory authority having authorised the subsidiary shall regain full responsibility 
for setting the Solvency Capital Requirement of the subsidiary and taking appropriate 
measures  to  ensure  that  it  is  adequately  met  by  own  funds  eligible  under  Article 
98(4). The parent undertaking shall however not be released from the commitments 
resulting from the most recent declarations accepted in accordance with Articles 237, 
238 and 240. 

Article 243 

Subsidiaries of an insurance or reinsurance undertaking: end of derogations for all 
subsidiaries 

1. 

In  addition  to  the  cases  referred  to  in  Article  242,  the  derogations  provided  for  in 
Articles 236, 237 and 238 shall cease to apply in the following cases: 

2. 

3. 

(a) 

any  of  the  conditions  referred  to  in  the  third  paragraph  of  Article  237  are  no 
longer  complied  with  and  compliance  is  not  restored  within  an  appropriate 
period of time as set out in paragraph 2; 

(b) 

the  group  no  longer  has  sufficient  eligible  own  funds  to  cover  the  minimum 
consolidated group Solvency Capital Requirement referred to in Article 228(2). 

In  the  case  referred  to  in  point  (a)  of  paragraph  1,  the  parent  undertaking  shall  be 
responsible for ensuring that all conditions are complied with on an on-going basis. 
In the event of non-compliance with any of these conditions, it shall inform the group 
supervisor and the supervisor of the subsidiary concerned without delay. The parent 
undertaking shall present a plan to restore compliance within an appropriate period 
of time. 

Without prejudice to the first subparagraph, the group supervisor shall verify at least 
once a year, on its own initiative, that the conditions referred to in the third paragraph 
of  Article  237  continue  to  be  complied  with.  Where  the  verification  performed 
identifies  deficiencies,  the  group  supervisor  shall  require  the  parent  undertaking  to 
present a plan to restore compliance within an appropriate period of time. 

If  the  group  supervisor  determines  that  the  plan  referred  to  in  the  first  or  second 
subparagraph is insufficient or subsequently that it is not being implemented within 
the  agreed  period  of  time,  the  group  supervisor  shall  conclude  that  the  conditions 
referred to in the third paragraph of Article 237 are no longer complied with and it 
shall immediately inform the other supervisory authorities concerned. 

In the case referred to in point (b) of the first paragraph, the group supervisor shall 
immediately inform the other supervisory authorities concerned. 

When the derogations provided for in Articles 236, 237 and 238 cease to apply, the 
supervisory authorities having authorised any subsidiary to which the rules laid down 
in Articles 236 to 241 apply shall regain full responsibility for setting the Solvency 
Capital Requirement of these subsidiaries and taking appropriate measures to ensure 
that  it  is  adequately  met  by  own  funds  eligible  under  Article  98(4).  The  parent 
undertaking shall however not be released from the commitments resulting from the 
most recent declarations accepted in accordance with Articles 237, 238 and 240. 

4. 

Where  the  group  has  restored  sufficient  eligible  own  funds  to  cover  the  minimum 
consolidated group Solvency Capital Requirement referred to in Article 228(2), the 

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derogations provided for in Articles 236, 237 and 238 shall be applicable only if the 
parent  undertaking  submits  a  new  application  and  obtains  a  favourable  decision  in 
accordance with the procedure set out in Article 235. 

Article 244 

Subsidiaries of an insurance or reinsurance undertaking: reduction of group supports 

1. 

2. 

Where  several  requests  to  transfer  eligible  own  funds  are  addressed  to  the  parent 
undertaking and the group supervisor in accordance with Articles 238 or 239, and the 
group does not have sufficient eligible own funds to meet all of those together, the 
amounts resulting from the most recent declarations accepted shall be reduced where 
necessary. 

The  reduction  shall  be  calculated  for  each  subsidiary  with  a  view  to  ensuring  that 
each  subsidiary  is  subject  to  the  same  ratio  between  the  sum  of  its  available  assets 
and  any  transfer  from  the  group  on  the  one  hand  and  the  sum  of  its  technical 
provisions and its minimum capital requirement on the other hand. 

Member States shall ensure that liabilities resulting from insurance contracts entered 
into  by  the  parent  undertaking  are  not  treated  more  favourably  than  liabilities 
resulting from insurance contracts entered into by any subsidiary which is subject to 
the rules laid down in Articles 236 to 241. 

Article 245 

Subsidiaries of an insurance or reinsurance undertaking: implementing measures 

In order to ensure the uniform application of Articles 234 to 244, the Commission shall adopt 
implementing measures relating to the following: 

(a) 

(b) 

(c) 

(d) 

specifying the criteria to be applied when assessing whether the conditions stated in 
Article 234 are satisfied; 

specifying  the  criteria  to  be  applied  when  verifying  that  the  requirements  stated  in 
Article 237 are met; 

specifying  the  means  to  be  used  when  disclosing  the  information  referred  to  in 
Article 241; 

specifying the procedures to be followed by supervisory authorities when exchanging 
information,  exercising  their  rights  and  fulfilling  their  duties  in  accordance  with 
Articles 235 to 240 and Articles 242, 243 and 244. 

Those measures designed to amend non-essential elements of this Directive by supplementing 
it  shall  be  adopted  in  accordance  with  the  regulatory  procedure  with  scrutiny  referred  to  in 
Article 304(3). 

Article 246 

Subsidiaries of an insurance or reinsurance undertaking: review 

The  Commission  shall  submit  to  the  European  Insurance  and  Occupational  Pensions 
Committee,  at  the  latest  five  years  after  the  date  referred  to  in  Article  310(1),  a  report  on 

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Member  States'  rules  and  supervisory  authorities'  practices  adopted  pursuant  to  this 
Subsection. 

This report shall address in particular the appropriate level of own funds which a subsidiary is 
required  to  hold  where  it  belongs  to  a  group  fulfilling  the  conditions  of  this  subsection,  the 
form which group support is required to take, the allowable amount of group support and the 
level of own funds at which the derogations provided for in Articles 236, 237 and 238 shall 
cease to apply. 

Article 247 

Subsidiaries of an insurance holding company 

Articles  234  to  246  shall  apply  mutatis  mutandis  to  insurance  and  reinsurance  undertakings 
which are the subsidiary of an insurance holding company. 

SECTION 2 - RISK CONCENTRATION AND INTRA-GROUP TRANSACTIONS 

Article 248 

Supervision of risk concentration 

1. 

2. 

Supervision of the risk concentration at group level shall be exercised in accordance 
with paragraphs 2 and 3, Article 250 and Chapter III. 

The  Member  States  shall  require  insurance  and  reinsurance  undertakings  or 
insurance holding companies to report on a regular basis and at least annually to the 
group supervisor any significant risk concentration at the level of the group. 

The  necessary  information  shall  be  submitted  to  the  group  supervisor  by  the 
insurance or reinsurance undertaking which is at the head of the group or, where the 
group  is  not  headed  by  a  insurance  or  reinsurance  undertaking,  by  the  insurance 
holding  company  or  by  the  insurance  or  reinsurance  undertaking  in  the  group 
identified  by  the  group  supervisor  after  consultation  with  the  other  supervisory 
authorities concerned and with the group. 

The  risk  concentrations  shall  be  subject  to  supervisory  review  by  the  group 
supervisor. 

3. 

The  group  supervisor,  after  consultation  with  the  other  supervisory  authorities 
concerned  and  the  group,  shall  identify  the  type  of  risks  insurance  and  reinsurance 
undertakings in a particular group shall report in all circumstances. 

When defining or giving their opinion about the type of risks, the group supervisor 
and  the  other  supervisory  authorities  concerned  shall  take  into  account  the  specific 
group and risk management structure of the group. 

In  order  to  identify  significant  risk  concentration  to  be  reported,  the  group 
supervisor, after consultation of the other supervisory authorities concerned and the 
group,  shall  impose  appropriate  thresholds  based  on  solvency  capital  or  technical 
provisions or both. 

When  reviewing  the  risk  concentrations,  the  group  supervisor  shall  in  particular 
monitor the possible risk of contagion in the group, the risk of a conflict of interests, 
and the level or volume of risks. 

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4. 

The  Commission  may  adopt  implementing  measures,  as  regards  the  definition  and 
identification  of  a  significant  risk  concentration  and  the  reporting  on  such  a  risk 
concentration, for the purposes of paragraphs 2 and 3. 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive  by 
supplementing it shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304(3). 

1. 

2. 

3. 

4. 

Article 249 

Supervision of intra-group transactions 

Supervision  of  intra-group  transactions  shall  be  exercised  in  accordance  with 
paragraphs 2 and 3, Article 250 and Chapter III. 

The  Member  States  shall  require  insurance  and  reinsurance  undertakings  or 
insurance holding companies to report on a regular basis and at least annually to the 
group supervisor all significant intra-group transactions by insurance and reinsurance 
undertakings within a group. 

In  addition,  Member  States  shall  require  reporting  of  very  significant  intra-group 
transactions as soon as is practicable. 

The  necessary  information  shall  be  submitted  to  the  group  supervisor  by  the 
insurance or reinsurance undertaking which is at the head of the group or, where the 
group  is  not  headed  by  an  insurance  or  reinsurance  undertaking,  by  the  insurance 
holding  company  or  by  the  insurance  or  reinsurance  undertaking  in  the  group 
identified  by  the  group  supervisor  after  consultation  with  the  other  supervisory 
authorities concerned and with the group. 

The  intra-group  transactions  shall  be  subject  to  supervisory  review  by  the  group 
supervisor. 

The  group  supervisor,  after  consultation  with  the  other  supervisory  authorities 
concerned and the group, shall identify the type of intra-group transactions insurance 
and reinsurance undertakings in a particular group must report in all circumstances. 
Article 248(3) shall apply by analogy. 

The  Commission  may  adopt  implementing  measures,  as  regards  the  definition  and 
identification  of  a  significant  intra-group  transaction  and  the  reporting  on  such  an 
intra-group transaction, for the purposes of paragraphs 2 and 3. 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive  by 
supplementing it shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304(3). 

SECTION 3 - RISK MANAGEMENT AND INTERNAL CONTROL 

Article 250 

Supervision of the system of governance 

1. 

The  requirements  set  out  in  TITLE  I,  Chapter  IV,  Section  2  shall  apply  mutatis 
mutandis at the level of the group. 

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Without prejudice to the first subparagraph, the risk management and internal control 
systems  and  reporting  procedures  shall  be  implemented  consistently  in  all  the 
undertakings  included  in  the  scope  of  group  supervision  pursuant  to  points  (a)  and 
(b) of Article 211(2) so that those systems and reporting procedures can be controlled 
at the level of the group. 

2. 

Without  prejudice  to  paragraph  1,  the  group  internal  control  mechanisms  shall 
include at least the following: 

3. 

4. 

1. 

2. 

(a) 

(b) 

adequate  mechanisms  as  regards  group  solvency  to  identify  and  measure  all 
material risks incurred and to appropriately relate eligible own funds to risks; 

sound  reporting  and  accounting  procedures  to  monitor  and  manage  the  intra-
group transactions and the risk concentration. 

The  systems  and  reporting  procedures  referred  to  in  paragraphs  1  and  2  shall  be 
subject to supervisory review by the group supervisor, in accordance with the rules 
laid down in Chapter III. 

Member States shall require the participating insurance or reinsurance undertaking or 
the insurance holding company to undertake at the level of the group the assessment 
required  by  Article  44.  The  own  risk  and  solvency  assessment  conducted  at  group 
level  shall  be  subject  to  supervisory  review  by  the  group  supervisor  in  accordance 
with Chapter III. 

Where  the  participating  insurance  or  reinsurance  undertaking  or  the  insurance 
holding company so decides, and subject to the agreement of the group supervisor, it 
may undertake any assessments required by Article 44 at the level of the group and at 
the level of any subsidiary in the group at the same time, and may produce a single 
document covering all the assessments. 

Where  the group exercises the  option provided in the second subparagraph, it shall 
submit  the  document  to  all  supervisory  authorities  concerned  at  the  same  time. 
Exercising  this  option  shall  not  remove  from  the  subsidiaries  concerned  the 
obligation to ensure that the requirements of Article 44 are met. 

CHAPTER III - MEASURES TO FACILITATE GROUP 
SUPERVISION 

Article 251 

Group Supervisor 

A single supervisor, responsible for coordination and exercise of group supervision, 
shall  be  designated  from  among  the  supervisory  authorities  of  the  Member  States 
concerned (hereinafter “group supervisor”). 

Where the same supervisory authority is competent for all insurance and reinsurance 
undertakings  in  a  group,  the  task  of  group  supervisor  shall  be  exercised  by  that 
supervisory authority. 

In  all  other  cases  and  subject  to  paragraph  3,  the  task  of  group  supervisor  shall  be 
exercised by the following: 

(a)  where  a  group  is  headed  by  an  insurance  or  reinsurance  undertaking,  by  the 

supervisory authority which has authorised that undertaking; 

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(b)  where a group is not headed by an insurance or reinsurance undertaking, by the 

supervisory authority identified in accordance with the following: 

(i)  where  the  parent  of  an  insurance  or  reinsurance  undertaking  is  an 
insurance  holding  company,  by  the  supervisory  authority  which  has 
authorised that insurance or reinsurance undertaking; 

(ii)  where  more  than  one  insurance  or  reinsurance  undertaking  with  a  head 
office in the Community have as their parent the same insurance holding 
company,  and  one  of  these  undertakings  has  been  authorised  in  the 
Member  State  in  which  the  insurance  holding  company  has  its  head 
office,  by  the  supervisory  authority  of  the  insurance  or  reinsurance 
undertaking authorised in that Member State; 

(iii)  where the group is headed by more than one insurance holding company 
with a head office in different Member States and there is an insurance or 
reinsurance  undertaking  in  each  of  these  States,  by  the  supervisory 
authority  of  the  insurance  or  reinsurance  undertaking  with  the  largest 
balance sheet total; 

(iv)  where  more  than  one  insurance  or  reinsurance  undertaking  with  a  head 
office in the Community have as their parent the same insurance holding 
company  and  none  of  these  undertakings  has  been  authorised  in  the 
Member  State  in  which  the  insurance  holding  company  has  its  head 
office,  by  the  supervisory  authority  which  authorised  the  insurance  or 
reinsurance undertaking with the largest balance sheet total; 

(v)  where the group is a group without a parent undertaking, or in any other 
case,  by  the  supervisory  authority  which  authorised  the  insurance  or 
reinsurance undertaking with the largest balance sheet total. 

3. 

In  particular  cases,  the  supervisory  authorities  concerned  may  derogate  from  the 
criteria set out in paragraph 2 if their application would be inappropriate, taking into 
account the structure of the group and the relative importance of the insurance and 
reinsurance  undertakings  activities  in  different  countries,  and  designate  a  different 
supervisory authority as group supervisor. 

For  that  purpose,  any  of  the  supervisory  authorities  concerned  may  request  that  a 
discussion  be  opened  on  whether  the  criteria  referred  to  in  paragraph  2  are 
appropriate. Such a discussion shall not take place more than once a year.  

The  supervisory  authorities  concerned  shall  do  everything  within  their  power  to 
reach a joint decision on the choice of the group supervisor within three months from 
the  request  for  discussion.  Before  taking  their  decision,  the  supervisory  authorities 
concerned shall give the group an opportunity to state its opinion. 

4. 

In the absence of a joint decision within three months, the task of group supervisor 
shall be exercised by the supervisory authority of the Member State where the group 
has its most important insurance and reinsurance activities. 

However,  where  that  result  is  opposed  by  a  majority  of  the  other  supervisory 
authorities  concerned,  the  designation  of  the  group  supervisor  shall  be  referred 
within  one  month  following  the  default  designation  for  final  decision  to  the 
Committee  of  European  Insurance  and  Occupational  Pensions  Supervisors,  which 
shall render its decision within one month following the referral. 

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5. 

6. 

The Committee of European Insurance and Occupational Pensions Supervisors shall 
inform  the  Commission,  at  least  once  a  year,  of  any  major  difficulties  with  the 
application of paragraphs 2, 3 and 4. 

Where  a  Member  State  has  more  than  one  supervisory  authority  for  the  prudential 
supervision of insurance and reinsurance undertakings, such Member State shall take 
the necessary measures to ensure coordination between those authorities. 

Article 252 

Rights and duties of the group supervisor – Coordination arrangements 

1. 

The  rights  and  duties  assigned  to  the  group  supervisor  with  regard  to  group 
supervision shall comprise the following: 

(a) 

coordination  of  the  gathering  and  dissemination  of  relevant  or  essential 
information  for  going  concern  and  emergency  situations,  including  the 
dissemination of information which is of importance for the supervisory task of 
a supervisory authority; 

(b) 

supervisory review and assessment of the financial situation of the group; 

(c) 

(d) 

(e) 

(f) 

assessment of compliance of the group with the rules on solvency and of risk 
concentration and intra-group transactions as set out in Articles 216 to 249; 

assessment of the system of governance of the group, as set out in Article 250, 
and of whether the members of the administrative or management body of the 
participating  undertaking  meet  the  requirements  set  out  in  Article  42  and 
Article 261; 

planning  and  coordination,  through  regular  meetings  or  other  appropriate 
means,  of  supervisory  activities  in  going  concern  as  well  as  in  emergency 
situations, in cooperation with the supervisory authorities concerned; 

other  tasks,  measures  and  decisions  assigned  to  the  group  supervisor  by  this 
Directive  or  deriving  from  the  application  of  this  Directive,  in  particular 
leading the process for validation of any internal model at group level as set out 
in Articles 229 and 231 and leading the process for permitting group support as 
set out in Article 235. 

2. 

In  order  to  facilitate  group  supervision,  the  group  supervisor  and  the  other 
supervisory authorities concerned shall have coordination arrangements in place. 

Those  coordination  arrangements  may  entrust  additional  tasks  to  the  group 
supervisor  and  may  specify,  without  prejudice  to  any  measure  adopted  pursuant  to 
this Directive, the procedures for the decision-making process among the supervisory 
authorities concerned as referred to in Articles 211(3), 212(2), 213(2), 214, 215, 217, 
218(2),  219(2),  225(2),  236,  248,  249,  251  (3)  and  (4),  254,  263  and  264  and  for 
cooperation with other supervisory authorities. 

3. 

The  Commission  shall  adopt  implementing  measures  for  the  coordination  of  group 
supervision for the purposes of paragraphs 1 and 2. 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive  by 
supplementing it shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304(3). 

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Article 253 

Cooperation and exchange of information between supervisory authorities 

1. 

The  authorities  responsible  for  the  supervision  of  the  individual  insurance  and 
reinsurance undertakings in a group and the group supervisor shall cooperate closely, 
including  in  cases  where  an  insurance  or  reinsurance  undertaking  encounters 
financial difficulties. 

Without  prejudice  to  their  respective  responsibilities,  those  authorities,  whether  or 
not  established  in  the  same  Member  State,  shall  provide  one  another  with  any 
essential  or  relevant  information  which  may  allow  or  facilitate  the  exercise  of  the 
supervisory  tasks  of  the  other  authorities  under  this  Directive.  In  this  regard,  the 
supervisory  authorities  concerned  and  the  group  supervisor  shall  communicate  on 
request  all  relevant  information  and  shall  communicate  on  their  own  initiative  all 
essential information. 

Information referred to in the second subparagraph shall be regarded as essential if it 
could materially influence the assessment of the financial soundness of an insurance 
or reinsurance undertaking. 

2. 

The  Commission  shall  adopt  implementing  measures  determining  the  items  which 
are, on a systematic basis, to be gathered by the group supervisor and disseminated to 
other supervisory authorities concerned or to be transmitted to the group supervisor 
by the other supervisory authorities concerned. 

The  Commission  shall  adopt  implementing  measures  specifying  the  items  essential 
or relevant for supervision at group level with a view to enhancing convergence of 
supervisory reporting. 

The  measures  referred  to  in  the  first  and  second  subparagraphs  designed  to  amend 
non-essential  elements  of  this  Directive  by  supplementing  it  shall  be  adopted  in 
accordance with the regulatory procedure with scrutiny referred to in Article 304(3). 

Article 254 

Consultation between supervisory authorities 

1. 

The  supervisory  authorities  concerned  shall,  where  a  decision  is  of  importance  for 
the supervisory tasks of other supervisory authorities, prior to that decision, consult 
each other with regard to the following items: 

(a) 

changes in the shareholder structure, organisational or management structure of 
insurance and reinsurance undertakings in a group, which require the approval 
or authorisation of supervisory authorities; 

(b)  major  sanctions  or  exceptional  measures  taken  by  supervisory  authorities, 
including  the  imposition  of  a  capital  add-on  to  the  Solvency  Capital 
Requirement under Article 37 and the imposition of any limitation on the use 
of  an  internal  model  for  the  calculation  of  the  Solvency  Capital  Requirement 
under Title I, Chapter VI, Section 4, Subsection 3. 

For the purposes of point (b), the group supervisor shall always be consulted. 

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In addition, the supervisory authorities concerned shall, where a decision is based on 
information  received  from  other supervisory authorities,  consult each other prior to 
that decision. 

2. 

A supervisory authority may decide not to consult in cases of urgency or where such 
consultation  may  jeopardise  the  effectiveness  of  the  decision.  In  that  case,  the 
supervisory  authority  shall,  without  delay,  inform  the  other  supervisory  authorities 
concerned. 

Article 255 

Requests from the group supervisor to other supervisory authorities 

The group supervisor may invite the supervisory authorities of the Member State in which a 
parent  undertaking  has  its  head  office,  and  which  do  not  themselves  exercise  the  group 
supervision pursuant to Article 251, to request from the parent undertaking any information 
which would be relevant for the exercise of its coordination rights and duties as laid down in 
Article 252, and to transmit that information to the group supervisor. 

The group supervisor shall, when it needs information referred to in Article 258(2) which has 
already been given to another supervisory authority, contact that authority whenever possible 
in order to prevent duplication of reporting to the various authorities involved in supervision. 

Article 256 

Cooperation with authorities responsible for credit institutions and investment firms 

Where  an  insurance  or  reinsurance  undertaking  and  either  a  credit  institution  as  defined  in 
Directive 2006/48/EC or an investment firm as defined in Council Directive 2004/39/EC, or 
both,  are  directly  or  indirectly  related  or  have  a  common  participating  undertaking,  the 
supervisory authorities concerned and the authorities responsible for the supervision of those 
other undertakings shall cooperate closely. 

Without  prejudice  to  their  respective  responsibilities,  those  authorities  shall  provide  one 
another with any information likely to simplify their task, in particular as set out in this Title. 

Article 257 

Professional secrecy and confidentiality 

Member  States  shall  authorise  the  exchange  of  the  information  between  their  supervisory 
authorities  and  between  their  supervisory  authorities  and  other  authorities,  as  referred  to  in 
Articles 253 to 256. 

Information received in the framework of group supervision, and in particular any exchange 
of information between supervisory authorities and between supervisory authorities and other 
authorities  which  is  provided  for  in  this  Title,  shall  be  subject  to  the  provisions  on 
professional secrecy and communication of confidential information laid down in Article 297. 

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1. 

2. 

1. 

2. 

Article 258 

Access to information 

Member  States  shall  ensure  that  the  natural  and  legal  persons  included  within  the 
scope  of  group  supervision,  and  their  related  undertakings  and  participating 
undertakings, are able to exchange any information which could be relevant for the 
purposes of group supervision. 

Member  States  shall  provide  that  their  authorities  responsible  for  exercising  group 
supervision  shall  have  access  to  any  information  relevant  for  the  purposes  of  that 
supervision  regardless  of  the  nature  of  the  undertaking  concerned.  Article  35  shall 
apply mutatis mutandis. 

The  supervisory  authorities  concerned  may  only  address  themselves  directly  to  the 
undertakings  in  the  group  to  obtain  the  necessary  information,  if  such  information 
has  been  requested  from  the  insurance  undertaking  or  reinsurance  undertaking 
subject  to  group  supervision  and  has  not  been  supplied  by  it  within  a  reasonable 
period of time. 

Article 259 

Verification of information 

Member  States  shall  ensure  that  their  supervisory  authorities  may  carry  out  within 
their  territory,  either  directly  or  through  the  intermediary  of  persons  whom  they 
appoint for that purpose, on-site verification of the information referred to in Article 
258 on the premises of any of the following: 

(a) 

the insurance or reinsurance undertaking subject to group supervision; 

(b) 

related undertakings of that insurance or reinsurance undertaking; 

(c) 

(d) 

parent undertakings of that insurance or reinsurance undertaking; 

related  undertakings  of  a  parent  undertaking  of  that  insurance  or  reinsurance 
undertaking. 

Where  supervisory  authorities  wish  in  specific  cases  to  verify  the  information 
concerning an undertaking, whether or not regulated, which is part of a group and is 
situated  in  another  Member  State,  they  shall  ask  the  supervisory  authorities  of  that 
other Member State to have the verification carried out. 

The  authorities  which  receive  such  a  request  shall,  within  the  framework  of  their 
competences, act upon that request either by carrying out the verification directly, by 
allowing an auditor or expert to carry it out, or by allowing the authority which made 
the request to carry it out itself. The group supervisor shall be informed of the action 
taken. 

The supervisory authority which made the request may, if it so wishes, participate in 
the verification when it does not carry out the verification directly. 

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Article 260 

1. 

2. 

3. 

Group solvency and financial condition report 

Member States shall require participating insurance and reinsurance undertakings or 
insurance holding companies to publicly disclose, on an annual basis, a report on the 
solvency and financial condition at the level of the group. Articles 50 and 52 to 54 
shall apply mutatis mutandis. 

Where a participating insurance or reinsurance undertaking or an insurance holding 
company  so  decides,  and  subject  to  the  agreement  of  the  group  supervisor,  it  may 
provide  a  single  solvency  and  financial  condition  report  which  shall  comprise  the 
following: 

(a) 

(b) 

the information at the level of the group which must be disclosed in accordance 
with paragraph 1; 

the  information  for  any  of  the  subsidiaries  within  the  group  which  must  be 
disclosed in accordance with Articles 50 and 52 to 54. 

Where  the  report  referred  to  in  paragraph  2  fails  to  include  information  which  the 
supervisory  authority  having  authorised  a  subsidiary  within  the  group  requires 
comparable  undertakings  to  provide,  and  where  the  omission  is  material,  the 
supervisory  authority  concerned  shall  have  the  power  to  require  the  subsidiary 
concerned to disclose the necessary additional information. 

Article 261 

Administrative or management body of insurance holding companies 

Member  States  shall  require  that  all  persons  who  effectively  run  the  insurance  holding 
company are fit and proper to perform their duties. 

The provisions set out in Article 42 shall apply by analogy. 

Article 262 

Enforcement measures 

1. 

If  the  insurance  or  reinsurance  undertakings  in  a  group  do  not  comply  with  the 
requirements referred to in Articles 216 to 250 or where the requirements are met but 
solvency  may  nevertheless  be  jeopardised  or  where  the  intra-group  transactions  or 
the  risk  concentrations  are  a  threat  to  the  financial  position  of  the  insurance  or 
reinsurance undertakings, the following shall require the necessary measures in order 
to rectify the situation as soon as possible: 

(a) 

(b) 

the group supervisor with respect to the insurance holding company; 

the  supervisory  authorities  with  respect  to  the  insurance  and  reinsurance 
undertakings. 

Where,  in  the  case  referred  to  in  point  (a)  of  the  first  subparagraph,  the  group 
supervisor is not one of the supervisory authorities of the Member State in which the 
insurance  holding  company  has  its  head  office,  the  group  supervisor  shall  inform 
those supervisory authorities of its findings with a view to enabling them to take the 
necessary measures. 

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Where,  in  the  case  referred  to  in  point  (b)  of  the  first  subparagraph,  the  group 
supervisor is not one of the supervisory authorities of the Member State in which the 
insurance or  reinsurance undertaking has its  head office, the group supervisor shall 
inform those supervisory authorities of its findings with a view to enabling them to 
take the necessary measures. 

Without  prejudice  to  paragraph  2,  Member  States  shall  determine  the  measures 
which  may  be  taken  by  their  supervisory  authorities  with  respect  to  insurance 
holding companies. 

The  supervisory  authorities  concerned,  including  the  group  supervisor,  shall  where 
appropriate coordinate their enforcement measures. 

Without prejudice to their criminal law provisions, Member States shall ensure that 
sanctions  or  measures  may  be  imposed  on  insurance  holding  companies  which 
infringe  laws,  regulations  or  administrative  provisions  enacted  to  implement  this 
Title,  or  on  the  person  effectively  managing  those  companies.  The  supervisory 
authorities  shall  cooperate  closely  to  ensure  that  such  sanctions  or  measures  are 
effective,  especially  when  the  central  administration  or  main  establishment  of  an 
insurance holding company is not located at its head office. 

2. 

3. 

The  Commission  may  adopt  implementing  measures  for  the  coordination  of 
enforcement measures referred to in paragraphs 1 and 2. 

Those  measures  designed  to  amend  non-essential  elements  of  this  Directive  by 
supplementing it shall be adopted in accordance with the regulatory procedure with 
scrutiny referred to in Article 304(3). 

CHAPTER IV - THIRD COUNTRIES 

Article 263 

1. 

2. 

Parent undertakings outside the Community: verification of equivalence 

In  the  case  referred  to  in  point  (c)  of  Article  211(2),  the  supervisory  authorities 
concerned  shall  verify  whether  the  insurance  and  reinsurance  undertakings,  the 
parent undertaking of which has its head office outside the Community, are subject 
to supervision, by a third-country supervisory authority, which is equivalent to that 
provided  for  by  this  Title  on  the  supervision  at  the  level  of  the  group  of  insurance 
and reinsurance undertakings referred to in points (a) and (b) of Article 211(2). 

The verification shall be carried out by the supervisory authority which would be the 
group supervisor if the criteria set out in Article 251(2) were to apply, at the request 
of  the  parent  undertaking  or  of  any  of  the  insurance  and  reinsurance  undertakings 
authorised in the Community or on its own initiative. That supervisory authority shall 
consult the other supervisory authorities concerned, and the Committee of European 
Insurance and Occupational Pensions Supervisors, before taking a decision. 

The  Commission  may  adopt,  after  consultation  of  the  European  Insurance  and 
Occupational Pensions Committee and in accordance with the procedure referred to 
in Article 304(2), a decision as to whether the prudential regime in a third country for 
the supervision of groups is equivalent to that laid down in this Title. Those decisions 
shall be regularly reviewed to take into account any changes to the prudential regime 
for the supervision of groups laid down in this Title and to the prudential regime in 
the third country for the supervision of groups.  

EN 

263 

   EN 

 
 
When a decision has been adopted by the Commission, in accordance with the first 
subparagraph,  in  respect  of  a  third  country,  that  decision  shall  be  recognised  as 
determinative for the purposes of the verification referred to in paragraph 1. 

Article 264 

Parent undertakings outside the Community: absence of equivalence 

1. 

In  the  absence  of  equivalent  supervision  referred  to  in  Article  263,  Member  States 
shall apply to the insurance and reinsurance undertakings either Articles 216 to 262, 
by analogy and with the exception of Articles 234 to 247, or one of the methods set 
out in paragraph 2. 

The general principles and methods set out in Articles 216 to 262shall apply at the 
level of the insurance holding company, third-country insurance undertaking or third-
country reinsurance undertaking. 

For the sole purpose of the group solvency calculation, the parent undertaking shall 
be treated as if it were an insurance or reinsurance undertaking subject to the same 
conditions as laid down in TITLE I, Chapter VI, Section 3, Subsections 1, 2 and 3 as 
regards the own funds eligible for the Solvency Capital Requirement and to either of 
the following: 

(a) 

(b) 

a Solvency Capital Requirement determined in accordance with the principles 
of Article 224 where it is an insurance holding company; 

a Solvency Capital Requirement determined in accordance with the principles 
of  Article  225,  where  it  is  a  third-country  insurance  undertaking  or  a  third-
country reinsurance undertaking. 

2. 

Member States shall allow their supervisory authorities to apply other methods which 
ensure  appropriate  supervision  of  the  insurance  and  reinsurance  undertakings  in  a 
group.  These  methods  must  be  agreed  by  the  group  supervisor,  after  consultation 
with the other supervisory authorities concerned. 

The  supervisory  authorities  may  in  particular  require  the  establishment  of  an 
insurance holding company which has its head office in the Community, and apply 
this Title to the insurance and reinsurance undertakings in the group headed by that 
insurance holding company. 

The methods chosen shall allow the objectives of the group supervision as defined in 
this  Title  to  be  achieved  and  shall  be  notified  to  the  other  supervisory  authorities 
concerned and the Commission. 

Article 265 

Parent undertakings outside the Community: levels 

Where the parent undertaking referred to in Article 263 is itself a subsidiary of an insurance 
holding  company  having  its  head  office  outside  the  Community  or  of  a  third-country 
insurance or reinsurance undertaking, Member States shall apply the verification provided for 
in  Article  263  only  at  the  level  of  the  ultimate  parent  undertaking  which  is  a  third-country 
insurance  holding  company,  a  third-country  insurance  undertaking  or  a  third-country 
reinsurance undertaking  

EN 

264 

   EN 

 
 
 
However, Member States shall allow their supervisory authorities to decide, in the absence of 
equivalent  supervision  referred  to  in  Article  263,  to  carry  out  a  new  verification  at  a  lower 
level where a parent undertaking  of insurance  or reinsurance undertakings exists, whether a 
third-country  insurance  holding  company,  a  third-country  insurance  undertaking  or  a  third-
country reinsurance undertaking. 

In  such  a  case,  the  supervisory  authority  referred  to  in  the  second  subparagraph  of  Article 
263(1) shall explain its decision to the group.  

Article 264 shall apply mutatis mutandis. 

Article 266 

Cooperation with third countries supervisory authorities 

1. 

The  Commission  may  submit  proposals  to  the  Council  for  the  negotiation  of 
agreements with one or more third countries regarding the means of exercising group 
supervision over: 

(a) 

(b) 

insurance  or 
reinsurance  undertakings  which  have,  as  participating 
undertakings, undertakings within the meaning of Article 211 which have their 
head office situated in a third country; and 

third-country insurance undertakings or third-country reinsurance undertakings 
which have, as participating undertakings, undertakings within the meaning of 
Article 211 which have their head office in the Community. 

2. 

The agreements referred to in paragraph 1 shall in particular seek to ensure both: 

(a) 

(b) 

that  the  supervisory  authorities  of  the  Member  States  are  able  to  obtain  the 
information necessary for the supervision at the level of the group of insurance 
and reinsurance undertakings which have  their head  office in  the  Community 
and which have subsidiaries or hold participations in undertakings outside the 
Community; and 

that  the  supervisory  authorities  of  third  countries  are  able  to  obtain  the 
information  necessary  for  the  supervision  at  the  level  of  the  group  of  third-
country insurance and reinsurance undertakings which have their head office in 
their  territories  and  which  have  subsidiaries  or  hold  participations  in 
undertakings in one or more Member States. 

3. 

Without prejudice to Article 300(1) and (2) of the Treaty, the Commission shall, with 
the  assistance  of  the  European  Insurance  and  Occupational  Pensions  Committee, 
examine the outcome of the negotiations referred to in paragraph 1. 

CHAPTER V - MIXED-ACTIVITY INSURANCE HOLDING 
COMPANIES 

Article 267 

Intra-group transactions 

1. 

Member  States  shall  ensure  that,  where  the  parent  undertaking  of  one  or  more 
insurance  or  reinsurance  undertakings  is  a  mixed-activity  insurance  holding 
company,  the  supervisory  authorities  responsible  for  the  supervision  of  these 

EN 

265 

   EN 

 
 
 
insurance or reinsurance undertakings exercise general supervision over transactions 
between these insurance or reinsurance undertakings and the mixed-activity holding 
company and its related undertakings. 

2. 

Articles 249, 253 to 259 and 262 shall apply mutatis mutandis. 

Article 268 

Cooperation with third countries 

As concerns cooperation with third countries, Article 266 shall apply mutatis mutandis. 

TITLE IV - ⌦ REORGANISATION AND WINDING-UP OF 
INSURANCE UNDERTAKINGS ⌫ 

(cid:208) 2001/17/EC Art. 1 (adapted) 

CHAPTER I - SCOPE AND DEFINITIONS 

Article 269 

Scope ⌦ of this Title ⌫ 

This  Directive  applies  ⌦ Title  shall  apply ⌫  to  reorganisation  measures  and  winding-up 
proceedings concerning ⌦ the following: ⌫ 

(1) 

(2.) 

insurance undertakings.; 

This Directive also applies, to the extent provided for in Article 30, to reorganisation 
measures  and  winding-up  proceedings  concerning  branches  ⌦ situated ⌫  in  the 
territory  of  the  Community  of  insurance  undertakings  having  ⌦ which  have ⌫ 
their head office outside the Community. 

(cid:208) 2001/17/EC Art. 2 (adapted) 

Article 270 

Definitions 

1. 

For the purpose of this Directive ⌦ Title the following definitions shall apply ⌫ : 

(ga)  “competent authorities” means the administrative or judicial authorities of the 
Member  States  which  are  competent  for  the  purposes  of  the  reorganisation 
measures or the winding-up proceedings; 

(a) 

«insurance  undertaking»  means  an  undertaking  which  has  received  official 
authorisation in accordance with Article 6 of Directive 73/239/EEC or Article 
6 of Directive 79/267/EEC; 

(b)  “branch”  means  any  permanent  presence  of  an  insurance  undertaking  in  the 
territory  of  a  Member  State  other  than  the  home  Member  State  which  carries 
out ⌦ on ⌫ insurance business ⌦ activities ⌫; 

EN 

266 

   EN 

 
 
 
 
 
 
(c) 

"reorganisation  measures"  means  measures  involving  any  intervention  by 
administrative  bodies  or  judicial  ⌦ the  competent ⌫  authorities  which  are 
intended  to  preserve  or  restore  the  financial  situation  of  an  insurance 
undertaking  and  which  affect  pre-existing  rights  of  parties  other  than  the 
insurance  undertaking  itself,  including  but  not  limited  to  measures  involving 
the  possibility  of  a  suspension  of  payments,  suspension  of  enforcement 
measures or reduction of claims; 

(d)  ”winding-up  proceedings”  means  collective  proceedings  involving  realising 
⌦ the realisation of ⌫ the assets of an insurance undertaking and distributing 
⌦ the  distribution  of ⌫  the  proceeds  among  the  creditors,  shareholders  or 
members  as  appropriate,  which  necessarily  involve  any  intervention  by  the 
administrative or the judicial ⌦ competent ⌫ authorities of a Member State, 
including where the collective proceedings are terminated by a composition or 
other analogous measure, whether or not they are founded on insolvency or are 
voluntary or compulsory; 

(e) 

«home  Member  State»  means  the  Member  State  in  which  an  insurance 
undertaking  has  been  authorised  in  accordance  with  Article  6  of  Directive 
73/239/EEC or Article 6 of Directive 79/267/EEC; 

(f) 

«host  Member  State»  means  the  Member  State  other  than  the  home  Member 
State in which an insurance undertaking has a branch; 

(h)  «supervisory authorities» means the competent authorities within the meaning 
of  Article  1(k)  of  Directive  92/49/EEC  and  of  Article  1(l)  of  Directive 
92/96/EEC; 

(ie)  “administrator”  means  any  person  or  body  appointed  by  the  competent 

authorities for the purpose of administering reorganisation measures; 

(jf)  “liquidator” means any person or body appointed by the competent authorities 
or by the governing bodies of an insurance undertaking, as appropriate, for the 
purpose of administering winding-up proceedings; 

(kg)  “insurance  claims”  means  any  amount  which  is  owed  by  an  insurance 
undertaking  to  insured  persons,  policyholders,  beneficiaries  or  to  any  injured 
party having direct right of action against the insurance undertaking and which 
arises from an insurance contract or from any operation provided for in points 
(b)  and  (c)  of  Article  1(2)  and  (3),  of  Directive  79/267/EEC  2(3)  in  direct 
insurance  business,  including  amounts  set  aside  for  the  aforementioned 
⌦ those ⌫ persons, when some elements of the debt are not yet known. 

The premiums owed by an insurance undertaking as a result of the non-conclusion or 
cancellation of these insurance contracts and operations ⌦ referred to in point (g) of 
the first subparagraph ⌫ in accordance with the law applicable to such contracts or 
operations before the opening of the winding-up proceedings shall also be considered 
insurance claims. 

12. 

Notwithstanding  the  definitions  laid  down  in  Article  2(e),  (f)  and  (g)  and  fFor  the 
purpose  of  applying  the  provisions  of  this  Directive  Title  to  the  reorganisation 
measures  and  winding-up  proceedings  concerning  a  branch  situated  in  a  Member 

(cid:208) 2001/17/EC Art. 30 (adapted) 

EN 

267 

   EN 

 
 
State  of  an  insurance  undertaking  whose  head  office  is  located  outside  the 
Community ⌦ the following definitions shall apply ⌫ : 

(a)  ”home Member State” means the Member State in which the branch has been 
⌦ was ⌫  granted  authorisation  according  to  Articles  23  of  Directive 
73/239/EEC and Article 27 of Directive 79/267/EEC, 143 to 147; and 

(b)  “supervisory  authorities”  and  «competent  authorities»  mean  such  ⌦ means 
the  supervisory ⌫  authorities  of  the  Member  State  in  which  the  branch  was 
authorised.; 

⌦ (c) 

“competent  authorities”  means  the  competent  authorities  of  the 

Member State in which the branch was authorised. ⌫ 

CHAPTER II - REORGANISATION MEASURES 

This Title applies to the reorganisation measures defined in Article 2(c). 

Article 3 

Scope 

(cid:208) 2001/17/EC Art. 4 (adapted) 

Article 271 

1. 

2. 

23. 

34. 

Adoption of reorganisation measures — Applicable law 

Only the competent authorities of the home Member State shall be entitled to decide 
on  the  reorganisation  measures  with  respect  to  an  insurance  undertaking,  including 
its branches in other Member States. 

The  reorganisation  measures  shall  not  preclude  the  opening  of  winding-up 
proceedings by the home Member State. 

The  reorganisation  measures  shall  be  governed  by  the  laws,  regulations  and 
procedures  applicable  in  the  home  Member  State,  unless  otherwise  provided  in 
Articles 19 to 26 287 to 294. 

The  rReorganisation  measures  ⌦ taken  in  accordance  with  the  legislation  of  the 
home  Member  State ⌫  shall  be  fully  effective  throughout  the  Community  in 
accordance  with  the  legislation  of  the  home  Member  State  without  any  further 
formalities,  including  against  third  parties  in  other  Member  States,  even  if  the 
legislation  of  those  other  Member  States  does  not  provide  for  such  reorganisation 
measures or alternatively makes their implementation subject to conditions which are 
not fulfilled. 

45. 

The reorganisation measures shall be effective throughout the Community once they 
become effective in the ⌦ home ⌫ Member State where they have been taken. 

EN 

268 

   EN 

 
 
 
(cid:208) 2001/17/EC Art. 5 (adapted) 

Article 272 

Information to the supervisory authorities 

The competent authorities of the home Member State shall inform as a matter or urgency the 
home Member State's supervisory authorities ⌦ of that Member State ⌫ of their decision on 
any reorganisation measure, where possible before the adoption of such a measure and failing 
that immediately thereafter. 

The supervisory authorities of the home Member State shall inform as a matter of urgency the 
supervisory  authorities  of  all  other  Member  States  of  the  decision  to  adopt  reorganisation 
measures including the possible practical effects of such measures. 

(cid:208) 2001/17/EC Art. 6 (adapted) 

Article 273 

1. 

2. 

3. 

4. 

Publication ⌦ of decisions on reorganisation measures ⌫ 

Where  an  appeal  is  possible  in  the  home  Member  State  against  a  reorganisation 
measure, the competent authorities of the home Member State, the administrator or 
any  person  entitled  to  do  so  in  the  home  Member  State  shall  make  public  its 
⌦ the ⌫ decision on a reorganisation measure in accordance with the publication 
procedures provided for in the home Member State and, furthermore, publish in the 
Official  Journal  of  the  European  Communities Union  at  the  earliest  opportunity  an 
extract from the document establishing the reorganisation measure. 

The supervisory authorities of all the other Member States which have been informed 
of the decision on a reorganisation measure pursuant to Article 5 272 may ensure the 
publication  of  such  decision  within  their  territory  in  the  manner  they  consider 
appropriate. 

The  publications  provided  for  in  paragraph  1  shall  also  specify  the  competent 
authority of the home Member State, the applicable law as provided in Article 4(2) 
271(3)  and  the  administrator  appointed,  if  any.  They  shall  be  carried  out 
⌦ made ⌫  in  the  official  language  or  in  one  of  the  official  languages  of  the 
Member State in which the information is published. 

The  reorganisation  measures  shall  apply  regardless  of  the  provisions  concerning 
publication  set  out  in  paragraphs  1  and  2  and  shall  be  fully  effective  as  against 
creditors, unless the competent authorities of the home Member State or the law of 
that ⌦ Member ⌫ State provide otherwise. 

When  ⌦ Where ⌫  reorganisation  measures  affect  exclusively  the  rights  of 
shareholders,  members  or  employees  of  an  insurance  undertaking,  considered  in 
those  capacities,  this  Article  paragraphs  1,  2  and  3  shall  not  apply  unless  the  law 
applicable to these reorganisation measures provides otherwise. 

The competent authorities shall determine the manner in which the interested parties 
affected  by  such  reorganisation  measures  shall  ⌦ referred  to  in  the  first 

EN 

269 

   EN 

 
 
 
 
 
subparagraph  are  to ⌫  be  informed  in  accordance  with  the  relevant  legislation 
⌦ applicable law ⌫ . 

(cid:208) 2001/17/EC Art. 7 (adapted) 

Article 274 

1. 

2. 

1. 

2. 

3. 

Information to known creditors - Right to lodge claims 

Where the legislation ⌦ law ⌫ of the home Member State requires lodgement of a 
claim  with  a  view  to  its  recognition  ⌦ to  be  lodged  in  order  for  it  to  be 
recognised ⌫ or provides for compulsory notification of a reorganisation measure to 
creditors who have their normal place of ⌦ habitual ⌫residence, domicile or head 
office  in  that  State,  the  competent  authorities  of  the  home  Member  State  or  the 
administrator  shall  also  inform  known  creditors  who  have  their  normal  place  of 
⌦ habitual ⌫  residence,  domicile  or  head  office  in  another  Member  State,  in 
accordance with the procedures laid down in Articles 15 and 17(1) 283 and 285(1). 

Where the legislation ⌦ law ⌫ of the home Member State provides for the right of 
creditors who have their normal place of ⌦ habitual ⌫ residence, domicile or head 
office  in  that  ⌦ Member ⌫  State  to  lodge  claims  or  to  submit  observations 
concerning  their  claims,  creditors  who  have  their  normal  place  of  ⌦ habitual ⌫ 
residence, domicile or head office in another Member State shall have the same right 
to lodge claims or submit observations in accordance with the procedures laid down 
in Articles 16 and 17(2) 284 and 285(2). 

TITLE CHAPTER III - WINDING-UP PROCEEDINGS 

(cid:208) 2001/17/EC Art. 8 (adapted) 

Article 275 

Opening of winding-up proceedings — Information to the supervisory authorities 

Only the competent authorities of the home Member State shall be entitled to take a 
decision  concerning  the  opening  of  winding-up  proceedings  with  regard  to  an 
insurance undertaking, including its branches in other Member States. This decision 
may be taken in the absence, or following the adoption, of reorganisation measures. 

A decision adopted according to the home Member State's legislation concerning the 
opening  of  winding-up  proceedings  of  an  insurance  undertaking,  including  its 
branches  in  other  Member  States, ⌦ adopted  in  accordance  with  the  legislation  of 
the home Member State ⌫ shall be recognised without further formality within the 
territory of all other Member States ⌦ throughout the Community ⌫ and shall be 
effective there as soon as the decision is effective in the Member State in which the 
proceedings are opened. 

The  supervisory  ⌦ competent ⌫  authorities  of  the  home  Member  State  shall  be 
informed  as  a  matter  of  urgency  ⌦ the  supervisory  authorities  of  that  Member 
State ⌫  of  the  decision  to  open  winding-up  proceedings,  if  possible  before  the 
proceedings are opened and failing that immediately thereafter. 

EN 

270 

   EN 

 
 
 
 
 
The  supervisory  authorities  of  the  home  Member  State  shall  inform  as  a  matter  of 
urgency  the  supervisory  authorities  of  all  other  Member  States  of  the  decision  to 
open  winding-up  proceedings  including  the  possible  practical  effects  of  such 
proceedings. 

(cid:208) 2001/17/EC Art. 9 (adapted) 

Article 276 

Applicable law 

1. 

2. 

The  decision  to  open  winding-up  proceedings  with  regard  to  an  insurance 
undertaking, the winding-up  proceedings and their effects shall be governed by the 
laws,  regulations  and  administrative  provisions  applicable  in  its  ⌦ the ⌫  home 
Member State unless otherwise provided in Articles 19 to 26 287 to 294. 

The  law  of  the  home  Member  State  shall  determine  in  particular  ⌦ at  least  the 
following ⌫ : 

(a) 

the assets which form part of the estate and the treatment of assets acquired by, 
or devolving on ⌦ to ⌫ , the insurance undertaking after the opening of the 
winding-up proceedings; 

(b) 

the respective powers of the insurance undertaking and the liquidator; 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

(j) 

the conditions under which set-off may be invoked; 

the  effects  of  the  winding-up  proceedings  on  current  contracts  to  which  the 
insurance undertaking is party; 

the effects of the winding-up proceedings on proceedings brought by individual 
creditors,  with  the  exception  of  lawsuits  pending  as  provided  for ⌦ referred 
to ⌫ in Article 26 294; 

the  claims  which  are  to  be  lodged  against  the  insurance  undertaking's  estate 
⌦ of  the  insurance  undertaking ⌫  and  the  treatment  of  claims  arising  after 
the opening of winding-up proceedings; 

the rules governing the lodging, verification and admission of claims; 

the rules governing the distribution of proceeds from the realisation of assets, 
the  ranking  of  claims,  and  the  rights  of  creditors  who  have  obtained  partial 
satisfaction after the opening of winding-up proceedings by virtue of a right in 
rem or through a set-off; 

the  conditions  for  and  the  effects  of  closure  of  winding-up  proceedings,  in 
particular by composition; 

creditors'  rights  ⌦ of  the  creditors ⌫  after  the  closure  of  winding-up 
proceedings; 

(k)  ⌦ the party ⌫ who is to bear the cost and expenses incurred in the winding-

up proceedings; 

(l) 

the rules relating to the voidness ⌦ nullity ⌫ , voidability or unenforceability 
of legal acts detrimental to all the creditors. 

EN 

271 

   EN 

 
 
 
(cid:208) 2001/17/EC Art. 10 (adapted) 

Article 277 

Treatment of insurance claims 

1. 

Member States shall ensure that insurance claims take precedence over other claims 
on  the  insurance  undertaking  according  to  ⌦ in ⌫  one  or  both  of  the  following 
methods ⌦ ways ⌫ : 

(a) 

(b) 

insurance  claims  shall,  with  respect  to  assets  representing  the  technical 
provisions,  ⌦ insurance  claims  shall ⌫  take  absolute  precedence  over  any 
other claim on the insurance undertaking; 

insurance claims shall, with respect to the whole of the insurance undertaking's 
assets  ⌦ of  the  insurance  undertaking,  insurance  claims  shall ⌫  take 
precedence  over  any  other  claim  on  the  insurance  undertaking  with  the  only 
possible exception of ⌦ the following ⌫ : 

(i) 

claims  by  employees  arising 
employment relationships,; 

(ii) 

claims by public bodies on taxes,; 

(iii)  claims by social security systems,; 

from  employment  contracts  and 

(iv)  claims on assets subject to rights in rem. 

Without  prejudice  to  paragraph  1,  Member  States  may  provide  that  the  whole  or  a 
the  winding-up  procedure,  as  defined 
part  of 
⌦ determined ⌫  by  their  national  legislation  ⌦ law ⌫  ,  shall  take  precedence 
over insurance claims. 

the  expenses  arising  from 

Member States which have opted for the method ⌦ chosen the option ⌫ provided 
for in point (a) of paragraph 1(a) shall require that insurance undertakings ⌦ to ⌫ 
establish  and  keep  up  to  date  a  special  register  in  line  ⌦ accordance ⌫  with  the 
provisions set out in the Annex Article 278. 

(cid:208) 2001/17/EC Annex (adapted) 

Article 278 

Special register referred to in Article 10(3) 

Every  insurance  undertaking  must  ⌦ shall ⌫  keep  at  its  head  office  a  special 
register of the assets used to cover the technical provisions calculated and invested in 
accordance with ⌦ law of ⌫ the home Member State's rules. 

Where  an  insurance  undertaking  transacts  ⌦ carries  on ⌫  both  non-life  and  life 
business  ⌦ activities ⌫  ,  it  must  ⌦ shall ⌫  keep  at  its  head  office  separate 
registers for each type of business. 

However, where a Member State authorises insurance undertakings to cover life and 
the risks listed in points ⌦ classes ⌫ 1 and 2 of point A of Annex A to Directive 

2. 

3. 

1. 

2. 

EN 

272 

   EN 

 
 
 
 
 
3. 

4. 

73/239/EEC I, it may provide that those insurance undertakings must keep a single 
register for the whole of their activities. 

The total value of the assets entered, valued in accordance with the rules ⌦ law ⌫ 
applicable in the home Member State, must ⌦ shall ⌫ at no time be less than the 
value of the technical provisions. 

Where  an  asset  entered  in  the  register  is  subject  to  a  right  in  rem  in  favour  of  a 
creditor  or  a  third  party,  with  the  result  that  part  of  the  value  of  the  asset  is  not 
available  for  the  purpose  of  covering  commitments,  that  fact  is  ⌦ shall  be ⌫ 
recorded  in  the  register  and  the  amount  not  available  is ⌦ shall ⌫  not ⌦ be ⌫ 
included in the total value referred to in point paragraph 3. 

5. ⌦ In  the  following  cases  the  treatment  of  an  asset  in  the  case  of  the  winding-up  of  the 
insurance undertaking with respect to the option provided for in point (a) of Article 
277  (1)  shall  be  determined  by  the  legislation  of  the  home  Member  State,  except 
where Articles 288, 289 and 300 apply to that asset: ⌫ 

(a)  Wwhere  an  ⌦ the ⌫  asset  employed  ⌦ used ⌫  to  cover  technical 
provisions is subject to a right in rem in favour of a creditor or a third party, 
without meeting the conditions of point set out in paragraph 4,; 

(b)  or where such an asset is subject to a reservation of title in favour of a creditor 

or of a third party; 

(c) 

or  where  a  creditor  has  a  right  to  demand  the  set-off  of  his  claim  against  the 
claim  of  the  insurance  undertaking,  the  treatment  of  such  asset  in  case  of  the 
winding-up of the insurance undertaking with respect to the method provided 
for  in  Article  10(1)(a)  shall  be  determined  by  the  legislation  of  the  home 
Member State except where Articles 20, 21 or 22 apply to that asset. 

⌦ Once  winding-up  proceedings  have  been  opened, ⌫  Tthe  composition  of  the 
assets entered in the register in accordance with points paragraphs 1 to 5, at the time 
when  winding-up  proceedings  are  opened,  must  ⌦ shall ⌫  not  thereafter  be 
changed  and  no  alteration  other  than  the  correction  of  purely  clerical  errors  must 
⌦ shall ⌫ be made in the registers, except with the authorisation of the competent 
authority. 

7. Notwithstanding point 6  ⌦ However ⌫  ,  the  liquidators  must  ⌦ shall ⌫  add 
to  the  said  ⌦ those ⌫  assets  the  yield  therefrom  and  the  value  of  the  pure 
premiums  received  in  respect  of  the  class  of  business  ⌦ insurance ⌫  concerned 
between the opening of the winding-up proceedings and the time of payment of the 
insurance claims or until any transfer of portfolio is effected. 

If  the  product  of  the  realisation  of  assets  is  less  than  their  estimated  value  in  the 
registers,  the  liquidators  must  be  required  to  ⌦ shall ⌫  justify  this  to  ⌦ the 
supervisory authorities of ⌫ the home Member States' competent authorities. 

The supervisory authorities of the Member States must take appropriate measures to 
ensure full application by the insurance undertakings of the provisions of this Annex. 

6. 

87. 

9. 

EN 

273 

   EN 

 
(cid:208) 2001/17/EC Art. 11 

Article 279 

Subrogation to a guarantee scheme 

The home Member State may provide that, where the rights of insurance creditors have been 
subrogated  to  a  guarantee  scheme  established  in  that  Member  State,  claims  by  that  scheme 
shall not benefit from the provisions of Article 10(1) 277(1). 

(cid:208) 2001/17/EC Art. 12 (adapted) 

Article 280 

Representation of preferential claims by assets 

By way of derogation from Article 18 of Directive 73/239/EEC and Article 21 of Directive 
79/267/EEC,  Member  States  which  apply  the  method  ⌦ choose  the  option ⌫  set  out  in 
point (b) of Article 10(1)(b) of this Directive 277(1) shall require every insurance undertaking 
to  represent,  at  any  moment  and  independently  from  a  possible  winding-up,  ⌦ ensure 
that ⌫ the claims which may take precedence over insurance claims pursuant to point (b) of 
Article  10(1)(b)  277(1)  and  which  are  registered  in  the  insurance  undertaking's  accounts 
⌦ are  represented,  at  any  moment  and  independently  from  a  possible  winding-up ⌫  ,  by 
assets.  mentioned  in  Article  21  of  Directive  92/49/EEC  and  Article  21  of  Directive 
92/96/EEC. 

(cid:208) 2001/17/EC Art. 13 (adapted) 

Article 281 

Withdrawal of the authorisation 

1. 

2. 

Where the opening of winding-up proceedings is decided in respect of an insurance 
undertaking,  the  authorisation  of  the  insurance  ⌦ that ⌫  undertaking  shall  be 
withdrawn ⌦ in accordance with the procedure laid down in Article 142 ⌫ , except 
to  the  extent  necessary  for  the  purposes  of  paragraph  2,  in  accordance  with  the 
procedure  laid  down  in  Article  22  of  Directive  73/239/EEC  and  Article  26  of 
Directive 79/267/EEC, if the authorisation has not been previously withdrawn. 

The  withdrawal  of  authorisation  pursuant  to  paragraph  1  shall  not  prevent  the 
liquidator  or  any  other  person  entrusted  ⌦ appointed ⌫  by  the  competent 
authorities from carrying on some of the insurance undertakings' activities ⌦ of the 
insurance  undertakings ⌫  in  so  far  as  that  is  necessary  or  appropriate  for  the 
purposes of winding-up. 

The home Member State may provide that such activities shall be carried on with the 
consent  and  under  the  supervision  of  the  supervisory  authorities  of  the  home 
⌦ that ⌫ Member State. 

EN 

274 

   EN 

 
 
 
 
 
 
 
1. 

2. 

1. 

2. 

(cid:208) 2001/17/EC Art. 14 (adapted) 

Article 282 

Publication ⌦ of decisions on winding-up procedures ⌫ 

The competent authority, the liquidator or any person appointed for that purpose by 
the competent authority shall publish the decision to open winding-up proceedings in 
accordance with the publication procedures provided for in the home Member State 
and also publish an extract from the winding-up decision in the Official Journal of 
the European Communities Union. 

The supervisory authorities of all the other Member States which have been informed 
of  the  decision  to  open  winding-up  proceedings  in  accordance  with  Article  8(3) 
275(3)  may  ensure  the  publication  of  such  decision  within  their  territories  in  the 
manner they consider appropriate. 

The  publication  of  the  decision  to  open  winding-up  proceedings  provided  for 
⌦ referred  to ⌫  in  paragraph  1  shall  also  specify  the  competent  authority  of  the 
home  Member  State,  the  applicable  law  and  the  liquidator  appointed.  It  shall  be  in 
the official language or in one of the official languages of the Member State in which 
the information is published. 

(cid:208) 2001/17/EC Art. 15 (adapted) 

Article 283 

Information to known creditors 

When  winding-up  proceedings  are  opened,  the  competent  authorities  of  the  home 
Member  State,  the  liquidator  or  any  person  appointed  for  that  purpose  by  the 
competent authorities shall without delay individually inform by written notice each 
known creditor who has his normal place of ⌦ habitual ⌫ residence, domicile or 
head office in another Member State thereof. 

The notice referred to in paragraph 1 shall in particular deal with ⌦ cover ⌫ time 
limits, the penalties ⌦ sanctions ⌫ laid down with regard to those time limits, the 
body  or  authority  empowered  to  accept  the  lodgement ⌦ lodging ⌫  of  claims  or 
observations relating to claims and the ⌦ any ⌫ other measures laid down. 

The  notice  shall  also  indicate  whether  creditors  whose  claims  are  preferential  or 
secured in rem need to lodge their claims. 

In the case of insurance claims, the notice shall further indicate the general effects of 
the  winding-up  proceedings  on  the  insurance  contracts,  in  particular,  the  date  on 
which the insurance contracts or the operations will cease to produce effects and the 
rights and duties of insured persons with regard to the contract or operation. 

EN 

275 

   EN 

 
 
 
 
 
(cid:208) 2001/17/EC Art. 16 (adapted) 

Article 284 

Right to lodge claims 

1. 

2. 

3. 

Any creditor ⌦ , including public authorities of Member States, whose ⌫ who has 
his  normal  place  of  ⌦ habitual ⌫  residence,  domicile  or  head  office  ⌦ is 
situated ⌫ in a Member State other than the home Member State, including Member 
States'  public  authorities,  shall  have  the  right  to  lodge  claims  or  to  submit  written 
observations relating to claims. 

The  claims  of  all  creditors  who  have  their  normal  place  of  residence,  domicile  or 
head  office  in  a  Member  State  other  than  the  home  Member  State,  including  the 
aforementioned authorities, ⌦ referred to in paragraph 1 ⌫ shall be treated in the 
same  way  and  accorded  ⌦ given ⌫  the  same  ranking  as  claims  of  an  equivalent 
nature  lodgeable  ⌦ which  may  be  lodged ⌫  by  creditors  who  have  their  normal 
place  of  ⌦ habitual ⌫  residence,  domicile  or  head  office  in  the  home  Member 
State. 

Except in cases where the law of the home Member State allows otherwise, a creditor 
shall  send  ⌦ to  the  competent  authority ⌫  copies  of  ⌦ any ⌫  supporting 
documents, if any, and shall indicate ⌦ the following: ⌫ 

(a) 

the nature ⌦ and the amount ⌫ of the claim,; 

(b) 

the date on which it ⌦ the claim ⌫ arose and the amount,; 

(c)  whether he alleges preference, security in rem or reservation of title in respect 

of the claim; 

(d) 

and ⌦ where appropriate, ⌫ what assets are covered by his security. 

The precedence granted to insurance claims by Article 10 277 need not be indicated. 

(cid:208) 2001/17/EC Art. 17 (adapted) 

Article 285 

Languages and form 

1. 

The information in the notice referred to in Article 15 283(1) shall be provided in the 
official language or one of the official languages of the home Member State. 

For that purpose a  form  shall be  used bearing the heading ⌦ one of  the following 
headings in all the official languages of the European Union: ⌫ 

(a) 

«Invitation to lodge a claim; time limits to be observed»; 

(b)  or,  where  the  law  of  the  home  Member  State  provides  for  the  submission  of 
observations relating to claims, «Invitation to submit observations relating to a 
claim; time limits to be observed», in all the official languages of the European 
Union. 

EN 

276 

   EN 

 
 
 
 
 
However, where a known creditor is a holder of an insurance claim, the information 
in the notice referred to in Article 15 283(1) shall be provided in the official language 
or  one  of  the  official  languages  of  the  Member  State  in  which  the  creditor  has  his 
normal place of ⌦ habitual ⌫residence, domicile or head office. 

2. 

Any  creditor  ⌦ Creditors ⌫  who  ⌦ have  their ⌫  has  his  normal  place  of 
⌦ habitual ⌫residence, domicile or head  office in a Member State other than the 
home Member State may lodge his claim ⌦ their claims ⌫ or submit observations 
relating  to  his  claim  ⌦ claims ⌫  in  the  official  language  or  one  of  the  official 
languages of that other Member State. 

However,  in  that  event  ⌦ case, ⌫  the  lodgement  ⌦ lodging ⌫  of  his  claim 
⌦ their  claims ⌫  or  the  submission  of  observations  on  his  claim  ⌦ their 
claims ⌫,  as  appropriate,  shall  bear  the  heading  «Lodgement  of  claim»  or 
«Submission  of  observations  relating  to  claims»,  as  appropriate,  in  the  official 
language or one of the official languages of the home Member State. 

(cid:208) 2001/17/EC Art. 18 (adapted) 

Article 286 

Regular information to the creditors 

1. 

2. 

Liquidators  shall  keep  creditors  regularly  informed,  in  an  appropriate  manner, 
⌦ keep  creditors  regularly  informed  on ⌫  in  particular  regarding  the  progress  of 
the winding-up. 

The  supervisory  authorities  of  the  Member  States  may  request  information  on 
developments  in  the  winding-up  procedure  from  the  supervisory  authorities  of  the 
home Member State. 

TITLE CHAPTER IV - ⌦ COMMON ⌫ PROVISIONS 
COMMON TO REORGANISATION MEASURES AND 
WINDING-UP PROCEEDINGS 

(cid:208) 2001/17/EC Art. 19 (adapted) 

Article 287 

Effects on certain contracts and rights 

By way of derogation from ⌦ Without prejudice to ⌫ Articles 4 271 and 9 276 the effects 
of the opening of reorganisation measures or of winding-up proceedings on the contracts and 
rights specified below shall be governed by the following rules ⌦ as follows ⌫ : 

(1a)  ⌦ in the case of ⌫ employment contracts and employment relationships, shall be 
governed  solely  by  the  law  of  the  Member  State  applicable  to  the  employment 
contract or employment relationship; 

(2b) 

a  contract  ⌦ in  the  case  of  contracts ⌫  conferring  the  right  to  make  use  of  or 
acquire  immovable  property,  shall  be  governed  solely  by  the  law  of  the  Member 
State in whose territory the immovable property is situated; 

EN 

277 

   EN 

 
 
 
 
 
(3c)  ⌦ in the case of ⌫ rights of the insurance undertaking with respect to immovable 
property,  a  ship  or  an  aircraft  subject  to  registration  in  a  public  register,  shall  be 
governed by the law of the Member State under whose authority the register is kept. 

1. 

2. 

3. 

4. 

1. 

(cid:208) 2001/17/EC Art. 20 (adapted) 

Article 288 

Third parties' rRights in rem ⌦ of third parties ⌫ 

The  opening  of reorganisation measures or winding-up proceedings shall not affect 
the  rights  in  rem  of  creditors  or  third  parties  in  respect  of  tangible  or  intangible, 
movable  or  immovable  assets  —  both  specific  assets  and  collections  of  indefinite 
assets as a whole which change from time to time — ⌦ which ⌫ belonging to the 
insurance  undertaking ⌦ and ⌫  which  are  situated  within  the  territory  of  another 
Member State at the time of the opening of such measures or proceedings. 

The  rights  referred  to  in  paragraph  1  shall  ⌦ at  least ⌫  in  particular  mean 
⌦ include ⌫ : 

(a) 

(b) 

the right to dispose of assets or have them disposed of and to obtain satisfaction 
from the proceeds of or income from those assets, in particular by virtue of a 
lien or a mortgage; 

the  exclusive  right  to  have  a  claim  met,  in  particular  a  right  guaranteed  by  a 
lien  in  respect  of  the  claim  or  by  assignment  of  the  claim  by  way  of  a 
guarantee; 

(c) 

the  right  to  demand  the  assets  from,  and/or  to  require  restitution  by,  anyone 
having possession or use of them contrary to the wishes of the party so entitled; 

(d) 

a right in rem to the beneficial use of assets. 

The ⌦ A ⌫ right, ⌦ under which a right within the meaning of paragraph 1 may 
be obtained, shall be considered to be a right in rem if it is ⌫ recorded in a public 
register and enforceable against third parties, under which a right in rem within the 
meaning of paragraph 1 may be obtained, shall be considered a right in rem. 

Paragraph  1  shall  not  preclude  actions  for  voidness  ⌦ nullity ⌫  ,  voidability  or 
unenforceability referred to in point (l) of Article 9(2)(l) 276(2). 

(cid:208) 2001/17/EC Art. 21 (adapted) 

Article 289 

Reservation of title 

The  opening  of  reorganisation  measures  or  winding-up  proceedings  against  an 
insurance undertaking purchasing an asset shall not affect the seller's rights ⌦ of a 
seller which are ⌫ based on a reservation of title where at the time of the opening of 
such measures or proceedings the asset is situated within the territory of a Member 
State  other  than  the  ⌦ Member ⌫  State  in  which  such  measures  or  proceedings 
were opened. 

EN 

278 

   EN 

 
 
 
 
 
2. 

The  opening  ⌦ ,  after  delivery  of  the  asset, ⌫  of  reorganisation  measures  or 
winding-up proceedings against an insurance undertaking ⌦ which is ⌫ selling an 
asset,  after  delivery  of  the  asset,  shall  not  constitute  grounds  for  rescinding  or 
terminating the sale and shall not prevent the purchaser from acquiring title where at 
the  time  of  the  opening  of  such  measures  or  proceedings  the  asset  sold  is  situated 
within the territory of a Member State other than the State in which such measures or 
proceedings were opened. 

3. 

Paragraphs 1 and 2 shall not preclude actions for voidness ⌦ nullity ⌫ , voidability 
or unenforceability referred to in point (l) of Article 9(2)(l) 276(2). 

(cid:208) 2001/17/EC Art. 22 (adapted) 

Article 290 

Set-off 

The  opening  of reorganisation measures or winding-up proceedings shall not affect 
the right of creditors to demand the set-off of their claims against the claims of the 
insurance undertaking, where such a set-off is permitted by the law applicable to the 
insurance undertaking's claim ⌦ of the insurance undertaking ⌫ . 

Paragraph  1  shall  not  preclude  actions  for  voidness  ⌦ nullity ⌫  ,  voidability  or 
unenforceability referred to in point (l) of Article 9(2)(l) 276(2). 

(cid:208) 2001/17/EC Art. 23 (adapted) 

Article 291 

Regulated markets 

Without  prejudice  to  Article  20288  the  effects  of  a  reorganisation  measure  or  the 
opening of winding-up proceedings on the rights and obligations of the parties to a 
regulated market shall be governed solely by the law applicable to that market. 

Paragraph 1 shall not preclude any action for voidness ⌦ nullity ⌫ , voidability, or 
unenforceability referred to in point (l) of Article 9(2)(l) 276(2) which may be taken 
to set aside payments or transactions under the law applicable to that market. 

(cid:208) 2001/17/EC Art. 24 (adapted) 

1. 

2. 

1. 

2. 

Article 292 

Detrimental acts 

Point (l) of Article 9(2)(l) 276(2) shall not apply, where a person who has benefited from a 
legal  act  ⌦ which  is ⌫  detrimental  to  all  the  creditors  provides  proof  that:  (a)  the  said 
⌦ that ⌫  act  is  subject  to  the  law  of  a  Member  State  other  than  the  home  Member  State, 
and (b) that law does not allow any means of challenging that act in the relevant case. 

EN 

279 

   EN 

 
 
 
 
 
 
 
(cid:208) 2001/17/EC Art. 25 (adapted) 

Article 293 

Protection of third-party purchasers 

⌦ The following law shall be applicable ⌫ Wwhere, by an act concluded after the adoption 
of  a  reorganisation  measure  or  the  opening  of  winding-up  proceedings,  an  insurance 
undertaking disposes, for a consideration, of ⌦ any of the following ⌫ : 

(1a)  ⌦ in the case of ⌫ an immovable asset, ⌦ the law of the Member State in whose 

territory the immovable asset is localised; ⌫ 

(2b)  ⌦ in the case of ⌫ a ship or an aircraft subject to registration in a public register, 

or ⌦ the law of the Member State under whose authority the register is kept; ⌫ 

(3c)  ⌦ in  the  case  of ⌫  transferable  or  other  securities  whose  existence  or  transfer 
presupposes entry in a register or account laid down by law or which are placed in a 
central  deposit  system  governed  by  the  law  of  a  Member  State,  ⌦ the  law  of  the 
Member State under whose authority the register, account or system is kept. ⌫ 

the  validity  of  that  act  shall  be  governed  by  the  law  of  the  Member  State  within  whose 
territory  the  immovable  asset  is  situated  or  under  whose  authority  the  register,  account  or 
system is kept. 

(cid:208) 2001/17/EC Art. 26 

Article 294 

Lawsuits pending 

The  effects  of  reorganisation  measures  or  winding-up  proceedings  on  a  pending  lawsuit 
concerning an asset or a right of which the insurance undertaking has been divested shall be 
governed solely by the law of the Member State in which the lawsuit is pending. 

(cid:208) 2001/17/EC Art. 27 (adapted) 

Article 295 

Administrators and liquidators 

1. 

The  administrator's  or  liquidator's  appointment  ⌦ of  the  administrator  or  the 
liquidator ⌫  shall  be  evidenced  by  a  certified  copy  of  the  original  decision 
appointing  him  ⌦ of  appointment ⌫  or  by  any  other  certificate  issued  by  the 
competent authorities of the home Member State. 

⌦ The Member State within whose territory the administrator or liquidator wishes 
to act may require ⌫ Aa translation into the official language or one of the official 
languages  of  the  ⌦ that ⌫  Member  State  within  the  territory  of  which  the 
administrator or liquidator wishes to act may be required. No legalisation ⌦ formal 
authentication of that translation ⌫ or other similar formality shall be required. 

EN 

280 

   EN 

 
 
 
 
 
 
 
2. 

3. 

Administrators and liquidators shall be entitled to exercise within the territory of all 
the  Member  States  all  the  powers  which  they  are  entitled  to  exercise  within  the 
territory of the home Member State. 

Persons to assist or, where appropriate, represent administrators and liquidators may 
be appointed, according to ⌦ in accordance with the law of ⌫ the home Member 
State's  legislation,  in  the  course  of  the  reorganisation  measure  or  winding-up 
proceedings,  in  particular  in  host  Member  States  and,  specifically,  in  order  to  help 
overcome  any  difficulties  encountered  by  creditors  in  the  host  Member ⌦ that ⌫ 
State. 

In  exercising  his  ⌦ their ⌫  powers  according  to  ⌦ the  law  of ⌫  the  home 
Member  State's  legislation,  an  administrator  ⌦ s ⌫  or  liquidator  ⌦ s ⌫  shall 
comply  with  the  law  of  the  Member  States  within  whose  territory  he  ⌦ they ⌫ 
wishes  to  take  action,  in  particular  with  regard  to  procedures  for  the  realisation  of 
assets and the informing of employees. 

Those  powers  may ⌦ shall ⌫  not  include  the  use  of  force  or  the  right  to  rule  on 
legal proceedings or disputes. 

(cid:208) 2001/17/EC Art. 28 (adapted) 

Article 296 

Registration in a public register 

1. 

The administrator, liquidator or any other authority or person duly empowered in the 
home  Member  State  may  request  that  a  reorganisation  measure  or  the  decision  to 
open winding-up proceedings be registered in the land register, the trade register and 
any other ⌦ relevant ⌫ public register kept in the other Member States. 

However, if  a Member  State prescribes ⌦ provides for ⌫ mandatory registration, 
the  authority  or  person  referred  to  in  the  first  subparagraph  1  shall  take  all  the 
measures necessary to ensure such registration. 

2. 

The  costs  of  registration  shall  be  regarded  as  costs  and  expenses  incurred  in  the 
proceedings. 

(cid:208) 2001/17/EC Art. 29 (adapted) 

Article 297 

Professional secrecy 

All persons required to receive or divulge  information  in  connection with the procedures of 
communication laid down in Articles 5 272 , 8 275 and 30 298 shall be bound by professional 
secrecy, in the same manner as laid down in Articles 63 to 68 16 of Directive 92/49/EEC and 
Article  15  of  Directive  92/96/EEC,  with  the  exception  of  any  judicial  authorities  to  which 
existing national provisions apply. 

EN 

281 

   EN 

 
 
 
 
 
(cid:208) 2001/17/EC Art. 30 (adapted) 

Article 298 

⌦ Treatment of ⌫ Bbranches of third country insurance undertakings 

2. When ⌦ Where ⌫ an insurance undertaking whose head office is outside the Community 
has  branches  established  in  more  than  one  Member  State,  each  branch  shall  be  treated 
independently with regard to the application of this Directive Title. 

The  competent  authorities  and  the  supervisory  authorities  of  theose  Member  States  shall 
endeavour to coordinate their actions.  

Any administrators or liquidators shall likewise endeavour to coordinate their actions. 

(cid:208) 88/357/EEC 

Article 6 

For the purposes of applying the first subparagraph of Article 15 (2) and Article 24 of the first 
Directive,  the  Member  States  shall  comply  with  Annex  1  to  this  Directive  as  regards  the 
matching rules. 

(cid:208) 92/49/EEC 

Article 36 

Any change which an undertaking intends in make to the information referred to in Article 14 
shall be subject to the procedure provided for in Articles 14 and 16. 

(cid:208) 88/357/EEC 

Article 26 

1. The risks which may be covered by way of Community co-insurance within the meaning of 
Directive 78/473/EEC shall be those defined in Article 5 (d) of the first Directive. 

2.  The  provisions  of  this  Directive  regarding  the  risks  defined  in  Article  5  (d)  of  the  first 
Directive shall apply to the leading insurer. 

EN 

282 

   EN 

 
 
 
 
 
 
(cid:208) 2002/83/EC Art. 61 (adapted) 
(cid:214) new 

TITLE V - ⌦ OTHER PROVISIONS ⌫  

Article 299 

Proof of ⌦ fulfilment of fit and proper requirements⌫good repute 

Where a Member State requires of its own nationals proof of (cid:214) the fulfilment of the 
requirements  referred  to  in  Article  42   good  repute  and  proof  of  no  previous 
bankruptcy,  or  proof  of  either  of  these,  that  ⌦ Member ⌫  State  shall  accept  as 
sufficient evidence in respect of nationals of other Member States the production of 
an  extract  from  the  «judicial  record»  or,  failing  this,  of  an  equivalent  document 
issued by a competent judicial or administrative authority in the home Member State 
or  the  Member  State  from  which  the  foreign  national  comes  showing  that  these 
requirements have been met. 

Where the home Member State or the Member State from which the foreign national 
concerned comes does not issue the document referred to in paragraph 1, it may be 
replaced by a declaration on oath — or in ⌦ Member ⌫ States where there is no 
provision  for  declaration  on  oath  by  a  solemn  declaration  —  made  by  the  person 
⌦ foreign  national ⌫  concerned  before  a  competent  judicial  or  administrative 
authority or, where appropriate, a notary in the home Member State or the Member 
State from which that person ⌦ foreign national ⌫ comes;. 

sSuch  authority  or  notary  shall  issue  a  certificate  attesting  the  authenticity  of  the 
declaration on oath or solemn declaration. 

The declaration ⌦ referred to in the first subparagraph ⌫ in respect of no previous 
bankruptcy may also be made before a competent professional or trade body in the 
⌦ Member State concerned ⌫ said country. 

⌦ The ⌫  Ddocuments  issued  in  accordance  with  ⌦ and  certificates  referred  to 
in ⌫ paragraphs 1 and 2 must ⌦ shall ⌫ not be produced ⌦ presented ⌫ more 
than three months after their date of issue. 

Member  States  shall  designate  the  authorities  and  bodies  competent  to  issue  the 
documents  referred  to  in  paragraphs  1  and  2  and  shall  forthwith  inform  the  other 
Member States and the Commission thereof. 

Each Member State shall also inform the other Member States and the Commission 
of  the  authorities  or  bodies  to  which  the  documents  referred  to  in  this  Article 
paragraphs 1 and 2 are to be submitted in support of an application to carry on in the 
territory of this Member State the activities referred to in Article 2. 

1. 

2. 

3. 

4. 

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(cid:208) 2005/68/EC Art. 53 (adapted) 

Article 300 

Right to apply to the courts 

Member  States  shall  ensure  that  decisions  taken  in  respect  of  ⌦ an  insurance  or ⌫  a 
reinsurance undertaking under laws, regulations and administrative provisions implementing 
this Directive are subject to the right to apply to the courts. 

(cid:208) 2002/83/EC Art. 62 

Article 301 

Cooperation between the Member States and the Commission 

1. 

2. 

3. 

(cid:208) 2005/68/EC Art. 54 (adapted) 

⌦ The ⌫  Member  States  shall  cooperate  with  each  other  for  the  purpose  of 
facilitating 
the 
Community and the application of this Directive. 

the  supervision  of  ⌦ insurance  and ⌫  reinsurance  within 

The  Commission  and  the  competent  ⌦ supervisory ⌫  authorities  of  the  Member 
States shall collaborate closely ⌦ with each other ⌫ for the purpose of facilitating 
the  supervision  of  ⌦ insurance  and ⌫  reinsurance  within  the  Community  and  of 
examining any difficulties which may arise in the application of this Directive. 

(cid:208) 2002/83/EC Art. 62 (adapted) 

Each  Member  State  ⌦ States ⌫  shall  inform  the  Commission  of  any  major 
difficulties to which ⌦ the ⌫ application of this Directive gives rise, inter alia, any 
arising  if  a  Member  State  becomes  aware  of  an  abnormal  transfer  of  business 
referred  to  in  this  Directive  to  the  detriment  of  undertakings  established  in  its 
territory  and  to  the  advantage  of  agencies  and  branches  located  just  beyond  its 
borders. 

The  Commission  and  the  competent  ⌦ supervisory ⌫  authorities  of  the  Member 
States concerned shall examine such ⌦ those ⌫ difficulties as quickly as possible 
in order to find an appropriate solution. 

Where necessary, the Commission shall submit appropriate proposals to the Council. 

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(cid:208) 88/357/EEC Art. 30 (adapted) 

Article 302 

⌦ Euro ⌫ 

Where  this  Directive  makes  reference  to  the  ECU  Euro,  the  exchange  value  in  national 
currencies  to  be  used  with  effect  from  31  December  of  each  year  shall  be  the  value  which 
applies on the last day of the preceding October for which exchange values for the ECU Euro 
are available in all Community currencies. 
Article  2  of  Directive  76/580/EEC86  shall  apply  only  to  Articles  3,  16  and  17  of  the  first 
Directive. 

(cid:208) 2002/83/EC Art. 68 (adapted) 
(cid:214) new 

Article 303 

Review of amounts expressed in euro 

1. The Commission shall submit to the Council before 15 March 1985 a report dealing with 
the  effects  of  the  financial  requirements  imposed  by  this  Directive  on  the  situation  in  the 
insurance markets of the Member States. 

21. 

2. 

The  Council,  acting  on  a  proposal  from  ⌦ As  far  as  life  insurance  is  concerned, 
every two years from the entry into force of this Directive, ⌫ the Commission, shall 
every  two  years  examine  and,  where  appropriate,  revise  (cid:214) submit  to  the  European 
Parliament and to the Council a review  of the amounts expressed in euro in this 
Directive,  in  the  light  of  how  ⌦ taking  into  account  the  evolution  of ⌫  the 
Community's  economic  and  monetary  situation  has  evolved  ⌦ of  the  Community 
accompanied, where appropriate, by the necessary proposals ⌫ . 

(cid:208) 88/357/EEC Art. 31 (adapted) 
(cid:214) new 

⌦ As  far  as  non-life  insurance  is  concerned, ⌫  Eevery  five  years  ⌦ from  the 
entry  into  force  of  this  Directive ⌫  ,  the  Council,  acting  on  a  proposal  from  the 
Commission,  shall  (cid:214) submit  to  the  European  Parliament  and  to  the  Council   a 
review and if necessary amend any ⌦ of the ⌫ amounts expressed in ECU euro in 
this Directive, taking into account changes in the economic and monetary situation of 
the Community ⌦ accompanied, where appropriate, by the necessary proposals ⌫ . 

86 

OJ No L 189, 13. 9. 1976, p. 13. 

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(cid:208) 2002/83/EC (adapted) 

Article 63 

Reports on the development of the market under the freedom to provide services 

The Commission shall forward to the European Parliament and to the Council regular reports, 
the first on 20 November 1995, on the development of the market in assurance and operations 
transacted under conditions of freedom to provide services. 

(cid:208) 88/357/EEC (adapted) 

Article 29 

The Commission shall forward to the Council regular reports, the first on 1 July 1993, on the 
development  of  the  market  in  insurance  transacted  under  conditions  of  freedom  to  provide 
services. 

5. Not later than 1 January 2006 the Commission shall issue a report on the application of this 
Directive and, if necessary, on the need for further harmonisation. 

(cid:208) 2005/1/EC Art. 7.2  

(cid:208) 2002/83/EC Art. 65 

Article 304 

Committee procedure 

(cid:208) 2005/1/EC Art. 8.3 and 
2005/68/EC Art. 55 

1. 

2. 

The  Commission  shall  be  assisted  by  the  European  Insurance  and  Occupational 
Pensions Committee established by Commission Decision 2004/9/EC87. 

Where  reference  is  made  to  this  paragraph,  Articles  3  and  7  of  Decision 
1999/468/EC shall apply, having regard to the provisions of Article 8 thereof. 

(cid:216) new 

87 

OJ L 3, 7.1.2004, p. 34. 

EN 

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(cid:208)2002/83/EC Art. 65 and 
2005/68/EC Art. 55 (adapted) 
(cid:214) new 

3. 

Where  reference  is  made  to  this  paragraph,  Articles  5  and  7  (cid:214) 5a(1)  to  (4)   of 
Decision  1999/468/EC  shall  apply,  having  regard  to  the  provisions  of  Article  8 
thereof. 

The period laid down in Article 5(6) of Decision 1999/468/EC shall be set at three months. 

3. The Committee shall adopt its Rules of Procedure. 

(cid:208) 2002/83/EC Art. 64 (adapted) 

Article 64 

Technical adjustment 

The  following  technical  adjustments  to  be  made  to  this  Directive  shall  be  adopted  in 
accordance with the procedure laid down in Article 65(2): 

–  extension of the legal forms provided for in Article 6(1)(a), 

–  amendments to the list set out in Annex I, or adaptation of the terminology used in that list 

to take account of the development of assurance markets, 

–  clarification  of  the  items  constituting  the  solvency  margin  listed  in  Article  27  to  take 

account of the creation of new financial instruments, 

–  alteration of the minimum guarantee fund provided for in Article 29(2) to take account of 

economic and financial developments, 

–  amendments,  to  take  account  of  the  creation  of  new  financial  instruments,  to  the  list  of 
assets acceptable as cover for technical provisions set out in Article 23 and to the rules on 
the spreading of investments laid down in Article 24, 

–  changes in the relaxations in the matching rules laid down in Annex II, to take account of 
the development of new currency-hedging instruments or progress made in economic and 
monetary union, 

–  clarification  of  the  definitions  in  order  to  ensure  uniform  application  of  this  Directive 

throughout the Community, 

–  the  technical  adjustments  necessary  to  the  rules  for  setting  the  maxima  applicable  to 
interest  rates,  pursuant  to  Article  20,  in  particular  to  take  account  of  progress  made  in 
economic and monetary union. 

(cid:208) 2005/68/EC Art. 56 (adapted) 

The following implementing measures to this Directive shall be adopted in accordance with 
the procedure referred to in Article 55(2): 

(a) extension of the legal forms provided for in Annex I, 

(b) clarification of the items constituting the solvency margin listed in Article 36 to 
take account of the creation of new financial instruments, 

EN 

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(c)  increase  by  up  to  50 %  of  the  premiums  or  claims  amounts  used  for  the 
calculation of the required solvency margin provided for in Article 37(3) and (4), in 
classes other than classes 11, 12 and 13 listed in point A of the Annex to Directive 
73/239/EEC, for specific reinsurance activities or contract types, to take account of 
the specificities of those activities or contracts, 

(d)  alteration  of  the  minimum  guarantee  fund  provided  for  in  Article 40(2)  to  take 
account of economic and financial developments, 

(e) clarification of the definitions in Article 2 in order to ensure uniform application 
of this Directive throughout the Community. 

(cid:208) 2007/44/EC Art. 8 (adapted) 

Article 305 

Entry into force ⌦ Notifications submitted prior to entry into force of the laws, regulations 
and administrative provisions necessary to comply with Articles 56 to 62 ⌫ 

2The assessment procedure applied to proposed acquisitions for which notifications referred 
to in Articles 1(2), 2(2), 3(2), 4(2) and 5(2) 56 have been submitted to the competent 
authorities  prior  to  the  entry  into  force  of  the  laws,  regulations  and  administrative 
provisions necessary to comply with this Directive Articles 56 to 62, shall be carried 
out  in  accordance  with  the  national  law  of  Member  States  in  force  at  the  time  of 
notification. 

TITLE VII - - TRANSITIONAL AND OTHER ⌦ FINAL ⌫ 
PROVISIONS 

(cid:208) 2002/83/EC Art. 60 (adapted) 

⌦ CHAPTER I - TRANSITIONAL PROVISIONS ⌫ 

⌦ SECTION 1 - INSURANCE ⌫ 

Article 306 

Derogations and abolition of restrictive measures 

(cid:208) 73/239/EEC Art. 30 (adapted) 
(cid:214) new 

1. Member States shall allow undertakings referred to in Title II which at the entry into force 
of the implementing measures to this Directive provide insurance in their territories in one or 
more of the classes referred to in Article 1 a period of five years, commencing with the date of 
notification of this Directive, in order to comply with the requirements of Articles 16 and 17. 

21. 

Furthermore, Member States may: 

EN 

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3. 

42. 

(a) allow any undertakings referred to in (1), which upon the expiry of the five-year 
period  have  not  fully  established  the  margin  of  solvency,  a  further  period  not 
exceeding  two  years  in  which  to  do  so  provided  that  such  undertakings  have,  in 
accordance with Article 20, submitted for the approval of the supervisory authority 
the measures which they propose to take for such purpose; 

(b) exempt ⌦ non-life insurance ⌫ undertakings referred to in (1) ⌦ which on 31 
January  1975  did  not  comply  with  the  requirements  of  Articles  16  and  17  of 
Directive  73/239/EEC ⌫  whose  annual  premium  or  contribution  income  upon  the 
expiry of the period of five years falls ⌦ on 31 July 1978 fell ⌫ short of six times 
the  amount  of  the  minimum  guarantee  fund  required  under  Article  17  (2)  ⌦ of 
Directive 73/239/EEC ⌫from the requirement to establish such minimum guarantee 
fund  before  the  end  of  the  financial  year  in  respect  of  which  the  premium  or 
contribution  income  is  as  much  as  six  times  such  minimum  guarantee  fund.  After 
considering the results of the examination provided for under Article 33 301(2), the 
Council  shall  unanimously  decide,  on  a  proposal  from  the  Commission,  when  this 
exemption is to be abolished by Member States. 

Undertakings desiring to extend their operations within the meaning of Article 8 (2) 
or  Article  10  may  not  do  so  unless  they  comply  immediately  with  the  rules  of  this 
Directive.  However,  the  undertakings  referred  to  in  paragraph  (2)  (b)  which  within 
the  national  territory  extend  their  business  to  other  classes  of  insurance  or  to  other 
parts  of  such  territory  may  be  exempted  for  a  period  of  ten  years  from  the  date  of 
notification  of  the  Directive  from  the  requirement  to  constitute  the  minimum 
guarantee fund referred to in Article 17 (2). 

An undertaking having a structure different from any of those listed in Article 8 may 
continue, for a period of three years from the notification of the Directive, to carry on 
their present business in the legal form in which they are constituted at the time of 
such  notification.  ⌦ Non-life  insurance ⌫  Uundertakings  set  up  in  the  United 
Kingdom  «by  Royal  Charter»  or  «by  private  Act»  or  «by  special  public  Act»  may 
continue  to  carry  on  their  business  in  their  present  form  ⌦ in  which  they  were 
constituted on 31 July 1973 ⌫ for an unlimited period. 

Undertakings  in  Belgium  which,  in  accordance  with  their  objects,  carry  on  the 
business  of  intervention  mortgage  loans  or  savings  operations  in  accordance  with 
No 4  of  Article  15  of  the  provisions  relating  to  the  supervision  of  private  savings 
banks, coordinated by the «arrête royal» of 23 June 1967, may continue to undertake 
such  business  for  a  period  of  three  years  from  the  date  of  notification  of  this 
Directive. 

The  Member  States  in  question  shall  draw  up  a  list  of  such  undertakings  and 
communicate it to the other Member States and the Commission. 

(cid:208) 2002/83/EC Art. 60 (adapted) 

1.  ⌦ Life  insurance ⌫  Uundertakings  set  up  in  the  United  Kingdom  by  Royal 
Charter or by private Act or by special Public Act may carry on their activity in the 
legal form in which they were constituted on 15 March 1979 for an unlimited period. 

The  United  Kingdom  shall  draw  up  a  list  of  such  ⌦ the ⌫  undertakings 
⌦ referred  to  in  the  first  and  second  subparagraphs ⌫  and  communicate  it  to  the 
other Member States and the Commission. 

EN 

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23. 

54. 

1. 

2. 

The  societies  registered  in  the  United  Kingdom  under  the  Friendly  Societies  Acts 
may continue the activities of life assurance ⌦ insurance ⌫ and savings operations 
which,  in  accordance  with  their  objects,  they  were  carrying  on  on  ⌦ as  of ⌫  15 
March 1979. 

(cid:208) 73/239/EEC Art. 30 (5) 
(adapted) 

At  the  request  of  ⌦ non-life  insurance ⌫  undertakings  which  comply  with  the 
requirements  of  Title  I,  Chapter  VI,  Sections  2,  4  and  5  Articles  15,  16  and  17, 
Member  States  shall  cease  to  apply  restrictive  measures  such  as  those  relating  to 
mortgages, deposits and securities established under present regulations. 

(cid:208) 2002/83/EC Art. 66 (adapted) 

Article 307 

Rights acquired by existing branches and assurance ⌦ insurance ⌫ undertakings 

Branches  which  started  business,  in  accordance  with  the  provisions  in  force  in  the 
Member State of the branch ⌦ where that branch is situated ⌫ , before 1 July 1994 
shall be presumed to have been subject to the procedure laid down in Article 40(1) to 
(5) 143 and 144. 

They shall be governed, from that date by Articles 13, 20, 37, 39 and 46. 

Articles  41  145  and  42  146  shall  not  affect  rights  acquired  by  assurance 
⌦ insurance ⌫  undertakings  carrying  on  business  under  the  freedom  to  provide 
services before 1 July 1994. 

(cid:208) 73/239/EEC (adapted) 

Article 31 

Member States shall allow agencies or branches referred to in Title III which, at the entry into 
force  of  the  implementing  measures  to  this  Directive,  are  undertaking  one  or  more  classes 
referred to in Article 1 and do not extend their business within the meaning of Article 10 (2) a 
maximum  period  of  five  years,  from  the  date  of  notification  of  this  Directive,  in  order  to 
comply with the conditions of Article 25. 

Article 32 

During  a  period  which  terminates  at  the  time  of  the  entry  into  force  of  an  agreement 
concluded with a third country pursuant to Article 29 and at the latest upon the expiry of a 
period of four years after the notification of the Directive, each Member State may retain in 
favour of undertakings of that country established in its territory the rules applied to them on 
1  January  1973  in  respect  of  matching  assets  and  the  localization  of  technical  reserves, 
provided that notification is given to the other Member States and the Commission and that 
the  limits  of  relaxations  granted  pursuant  to  Article  15  (2)  in  favour  of  the  undertakings  of 
Member States established in its territory are not exceeded. 

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(cid:208) 73/239/EEC (adapted) 

Article 34 

1. The Commission shall submit to the Council, within six years from the date of notification 
of  this  Directive,  a  report  on  the  effects  of  the  financial  requirements  imposed  by  this 
Directive on the situation on the insurance markets of the Member States. 

2. The Commission shall, as and when necessary, submit interim reports to the Council before 
the end of the transitional period provided for in Article 30 (1). 

(cid:208) 92/49/EEC (adapted) 

Article 51 

The following technical  adjustments to be made to Directives 73/239/EEC and  88/357/EEC 
and to this Directive shall be adopted in accordance with the procedure laid down in Directive 
91/675/EEC: 

–  extension of the legal forms provided for in Article 8 (1) (a) of Directive 73/239/EEC, 

–  amendments to the list set out in the Annex to Directive 73/239/EEC, or adaptation of the 

terminology used in that list to take account of the development of insurance markets, 

–  clarification  of  the  items  constituting  the  solvency  margin  listed  in  Article  16  (1)  of 

Directive 73/239/EEC to take account of the creation of new financial instruments, 

–  alteration  of  the  minimum  guarantee  fund  provided  for  in  Article  17  (2)  of  Directive 

73/239/EEC to take account of economic and financial developments, 

–  amendments,  to  take  account  of  the  creation  of  new  financial  instruments,  to  the  list  of 
assets  acceptable  as  cover  for  technical  provisions  set  out  in  Article  21  of  this  Directive 
and to the rules on the spreading of investments laid down in Article 22, 

–  changes  in  the  relaxations  in  the  matching  rules  laid  down  in  Annex  1  to  Directive 
88/357/EEC, to take account of the development of new currency-hedging instruments or 
progress made towards economic and monetary union, 

–  clarification  of  the  definitions  in  order  to  ensure  uniform  application  of  Directives 

73/239/EEC and 88/357/EEC and of this Directive throughout the Community. 

Article 52 

1. Branches which have started business, in accordance with the provisions in force in their 
Member  State  of  establishment,  before  the  entry  into  force  of  the  provisions  adopted  in 
implementation of this Directive shall be presumed to have been subject to the procedure laid 
down in Article 10 (1) to (5) of Directive 73/239/EEC. They shall be governed, from the date 
of that entry into force, by Articles 15, 19, 20 and 22 of Directive 73/239/EEC and by Article 
40 of this Directive. 

2.  Articles  34  and  35  shall  not  affect  rights  acquired  by  insurance  undertakings  carrying  on 
business under the freedom to provide services before the entry into force of the provisions 
adopted in implementation of this Directive. 

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(cid:208) 2002/83/EC Art. 71 

Article 71 

Transitional period for Articles 3(6), 27, 28, 29, 30 and 38 

1.  Member  States  may  allow  assurance  undertakings  which  at  20  March  2002  provided 
assurance in their territories in one or more of classes referred to in Annex I, a period of five 
years,  commencing  on  that  same  date,  in  order  to  comply  with  the  requirements  set  out  in 
Articles 3(6), 27, 28, 29, 30 and 38. 

2.  Member  States  may  allow  any  undertakings  referred  to  in  paragraph  1,  which  upon  the 
expiry  of  the  five-year  period  have  not  fully  established  the  required  solvency  margin,  a 
further  period  not  exceeding  two  years  in  which  to  do  so  provided  that  such  undertakings 
have, in accordance with Article 37, submitted for the approval of the competent authorities, 
the measures which they propose to take for such purpose. 

(cid:208) 2005/68/EC Art. 63 (adapted) 

⌦ SECTION 2 - REINSURANCE ⌫ 

Article 308 

Transitional period for Articles 57(3) and 60(6) of Directive 2005/68/EC  

A  Member  State  may  postpone  the  application  of  the  provisions  of  Article  57(3)  of  this 
Directive 2005/68/EC amending Article 15(3) of Directive 73/239/EEC and of the provision 
of Article 60(6) of this Directive 2005/68/EC until 10 December 2008. 

(cid:208) 2005/68/EC Art. 61 (adapted) 

Article 309 

1. 

2. 

Right acquired by existing reinsurance undertakings 

Reinsurance undertakings subject to this Directive which were authorised or entitled 
to  conduct  reinsurance  business  in  accordance  with  the  provisions  of  the  Member 
States  in  which  they  have  their  head  offices  before  10 December  2005  shall  be 
deemed to be authorised in accordance with Article 3 14. 

However,  they  shall  be obliged  to  comply  with  the  provisions  of  this  Directive 
concerning the carrying on of the business of reinsurance and with the requirements 
set out in points (b), and (d) to (g) of Article 6(a), (c), (d) 18(1), Articles 7, 8 and 12 
19, 20 and 24 and Articles 32 to 41 Title I Chapter VI, Sections 2, 3 and 4 as from 
10 December 2007. 

Member States may allow reinsurance undertakings referred to in paragraph 1 which 
at 10 December 2005 ⌦ did ⌫ do not comply with point (b) of Articles 6(a), 7, 8 
18(1),  Articles  19  and  20  and  32  to  40  Title  I  Chapter  VI,  Sections  2,  3  and  4  a 
period until 10 December 2008 in order to comply with such requirements. 

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CHAPTER II - FINAL PROVISIONS  

(cid:216) new 

Article 310 

Transposition 

1. 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions necessary to comply with Articles 4, 6-8, 10, 13, 14, 18, 23, 26-31, 34-54, 
66, 67, 70, 71, 73-140, 142, 144, 146, 150, 160-165, 170, 171, 176, 188, 190, 208-
268, 280, 299, 306 and Annex III, IV and V by 31 October 2012 at the latest. They 
shall  forthwith  communicate  to  the  Commission  the  text  of  those  provisions  and  a 
correlation table between those provisions and this Directive. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication.  They  shall  also  include  a  statement  that  references  in  existing  laws, 
regulations and administrative provisions to the directives repealed by this Directive 
shall be construed as references to this Directive. Member States shall determine how 
such reference is to be made and how that statement is to be formulated. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

Article 311 

Repeal 

1. 

2. 

Directives  73/239/EEC,  78/473/EEC,  88/357/EEC,  92/49/EEC,  98/78/EC, 
2001/17/EC,  2002/83/EC,  2005/68/EC  and  2007/44/EC,  as  amended  by  the 
Directives listed in Annex VI, Part A, are repealed with effect from the day after the 
date  set  out  in  Article  310  (1),  without  prejudice  to  the  obligations  of  the  Member 
States relating to the time-limits for transposition into national law and application of 
the Directives set out in Annex VI, Part B.  

References  to  the  repealed  Directives  shall  be  construed  as  references  to  this 
Directive and shall be read in accordance with the correlation table in Annex VI. 

Directives 64/225/EEC, 73/240/EEC, 76/580/EEC, 84/641/EEC and 87/344/EEC are 
repealed as amended by the Directives listed in Annex VI, Part A, with effect from 
the day after the date set out in Article 310 (1), without prejudice to the obligations 
of  the  Member  States  relating  to  the  time-limits  for  transposition  into  national  law 
and application of the Directives set out in Annex VI, Part B. 

Article 312 

Entry into force 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

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Articles 1-3, 5, 9, 11, 12, 15-17, 19-22, 24-25, 32, 33, 55-65, 68, 69, 72, 141, 143, 145, 147- 
149,  151-159,  166-169,  172-175,  177-187,  189,  191-207,  269-279,  281-298,  300-305,  307-
313 and Annexes I and II, V, VI and VII shall apply from 1. November 2012.  

Article 313 

Addressees 

This Directive is addressed to the Member States. 

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(cid:208) 73/239/EEC (adapted) 

ANNEX I 

⌦ CLASSES OF NON-LIFE INSURANCE ⌫ 

CLASSIFICATION OF RISKS ACCORDING TO CLASSES OF INSURANCE 

Accident (including industrial injury and occupational diseases): 

fixed pecuniary benefits; 

benefits in the nature of indemnity; 

combinations of the two; 

injury to passengers. 

Sickness: 

fixed pecuniary benefits; 

benefits in the nature of indemnity; 

combinations of the two. 

Land vehicles (other than railway rolling stock) 

A. 

1. 

– 

– 

– 

– 

2. 

– 

– 

– 

3. 

All damage to or loss of: 

– 

– 

4. 

land motor vehicles; 

land vehicles other than motor vehicles. 

Railway rolling stock 

All damage to or loss of railway rolling stock. 

5. 

Aircraft 

All damage to or loss of aircraft. 

6. 

Ships (sea, lake and river and canal vessels) 

All damage to or loss of: 

– 

– 

– 

7. 

river and canal vessels; 

lake vessels; 

sea vessels. 

Goods in transit (including merchandise, baggage, and all other goods) 

All damage to or loss of goods in transit or baggage, irrespective of the form of transport.  

8. 

Fire and natural forces 

All damage to or loss of property (other than property included in classes 3, 4, 5, 6 and 7) due 
to: 

– 

– 

– 

fire; 

explosion; 

storm; 

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– 

– 

– 

9. 

natural forces other than storm; 

nuclear energy; 

land subsidence. 

Other damage to property 

All damage to or loss of property (other than property included in classes 3, 4, 5, 6 and 7) due 
to hail or frost, and any event such as theft, other than those mentioned under 8. 

10. 

Motor vehicle liability 

All liability arising out of the use of motor vehicles operating on the land (including carrier's 
liability). 

11. 

Aircraft liability 

All liability arising out of the use of aircraft (including carrier's liability). 

12. 

Liability for ships (sea, lake and river and canal vessels) 

All liability arising out of the use of ships, vessels or boats on the sea, lakes, rivers or canals 
(including carrier's liability). 

13. 

General liability 

All liability other than those forms mentioned under Nos. 10, 11 and 12. 

14. 

Credit: 

– 

– 

– 

– 

– 

insolvency (general); 

export credit; 

instalment credit; 

mortgages; 

agricultural credit. 

15. 

Suretyship: 

– 

– 

suretyship (direct); 

suretyship (indirect). 

16. 

Miscellaneous financial loss: 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

employment risks; 

insufficiency of income (general); 

bad weather; 

loss of benefits; 

continuing general expenses; 

unforeseen trading expenses; 

loss of market value; 

loss of rent or revenue; 

indirect trading losses other than those mentioned above; 

other financial loss (non-trading) ; 

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– 

17. 

other forms of financial loss. 

Legal expenses 

Legal expenses and costs of litigation.  

18. 

Assistance 

Assistance  for  persons  who  get  into  difficulties  while  travelling,  while  away  from  home  or 
while away from their permanent ⌦ habitual ⌫residence.  

(cid:208) 84/641/EEC Art. 14 (adapted) 

The  risks  included  in  a  class  may  not  be  included  in  any  other  class  except  in  the  cases 
referred to in point C. 

(cid:208) 73/239/EEC (adapted) 

B. 

DESCRIPTION  OF  AUTHORIZATIONS  GRANTED  FOR  MORE  THAN  ONE  CLASS  OF 
INSURANCE 

Where the authorization ⌦ The following names shall be given to authorisations which ⌫ 
simultaneously covers ⌦ the following classes ⌫ : 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

Classes Nos 1 and 2,: it shall be named «Accident and Health Insurance»; 

Classes Nos 1 (fourth indent), 3, 7 and 10,: it shall be named «Motor Insurance»; 

Classes  Nos 1  (fourth  indent),  4,  6,  7  and  12,:  it  shall  be  named  «Marine  and 
Transport Insurance»; 

Classes Nos 1 (fourth indent), 5, 7 and 11,: it shall be named «Aviation Insurance»; 

Classes Nos 8 and 9,: it shall be named «Insurance against Fire and other Damage to 
Property»; 

Classes Nos 10, 11, 12 and 13,: it shall be named «Liability Insurance»; 

Classes Nos 14 and 15,: it shall be named «Credit and Suretyship Insurance»; 

All  classes,  it  shall  be  named  at  the  choice  of  the  Member  State  in  question 
⌦ States ⌫ , which shall notify the other Member States and the Commission of its 
⌦ their ⌫ choice. 

C. ANCILLARY RISKS 

An  undertaking  obtaining  an  authorization  for  a  principal  risk  belonging  to  one  class  or  a 
group of classes may also insure risks included in another class without an authorization being 
necessary for them if they: 

– 

– 

– 

are connected with the principal risk, 

concern the object which is covered against the principal risk, and 

are covered by the contract insuring the principal risk. 

EN 

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(cid:208) 87/344/EEC Art. 9 

However, the risks included in classes 14, 15 and 17 in point A may not be regarded as risks 
ancillary to other classes. 

Nonetheless, the risk included in class 17 (legal expenses insurance) may be regarded as an 
ancillary risk of class 18 where the conditions laid down in the first subparagraph are fulfilled, 
where  the  main  risk  relates  solely  to  the  assistance  provided  for  persons  who  fall  into 
difficulties  while  travelling,  while  away  from  home  or  while  away  from  their  permanent 
residence. 

Legal expenses insurance may also be regarded as an ancillary risk under the conditions set 
out  in  the  first  subparagraph  where  it  concerns  disputes  or  risks  arising  out  of,  or  in 
connection with, the use of seagoing vessels. 

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(cid:208) 2002/83/EC (adapted) 

ANNEX II 

CLASSES OF ASSURANCE ⌦ LIFE INSURANCE ⌫ 

I. 

II. 

III. 

IV. 

V. 

VI. 

The assurance ⌦ life insurance ⌫ referred to in points (a) (i),(ii) and (iii) of Article 
2(1)(a), (b) and (c) 2(3) excluding those referred to in II and III; 

Marriage assurance, birth assurance;  

The assurance ⌦ insurance ⌫ referred to in points (a) (i) and (ii) of Article 2(1)(a) 
and (b) 2(3), which are linked to investment funds; 

Permanent health insurance, referred to in point (a)(iv) of Article 2(1)(d) 2(3); 

Tontines, referred to in point (b) (i) of Article 2(2)(a) 2(3); 

Capital redemption operations, referred to in point (b) (ii) of Article 2(3); 

VII.  Management of group pension funds, referred to in point (b) (iii) and (iv) of Article 

2(2)(c) and (d) 2(3); 

VIII. 

The operations referred to in point (b) (iii) of Article 2(2)(e) 2(3); 

IX. 

The operations referred to in point (c) of Article 2(3). 

(cid:208) 87/343/EEC Art. 1.8 and Annex 

D. METHODS  OF  CALCULATING  THE  EQUALISATION  RESERVE  FOR  THE  CREDIT  INSURANCE 

CLASS 

Method No 1 

1.  In  respect  of  the  risks  included  in  the  class  of  insurance  in  point  A  No 14  (hereinafter 
referred  to  as  «credit  insurance»),  the  undertaking  shall  set  up  an  equalization  reserve  to 
which shall be charged any technical deficit arising in that class for a financial year. 

2. Such reserve shall in each financial year receive 75 % of any technical surplus arising on 
credit insurance business, subject to a limit of 12 % of the net premiums or contributions until 
the reserve has reached 150 % of the highest annual amount of net premiums or contributions 
received during the previous five financial years. 

Method No 2 

1. In respect of the risks included in the class of insurance listed in point A No 14 (hereinafter 
referred to as «credit insurance») the undertaking shall set up an equalization reserve to which 
shall be charged any technical deficit arising in that class for a financial year. 

2.  The  minimum  amount  of  the  equilization  reserve  shall  be  134 %  of  the  average  of  the 
premiums  or  contributions  received  annually  during  the  previous  five  financial  years  after 
subtraction of the cessions and addition of the reinsurance acceptances. 

3. Such reserve shall in each of the successive financial years receive 75 % of any technical 
surplus  arising  in  that  class  until  the  reserve  is  at  least  equal  to  the  minimum  calculated  in 
accordance with paragraph 2. 

EN 

299 

   EN 

 
 
 
4. Member States may lay down special rules for the calculation of the amount of the reserve 
and/or  the  amount  of  the  annual  levy  in  excess  of  the  minimum  amounts  laid  down  in  this 
Directive. 

Method No 3 

1. An equalization reserve shall be formed for class 14 in point A (hereinafter referred to as 
«credit insurance») for the purpose of offsetting any above-average claims ratio for a financial 
year in that class of insurance. 

2. The equalization reserve shall be calculated on the basis of the method set out below. 

All calculations shall relate to income and expenditure for the insurer's own account. 

An  amount  in  respect  of  any  claims  shortfall  for  each  financial  year  shall  be  placed  to  the 
equalization reserve until it has reached, or is restored to, the required amount. 

There shall be deemed to be a claims shortfall if the claims ratio for a financial year is lower 
than  the  average  claims  ratio  for  the  reference  period.  The  amount  in  respect  of  the  claims 
shortfall shall be arrived at by multiplying the difference between the two ratios by the earned 
premiums for the financial year. 

The required amount shall be equal to six times the standard devition of the claims ratios in 
the reference period from the average claims ratio, multiplied by the earned premiums for the 
financial year. 

Where claims for any financial year are in excess, an amount in respect thereof shall be taken 
from the equalization reserve. Claims shall be deemed to be in excess if the claims ratio for 
the financial year is higher than the average claims ratio. The amount in respect of the excess 
claims shall be arrived at by multiplying the difference between the two ratios by the earned 
premiums for the financial year. 

Irrespective  of  claims  experience,  3,5 %  of  the  required  amount  of  the  equalization  reserve 
shall  be  first  placed  to  that  reserve  each  financial  year  until  its  required  amount  has  been 
reached or restored. 

The lenght of the reference period shall be not less than 15 years and not more than 30 years. 
No  equalization  reserve  need  be  formed  if  no  underwriting  loss  has  been  noted  during  the 
reference period. 

The required amount of the equalization reserve and the amount to be taken from it may be 
reduced if the average claims ratio for the reference period in conjunction with the expenses 
ratio show that the premiums include a safety margin. 

Method No 4 

1. An equalization reserve shall be formed for class 14 in point A (hereinafter referred to as 
«credit insurance») for the purpose of offsetting any above-average claims ratio for a financial 
year in that class of insurance. 

2. The equalization reserve shall be calculated on the basis of the method set out below. 

All calculations shall relate to income and expenditure for the insurer's own account. 

An  amount  in  respect  of  any  claims  shortfall  for  each  financial  year  shall  be  placed  to  the 
equalization reserve until it has reached the maximum required amount. 

There shall be deemed to be a claims shortfall if the claims ratio for a financial year is lower 
than  the  average  claims  ratio  for  the  reference  period.  The  amount  in  respect  of  the  claims 

EN 

300 

   EN 

 
shortfall shall be arrived at by multiplying the difference betwen the two ratios by the earned 
premiums for the financial year. 

The  maximum  required  amount  shall  be  equal  to  six  times  the  standard  deviation  of  the 
claims  ratio  in  the  reference  period  from  the  average  claims  ratio,  multiplied  by  the  earned 
premiums for the financial year. 

Where claims for any financial year are in excess, an amount in respect thereof shall be taken 
from the equalization reserve until it has reached the minimum required amount. Claims shall 
be deemed to be in excess if the claims ratio for the financial year is higher than the average 
claims ratio. The amount in respect of the excess claims shall be arrived at by multiplying the 
difference between the two ratios by the earned premiums for the financial year. 

The  minimum  required  amount  shall  be  equal  to  three  times  the  standard  deviation  of  the 
claims ratio in the reference from the average claims ratio multiplied by the earned premiums 
for the financial year. 

The length of the reference period shall be not less than 15 years and not more than 30 years. 
No  equalization  reserve  need  be  formed  if  no  underwriting  loss  has  been  noted  during  the 
reference period. 

Both  required  amounts  of  the  equalization  reserve  and  the  amount  to  be  placed  to  it  or  the 
amount to be taken from it may be reduced if the average claims ratio for the reference period 
in  conjunction  with  the  expenses  ratio  show  that  the  premiums  include  a  safety  margin  and 
that safety margin is more than one-and-a-half times the standard deviation of the claims ratio 
in  the  reference  period.  In  such  a  case  the  amounts  in  question  shall  be  multiplied  by  the 
quotient or one-and-a-half times the standard deviation and the safety margin. 

(cid:208) 88/357/EEC Annex 1 

ANNEX 1 

MATCHING RULES 

The  currency  in  which  the  insurer's  commitments  are  payable  shall  be  determined  in 
accordance with the following rules: 

1. Where the cover provided by a contract is expressed in terms of a particular currency, the 
insurer's commitments are considered to be payable in that currency. 

2.  Where  the  cover  provided  by  a  contract  is  not  expressed  in  terms  of  any  currency,  the 
insurer's commitments are considered to be payable in the currency of the country in which 
the risk is situated. However, the insurer may choose the currency in which the premium is 
expressed if there are justifiable grounds for exercising such a choice. 

This  could  be  the  case  if,  from  the  time  the  contract  is  entered  into,  it  appears  likely  that  a 
claim will be paid in the currency of the premium and not in the currency of the country in 
which the risk is situated. 

3.  The  Member  States  may  authorise  the  insurer  to  consider  that  the  currency  in  which  he 
must  provide  cover  will  be  either  that  which  he  will  use  in  accordance  with  experience 
acquired  or,  in  the  absence  of  such  experience,  the  currency  of  the  country  in  which  he  is 
established: 

– 

for  contracts  covering  risks  classified  under  classes  4,  5,  6,  7,  11,  12  and  13 
(producers' liability only), and 

EN 

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– 

for  contracts  covering  the  risks  classified  under  other  classes  where,  in  accordance 
with the nature of the risks, the cover is to be provided in a currency other than that 
which would result from the application of the above procedures. 

4. Where a claim has been reported to an insurer and is payable in a specified currency other 
than  the  currency  resulting  from  application  of  the  above  procedures,  the  insurer's 
commitments shall be considered to be payable in that currency, and in particular the currency 
in which the compensation to be paid by the insurer has been determined by a court judgment 
or by agreement between the insurer and the insured. 

5. Where a claim is assessed in a currency which is known to the insurer in advance but which 
is different from the currency resulting from application of the above procedures, the insurers 
may consider their commitments to be payable in that currency. 

6.  The  Member  States  may  authorise  undertakings  not  to  cover  their  technical  reserves  by 
matching  assets  if  application  of  the  above  procedures  would  result  in  the  undertaking  — 
whether  head  office  or  branch  —  being  obliged,  in  order  to  comply  with  the  matching 
principle, to hold assets in a currency amounting to not more than 7 % of the assets existing in 
other currencies. 

However: 

(a)  in  the  case  of  technical  reserve  assets  to  be  matched  in  Greek  drachmas,  Irish 
pounds and Portuguese escudos, this amount shall not exceed: 

– 

– 

1 million ECU during a transitional period ending 31 December 1992, 

2 million ECU from 1 January 1993 to 31 December 1998; 

(b)  in  the  case  of  technical  reserve  assets  to  be  matched  in  Belgian  francs, 
Luxembourg francs and Spanish pesetas, this amount shall not exceed 2 million ECU 
during a transitional period ending 31 December 1996. 

From  the  end  of  the  transitional  periods  defined  under  (a)  and  (b),  the  general  regime  shall 
apply for these currencies, unless the Council decides otherwise. 

(cid:208) 2002/83/EC Annex II 

3. 

Member  States  may  choose  not  to  require  assurance  undertakings  to  apply  the 
matching  principle  where  commitments  are  payable  in  a  currency  other  than  the 
currency of one of the Member States, if investments in that currency are regulated, 
if  the  currency  is  subject  to  transfer  restrictions  or  if,  for  similar  reasons,  it  is  not 
suitable for covering technical provisions. 

8. 

Insurance  undertakings  may  hold  non-matching  assets  to  cover  an  amount  not 
exceeding 20 % of their commitments in a particular currency. 

(cid:208) 92/49/EEC Art. 23 

However,  total  assets  in  all  currencies  combined  must  be  at  least  equal  to  total 
commitments in all currencies combined. 

(cid:208) 2002/83/EC Annex II 

EN 

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9. 

A  Member  State  may  provide  that  when  under  the  preceding  procedures  a 
commitment must be covered by assets expressed in a Member State's currency that 
requirement  shall  also  be  considered  as  satisfied  when  the  assets  are  expressed  in 
ecus. 

(cid:208) 92/49/EEC Art. 23 

(cid:208) 88/357/EEC 

ANNEX 2A 

Underwriting account 

1. Total gross premiums earned 

2. Total cost of claims 

3. Commission costs 

4. Gross underwriting result 

ANNEX 2B 

Underwriting account 

1. Gross premiums for the last underwriting year 

2.  Gross  claims  in  the  last  underwriting  year  (including  reserve  at  the  end  of  underwriting 
year) 

3. Commission costs 

4. Gross underwriting result 

(cid:208) 2002/83/EC (adapted) 

ANNEX III 
Information for policy holders 

The  following  information,  which  is  to  be  communicated  to  the  policy  holder  before  the 
contract is concluded (A) or during the term of the contract (B), must be provided in a clear 
and  accurate  manner,  in  writing,  in  an  official  language  of  the  Member  State  of  the 
commitment.However,  such  information  may  be in another language if the policy holder so 
requests and the law of the Member State so permits or the policy holder is free to choose the 
law applicable. 

A. BEFORE CONCLUDING THE CONTRACT 

Information about the 
assurance undertaking 

(a)1 The name of the 
undertaking and its legal 
form 

(a)2 The name of the 

Information about the commitment 

(a)4 Definition of each benefit and each option 

(a)5 Term of the contract 

(a)6 Means of terminating the contract 

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Member State in which 
the head office and, 
where appropriate, the 
agency or branch 
concluding the contract is 
situated 

(a)3 The address of the 
head office and, where 
appropriate, of the 
agency or branch 
concluding the contract 

(a)7 Means of payment of premiums and duration of payments 

(a)8 Means of calculation and distribution of bonuses 

(a)9 Indication of surrender and paid-up values and the extent to 
which they are guaranteed 

(a)10 Information on the premiums for each benefit, both main 
benefits and supplementary benefits, where appropriate 

(a)11 For unit-linked policies, definition of the units to which the 
benefits are linked 

(a)12 Indication of the nature of the underlying assets for unit-
linked policies 

(a)13 Arrangements for application of the cooling-off period 

(a)14 General information on the tax arrangements applicable to 
the type of policy 

(a)15 The arrangements for handling complaints concerning 
contracts by policy holders, lives assured or beneficiaries under 
contracts including, where appropriate, the existence of a 
complaints body, without prejudice to the right to take legal 
proceedings 

(a)16 Law applicable to the contract where the parties do not have 
a free choice or, where the parties are free to choose the law 
applicable, the law the assurer proposes to choose 

B. DURING THE TERM OF THE CONTRACT 

In addition to the policy conditions, both general and special, the policy-holder must receive 
the following information throughout the term of the contract. 

Information about the assurance 
undertaking 

(b)1 Any change in the name of the 
undertaking, its legal form or the address 
of its head office and, where appropriate, 
of the agency or branch which concluded 
the contract 

Information about the commitment 

(b)2 All the information listed in points (a)(4) to 
(a)(12) of A in the event of a change in the policy 
conditions or amendment of the law applicable to 
the contract 

(b)3 Every year, information on the state of 
bonuses 

ANNEX IV 

1. PROFESSIONAL SECRECY 

Until  17  November  2002,  Member  States  may  conclude  cooperation  agreements,  providing 
for  exchanges  of  information,  with  the  competent  authorities  of  third  countries  only  if  the 
information  disclosed  is  subject  to  guarantees  of  professional  secrecy  at  least  equivalent  to 
those referred to in Article 16 of this Directive. 

EN 

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2. ACTIVITIES AND BODIES EXCLUDED FROM THIS DIRECTIVE 

Until 1 January 2004, this Directive shall not concern mutual associations, where: 

– 

– 

the articles of association contain provisions for calling up additional contributions or 
reducing  their  benefits  or  claiming  assistance  from  other  persons  who  have 
undertaken to provide it, and 

the annual contribution income for the activities covered by this Directive does not 
exceed EUR 500000 for three consecutive years. If this amount is exceeded for three 
consecutive years this Directive shall apply with effect from the fourth year. 

3. UNTIL 1 JANUARY 2004, MEMBER STATES SHALL APPLY THE FOLLOWING PROVISIONS: 

A. Solvency margin 

Each Member State shall require of every assurance undertaking whose head office is situated 
in its territory an adequate solvency margin in respect of its entire business. 

The solvency margin shall consist of: 

1. the assets of the assurance undertaking free of any foreseeable liabilities, less any 
intangible items. In particular the following shall be included: 

– 

the paid-up share capital or, in the case of a mutual assurance undertaking, the 
effective initial fund plus any members' accounts which meet all the following 
criteria: 

(a)  the  memorandum  and  articles  of  association  must  stipulate  that 
payments may be made from these accounts to members only in so far as 
this does not cause the solvency margin to fall below the required level, 
or, after the dissolution of the undertaking, if all the undertaking's other 
debts have been settled; 

(b)  the  memorandum  and  articles  of  association  must  stipulate,  with 
respect  to  any  such  payments  for  reasons  other  than  the  individual 
termination  of  membership,  that  the  competent  authorities  must  be 
notified  at  least  one  month  in  advance  and  can  prohibit  the  payment 
within that period; 

(c) the relevant provisions of the memorandum and articles of association 
may be amended only after the competent authorities have declared that 
they  have  no  objection  to  the  amendment,  without  prejudice  to  the 
criteria stated in (a) and (b), 

– 

– 

– 

– 

one  half  of  the  unpaid  share  capital  or  initial  fund,  once  the  paid-up  part 
amounts to 25 % of that share capital or fund, 

reserves  (statutory  reserves  and  free  reserves)  not  corresponding 
underwriting liabilities, 

to 

any profits brought forward, 

cumulative  preferential  share  capital  and  subordinated  loan  capital  may  be 
included but, if so, only up to 50 % of the margin, no more than 25 % of which 
shall  consist  of  subordinated  loans  with  a  fixed  maturity,  or  fixed-term 
cumulative  preferential  share  capital,  if  the  following  minimum  criteria  are 
met: 

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(a)  in  the  event  of  the  bankruptcy  or  liquidation  of  the  assurance 
the 
undertaking,  binding  agreements  must  exist  under  which 
subordinated  loan  capital  or  preferential  share  capital  ranks  after  the 
claims of all other creditors and is not to  be  repaid until all  other  debts 
outstanding at the time have been settled. 

Subordinated loan capital must also fulfil the following conditions: 

(b) only fully paid-up funds may be taken into account; 

(c) for loans with a fixed maturity, the original maturity must be at least 
five  years.  No  later  than  one  year  before  the  repayment  date,  the 
assurance undertaking must submit to the competent authorities for their 
approval  a  plan  showing  how  the  solvency  margin  will  be  kept  at  or 
brought to the required level at maturity, unless the extent to which the 
loan  may  rank  as  a  component  of  the  solvency  margin  is  gradually 
reduced during at least the last five years before the repayment date. The 
competent  authorities  may  authorise  the  early  repayment  of  such  loans 
provided application is made by the issuing assurance undertaking and its 
solvency margin will not fall below the required level; 

(d)  loans  the  maturity  of  which  is  not  fixed  must  be  repayable  only 
subject to five years' notice unless the loans are no longer considered as a 
component  of  the  solvency  margin  or  unless  the  prior  consent  of  the 
competent authorities is specifically required for early repayment. In the 
latter  event  the  assurance  undertaking  must  notify  the  competent 
authorities at least six months before the date of the proposed repayment, 
specifying the actual and required solvency margin both before and after 
that repayment. The competent authorities shall authorise repayment only 
if  the  assurance  undertaking's  solvency  margin  will  not  fall  below  the 
required level; 

(e)  the  loan  agreement  must  not  include  any  clause  providing  that  in 
specified  circumstances,  other  than  the  winding-up  of  the  assurance 
undertaking, the debt will become repayable before the agreed repayment 
dates; 

(f)  the  loan  agreement  may  be  amended  only  after  the  competent 
authorities have declared that they have no objection to the amendment, 

– 

securities with no specified maturity date and other instruments that fulfil the 
following conditions, including cumulative preferential shares other than those 
mentioned  in  the  fifth  indent,  up  to  50 %  of  the  margin  for  the  total  of  such 
securities and the subordinated loan capital referred to in the fifth indent: 

(a) they may not be repaid on the initiative of the bearer or without the 
prior consent of the competent authority; 

(b) the contract of issue must enable the assurance undertaking to defer 
the payment of interest on the loan; 

(c)  the  lender's  claims  on  the  assurance  undertaking  must  rank  entirely 
after those of all non-subordinated creditors; 

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(d) the documents governing the issue of the securities must provide for 
the  loss-absorption  capacity  of  the  debt  and  unpaid  interest,  while 
enabling the assurance undertaking to continue its business; 

(e) only fully paid-up amounts may be taken into account. 

2. in so far as authorised under national law, profit reserves appearing in the balance 
sheet where they may be used to cover any losses which may arise and where they 
have not been made available for distribution to policy holders; 

3. upon application, with supporting evidence, by the undertaking to the competent 
authority of the Member State in the territory of which its head office is situated and 
with the agreement of that authority: 

(a) an amount equal to 50 % of the undertaking's future profits; the amount of 
the future profits shall be obtained by multiplying the estimated annual profit 
by  a  factor  which  represents  the  average  period  left  to  run  on  policies;  the 
factor  used  may  not  exceed  10;  the  estimated  annual  profit  shall  be  the 
arithmetical average of the profits made over the last five years in the activities 
listed in Article 2 of this Directive. 

The bases for calculating the factor by which the estimated annual profit is to 
be  multiplied  and  the  items  comprising  the  profits  made  shall  be  defined  by 
common  agreement  by  the  competent  authorities  of  the  Member  States  in 
collaboration with the Commission. Pending such agreement, those items shall 
be determined in accordance with the laws of the home Member State. 

When the competent authorities have defined the concept of profits made, the 
Commission  shall  submit  proposals  for  the  harmonisation  of  this  concept  by 
means of a Directive on the harmonisation of the annual accounts of insurance 
undertakings  and  providing  for  the  coordination  set  out  in  Article  1(2)  of 
Directive 78/660/EEC; 

(b) where Zillmerising is not practised or where, if practised, it is less than the 
loading for acquisition costs included in the premium, the difference between a 
non-Zillmerised  or  partially  Zillmerised  mathematical  provision  and  a 
mathematical  provision  Zillmerised  at  a  rate  equal  to  the  loading  for 
acquisition  costs  included  in  the  premium;  this  figure  may  not,  however, 
exceed 3,5 % of the sum of the differences between the relevant capital sums 
of life assurance activities and the mathematical provisions for all policies for 
which Zillmerising is possible; the difference shall be reduced by the amount 
of any undepreciated acquisition costs entered as an asset; 

(c) where approval is given by the competent authorities of the Member States 
concerned in which the assurance undertaking is carrying on its activities any 
the  underestimation  of  assets  and 
hidden 
overestimation  of  liabilities  other  than  mathematical  provisions  in  so  far  as 
such hidden reserves are not of an exceptional nature. 

resulting 

reserves 

from 

B. Minimum solvency margin 

Subject  to  section  C,  the  minimum  solvency  margin  shall  be  determined  as  shown  below 
according to the classes of assurance underwritten. 

(a) For the kinds of assurance referred to in Article 2(1)(a) and (b) of this Directive 
other than assurance linked to investment funds and for the operations referred to in 

EN 

307 

   EN 

 
 
 
 
 
 
 
 
 
 
 
Article  2(3)  of  this  Directive,  it  must  be  equal  to  the  sum  of  the  following  two 
results: 

– 

first result: 

a 4 % fraction of the mathematical provisions relating to direct business gross 
of  reinsurance  cessions  and  to  reinsurance  acceptances  shall  be  multiplied  by 
the ratio, for the last financial year, of the total mathematical provisions net of 
reinsurance  cessions  to  the  gross  total  mathematical  provisions  as  specified 
above; that ratio may in no case be less than 85 %, 

– 

second result: 

for policies on which the capital at risk is not a negative figure, a 0,3 % fraction 
of  such  capital  underwritten  by  the  assurance  undertaking  shall  be  multiplied 
by the ratio, for the last financial year, of the total capital at risk retained as the 
undertaking's  liability  after  reinsurance  cessions  and  retrocessions  to  the  total 
capital at risk gross of reinsurance; that ratio may in no case be less than 50 %. 

For temporary assurance on death of a maximum term of three years the above 
fraction shall be 0,1 %; for such assurance of a term of more than three years 
but not more than five years the above fraction shall be 0,15 %. 

(b) For the supplementary insurance referred to in Article 2(1)(c) of this Directive, it 
shall be equal to the result of the following calculation: 

– 

– 

– 

the  premiums  or  contributions  (inclusive  of  charges  ancillary  to  premiums  or 
contributions)  due  in  respect  of  direct  business  in  the  last  financial  year  in 
respect of all financial years shall be aggregated, 

to this aggregate there shall be added the amount of premiums accepted for all 
reinsurance in the last financial year, 

from  this  sum  shall  then  be  deducted  the  total  amount  of  premiums  or 
contributions cancelled in the last financial year as well as the total amount of 
taxes and levies pertaining to the premiums or contributions entering into the 
aggregate. 

The amount so obtained shall be divided into two portions, the first extending up to 
EUR 10  million  and  the  second  comprising  the  excess;  18 %  and  16 %  of  these 
portions respectively shall be calculated and added together. 

The  result  shall  be  obtained  by  multiplying  the  sum  so  calculated  by  the  ratio 
existing in respect of the last financial year between the amount of claims remaining 
to be borne by the assurance undertaking after deduction of transfers for reinsurance 
and the gross amount of claims; this ratio may in no case be less than 50 %. 

In the case of the association of underwriters known as Lloyd's, the calculation of the 
solvency  margin  shall  be  made  on  the  basis  of  net  premiums,  which  shall  be 
multiplied  by  flat-rate  percentage  fixed  annually  by  the  competent  authority  of  the 
head office Member State. This flat-rate percentage must be calculated on the basis 
of the most recent statistical data on commissions paid. The details together with the 
relevant  calculations  shall  be  sent  to  the  competent  authorities  of  the  countries  in 
whose territory Lloyd's is established. 

(c) For permanent health insurance not subject to cancellation referred to in Article 
2(1)(d) of this Directive, and for capital redemption operations referred to in Article 
2(2)(b)  thereof,  it  shall  be  equal  to  a  4 %  fraction  of  the  mathematical  provisions 

EN 

308 

   EN 

 
 
 
 
 
 
 
 
 
calculated in compliance with the conditions set out in the first result in (a) of this 
section. 

(d)  For  tontines,  referred  to  in  Article  2(2)(a)  of  this  Directive,  it  shall  be  equal  to 
1 % of their assets. 

(e)  For  assurance  covered  by  Article  2(1)(a)  and  (b)  of  this  Directive  linked  to 
investment funds and for the operations referred to in Article 2(2)(c), (d) and (e) of 
this Directive it shall be equal to: 

– 

– 

a  4 %  fraction  of  the  mathematical  provisions,  calculated  in  compliance  with 
the  conditions  set  out  in  the  first  result  in  (a)  of  this  section  in  so  far  as  the 
assurance  undertaking  bears  an  investment  risk,  and  a  1 %  fraction  of  the 
provisions  calculated  in  the  same  way,  in  so  far  as  the  undertaking  bears  no 
investment  risk  provided  that  the  term  of  the  contract  exceeds  five  years  and 
the allocation to cover management expenses set out in the contract is fixed for 
a period exceeding five years, plus 

a  0,3 %  fraction  of  the  capital  at  risk  calculated  in  compliance  with  the 
conditions  set  out  in  the  first  subparagraph  of  the  second  result  of  (a)  of  this 
section in so far as the assurance undertaking covers a death risk. 

C. Guarantee fund 

1.  One  third  of  the  required  solvency  margin  as  specified  in  section  B  shall  constitute  the 
guarantee fund. Subject to paragraph 2 of this section, at least 50 % of this fund shall consist 
of the items listed in section A(1) and (2). 

2. 

(a)  (a)  The  guarantee  fund  may  not,  however,  be  less  than  a  minimum  of 
EUR 800000. 

(b)  Any  Member  State  may  provide  for  the  minimum  of  the  guarantee  fund  to  be 
reduced  to  EUR 600000  in  the  case  of  mutual  associations  and  mutual-type 
associations and tontines. 

(c) For mutual associations referred to in the second sentence of the second indent of 
Article 3(6) of this Directive, as soon as they come within the scope of this Directive, 
and for tontines, any Member State may permit the establishment of a minimum of 
the guarantee fund of EUR 100000 to be increased progressively to the amount fixed 
in  (b)  of  this  section  by  successive  tranches  of  EUR 100000  whenever  the 
contributions increase by EUR 500000. 

(d) The minimum of the guarantee fund referred to in (a), (b) and (c) of this section 
must consist of the items listed in section A(1) and (2). 

3. Mutual associations wishing to extend their business within the meaning of Article 6(4) or 
Article  40  of  this  Directive  may  not  do  so  unless  they  comply  immediately  with  the 
requirements of paragraph 2(a) and (b) of this section. 

EN 

309 

   EN 

 
 
 
 
 
 
 
(cid:208) 2005/68/EC (adapted) 

ANNEX I III 

⌦ LEGAL FORMS OF UNDERTAKINGS ⌫ 

(cid:208) 92/49/EEC Art. 6 (adapted) 

1.  The  home  Member  State  shall  require  every  ⌦ A.  Forms  of  non-life ⌫  insurance 
undertakings for which authorization is sought to: 

(a) adopt one of the following forms: 

(1) 

the  Kingdom  of  Belgium:  «société  anonyme  —naamloze 
in 
the  case  of 
vennootschap»  — 
,  «société  en  commandite  par  actions  —commanditaire 
vennootschap  op  aandelen»  —  ,«association  d'assurance  mutuelle  —onderlinge 
verzekeringsvereniging» — ,«société coopérative —coöperatieve vennootschap»; 

(cid:208) 2006/101/EC Art. 1 and Annex 
pt 1 

(2) 

in the case of the Republic of Bulgaria: "акционерно дружество"; 

(3) 

in the case of the Czech Republic: «akciová společnost», «družstvo»; 

(cid:208) Art. 20 and Annex II, p. 335 

(4) 

(5) 

in the case of the Kingdom of Denmark: «aktieselskaber», «gensidige selskaber»; 

(cid:208) 92/49/EEC Art. 6 

in 
the  case  of 
«Versicherungsverein 
Wettbewerbsversicherungsunternehmen»; 

auf 

the  Federal  Republic  of  Germany:  «Aktiengesellschaft», 
«Öffentlich-rechtliches 

Gegenseitigkeit», 

(6) 

in the case of the Republic of Estonia: «aktsiaselts»; 

(cid:208) Art. 20 and Annex II, p. 335 

(cid:208) 92/49/EEC Art. 6 

(7) 

(8) 

(9) 

in the case of Ireland: incorporated companies limited by shares or by guarantee or 
unlimited; 

in  the  case  of  the  Hellenic  Republic:  «ανώνυµη  εταιρία»,  «αλληλασφαλιστικός 
συνεταιρισµός»; 

in  the  case  of  the  Kingdom  of  Spain:  «sociedad  anónima»,  «sociedad  mutua», 
«sociedad cooperativa»; 

EN 

310 

   EN 

 
 
 
 
 
 
 
 
 
(10) 

in  the  case  of  the  French  Republic:  «société  anonyme»,  «société  d'assurance 
mutuelle»,  «institution  de  prévoyance  régie  par  le  code  de  la  sécurité  sociale», 
«institution de prévoyance régie par le code rural» and «mutuelles régies par le code 
de la mutualité»; 

(11) 

in  the  case  of  the  Italian  Republic:  «società  per  azioni»,  «società  cooperativa», 
«mutua di assicurazione»; 

(cid:208) Art. 20 and Annex II, p. 335 
(adapted) 

(12) 

(13) 

(14) 

(15) 

(16) 

(17) 

in the case of the Republic of Cyprus: «Εταιρεία περιορισµένης ευθύνης µε µετοχές ή 
εταιρεία περιορισµένης ευθύνης χωρίς µετοχικό κεφάλαιο»; 

in  the  case  of  the  Republic  of  Latvia:  «apdrošināšanas  akciju  sabiedrība», 
«savstarpējās apdrošināšanas kooperatīvā biedrība»; 

in  the  case  of  the  Republic  of  Lithuania:  «akcinės  bendrovės»,  «uždarosios 
⌦ uždaroji ⌫ akcinės bendrovės»; 

in  the  case  of  the  Grand  Duchy  of  Luxembourg:  «société  anonyme»,  «société  en 
commandite  par  actions»,  «association  d'assurances  mutuelles»,  «société 
coopérative»; 

(cid:208) 92/49/EEC Art. 6 

(cid:208) Art. 20 and Annex II, p. 335 
(cid:214) new 

in  the  case  of  the  Republic  of  Hungary:  «biztosító  részvénytársaság»,  «biztosító 
szövetkezet»,  «biztosító  egyesület»,  «külföldi  székhelyű  biztosító  magyarországi 
fióktelepe»; 

in  the  case  of  the  Republic  of  Malta:  «kumpanija  pubblika»,  «kumpanija  privata», 
«fergħa»,  «Korp  ta'  l-  Assikurazzjoni  Rikonnoxxut»(cid:214) «limited  liability  company/ 
kumpannija b` responsabbilta` limitata»; 

(18) 

in  the  case  of  the  Kingdom  of  the  Netherlands:  «naamloze  vennootschap», 
«onderlinge waarborgmaatschappij»; 

(cid:208) 92/49/EEC Art. 6 

(19) 

in  the  case  of  the  Republic  of  Austria:  «Aktiengesellschaft»,  «Versicherungsverein 
auf Gegenseitigkeit»; 

(cid:208) Act of Accession of Austria, 
Sweden and Finland Art. 29 and 
Annex I, p. 197 

EN 

311 

   EN 

 
 
 
 
 
 
(20) 

in the case of the Republic of Poland: «spółka akcyjna», «towarzystwo ubezpieczeń 
wzajemnych»; 

(cid:208) Art. 20 and Annex II, p. 335 

(21) 

in the case of the Portuguese Republic: «sociedade anónima», «mútua de seguros»; 

(cid:208) 92/49/EEC Art. 6 

(cid:208) 2006/101/EC Art. 1 and Annex 
pt 1 

(22) 

in the case of Romania: "societăţi pe acţiuni", "societăţi mutuale"; 

(23) 

in  the  case  of  the  Republic  of  Slovenia:  «delniška  družba»,  «družba  za  vzajemno 
zavarovanje»; 

(24) 

in the case of the Slovak Republic: «akciová spoločnost»; 

(cid:208) Art. 20 and Annex II, p. 335 

(cid:208) Act of Accession of Austria, 
Sweden and Finland Art. 29 and 
Annex I, p. 197 

(25) 

(26) 

(27) 

in  the  case  of  the  Republic  of  Finland:  «keskinäinen  vakuutusyhtiö  —ömsesidigt 
försäkringsbolag»  — 
, 
«vakuutusyhdistys —försäkringsförening»; 

,  «vakuutusosakeyhtiö  —försäkringsaktiebolag»  — 

in  the  case  of  the  Kingdom  of  Sweden:  «försäkringsaktiebolag»,  «ömsesidiga 
försäkringsbolag», «understödsföreningar»; 

(cid:208) 92/49/EEC Art. 6 

in the case of the United Kingdom: incorporated companies limited by shares or by 
guarantee  or  unlimited,  societies  registered  under  the  Industrial  and  Provident 
Societies Acts, societies registered under the Friendly Societies Acts, the association 
of underwriters known as Lloyd's. 

(28) 

An insurance undertaking may also adopt ⌦ in any case and as an alternative to the 
forms  listed  in  points  (1)  to  (27), ⌫  the  form  of  a  European  Company  (SE)  when 
that  has  been  established  ⌦ as  defined 
in  Council  Regulation  (EC)  No 
2157/2001 ⌫88 . 

(cid:208) 92/49/EEC Art. 6 (adapted) 

88 

OJ L 294, 10.11.2001, p. 1. 

EN 

312 

   EN 

 
 
 
 
 
 
 
 
                                                 
1. The home Member State shall require every assurance undertaking for which authorisation 
is sought to: 

B. (a) adopt one of the following fForms ⌦ of life insurance undertakings ⌫ : 

(cid:208) 2002/83/EC Art. 6 (adapted) 

(1) 

(2) 

in the case of the Kingdom of Belgium: «société anonyme/naamloze vennootschap», 
«société  en  commandite  par  actions/commanditaire  vennootschap  op  aandelen», 
«association  d'assurance  mutuelle/onderlinge  verzekeringsvereniging»,  «société 
coopérative/coöperatieve vennootschap»; 

(cid:208) 2006/101/EC Art. 1 and Annex 
pt 3 

the  case  of 

in 
"взаимозастрахователна кооперация"; 

the  Republic  of  Bulgaria: 

"акционерно  дружество", 

(3) 

in the case of the Czech Republic: «akciová společnost», «družstvo»; 

(cid:208) 2004/66/EC Art. 1 and Annex  

(cid:208) 2002/83/EC 

(4) 

(5) 

in  the  case  of  the  Kingdom  of  Denmark:  «aktieselskaber»,  «gensidige  selskaber», 
«pensionskasser  omfattet 
(tværgående 
pensionskasser)»; 

forsikringsvirksomhed 

lov  om 

af 

in 
the  case  of 
«Versicherungsverein 
Wettbewerbsversicherungsunternehmen»; 

auf 

the  Federal  Republic  of  Germany:  «Aktiengesellschaft», 
«öffentlich-rechtliches 

Gegenseitigkeit», 

(6) 

in the case of the Republic of Estonia: «aktsiaselts»; 

(cid:208) 2004/66/EC Art. 1 and Annex  

(cid:208) 2002/83/EC 

(7) 

(8) 

(9) 

(10) 

in the case of Ireland: «incorporated companies limited by shares or by guarantee or 
unlimited»,  «societies  registered  under  the Industrial  and  Provident  Societies  Acts» 
and «societies registered under the Friendly Societies Acts»; 

in the case of the Hellenic Republic: «ανώνυµη εταιρία»; 

in  the  case  of  the  Kingdom  of  Spain:  «sociedad  anónima»,  «sociedad  mutua», 
«sociedad cooperativa»; 

in  the  case  of  the  French  Republic:  «société  anonyme»,  «société  d'assurance 
mutuelle»,  «institution  de  prévoyance  régie  par  le  code  de  la  sécurité  sociale», 
«institution de prévoyance régie par le code rural» and «mutuelles régies par le code 
de la mutualité»; 

EN 

313 

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(11) 

in  the  case  of  the  Italian  Republic:  «societá  per  azioni»,  «societá  cooperativa», 
«mutua di assicurazione»; 

(cid:208) 2004/66/EC Art. 1 and Annex 
(adapted)  

(12) 

(13) 

(14) 

(15) 

(16) 

(17) 

in the case of the Republic of Cyprus: «Εταιρεία περιορισµένης ευθύνης µε µετοχές 
ή εταιρεία περιορισµένης ευθύνης µε εγγύηση»; 

in  the  case  of  the  Republic  of  the  Latvia:  «apdrošināšanas  akciju  sabiedrība», 
«savstarpējās apdrošināšanas kooperatīvā biedrība»; 

in  the  case  of  the  Republic  of  Lithuania:  «akcinės  bendrovės»,  «uždarosios 
⌦ uždaroji ⌫ akcinės bendrovės»; 

in  the  case  of  the  Grand  Duchy  of  Luxembourg:  «société  anonyme»,  «société  en 
commandite  par  actions»,  «association  d'assurances  mutuelles»,  «société 
coopérative»; 

(cid:208) 2002/83/EC 

(cid:208) 2004/66/EC Art. 1 and Annex 
(cid:214) new 

in  the  case  of  the  Republic  of  Hungary:  «biztosító  részvénytársaság»,  «biztosító 
szövetkezet»,  «biztosító  egyesület»,  «külföldi  székhelyű  biztosító  magyarországi 
fióktelepe»; 

in  the  case  of  the  Republic  of  Malta:  «kumpanija  pubblika»,  «kumpanija  privata», 
«fergħa»,  «Korp  ta'  l-  Assikurazzjoni  Rikonnoxxut»(cid:214) «limited  liability  company/ 
kumpannija b` responsabbilta` limitata»; 

(18) 

in  the  case  of  the  Kingdom  of  the  Netherlands:  «naamloze  vennootschap», 
«onderlinge waarborgmaatschappij»; 

(cid:208) 2002/83/EC 

(19) 

in  the  case  of  the  Republic  of  Austria:  «Aktiengesellschaft»,  «Versicherungsverein 
auf Gegenseitigkeit»; 

(cid:208) 2002/83/EC 

(20) 

in the case of the Republic of Poland: «spółka akcyjna», «towarzystwo ubezpieczeń 
wzajemnych»; 

(cid:208) 2004/66/EC Art. 1 and Annex  

(21) 

in the case of the Portuguese Republic: «sociedade anónima», «mútua de seguros»; 

(cid:208) 2002/83/EC 

EN 

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(cid:208) 2006/101/EC Art. 1 and Annex 
pt 3 

(22) 

in the case of Romania: "societăţi pe acţiuni", "societăţi mutuale"; 

(23) 

in  the  case  of  the  Republic  of  Slovenia:  «delniška  družba»,  «družba  za  vzajemno 
zavarovanje»; 

(24) 

in the case of the Slovak Republic: «akciová spoločnost»; 

(cid:208) 2004/66/EC Art. 1 and Annex  

(cid:208) 2002/83/EC (adapted) 

(25) 

(26) 

(27) 

(28) 

in  the  case  of  the  Republic  of  Finland:  «keskinäinen  vakuutusyhtiö/ömsesidigt 
«vakuutusosakeyhtiö/försäkringsaktiebolag», 
försäkringsbolag», 
«vakuutusyhdistys/försäkringsförening»; 

the  case  of  Kingdom  of  Sweden:  «försäkringsaktiebolag»,  «ömsesidiga 

in 
försäkringsbolag», «understödsföreningar»; 

in the case of the United Kingdom: «incorporated companies limited by shares or by 
guarantee  or  unlimited»,  «societies  registered  under  the  Industrial  and  Provident 
Societies  Acts»,  «societies  registered  or  incorporated  under  the  Friendly  Societies 
Acts», «the association of underwriters known as Lloyd's». 

An assurance undertaking may also adopt ⌦ in any case and as an alternative to the 
forms listed in points (1) to (27), ⌫ the form of a European company when that has 
been established ⌦ (SE) as defined in Regulation (EC) No 2157/2001 ⌫ . 

(cid:208) 2005/68/EC 

ANNEX I 

C. Forms of reinsurance undertakings: 

(1) 

in the case of the Kingdom of Belgium: «société anonyme/naamloze vennootschap», 
«société  en  commandite  par  actions/commanditaire  vennootschap  op  aandelen», 
«association  d'assurance  mutuelle/onderlinge  verzekeringsvereniging»,  «société 
coopérative/coöperatieve vennootschap»; 

(2) 

in the case of the Republic of Bulgaria "акционерно дружество"; 

(cid:216) new 

(3) 

(4) 

in the case of the Czech Republic: «akciová společnost»; 

in the case of the Kingdom of Denmark: «aktieselskaber», «gensidige selskaber»; 

(cid:208) 2005/68/EC 

EN 

315 

   EN 

 
 
 
 
 
 
 
(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

(12) 

(13) 

(14) 

(15) 

(16) 

(17) 

(18) 

(19) 

(20) 

in 
the  case  of 
«Versicherungsverein 
Wettbewerbsversicherungsunternehmen»; 

auf 

the  Federal  Republic  of  Germany:  «Aktiengesellschaft», 
«Öffentlich-rechtliches 

Gegenseitigkeit», 

in the case of the Republic of Estonia: «aktsiaselts»; 

in the case of Ireland: incorporated companies limited by shares or by guarantee or 
unlimited; 

in  the  case  of  the  Hellenic  Republic:  «ανώνυµη  εταιρία»,  «αλληλασφαλιστικός 
συνεταιρισµός»; 

in the case of the Kingdom of Spain: «sociedad anónima»; 

in  the  case  of  the  French  Republic:  «société  anonyme»,  «société  d'assurance 
mutuelle»,  «institution  de  prévoyance  régie  par  le  code  de  la  sécurité  sociale», 
«institution de prévoyance régie par le code rural» and «mutuelles régies par le code 
de la mutualité»; 

in the case of the Italian Republic: «società per azioni»; 

in  the  case  of  the  Republic  of  Cyprus:  «Εταιρεία  Περιορισµένης  Ευθύνης  µε 
µετοχές» ή «Εταιρεία Περιορισµένης Ευθύνης µε εγγύηση»; 

in the case of the Republic of Latvia: «akciju sabiedrība», «sabiedrība ar ierobežotu 
atbildību»; 

in  the  case  of  the  Republic  of  Lithuania:  «akcinė  bendrovė»,  «uždaroji  akcinė 
bendrovė»; 

in  the  case  of  the  Grand  Duchy  of  Luxembourg:  «société  anonyme»,  «société  en 
commandite  par  actions»,  «association  d'assurances  mutuelles»,  «société 
coopérative»; 

in  the  case  of  the  Republic  of  Hungary:  «biztosító  részvénytársaság»,  «biztosító 
szövetkezet», «harmadik országbeli biztosító magyarországi fióktelepe»; 

in  the  case  of  the  Republic  of  Malta:  «limited  liability  company/kumpannija  tà 
responsabbiltà limitata»; 

in  the  case  of  the  Kingdom  of  the  Netherlands:  «naamloze  vennootschap», 
«onderlinge waarborgmaatschappij»; 

in  the  case  of  the  Republic  of  Austria:  «Aktiengesellschaft»,  «Versicherungsverein 
auf Gegenseitigkeit»; 

in the case of the Republic of Poland: «spółka akcyjna», «towarzystwo ubezpieczeń 
wzajemnych»; 

(21) 

in the case of the Portuguese Republic: «sociedade anónima», «mútua de seguros»; 

(22) 

in the case of Romania “societate pe actiuni”;  

(cid:216) new 

(cid:208) 2005/68/EC (adapted) 

(23) 

in the case of the Republic of Slovenia: «delniška družba»; 

EN 

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   EN 

 
 
 
(24) 

(25) 

(26) 

(27) 

in the case of the Slovak Republic: «akciová spoločnost»; 

in  the  case  of  the  Republic  of  Finland:  «keskinäinen  vakuutusyhtiö/ömsesidigt 
försäkringsbolag», 
«vakuutusosakeyhtiö/försäkringsaktiebolag», 
«vakuutusyhdistys/försäkringsförening»; 

in  the  case  of  the  Kingdom  of  Sweden:  «försäkringsaktiebolag»,  «ömsesidigt 
försäkringsbolag»; 

in the case of the United Kingdom: incorporated companies limited by shares or by 
guarantee  or  unlimited,  societies  registered  under  the  Industrial  and  Provident 
Societies Acts, societies registered or incorporated under the Friendly Societies Acts, 
«the association of underwriters known as Lloyd's». 

⌦ (28)  in any case and as an alternative to the forms listed in points (1) to (27), the form of a 
European Company (SE) as defined in Regulation (EC) No 2157/2001. ⌫ 

EN 

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   EN 

 
(cid:208) 2001/17/EC 

ANNEX 

SPECIAL REGISTER REFERRED TO IN ARTICLE 10(3) 

1.  Every  insurance  undertaking  must  keep  at  its  head  office  a  special  register  of  the  assets 
used  to  cover  the  technical  provisions  calculated  and  invested  in  accordance  with  the  home 
Member State's rules. 

2. Where an insurance undertaking transacts both non-life and life business, it must keep at its 
head  office  separate  registers  for  each  type  of  business.  However,  where  a  Member  State 
authorises insurance undertakings to cover life and the risks listed in points 1 and 2 of Annex 
A  to  Directive  73/239/EEC,  it  may  provide  that  those  insurance  undertakings  must  keep  a 
single register for the whole of their activities. 

3. The total value of the assets entered, valued in accordance with the rules applicable in the 
home Member State, must at no time be less than the value of the technical provisions. 

4. Where an asset entered in the register is subject to a right in rem in favour of a creditor or a 
third party, with the result that part of the value of the asset is not available for the purpose of 
covering commitments, that fact is recorded in the register and the amount not available is not 
included in the total value referred to in point 3. 

5. Where an asset employed to cover technical provisions is subject to a right in rem in favour 
of a creditor or a third party, without meeting the conditions of point 4, or where such an asset 
is subject to a reservation of title in favour of a creditor or of a third party or where a creditor 
has a right to demand the set-off of his claim against the claim of the insurance undertaking, 
the  treatment  of  such  asset  in  case  of  the  winding-up  of  the  insurance  undertaking  with 
respect to the method provided for in Article 10(1)(a) shall be determined by the legislation of 
the home Member State except where Articles 20, 21 or 22 apply to that asset. 

6. The composition of the assets entered in the register in accordance with points 1 to 5, at the 
time  when  winding-up  proceedings  are  opened,  must  not  thereafter  be  changed  and  no 
alteration  other  than  the  correction  of  purely  clerical  errors  must  be  made  in  the  registers, 
except with the authorisation of the competent authority. 

7. Notwithstanding point 6, the liquidators must add to the said assets the yield therefrom and 
the value of the pure premiums received in respect of the class of business concerned between 
the opening of the winding-up proceedings and the time of payment of the insurance claims or 
until any transfer of portfolio is effected. 

8. If the product of the realisation of assets is less than their estimated value in the registers, 
the  liquidators  must  be  required  to  justify  this  to  the  home  Member  States'  competent 
authorities. 

9. The supervisory authorities of the Member States must take appropriate measures to ensure 
full application by the insurance undertakings of the provisions of this Annex. 

EN 

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   EN 

 
 
(cid:208) 2005/68/EC Art. 59.9 and 
Annex II 

ANNEX I 

CALCULATION OF THE ADJUSTED SOLVENCY OF INSURANCE UNDERTAKINGS 
AND REINSURANCE UNDERTAKINGS WITH RESPECT TO TITLE IV 

1. CHOICE OF CALCULATION METHOD AND GENERAL PRINCIPLES 

A.  Member  States  shall  provide  that  the  calculation  of  the  adjusted  solvency  of 
insurance undertakings and reinsurance undertakings referred to in Article 2(1) shall 
be carried out according to one of the methods described in point 3. A Member State 
may,  however,  provide  for  the  competent  authorities  to  authorise  or  impose  the 
application  of  a  method  set  out  in  point  3  other  than  that  chosen  by  the  Member 
State. 

B. Proportionality 

The calculation of the adjusted solvency of an insurance undertaking or a reinsurance 
undertaking  shall  take  account  of  the  proportional  share  held  by  the  participating 
undertaking in its related undertakings. 

«Proportional share» means either, where method 1 or method 2 described in point 3 
is used, the proportion of the subscribed capital that is held, directly or indirectly, by 
the  participating  undertaking  or,  where  method  3  described  in  point  3  is  used,  the 
percentages used for the establishment of the consolidated accounts. 

However,  whichever  method  is  used,  when  the  related  undertaking  is  a  subsidiary 
undertaking and has a solvency deficit, the total solvency deficit of the subsidiary has 
to be taken into account. 

However, where, in the opinion of the competent authorities, the responsibility of the 
limited  strictly  and 
parent  undertaking  owning  a  share  of 
unambiguously  to  that  share  of  the  capital,  such  competent  authorities  may  give 
permission  for  the  solvency  deficit  of  the  subsidiary  undertaking  to  be  taken  into 
account on a proportional basis. 

the  capital 

is 

Where  there  are  no  capital  ties  between  some  of  the  undertakings  in  an  insurance 
group  or  a  reinsurance  group,  the  competent  authority  shall  determine  which 
proportional share will have to be taken account of. 

C.Elimination of double use of solvency margin elements 

C.1.General treatment of solvency margin elements 

Regardless of the method used for the calculation of the adjusted solvency of 
an  insurance  undertaking  or  a  reinsurance  undertaking,  the  double  use  of 
elements  eligible  for  the  solvency  margin  among  the  different  insurance 
undertakings or reinsurance undertakings taken into account in that calculation 
must be eliminated. 

For  that  purpose,  when  calculating  the  adjusted  solvency  of  an  insurance 
undertaking or a reinsurance undertaking and where the methods described in 
point 3 do not provide for it, the following amounts shall be eliminated: 

EN 

319 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
– 

– 

– 

the  value  of  any  asset  of  that  insurance  undertaking  or  reinsurance 
undertaking  which  represents  the  financing  of  elements  eligible  for  the 
solvency  margin  of  one  of  its  related  insurance  undertakings  or  related 
reinsurance undertakings, 

the  value  of  any  asset  of  a  related  insurance  undertaking  or  a  related 
reinsurance  undertaking  of  that  insurance  undertaking  or  reinsurance 
undertaking  which  represents  the  financing  of  elements  eligible  for  the 
solvency  margin  of 
reinsurance 
undertaking, 

insurance  undertaking  or 

that 

the  value  of  any  asset  of  a  related  insurance  undertaking  or  related 
reinsurance  undertaking  of  that  insurance  undertaking  or  reinsurance 
undertaking  which  represents  the  financing  of  elements  eligible  for  the 
solvency  margin  of  any  other  related  insurance  undertaking  or  related 
reinsurance  undertaking  of  that  insurance  undertaking  or  reinsurance 
undertaking. 

C.2.Treatment of certain elements 

Without prejudice to the provisions of Section C.1: 

– 

– 

profit  reserves  and  future  profits  arising  in  a  related  life  assurance 
undertaking  or  a  related  life  reinsurance  undertaking  of  the  insurance 
undertaking  or reinsurance undertaking  for  which  the  adjusted solvency 
is calculated, and 

any subscribed but not paid-up capital of a related insurance undertaking 
or  a  related  reinsurance  undertaking  of  the  insurance  undertaking  or  of 
reinsurance undertaking for which the adjusted solvency is calculated, 

may  only  be  included  in  the  calculation  in  so  far  as  they  are  eligible  for 
covering  the  solvency  margin  requirement  of  that  related  undertaking. 
However,  any  subscribed  but  not  paid-up  capital  which  represents  a  potential 
obligation  on  the  part  of  the  participating  undertaking  shall  be  entirely 
excluded from the calculation. 

Any  subscribed  but  not  paid-up  capital  of  the  participating  insurance 
undertaking  or  the  participating  reinsurance  undertaking  which  represents  a 
potential  obligation  on  the  part  of  a  related  insurance  undertaking  or  of  a 
related reinsurance undertaking shall also be excluded from the calculation. 

Any subscribed but not paid-up capital of a related insurance undertaking or a 
reinsurance undertaking which represents a potential obligation on the part of 
another  related  insurance  undertaking  or  reinsurance  undertaking  of  the  same 
participating  insurance  undertaking  or  reinsurance  undertaking  shall  be 
excluded from the calculation. 

C.3.Transferability 

If  the  competent  authorities  consider  that  certain  elements  eligible  for  the 
solvency  margin  of  a  related  insurance  undertaking  or  a  related  reinsurance 
undertaking  other  than  those  referred  to  in  Section  C.2  cannot  effectively  be 
made  available  to  cover  the  solvency  margin  requirement  of  the  participating 
insurance  undertaking  or  the  participating  reinsurance  undertaking  for  which 
the  adjusted  solvency  is  calculated,  those  elements  may  be  included  in  the 

EN 

320 

   EN 

 
 
 
 
 
 
 
 
calculation only in so far as they are eligible for covering the solvency margin 
requirement of the related undertaking. 

C.4.  The  sum  of  the  elements  referred  to  in  Sections  C.2  and  C.3  may  not 
exceed  the  solvency  margin  requirement  of  the  related  insurance  undertaking 
or the related reinsurance undertaking. 

D.Elimination of the intra-group creation of capital 

When  calculating  adjusted  solvency,  no  account  shall  be  taken  of  any  element 
eligible  for  the  solvency  margin  arising  out  of  reciprocal  financing  between  the 
insurance undertaking or the reinsurance undertaking and: 

– 

– 

– 

a related undertaking, 

a participating undertaking, 

another related undertaking of any of its participating undertakings. 

Furthermore,  no  account  shall  be  taken  of  any  element  eligible  for  the  solvency 
margin of a related insurance undertaking or a related reinsurance undertaking of the 
insurance undertaking or reinsurance undertaking for which the adjusted solvency is 
calculated when the element in question arises out of reciprocal financing with any 
other related undertaking of that insurance undertaking or reinsurance undertaking. 

In  particular,  reciprocal  financing  exists  when  an  insurance  undertaking  or  a 
reinsurance undertaking, or any of its related undertakings, holds shares in, or makes 
loans to, another undertaking which, directly or indirectly, holds an element eligible 
for the solvency margin of the first undertakings. 

E.  The  competent  authorities  shall  ensure  that  the  adjusted  solvency  is  calculated 
with the same frequency as that laid down by Directives 73/239/EEC, 91/674/EEC, 
2002/83/EC  and  2005/68/EC  for  calculating  the  solvency  margin  of  insurance 
undertakings or reinsurance undertakings. The value of the assets and liabilities shall 
be  assessed  in  accordance  with  the  relevant  provisions  of  Directives  73/239/EEC, 
91/674/EEC, 2002/83/EC and 2005/68/EC. 

2. APPLICATION OF THE CALCULATION METHODS 

2.1.Related insurance undertakings and related reinsurance undertakings. 

The adjusted solvency calculation shall be carried out in accordance with the general 
principles and methods set out in this Annex. 

In  the  case  of  all  methods,  where  the  insurance  undertaking  or  reinsurance 
undertaking has more than one related insurance undertaking or related reinsurance 
undertaking the adjusted solvency calculation shall be carried out by integrating each 
of these related insurance undertakings or related reinsurance undertakings. 

In cases of successive participations (for example, where an insurance undertaking or 
a  reinsurance  undertaking  is  a  participating  undertaking  in  another  insurance 
undertaking or reinsurance undertaking which is also  a participating undertaking in 
an  insurance  undertaking  or  a  reinsurance  undertaking),  the  adjusted  solvency 
calculation  shall  be  carried  out  at  the  level  of  each  participating  insurance 
undertaking  or  reinsurance  undertaking  which  has  at  least  one  related  insurance 
undertaking or one related reinsurance undertaking. 

EN 

321 

   EN 

 
 
 
 
 
 
 
 
 
 
 
Member  States  may  waive  calculation  of  the  adjusted  solvency  of  an  insurance 
undertaking or a reinsurance undertaking: 

– 

– 

if the insurance undertaking or reinsurance undertaking is a related undertaking 
of another insurance undertaking or a reinsurance undertaking authorised in the 
same  Member  State,  and  that  related  undertaking  is  taken  into  account  in  the 
calculation of the adjusted solvency of the participating insurance undertaking 
or reinsurance undertaking, or 

if  the  insurance  undertaking  or  the  reinsurance  undertaking  is  a  related 
undertaking of an insurance holding company which has its registered office in 
the  same  Member  State  as  the  insurance  undertaking  or  the  reinsurance 
undertaking, and both the holding insurance company and the related insurance 
undertaking or the related reinsurance undertaking are taken into account in the 
calculation carried out. 

Member States may also waive calculation of the adjusted solvency of an insurance 
undertaking  or  reinsurance  undertaking  if  it  is  a  related  insurance  undertaking  or  a 
related  reinsurance  undertaking  of  another  insurance  undertaking,  a  reinsurance 
undertaking  or  an  insurance  holding  company  which  has  its  registered  office  in 
another  Member  State,  and  if  the  competent  authorities  of  the  Member  States 
concerned  have  agreed  to  grant  exercise  of  the  supplementary  supervision  to  the 
competent authority of the latter Member State. 

In  each  case,  the  waiver  may  be  granted  only  if  the  competent  authorities  are 
satisfied  that  the  elements  eligible  for  the  solvency  margins  of  the  insurance 
undertakings  or  the  reinsurance  undertakings  included  in  the  calculation  are 
adequately distributed between those undertakings. 

Member  States  may  provide  that  where  the  related  insurance  undertaking  or  the 
related reinsurance undertaking has its registered office in a Member State other than 
that  of  the  insurance  undertaking  or  the  reinsurance  undertaking  for  which  the 
adjusted  solvency  calculation  is  carried  out,  the  calculation  shall  take  account,  in 
respect  of  the  related  undertaking,  of  the  solvency  situation  as  assessed  by  the 
competent authorities of that other Member State. 

2.2.Intermediate insurance holding companies 

When calculating the adjusted solvency of an insurance undertaking or a reinsurance 
undertaking which holds a participation in a related insurance undertaking, a related 
reinsurance  undertaking,  a  non-member  country  insurance  undertaking  or  a  non-
member  country  reinsurance  undertaking,  through  an  insurance  holding  company, 
the  situation  of  the  intermediate  insurance  holding  company  is  taken  into  account. 
For  the  sole  purpose  of  that  calculation,  to  be  undertaken  in  accordance  with  the 
general  principles  and  methods  described  in  this  Annex,  this  insurance  holding 
company  shall  be  treated  as  if  it  were  an  insurance  undertaking  or  reinsurance 
undertaking  subject  to  a  zero  solvency  requirement  and  were  subject  to  the  same 
conditions as are laid down in Article 16 of Directive 73/239/EEC, in Article 27 of 
Directive  2002/83/EC  or  in  Article 36  of  Directive  2005/68/EC,  in  respect  of 
elements eligible for the solvency margin. 

2.3.Related  non-member  country  insurance  undertakings  and  related  non-member 
country reinsurance undertakings 

EN 

322 

   EN 

 
 
 
 
 
 
 
 
When calculating the adjusted solvency of an insurance undertaking or a reinsurance 
undertaking which is a participating undertaking in a non-member country insurance 
undertaking or in a non-member country reinsurance undertaking, the latter shall be 
treated solely for the purposes of the calculation, by analogy with a related insurance 
undertaking or a related reinsurance undertaking, by applying the general principles 
and methods described in this Annex. 

However, where the non-member country in which that undertaking has its registered 
office makes it subject to authorisation and imposes on it a solvency requirement at 
least  comparable  to  that  laid  down  in  Directives  73/239/EEC,  2002/83/EC  or 
2005/68/EC, taking into account the elements of cover of that requirement, Member 
States  may  provide  that  the  calculation  shall  take  into  account,  as  regards  that 
undertaking,  the  solvency  requirement  and  the  elements  eligible  to  satisfy  that 
requirement as laid down by the non-member country in question. 

2.4.Related credit institutions, investment firms and financial institutions 

When  calculating  the  adjusted  solvency  of  an  insurance  undertaking  or  reinsurance 
undertaking  which  is  a  participating  undertaking  in  a  credit  institution,  investment 
firm  or  financial  institution,  the  rules  laid  down  in  Article 16  of  Directive 
73/239/EEC,  in  Article 27  of  Directive  2002/83/EC  and  in  Article 36  of  Directive 
2005/68/EC, on the deduction of such participations shall apply mutatis mutandis, as 
well  as  the  provisions  on  the  ability  of  Member  States  under  certain  conditions  to 
allow alternative methods and to allow such participations not to be deducted. 

2.5.Non-availability of the necessary information 

Where  information  necessary  for  calculating  the  adjusted  solvency  of  an  insurance 
undertaking  or  reinsurance  undertaking,  concerning  a  related  undertaking  with  its 
registered office in a Member State or a non-member country, is not available to the 
competent authorities, for whatever reason, the book value of that undertaking in the 
participating  insurance  undertaking  or  reinsurance  undertaking  shall  be  deducted 
from  the  elements  eligible  for  the  adjusted  solvency  margin.  In  that  case,  the 
unrealised gains connected with such participation shall not be allowed as an element 
eligible for the adjusted solvency margin. 

3. CALCULATION METHODS 

Method 1:Deduction and aggregation method 

The adjusted solvency situation of the participating insurance undertaking or the participating 
reinsurance undertaking is the difference between: 

(i) the sum of: 

(a) the elements eligible for the solvency margin of the participating insurance 
undertaking or the participating reinsurance undertaking, and 

(b)  the  proportional  share  of  the  participating  insurance  undertaking  or  the 
participating reinsurance undertaking in the elements eligible for the solvency 
margin  of  the  related  insurance  undertaking  or  the  related  reinsurance 
undertaking, 

and 

(ii) the sum of: 

EN 

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   EN 

 
 
 
 
 
 
 
 
 
 
 
 
(a)  the  book  value  in  the  participating  insurance  undertaking  or  the 
participating  reinsurance  undertaking  of  the  related  insurance  undertaking  or 
the related reinsurance undertaking, and 

(b) the solvency requirement of the participating insurance undertaking or the 
participating reinsurance undertaking, and 

(c) the proportional share of the solvency requirement of the related insurance 
undertaking or the related reinsurance undertaking. 

Where  the  participation  in  the  related  insurance  undertaking  or  the  related  reinsurance 
undertaking  consists,  wholly  or  in  part,  of  an  indirect  ownership,  then  item  (ii)(a)  shall 
incorporate the value of such indirect ownership, taking into account the relevant successive 
interests, and items (i)(b) and (ii)(c) shall include the corresponding proportional shares of the 
elements eligible for the solvency margin of the related insurance undertaking or the related 
reinsurance undertaking. 

Method 2:Requirement deduction method 

The  adjusted  solvency  of  the  participating  insurance  undertaking  or  the  participating 
reinsurance undertaking is the difference between: 

(i)  the  sum  of  the  elements  eligible  for  the  solvency  margin  of  the  participating 
insurance undertaking or the participating reinsurance undertaking, 

and 

(ii) the sum of: 

(a) the solvency requirement of the participating insurance undertaking or the 
participating reinsurance undertaking, and 

(b) the proportional share of the solvency requirement of the related insurance 
undertaking or the related reinsurance undertaking. 

When  valuing  the  elements  eligible  for  the  solvency  margin,  participations  within  the 
meaning of this Directive are valued by the equity method, in accordance with the option set 
out in Article 59(2)(b) of Directive 78/660/EEC. 

Method 3:Accounting consolidation-based method 

The  calculation  of  the  adjusted  solvency  of  the  participating  insurance  undertaking  or  the 
participating  reinsurance  undertaking  shall  be  carried  out  on  the  basis  of  the  consolidated 
accounts. The adjusted solvency of the participating insurance undertaking or the participating 
reinsurance  undertaking  is  the  difference  between  the  elements  eligible  for  the  solvency 
margin calculated on the basis of consolidated data, and: 

(a)  either  the  sum  of  the  solvency  requirement  of  the  participating  insurance 
undertaking  or  the  participating  reinsurance  undertaking  and  of  the  proportional 
shares  of  the  solvency  requirements  of  the  related  insurance  undertakings  or  the 
related reinsurance undertaking, based on the percentages used for the establishment 
of the consolidated accounts, 

(b) or the solvency requirement calculated on the basis of consolidated data. 

The  provisions  of  Directives  73/239/EEC,  91/674/EEC,  2002/83/EC  and  2005/68/EC  shall 
apply for the calculation of the elements eligible for the solvency margin and of the solvency 
requirement based on consolidated data. 

EN 

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   EN 

 
 
 
 
 
 
 
 
 
 
 
ANNEX II 

SUPPLEMENTARY SUPERVISION FOR INSURANCE UNDERTAKINGS AND 
REINSURANCE UNDERTAKINGS THAT ARE SUBSIDIARIES OF AN 
INSURANCE HOLDING COMPANY, A NON-MEMBER COUNTRY INSURANCE 
UNDERTAKING OR A NON-MEMBER COUNTRY REINSURANCE 
UNDERTAKING  

1. In the case of two or more insurance undertakings or reinsurance undertakings referred to 
in  Article 2(2)  which  are  the  subsidiaries  of  an  insurance  holding  company,  a  non-member 
country insurance undertaking or a non-member country reinsurance undertaking and which 
are  established  in  different  Member  States,  the  competent  authorities  shall  ensure  that  the 
method described in this Annex is applied in a consistent manner. 

The  competent  authorities  shall  exercise  the  supplementary  supervision  with  the  same 
frequency  as  that  laid  down  by  Directives  73/239/EEC,  91/674/EEC,  2002/83/EC  and 
2005/68/EC  for  calculating  the  solvency  margin  of  insurance  undertakings  and  reinsurance 
undertakings. 

2.  Member  States  may  waive  the  calculation  provided  for  in  this  Annex  with  regard  to  an 
insurance undertaking or a reinsurance undertaking: 

– 

– 

– 

if that insurance undertaking or  reinsurance undertaking  is a related undertaking of 
another  insurance  undertaking  or  reinsurance  undertaking  and  if  it  is  taken  into 
account  in  the  calculation  provided  for  in  this  Annex  carried  out  for  that  other 
undertaking, 

if  that  insurance  undertaking  or  reinsurance  undertaking  and  one  or  more  other 
insurance undertakings or reinsurance undertakings authorised in the same Member 
State  have  as  their  parent  undertaking  the  same  insurance  holding  company,  non-
member  country  insurance  undertaking,  or  non-member  country  reinsurance 
undertaking, and the insurance undertaking or reinsurance undertaking is taken into 
account  in  the  calculation  provided  for  in  this  Annex  carried  out  for  one  of  these 
other undertakings, 

if  that  insurance  undertaking  or  reinsurance  undertaking  and  one  or  more  other 
insurance  undertakings  or  reinsurance  undertakings  authorised  in  other  Member 
States  have  as  their  parent  undertaking  the  same  insurance  holding  company,  non-
member  country 
insurance  undertaking  or  non-member  country  reinsurance 
undertaking,  and  an  agreement  granting  exercise  of  the  supplementary  supervision 
covered by this Annex to the supervisory authority of another Member State has been 
concluded in accordance with Article 4(2). 

In the case of successive participations (for example: an insurance holding company 
or  a  non-member  country  insurance  or  reinsurance  undertaking,  which  is  itself 
owned by another insurance holding company or a non-member country insurance or 
reinsurance undertaking), Member States may apply the calculations provided for in 
this  Annex  only  at  the  level  of  the  ultimate  parent  undertaking  of  the  insurance 
undertaking  or  reinsurance  undertaking  which  is  an  insurance  holding  company,  a 
non-member  country  insurance  undertaking  or  a  non-member  country  reinsurance 
undertaking. 

3.  The  competent  authorities  shall  ensure  that  calculations  analogous  to  those  described  in 
Annex I are carried out at the level of the insurance holding company, non-member country 
insurance undertaking or non-member country reinsurance undertaking. 

EN 

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The analogy shall consist in applying the general principles and methods described in Annex I 
at the level of the insurance holding company, non-member country insurance undertaking or 
non-member country reinsurance undertaking. 

For the sole purpose of that calculation, the parent undertaking shall be treated as if it were an 
insurance undertaking or reinsurance undertaking subject to: 

– 

– 

a zero solvency requirement where it is an insurance holding company, 

a solvency requirement determined in accordance with the principles of Section 2.3 
of  Annex I,  where  it  is  a  non-member  country  insurance  undertaking  or  a  non-
member country reinsurance undertaking, 

and is subject to the same conditions as laid down in Article 16 of Directive 73/239/EEC, in 
Article 27 of Directive 2002/83/EC and in Article 36 of Directive 2005/68/EC as regards the 
elements eligible for the solvency margin. 

4.Non-availability of the necessary information 

Where  information  necessary  for  the  calculation  provided  for  in  this  Annex,  concerning  a 
related undertaking with its registered office in a Member State or a non-member country, is 
not  available  to  the  competent  authorities,  for  whatever  reason,  the  book  value  of  that 
undertaking in the participating undertaking shall be deducted from the elements eligible for 
the calculation provided for in this Annex. In that case, the unrealised gains connected with 
such participation shall not be allowed as an element eligible for the calculation. 

EN 

326 

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(cid:216) new 

ANNEX IV 

SOLVENCY CAPITAL REQUIREMENT (SCR) STANDARD FORMULA 

1. 

Calculation of the Basic Solvency Capital Requirement 

The  Basic  Solvency  Capital  Requirement  set  out  in  Article  104(1)  shall  be  equal  to  the 
following: 

Basic

SCR

=

∑∑

i

,

j

Corr

,
ji

×

SCR
i

×

SCR

j

where  SCRi  denotes  the  risk  module  i  and  SCRj  denotes  the  risk  module  j,  and  where  "i,j" 
means that the sum of the different terms should cover all possible combinations of i and j. In 
the calculation, SCRi and SCRj are replaced by the following: 

– 

– 

– 

– 

– 

SCR non-life denotes the non-life underwriting risk module; 

SCR life denotes the life underwriting risk module; 

SCR special health denotes the special health underwriting risk module; 

SCR market denotes the market risk module;  

SCR default denotes the counterparty default risk module. 

EN 

327 

   EN 

 
 
 
The  factor  Corr  i,j  denotes  the  item  set  out  in  row  i  and  in  column  j  of  the  following 
correlation matrix: 

Market 

Default 

Life 

Special 
health 

Non-life 

j 

i 

Market 

Default 

Life 

Special 
health 

1 

0.25 

0.25 

0.25 

0.25 

1 

0.25 

0.25 

0.25 

0.25 

1 

0.25 

0.25 

0.25 

0.25 

1 

0 

0.25 

0.5 

0 

0 

1 

Non-life 

0.25 

0.5 

0 

2. 

Calculation of the non-life underwriting risk module 

The  non-life  underwriting  risk  module  set  out  in  Article  105(2)  shall  be  equal  to  the 
following: 

SCR

non

−

life

=

∑

i

,

j

Corr

ji
,

×

SCR
i

×

SCR

j

where  SCRi  denotes  the  sub-module  i  and  SCRj  denotes  the  sub-module  j,  and  where  "i,j" 
means that the sum of the different terms should cover all possible combinations of i and j. In 
the calculation, SCRi and SCRj are replaced by the following:  

– 

– 

3. 

SCR nl premium and reserve denotes the non-life premium and reserve risk sub-module;  

SCR nl catastrophe denotes the non-life catastrophe risk sub-module. 

Calculation of the life underwriting risk module 

The life underwriting risk module set out in Article 105(3) shall be equal to the following: 

SCR

life

=

∑

i

,

j

Corr

,
ji

×

SCR
i

×

SCR

j

where  SCRi  denotes  the  sub-module  i  and  SCRj  denotes  the  sub-module  j,  and  where  "i,j" 
means that the sum of the different terms should cover all possible combinations of i and j. In 
the calculation, SCRi and SCRj are replaced by the following: 

– 

– 

– 

– 

– 

– 

SCR mortality denotes the mortality risk sub-module;  

SCR longevity denotes the longevity risk sub-module; 

SCR disability denotes the disability - morbidity risk sub-module; 

SCR life expense denotes the life expense risk sub-module; 

SCR revision denotes the revision risk sub-module; 

SCR lapse denotes the lapse risk sub-module;  

EN 

328 

   EN 

 
 
 
 
– 

4. 

SCR life catastrophe denotes the life catastrophe risk sub-module. 

Calculation of the special health underwriting risk module 

The  special  health  underwriting  risk  module  set  out  in  Article  105(4)  shall  be  equal  to  the 
following: 

SCR

special

health

=

∑

i

,

j

Corr

,
ji

×

SCR
i

×

SCR

j

where  SCRi  denotes  the  sub-module  i  and  SCRj  denotes  the  sub-module  j,  and  where  "i,j" 
means that the sum of the different terms should cover all possible combinations of i and j. In 
the calculation, SCRi and SCRj are replaced by the following: 

– 

– 

– 

5. 

SCR health premium and reserve denotes the health premium and reserve risk sub-module;  

SCR health expense denotes the health expense risk sub-module; 

SCR health epidemic denotes the health epidemic risk sub-module. 

Calculation of the market risk module 

The market risk module, set out in Article 105(5) shall be equal to the following: 

SCR

market

=

∑

i

,

j

Corr

,
ji

×

SCR
i

×

SCR

j

where  SCRi  denotes  the  sub-module  i  and  SCRj  denotes  the  sub-module  j,  and  where  "i,j" 
means that the sum of the different terms should cover all possible combinations of i and j. In 
the calculation, SCRi and SCRj are replaced by the following: 

– 

– 

– 

– 

– 

– 

SCR interest rate denotes the interest rate risk sub-module;  

SCR equity denotes the equity risk sub-module; 

SCR property denotes the property risk sub-module; 

SCR spread denotes the spread risk sub-module; 

SCR concentration denotes the market risk concentrations sub-module;  

SCR currency denotes the currency risk sub-module. 

EN 

329 

   EN 

 
 
 
(cid:208) 92/49/EEC Art. 44(2) (adapted) 

ANNEX V 

⌦ GROUPS OF NON-LIFE INSURANCE CLASSES FOR THE PURPOSES OF ARTICLE 
157 ⌫ 

The groups of classes are hereby defined as follows: 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

Accident and sickness (classes 1 and 2 of Annex I), 

motor  (classes  3,  7  and  10  of  Annex  I,  the  figures  for  class  10,  excluding  carriers' 
liability, being given separately), 

fire and other damage to property (classes 8 and 9 of Annex I), 

aviation, marine and transport (classes 4, 5, 6, 7, 11 and 12 of Annex I), 

general liability (class 13 of Annex I), 

credit and suretyship (classes 14 and 15 of Annex I), 

other classes (classes 16, 17 and 18 of Annex I). 

EN 

330 

   EN 

 
 
(cid:208)  

ANNEX VI 

Part A 

Repealed Directives with list of their successive amendments 
(referred to in Article 312) 

Council Directive 64/225/EEC 

(OJ 56, 4.4.1964, p. 878) 

Annex  I,  Point  III(G)(1)  of  the  1973  Act  of 
Accession 

(OJ L 236, 23.9.2003, p. 342) 

First Council Directive 73/239/EEC 

(OJ L 228, 16.8.1973, p. 3) 

Council Directive 76/580/EEC 

(OJ L 189, 13.7.1976, p. 13) 

Council Directive 84/641/EEC 

(OJ L 339, 27.12.1984, p. 21) 

Council Directive 87/343/EEC 

(OJ L 185, 4.7.1987, p. 72) 

Council Directive 87/344/EEC 

(OJ L 185, 4.7.1987, p. 77) 

only Article 1 

only Articles 1 to 14 

only Article 9 

Second Council Directive 88/357/EEC 

only Articles 9, 10 and 11 

(OJ L 172, 4.7.1988, p. 1) 

Council Directive 90/618/EEC 

(OJ L 330, 29.11.1990, p. 44) 

Council Directive 92/49/EEC 

(OJ L 228, 11.8.1992, p. 1) 

European  Parliament 
95/26/EEC 

and  Council  Directive 

(OJ L 168, 18.7.1995, p. 7) 

only Articles 2, 3 and 4 

only  Articles  4,  5,  6,  7,  9, 
10,  11,  13,  14,  17,  18,  24, 
32, 33 and 53 

only  Article  2(2), 
indent, and Article 3(1) 

third 

Directive  2000/26/EC  of  the  European  Parliament 
and of the Council 

only Article 8 

EN 

331 

   EN 

 
 
 
 
 
 
(OJ L 181, 20.7.2000, p. 65) 

Directive  2002/13/EC  of  the  European  Parliament 
and of the Council 

(OJ L 77, 20.3.2002, p. 17) 

Directive 2002/87/EC of the European Parliament 
and of the Council 

only Article 22 

(OJ L 35, 11.2.2003, p. 1) 

Directive 2005/1/EC of the European Parliament and 
of the Council 

only Article 4 

(OJ L 79, 24.3.2005, p. 9) 

Directive 2005/68/EC of the European Parliament 
and of the Council 

only Article 57 

(OJ L 323, 9.12.2005, p. 1) 

Directive 2006/101/EC of the European Parliament 
and of the Council 

only Point I of the Annex 

(OJ L 363, 20.12.2006, p. 238) 

Council Directive 73/240/EEC 

(OJ L 228, 16.8.1973, p. 20) 

Council Directive 76/580/EEC 

(OJ L 189, 13.7.1976, p. 13) 

Council Directive 78/473/EEC 

(OJ L 151, 7.6.1978, p. 25) 

Council Directive 84/641/EEC 

(OJ L 339, 27.12.1984, p. 21) 

Council Directive 87/344/EEC 

(OJ L 185, 4.7.1987, p. 77) 

Second Council Directive 88/357/EEC 

(OJ L 172, 4.7.1988, p. 1) 

Council Directive 90/618/EEC 

(OJ L 330, 29.11.1990, p. 44) 

Council Directive 92/49/EEC 

(OJ L 228, 11.8.1992, p. 1) 

only Articles 5 to 10 

only  Articles  12(1),  19,  23, 
27,  30,  34,  35,  36,  37,  39, 
40, 42, 43, 44, 45 and 46 

EN 

332 

   EN 

 
 
 
 
 
 
 
 
Directive  2000/26/EC  of  the  European  Parliament 
and of the Council 

only Article 9 

(OJ L 181, 20.7.2000, p. 65) 

Directive 2005/14/EC of the European Parliament 
and of the Council 

only Article 3 

(OJ L 149, 11.6.2005, p. 14) 

Council Directive 92/49/EEC 

(OJ L 228, 11.8.1992, p. 1) 

European  Parliament 
95/26/EEC 

and  Council  Directive 

(OJ L 168, 18.7.1995, p. 7) 

only  Article  2(1), 
first 
indent,  Article  4(1),  (3)  and 
(5),  and  Article  5,  second 
indent 

Directive 2000/64/EC of the European Parliament 
and of the Council 

only Article 2 

(OJ L 290, 17.11.2000, p. 27) 

Directive 2002/87/EC of the European Parliament 
and of the Council 

only Article 24 

(OJ L 35, 11.2.2003, p. 1) 

Directive 2005/1/EC of the European Parliament and 
of the Council 

only Article 6 

(OJ L 79, 24.3.2005, p. 9) 

Directive  2005/68/EC  of  the  European  Parliament 
and the Council  

only Article 58 

(OJ L 323, 9.12.2005, p. 1) 

Directive 2007/44/EC of the European Parliament 
and of the Council 

only Article 1 

(OJ L 247, 21.9.2007, p. 1)) 

Directive  98/78/EC  of  the  European  Parliament  and  of 
the Council 

(OJ L 330, 5.12.1998, p. 1) 

Directive 2002/87/EC of the European Parliament 
and of the Council 

only Article 28 

(OJ L 35, 11.2.2003, p. 1) 

Directive 2005/1/EC of the European Parliament and 
of the Council 

only Article 7 

EN 

333 

   EN 

 
 
 
 
(OJ L 79, 24.3.2005, p. 9) 

Directive 2005/68/EC of the European Parliament 
and of the Council 

only Article 59 

(OJ L 323, 9.12.2005, p. 1) 

Directive  2001/17/EC  of  the  European  Parliament  and 
of the Council 

(OJ L 110, 20.4.2001, p. 28) 

Directive 2002/83/EC of the European Parliament and 
of the Council 

(OJ L 345, 19.12.2002, p. 1) 

Council Directive 2004/66/EC 

(OJ L 168, 1.5.2004, p. 35) 

only Point II of the Annex 

Directive 2005/1/EC of the European Parliament and 
of the Council 

only Article 8 

(OJ L 79, 24.3.2005, p. 9) 

Directive 2005/68/EC of the European Parliament 
and of the Council 

only Article 60 

(OJ L 323, 9.12.2005, p. 1) 

Directive 2006/101/EC of the European Parliament 
and of the Council 

only Point III of the Annex 

(OJ L 363, 20.12.2006, p. 238) 

Directive  2007/44/EC  of  the  European  Parliament 
and the Council  

only Article 2 

(OJ L 247, 21.9.2007, p. 1) 

Directive 2005/68/EC of the European Parliament and 
of the Council 

(OJ L 323, 9.12.2005, p. 1) 

Directive 2007/44/EC of the European Parliament 
and the Council  

only Article 4 

(OJ L 247, 21.9.2007, p. 1) 

Directive 2007/44/EC of the European Parliament and 
the Council  

(OJ L 247, 21.9.2007, p. 1) 

EN 

334 

   EN 

 
 
 
 
 
Part B 

List of time-limits for transposition into national law 
(referred to in Article 312) 

Directive 

Time-limit for transposition 

Time-limit for application 

64/225/EEC 

73/239/EEC 

73/240/EEC 

76/580/EEC 

78/473/EEC 

84/641/EEC 

87/343/EEC 

87/344/EEC 

88/357/EEC 

90/618/EEC 

92/49/EEC 

95/26/EEC 

98/78/EC 

2000/26/EC 

2000/64/EC 

2001/17/EC 

2002/13/EC 

2002/83/EC 

2004/66/EC 

2002/87/EC 

2005/1/EC 

17 November 2002 

31 January 1975 

31 December 1976 

31 December 1976 

3 December 1979 

3 June 1980 

30 June 1987 

1 January 1988 

1 January 1990 

1 January 1990 

1 July 1990 

1 July 1990 

30 December 1989 

30 June 1990 

20 May 1992 

20 November 1992 

31 December 1993 

1 July 1994 

18 July 1996 

5 June 2000 

18 July 1996 

17 November 2002 

17 November 2002 

17 November 2002 

17 November 2002 

20 April 2003 

20 September 2003 

20 September 2003 

1 May 2004 

10 August 2004 

13 May 2005 

EN 

335 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
2005/14/EC 

2005/68/EC 

11 May 2005 

10 December 2007 

2006/101/EC 

1 January 2007 

2007/44/EC 

21 March 2009 

EN 

336 

   EN 

 
 
 
 
 
(cid:215) 

ANNEX VII 

CORRELATION TABLE 

Directive 

Directive 

Directive 

Directive 

Directive 

Directive 

Directive 

Directive 

Directive 

73/239/EEC 

78/473/EEC 

87/344/EEC 

88/357/EEC 

92/49/EEC 

98/78/EEC 

2001/17/EC 

2002/83/EC 

2005/68/EC 

Directive 
2007/44/EC 

This Directive 

Article 1 (1) 

Article 1(2) 

Article 1(3) 

Article 2(1),(a) 
to (c) 

Article 2(1)(d) 

Article 2(1)(e) 

Article 2(2)(a) 

Article 2(2)(b) 

Article 2(2)(c) 

Article 2(2)(d) 

Article 2(3), 
subparagraphs 
1-4 

Article 2 

Article 1(1) 

Article 2 1st 
sentence 

Article 1(1) 

Article 3(4) 

Articles 1 and 2(2), 269 

Article 2(2) 

--- 

--- 

Article 3 

--- 

Article 5(1) 

Article 5(2) 

Article 5(3) 

Article 5(4) 

Article 6 

EN 

337 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 2(3), 
subparagraph 
5 

Article 3 (1), 
subparagraphs 
1 and 2 

Article 3 (1), 
subparagraph 
3 

Article 3(2) 

Article 4, 1st 
sentence 

Article 4 (a) 

Article 4 (b) 

Article 4 (c) 

Article 4 (d) 

Article 4 (e) 

Article 4 (f) 

Article 4 (g) 

Article 5 (a)  

Article 5(b) 

Article 5(c) 

EN 

338 

Article 15 (4) 

--- 

Article 14(3) 

Article 7 

Article 8, 1st sentence 

Article 8 (2) 

--- 

Article 8 (3) 

Article 8 (5) 

--- 

Article 8 (1) 

Article 8 (4) 

--- 

--- 

Article 132 (1), sub-
paragraph 3 

Article 
1(1)(o) 

Article 
1(1)(p) 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 5(d) 

Article 6 

Article 7(1) 
and (2), 
subparagraph 
1 

Article 7(2), 
subparagraph 
2 (a) 

Article 7(2), 
subparagraph 
2 (b) 

Article 8(1) (a) 

Article 8(1) 
(a), last 
paragraph 

Article 8(1) 
(b) 

Article 8(1)(c) 

Article 8(1)(d) 

Article 8(1)(e) 

Article 8(1)(f) 

Article 4 

Article 5 (1) 
and (2), 
subparagraph 
1 

Article 5 (2), 
subparagraph 
2 (a) 

Article 5(2) 
subparagraph 
2 (b) 

Article 6 (1) 
(a) 

Article 6 (1) 
(b) 

Article 6 (1) 
(c) 

Article 6 (1) 
(d) 

Article 6 (1) 
(e) 

Article 4 

Article 3 

Article 5(1) 
and (2), 
subparagraph 
1 

Article 
6(1)(a) 

Annex I 

Article 
6(1)(b) 

Article 
6(1)(c) 

Article 
6(1)(d) 

Article 
6(1)(e) 

Article 6(a) 

Article 6(b) 

Article 6(c) 

Article 6(d) 

--- 

Article 14 (1), (2) (a) and 
(b) 

-Article 15 (1) and (2), 
subparagraph 1 

-Article 15(3), 
subparagraph 1 

--- 

Annex IIIA and B 

Article 17 (2) 

Article 18(1)(a) 

Article 18(1)(c) 

Article 18(1)(d) 

Article 18(g) 

Article 18(h) 

EN 

339 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 8(1), 
subparagraphs 
2-4 

Article 8(1a) 

Article 8(2) 

Article 8(3), 
subparagraph 
1 

Article 8(3), 
subparagraph 
2  

Article 8(3), 
subparagraph 
3 

Article 8(3), 
subparagraph 
4 

Article 8(4) 

Article 9 (a)-
(d) 

Article 9(e) 
and (f) 

Article 6 (2) 

Article 6 (3), 
subparagraph 
1  

Article 6 (3) 
subparagraph 
2 and Article 
29 
subparagraph 
1, 1st sentence 

Article 6 (3) 
subparagraph 
3 and Article 
29 
subparagraph 
2 

Article 6 (3) 
subparagraph 
4 

Article 6 (4) 

Article 7 (a) –
(d) 

Article 7 (e) 
and (f) 

Article 6(2) 

Article 7 

Article 6(3) 

Article 8 

Article 6(4) 

Article 6 (5), 
subparagraph 
3 

Article 6 (5), 
subparagraph 
1 

Article 9(1) 

Article 9(2) 

Article 6(6) 

Article 10 

Article 7 (a)-
(d) 

Article 11(1) 
(a), (c), (d) 
and (e) 

Article 
11(2)(a) and 
(b) 

Article 19 

Article 20 

Article 18(2) 

Article 21(4) 

Articles 21(1) 
subparagraph 1 

Article 21(2) 

Article 21(3) 

Article 22 

Article 23 (1) (a), (c), (d) 
and (e)  

Article 23 (2) (e) 

EN 

340 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 9(g) 
and (h) 

Article 10(1) 

Article 10(2), 
subparagraph 
1 

Article 10(2), 
subparagraph 
2 

Article 10(3) 

Article 10(4) 

Article 10(5) 

Article 10(6) 

Article 11 

Article 12 

Article 12a 

Article 13(1) 
and (2), 
subparagraph 
1 

Article 13(2), 
subparagraph 

Article 7 (g) 
and (h) 

Article 32 (1) 

Article 32 (2) 
1st 
subparagraph 

Article 32 (2) 
2nd 
subparagraph 

Article 32 (3) 

Article 32 (4) 

Article 32 (5) 

Article 32 (6) 

Article 33 

Article 56 

Article 9 (1) 
and (2) ,1st 
subparagraph 

Article 9 (2) 
2nd 

Article 7(f) 
and (g) 

Article 
11(2)(c) and 
(d) 

Article 40(1) 

Article 40(2) 

Article 40(3) 

Article 40(4) 

Article 40(5) 

Article 40(6) 

Article 9 

Article 13 

Article 9a 

Article 10(1) 
and (2), 
subparagraph 
1 

Articles 14 
and 60 (2) 

Article 15(1) 
and (2) 

Article 23 (2) (a) and (d) 

Article 143 (1), 
subparagraph 1 

Article 143 (2) 

Article 143 (3) 

Article 144 (1) and (2) 

Article 144(3), 
subparagraph 1 

Article 144(3), 
subparagraph 2  

Article 143 (4)- 

--- 

Article 25 

Article 26 

Article 29(1), (2), 
subparagraph 1and (3)  

Article 29 (2), 
subparagraph 2 

EN 

341 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 

Article 13(2), 
subparagraph 
3 

Article 13(3) 

Article 14 

Article 15(1), 
(2) and (3), 
subparagraph 
2 

Article 15(3), 
subparagraph 
1 

Article 15a 

Article 16 

Article 16a 

Article 17(1); 

Article 17 (2) 

Article 17a 

Article 17b 

Article 18 

subparagraph 

Article 9 (3) 

Article 10 

Article 17 

Article 18 

Article 10(2) 
subparagraph 
2 

Article 60 (3) 

Article 31 (1) 

Article 10(3) 

Article 15(4) 

--- 

Article 11 

Article 16 

Article 32 

Article 20(1)-
(3) and (4) 
subparagraph 
2 

Article 20(4), 
subparagraph 
1 

Article 
32(1)and (3) 

Article 32(2) 

Articles 27 

Article 28 

Article 33 

Articles 35, 
36, 60 (8) 

Articles 37-
39, 60 (9) 

Articles 75 to 85 

Articles 132(2) and 171 

--- 

Articles 86-99 

Articles 100-125 

Article 29(1) 

Article 40(1) 

Articles 126 and 127(1) 
points (a) to (c) and (2)  

Article 29(2) 

Article 40(2) 

Article127 (1) point (d) 

Article 30 

Article 41 

Articles 28 
and 28(a) 

Article 60 
(10) 

Article 31 

--- 

--- 

--- 

EN 

342 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 19(1)  

Article 19(1a) 

Article 19(2) 

Article 19(3), 
subparagraphs 
1 and 2 (a) and 
(b) 

Article 19(3), 
subparagraph 
2 (c) 

Article 19(3), 
subparagraph 
3 

Article 20 (1)  

Article 20 (2), 
subparagraph 
1 

Article 20(2), 
subparagraph 
2  

Article 20(3), 
subparagraph 
1  

Article 20(3), 
subparagraph 
2  

Article 20(4) 

Article 10 

Article 10 

Article 10 

Article 11 (2) 

Article 11 (3) 
subparagraphs 
1 and 2 (a) 
and (b) 

Article 11 (3) 
subparagraph 
2 (c)  

Article 11 (3) 
subparagraph 
3 

Article 13 (2) 
subparagraph 
1 

Article 13 (2) 
subparagraph 
2 

Article 13 (3) 
subparagraph 
1 

Article 13 (3) 
subparagraph 
2 

Article 13 (4) 

Article 13(1) 

Article 17(1) 

Article 13(2) 

Article 17(2) 

Article 13(3), 
subparagraphs 
1 and 2 (a) 
and (b) 

Article 17(3) 
and (4), 
subparagraph 
1 (a) and (b) 

Article 13(3), 
subparagraph
2 (c) 

Article 17(4), 
subparagraph 
1 (c) 

Article 13(3), 
subparagraph 
3 

Article 17(4) 
subparagraph 
2 

Article 33(1) 

Article 33(2) 

Article 33(3) 

Article 34 (1)-(3), (5), (6) 
and (7) 

Article 34 (8) 

Article 35 (2)(b) 

Article 37 (1)   Article 42 (1)  

Article 135 

Article 37 (2), 
subparagraph 
1 

Article 42 (2), 
subparagraph 
1 

Article 37 (2), 
subparagraph 
2 

Article 42 (2), 
subparagraph 
2 

Article 37 (3), 
subparagraph 
1 

Article 42 (3), 
subparagraph 
1 

Article 37 (3), 
subparagraph 
2 

Article 42 (3), 
subparagraph 
2 

--- 

Article 136(4) 

--- 

Article 137(3) 

--- 

EN 

343 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 20 (5) 

Article 20a(1), 
subparagraph 
1, 1st sentence 

Article 20a(1), 
subparagraph 
1, 2nd sentence 
(a)-(d) 

Article 20a(1), 
subparagraph 
1, 2nd sentence 
(e) 

Article 20a(2) 

Article 20a(3) 

Article 20a(4) 

Article 20a(5) 

Article 21 

Article 22 (1) 
subparagraph 
1, points (a), 
(b) and (d) 

Article 22 (1) 
subparagraph 
1 point (c)  

Article 22 (1) 
subparagraph 
2, 1st sentence  

Article 13 (5) 

Article 37(5) 

Article 42 (4) 

Article 138 

Article 38(1), 
1st sentence  

Article 43(1)  

Article 38(1), 
2nd sentence 
(a)-(d) 

Article 43(2) 
(a)-(d) 

Article 38(1), 
2nd sentence 
(e) 

Article 43(2) 
(e) 

Article 38(2) 

Article 136(2), 137(2) 

Article 140(1) 

--- 

--- 

Article 38(3) 

Article 43(4) 

Article 140(2) 

Article 38(4) 

Article 43(5) 

--- 

Article 38(5) 

Article 43(6) 

Article 140(3) 

Article 11 (1) 

--- 

Article 14 

Article 39 (1) 
subparagraph 
1, points (a), 
(b) and (d) 

Article 44 (1) 
subparagraph 
1, points (a), 
(b) and (d) 

Article 39 (1) 
subparagraph 
1 point (c) 

Article 44 (1) 
subparagraph 
1 point (c) 

Article 39 (1) 
subparagraph 
2, 1st sentence 

Article 44 (1) 
subparagraph 
2,  

Article 142 (1) (a), (b) and 
(d) 

Article 142 (1) (c) 

Article 142 (2), 
subparagraph 1 

EN 

344 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 22 (1) 
subparagraph 
2, 2nd sentence  

Article 22 (2)  

Article 23(1) 

Article 
23(2)(a)-(f) 
and (h) 

Article 
23(2)(h) 

Article 24 
subparagraph 
1, 1st sentence 

Article 24 
subparagraph 
1, 2nd sentence 
- subparagraph 
3  

Article 25 

Article 26 

Article 27 
subparagraph 
1 

Article 27 
subparagraph 
2 

Article 28 

Article 39 (1) 
subparagraph 
2, 1nd sentence 

Article 142 (2), 
subparagraph 2 

Article 39 (2)  Article 44(2) 

Article 142 (3) 

Article 51(1) 

Article 51(2) 

Article 54 
subparagraph 
1, 1st sentence 

Article 54, 
subparagraph 
1, 2nd 
sentence – 
subparagraph 
3 

Article 55 

Article 56 

Article 52 (2), 
subparagraph 
1 

Article 160(1) 

Article 160(2) (a)-(f) and 
(h) 

Article 161(2)(g) 

Article 163, 1st sentence 

--- 

Article 164  

Article 165 

Article 166, subparagraph 
1 

Article 166, subparagraph 
2 

Article 52(3) 

Article 168 

EN 

345 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 28a 

Article 29 

Article 29a (1) 

Article 29 a 
(2) 

Article 29b (1) 
and (2) 

Article 29b(3)-
(6) 

Article 30(1) 
and (2)(a) 

Article 
30(2)(b) 

Article 30(3) 
and (4) 

Article 30(5) 

Article 31 

Article 32 

Article 33 

Article 34 

Article 53  

Article 53 

Article 57 

Article 58 
subparagraph 
1 

Article 58 
subparagraph 
2 

Article 59 (1) 
and (2) 

Article 52(1) 
and (2) 

Article 59 (3)-
(6) 

Article 52(3) 
and (4) 

Article 162 

Article 169 

Article 174, 
subparagraphs 1-3 

--- 

Article 175 (1) and (2) 

--- 

--- 

Article 306(1) 

Article 306 (2) 

Article 306(4) 

--- 

--- 

Article 28 

Article 29 

Article 9 

Article 11(5) 

EN 

346 

Article 62 

Article 54(2) 

Article 301(2) and (3) 

Article 6(5), 
subparagraph 
4 

   EN 

Article 6 

--- 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 35 

Article 10 

Article 10 

Article 32 

Article 57(1) 

Articles 
11(1)-(3) 

Article 31(1) 
and (2) 

Article 69(1) 
to (4) 

Article 64(1) 

Article 7(1) 

Article 310(1) 

Article 36 

Article 11 

Article 11 

Article 33 

Article 57(2) 

Article 11(4) 

Article 70 

Article 64(2) 

Article 31(3) 

Article 7(2) 

Article 310(2) 

Article 37 

Article 34 

--- 

Article 38 

Article 12 

Article 12 

Article 35 

Article 58 

Article 13 

Article 74 

Article 66 

Article 33 

Article 9 

Article 313 

Annex, pt A  

Annex, pt A, 
B 

Annex, pt C 

Annex, pt D 

Article 1(1) 
subparagrap
h 1 

Article 1(1) 
subparagrap
h 2 

Article 1(2) 

Article 2(1) 

Article 2(2) 

Article 3 

EN 

347 

   EN 

Article 15(2), 
subparagraph 2 and Annex 
I 

Annex I 

Article 16 

--- 

Article 188(1) 

Article 188(2) 

--- 

Article 188(1) 

Article 188(4) 

Article 189  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 4(1) 

Article 4(2) 

Article 5 

Article 6 

Article 7 

Article 8 

Article 1 

Article 2 

Article 3(1) 

Article 3(2) 
subparagraph 
1, 1st sentence 

Article 3(2) 
(a)-(c) 

Article 3(3) 

Article 4 

Article 5 

Article 6 

Article 7 

Article 8 

Article 190 subparagraphs 
1 and 2 

--- 

Article 191 

Article 193 

Article 192 

Article 194 

--- 

Article 196 

Article 197 

Article 198 (1) 
subparagraph 1 

Article 198 (2)-(4) 

Article 
198(1)subparagraph 2 

Article 199 

Article 200 

Article 201 

Article 202 

Article 203 

EN 

348 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 9 

Article 1 

Article 2(a) 
and (b), (e)  

Article 2(c)  

Article 2(d) 

Article 2(f) 

Article 3 

Article 4 

Article 6 

Article 
7(1)(a) to (e) 

Article 1(e) 

Article 7(1)(f)  Article 27 

Article 
7(1)(g) – 7(3) 

Article 8(1) 
and (2) 

Article 8(3) 

Article 
8(4)(a) and 
(c) 

349 

Article 30 (1) 

Article 16 (2) 

--- 

--- 

--- 

Article 13(10) 

--- 

Article 143 (1), 2nd 
subparagraph 

Article 185 

--- 

--- 

--- 

--- 

Article 177(1) and (2) 

--- 

--- 

Article 
1(1)(c) 

Article 
2(1)(e) 

Article 
1(1)(h) 

Article 1 (b), 
2nd sentence  

   EN 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 
8(4)(d) 

Article 8(5) 

Article 12 

Article 12a 
(1)-(3) 

Article 12a 
(4) 
subparagraph 
1 

Article 12a 
(4) 
subparagraphs 
2 – 6 

Article 14 

Article 34 

Article 16 (1), 
subparagraphs 
1 and 2 

Article 16(1) 
subparagraph 
3 

Article 35 

Article 35 

Article 41 

Article 42 

Article 17 

Article 36 

Article 43 

Article 26 

Article 27 

Article 31 

350 

EN 

   EN 

Article 177(3) 

Article 177(4)(5) 

--- 

Article 148 

Article 149 

Article 150 

Article 145 

Article 146 (1), (3) and (4) 

Article 146 (2) 

Article 147 

--- 

--- 

Article 302 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 31 

Annex I 

Article 23 

Article 68(2) 

Annex II 

Annex 2A 

Annex 2B 

Articles 5, 9, 
10, 11  

Article 303 

--- 

--- 

--- 

--- 

Article 13(1) 

Article 13(9) 

Article 13(6) (a) 

--- 

Article 1(a) 

Article 1 (a) 

Article 2(a) 

Article 2(e) 

Article 1(b) 

Article 1(c) 

Article 1(d) 

Article 1(f) 

Article 1(g) 

Article 
1(1)(a) 

Article 
1(1)(b) 

Article 
1(1)(e) 

Article 
2(1)(d) 

Article 2(1)(f) 

Article 1(1)(f)  Article 
2(1)(g) 

Article 1(1)(i)  Article 2(1)(i) 

Article 13 (14) 

Article 1(1)(j)  Article 2(1)(j) 

Articles 13(17), 24(2) and 
Article 62 

Article 1(h),  

Article 1(d) 

Article 
1(1)(k) 

Article 
2(1)(k) 

Article 13(12) 

Article 1 (i) 

Article 1(e) 

Article 1(1)(l)  Article 2(1)(l) 

Article 13(13) 

Article 1(j) 

Article 1(k) 

Article 1(k) 

Article 2(h) 

Article 
1(1)(m) 

Article 
1(1)(n) 

Article 
2(1)(m) 

Article 13 (18) 

Article 13 (8) 

EN 

351 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 1(l) 

Article 1(l)(a)  Article 1(f) 

Article 1(l)(b) 

Article 3 

Article 8  

Article 12 (2) 

Article 12 (3)-
(6) 

Article 15 (1) 
and (2) 

Article 15(3) 

Article 15(4) 

Articles 15a  

Articles 15b  

Articles 15c  

Article 16(1) 

Article 16(2) 

Article 16(3) 

Article 1(1)(r)  Article 
2(1)(n) 

Article 
1(1)(r)(i) 

Article 
2(1)(n)(i) 

Article 
1(1)(r)(ii) 

Article 
2(1)(n)(ii) 

Article 14 (1)  Article 18 

Article 14(2)-
(5) 

Article 15 (1) 
and (2) 

Article 19(1) 

Article 15(3) 

Article 22 

Article 15(4) 

Article 23 

Article 15a 

Article 19(2)-
(8) 

Article 15b 

Article 19a 

Article 15c 

Article 20 

Article 16(1) 

Article 24 

Article 16(2) 

Article 25 

Article 16(3) 

Article 26 

Article 13 (15) 

Article 13 (16) 

Article 13 (14) 

Article 186 

Article 24 (1) 

Article 39(1) 

Article 39 

Article 56 

Article 60 

Article 61 

Article 57 (1)-(7) 

Article 58 

Article 59 

Article 63 

Article 64 

Article 65 

EN 

352 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 16(4) 

Article 16(5) 

Article 16(5b) 
subparagraphs 
1-4 

Article 16(5b) 
subparagraph 
5 

Article 16(7) 
subparagraph 
6 

Article 16(5c) 

Article 16 (6) 

Article 16a 
(1)(a) 

Article 16a 
(1)(b) 

Article 16a(2) 

Article 20 

Article 21 

Article 22 

Article 25 

Article 16(4) 

Article 27 

Article 66 

Article 16(5) 

Article 28(1) 

Article 67 (1) 

Article 16(7) 
subparagraphs 
1-4 

Article 28 (3) 
subparagraphs 
1-4 

Article 16(7) 
subparagraph 
5 

Article 28 (3) 
subparagraph 
5 

Article 16(7) 
subparagraph 
6 

Article 16(8) 

Article 29 

Article 67 (3)  

Article 67 (4) 

Article 66(4) 

Article 69 

Article 16(6) 

Article 28 (2) 

 Article 67(2) 

Article 
17(1)(a) 

Article 
17(1)(b) 

Article 
31(1)subparag
raph 1 

Article 
31(1)subparag
raph 2 

Article 71(1)(a)-(c) 

Article 71(1) 
subparagraph 2 

Article 17(2) 

Article 31(2) 

Article 71(2) 

Article 22 

Article 23 

Article 34 (1)-
(3) 

Article 24 

Article 34(4) 

--- 

--- 

--- 

--- 

EN 

353 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 28 

Article 29  

Article 30(2) 

Article 31 

Article 38 

Article 39 (2) 
and (3) 

Article 40 (2) 

Article 40 (3) 

Article 40 (4), 
(6)-(8) and 
(10) 

Article 40 (5) 

Article 40 (9) 

Article 41 

Article 42(2) 

Article 43(2) 
and (3) 

Article 44(2) 

Article 45(2) 

Article 46 (2) 

Article 33 

Article 178 

Article 44 

Article 45 

Article 46 (1) 

Article 46(2) 

Article 46(3), 
(5)-(7) and (9) 

Article 46(4) 

Article 46(8) 

Article 47 

Article 48 

Article 179(1) and (3) 

Article 179(2) 

Article 181 

Article 151 

Article 152 

Article 153 (8) 

Article 153 (1) 

Article 153 (2), (4)-(6) 
and (9) 

Article 153 (3) 

Article 153 (7) 

Article 154 

Article 158 

Article 182 

Article 49 

Article 157 and Annex V 

Article 187 

Article 155 

Article 50 

   EN 

EN 

354 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Articles 47-50 

Article 51 

Article 51 
final indent 

Article 52 

Article 54 

Article 55 

Articles 24 
and 26 

Articles 
12(1), 19, 33, 
37, 39(1), 
40(1), 42(1), 
43(1), 44(1), 
45(1), 46(1),  

Article 64 

Article 56 

--- 

--- 

Article 1 (4) 

Article 57 (8) 

--- 

Article 204 

Article 205 

--- 

--- 

Article 13(2) 

Article 13(3) 

Article 210(1)(a) 

Article 210(1)(b) 

Article 210(1)(e) 

Article 210(1)(f) 

Article 1(b) 

Article 1(c) 

Article 1(g) 

Article 1(h) 

Article 1(i) 

Article 1(j) 

Article 1(1)(s) 

Article 
2(1)(c) 

Article 59 (2) 
(a) (i) 

Article 59 (2) 
(a) (j) 

EN 

355 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 1(l) 

Article 2 

Article 3 

Article 4 

Article 5(1) 

Article 5(2) 

Article 6 

Article 7 

Article 8 

Article 9  

Article 10 

Article 10a 

Article 10b 

Article 59 (2) 
(b) 

Article 59 (3) 

Article 59 (3) 

Article 59 (3) 

Article 59 (4) 

Article 59 (5) 

Article 13 (4) 

Article 211 

Article 212 

Article 251 

Article 250 

Article 258(1) 

Articles 258(2), 259(1) 
and (2) 

Article 59 (5) 

Articles 253(1), 256, 257 

Article 59 (5) 

Articles 249, 250, 262(1) 

Article 59 (6) 

Articles 216, 217, 262(1) 

Article 59 (7)  

Articles 216, 217, 262(1), 
263-265 

Article 59 (8) 

Articles 266 

Article 261 

Article 12 

Article 32 

Article 73 

Article 65 

Article 8(1) 

Article 312 

Annex I 

Annex II 

Article 1(2) 

Article 59 (9) 
and Annex II 

Article 59 (9) 
and Annex II 

Articles 213-215, 218-246 

Articles 213-215, 218-247 

Article 269 

EN 

356 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 
2(1)(h) 

Article 2(b) 

Article 2(c) 

Article 2(d) 

Articles 2(f) 

Article 2(g) 

Article 2(i) 

Article 2(j) 

Article 2(k) 

Article 3 

Article 4 

Article 5 

Article 6 

Article 7 

Article 8 

Article 9 

Article 10 

Article 11 

Article 270(1) (b) 

Article 270(1)(c) 

Article 270(1)(d) 

Article 13 (7) 

Article 270(1)(a) 

Article 270(1)(e) 

Article 270(1)(f) 

Article 270(1)(g) 

--- 

Article 271 

Article 272 

Article 273 

Article 274 

Article 275 

Article 276 

Article 277  

Article 279 

EN 

357 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 12 

Article 13 

Article 14 

Article 15 

Article 16 

Article 17 

Article 18 

Article 19 

Article 20 

Article 21 

Article 22 

Article 23 

Article 24 

Article 25 

Article 26 

Article 27 

Article 28 

Article 29 

Article 280 

Article 281 

Article 282 

Article 283 

Article 284 

Article 285  

Article 286 

Article 287 

Article 288 

Article 289 

Article 290 

Article 291 

Article 292 

Article 293 

Article 294 

Article 295 

Article 296 

Article 297 

EN 

358 

   EN 

Article 30(1) 

Article 270(2) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 30(2) 

Annex  

Article 
1(1)(d) 

Article 
1(1)(g) 

Article 
1(1)(q) 

Article 1(2) 

Article 2(3) 

Article 2 

Article 3 (1), 
(2), (3) and 
(8) 

Article 3 (5), 
and (7) 

Article 3 (6) 

Article 5(2) 
subparagraphs 
2 and 3 

Article 6(5) 
subparagraph 
2 

Article 7(e) 

Article 298 

Article 278 

--- 

Article 13(11) 

--- 

--- 

Article 2(3) 

Article 9 

Article 10 

--- 

Article 15(2) 
subparagraph 3 and (3) 
subparagraph 2 

Article 21(1) 
subparagraph 2 

Article 23(2)(f) 

Article 8 

Article 12 

Article 24(1) 

EN 

359 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 12 

Article 16(9) 

Article 30 

Article 18(1) 
to (6) 

Article 18(7) 

Article 19(1), 
subparagraph 
1, 1st indent 

Article 19(1), 
subparagraph 
2, 2nd indent 

Article 19(1), 
subparagraph 
2 – (3) 

Article 21 

Article 25 

Article 26 

Article 32 

Article 34 

Article 35 

Article 36(1) 

Article 36(2) 

Article 206 

Article 68 

Article 72 

---- 

Article 73(1) 

Article 73(3), 
subparagraph 2 

Article 73(4) – (7) 

Article 207 

--- 

--- 

--- 

Article 180 

Article 184 

Article 183(1) 

Article 183(4), 1st 
sentence 

EN 

360 

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Article 36(3) 

Article 36(4) 

Article 41 

Article 42 (1) 
– (3) 

Article 43 

Article 45 

Article 48 

Article 49 

Article 51 (2) 
(a) to (g) 

Article 51(3) 
and (4) 

Article 52(1) 

Article 55 (1) 
and (2) 

Article 56 

Article 59 (1) 
and (2) 

Article 52(1) 
and (2) 

Article 59 (3) 
and (6) 

Article 52(3) 
and (4) 

Article 60(1) 

Article 183(6) 

Article 183(7) 

Article 145 

Article 146 (1), (3) and (4) 

Article 147 

--- 

Article 158 

Article 157 

Article 160 (2) (a) to (e), 
(g) and (h) 

Article 161 

Article 167 

Article 164 (1) and (2) 

Article 165 

Article 175 (1) and (2) 

--- 

Article 306(2), 
subparagraphs 2 and 3 

EN 

361 

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Article 60(2) 

Article 61 

Article 65 

Article 55 

Article 66 

Article 67 

Article 53 

Article 68(1) 

Article 71 

Article 72 

Annex I 

Annex III 

Annex IV 

Annex V 

Annex VI 

Article 1(2) 

Article 
2(1)(a) 

Article 
2(1)(b) 

Article 
2(1)(h) 

Article 

Article 306(3) 

Article 299 

Article 304 

Article 307 

Article 300 

--- 

--- 

Article 311 

Annex II 

Article 183(2)- (5) 

--- 

Annex VI 

Annex VII 

Article 11 

Article 13(5) 

--- 

Article 13(7) 

Article 13(21) 

EN 

362 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2(1)(o) 

Article 
2(1)(p) 

Article 
2(1)(q) 

Article 2(2) 

Article 4 (2) 

Article 5 

Article 13(22) 

Article 208(3) 

--- 

Article 15(5) 

Article 17, Annex IIIC; 

Article 9 (1) 

Article 21 (4) 

Article 
11(1)(b) 

Article 23(1)(b) 

Article 15(3) 

Article 31(2) 

Article 21 

Article 45 

Article 46 

Article 47 

Article 48 

Article 50 

Article 51 

---- 

---- 

Article 209 

Article 156 

Article 159 

Article 173 

Article 174 

Article 54(1) 

Article 301(1) 

Article 61 

Article 309 

EN 

363 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Article 62 

Article 63 

Articles 57, 
58, 59 and 60, 
Annex II,  

Article 12 

Article 308 

--- 

Articles 1(4), 
2(4) and 4(6) 

Article 57(8) 

Article 8 (2) 

Article 315 

EN 

364 

   EN