Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives 2003/71/EC and 2009/138/EC in respect of the powers of the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority
Date: 2011-01-19
Institutions: European Commission
Subjects: approximation of laws, financial control, financial legislation, financial market, insurance company, insurance law, investment, official market, pension scheme, securities

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EUROPEAN COMMISSION  

Brussels, 19.1.2011 
COM(2011) 8 final 

2011/0006 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Directives 2003/71/EC and 2009/138/EC in respect of the powers of the 
European Insurance and Occupational Pensions Authority and the European Securities 
and Markets Authority 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Experience  of  the  financial  crisis  has  exposed  important  failures  in  financial  supervision. 
President Barroso therefore requested a group of high level experts, chaired by Mr Jacques de 
Larosière,  to  make  proposals  to  strengthen  European  supervisory  arrangements.  The  Group 
presented its report on 25 February 2009. Building on its recommendations, the Commission 
set out proposals for a new European financial supervisory architecture in its Communication 
to the Spring European Council of March 2009. The Commission presented its ideas in more 
detail in its Communication of May 2009 which proposed:  

–  Establishing a European System of Financial Supervisors (ESFS), consisting of a network 
of  national  financial  supervisors  working  in  tandem  with  new  European  Supervisory 
the  existing  European  supervisory 
Authorities  (ESAs),  created  by 
committees1  into  a  European  Banking  Authority  (EBA),  a  European  Insurance  and 
Occupational  Pensions  Authority  (EIOPA),  and  a  European  Securities  and  Markets 
Authority  (ESMA),  thereby  combining  the  advantages  of  an  overarching  European 
framework  for  financial  supervision  with  the  expertise  of  local  micro-prudential 
supervisory bodies that are closest to the institutions operating in their jurisdictions; and 

transforming 

–  Establishing  a  European  Systemic  Risk  Board  (ESRB),  to  monitor  and  assess  potential 
threats  to  financial  stability  that  arise  from  macro-economic  developments  and  from 
developments within the financial system as a whole. To this end, the ESRB would provide 
an early warning of system-wide risks that may be building up and, where necessary, issue 
recommendations for action to deal with these risks. 

The Communication also concluded that in order for the ESFS to work effectively, changes to 
the financial  services legislation would be necessary, in particular  to provide an  appropriate 
scope to the more general powers provided for in the individual regulations establishing the 
authorities,  ensuring  a  more  harmonised  set  of  financial  rules  through  the  possibility  to 
develop  draft  technical  standards  and  facilitate  the  sharing,  where  necessary,  of  micro-
prudential information. 

2. 

CONSULTATION OF THE INTERESTED PARTIES 

Two  open  consultations  were  conducted  in  the  development  of  these  proposals.  Firstly, 
following  the  report  of  the  high-level  group  chaired  by  Jacques  de  Larosière  and  the 
publication of the 4 March 2009 Commission Communication, the Commission organised a 
first consultation from 10 March to 10 April 2009 as input to its Communication on Financial 
Supervision  in  Europe  published  on  27  May  2009.  A  summary  of  the  public  submissions 
received can be found at: 

http://ec.europa.eu/internal_market/consultations/docs/2009/fin_supervision/summary_en.pdf 

1 

These are the Committee of European Banking Supervisors (CEBS), the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) 
and the Committee of European Securities Regulators (CESR). 

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Secondly,  from  27  May  to  15  July  2009,  the  Commission  organised  another  consultation, 
inviting  all  interested  parties  to  comment  on  the  more  detailed  reforms  presented  in  the 
Communication on Financial Supervision in Europe of 27 May 2009. The responses received 
were  for  the  greater  part  supportive  of  the  suggested  reforms,  with  comments  on  detailed 
aspects of the proposed ESRB and ESFS. A summary of the public submissions received can 
be found at: 

http://ec.europa.eu/internal_market/consultations/docs/2009/fin_supervision_may/replies_su
mmary_en.pdf 

Additionally,  a  Commission  Services  Staff  Working  Paper  was  published  on  23  September 
2009  to  preview  the  possible  areas  where  amendments  to  sectoral  legislation  may  be 
necessary. The working paper can be found at: 

http://ec.europa.eu/internal_market/finances/docs/committees/supervision/20090923/sec2009
_1233_en.pdf 

3. 

IMPACT ASSESSMENT 

The May Commission Communication on Financial Supervision in Europe was accompanied 
by  an  impact  assessment  analysing  the  main  policy  options  for  establishing  the  ESFS  and 
ESRB.  A  second  impact  assessment  accompanied  the  legislative  proposals,  examining  the 
options in more detail. The second impact assessment analysed the options for the appropriate 
powers  for  the  authorities  to  work  towards  achieving  a  single  set  of  harmonised  rules  and 
concluded  that  this  capacity  would  be  rightly  limited  to  those  areas  to  be  defined  in 
forthcoming  sectoral  legislation,  and  identified  such  potential  areas.  Additionally,  in 
developing  the  draft  technical  standards  themselves,  the  authorities  should  undertake 
appropriate  analysis  of  potential  related  costs  and  benefits  and  consult  stakeholders  before 
submitting them to the Commission. 

The second impact assessment report is available at: 

http://ec.europa.eu/internal_market/finances/committees/index_en.htm#package 

4. 

LEGAL ELEMENTS OF THE PROPOSAL 

Given that changes need to be introduced into existing Directives to ensure the development 
of  a  single  rule  book,  an  amending  Directive  is  the  most  appropriate  instrument.  This 
amending Directive should have the same legal basis as the Directives it amends. 

5. 

BUDGETARY IMPLICATIONS 

The proposal has no implication for the EU budget. 

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6. 

DETAILED EXPLANATION OF THE PROPOSAL 

On 23 September 2009, the Commission adopted proposals for Regulations establishing EBA, 
EIOPA,  and  ESMA.2  "In  this  respect  the  Commission  wishes  to  recall  the  Statements  in 
relation to Articles 290 and 291 TFEU it made at the adoption of the Regulations establishing 
the  European  Supervisory  Authorities  according  to  which:  "As  regards  the  process  for  the 
adoption  of  regulatory  standards,  the  Commission  emphasises  the  unique  character  of  the 
financial services sector, following from the Lamfalussy structure and explicitly recognised in 
Declaration  39  to  the  TFEU.  However,  the  Commission  has  serious  doubts  whether  the 
restrictions  on  its  role  when  adopting  delegated  acts  and  implementing  measures  are  in  line 
with Articles 290 and 291 TFEU." 

Along with those Regulations and in order for the ESFS to work effectively, changes to the 
sectoral legislation are necessary. The areas in which amendments are proposed fall broadly 
into the following categories: 

•  Definition  of  the  appropriate  scope  of  technical  standards  as  an  additional  tool  for 

supervisory convergence and with a view of developing a single rule book; 

•  To  appropriately  integrate  the  possibility  for  the  authorities  to  settle  disagreements  in  a 
balanced  way  to  those  areas  where  common  decision  making  processes  already  exist  in 
sectoral legislation; 

•  General  amendments  which  are  common  to  most  sectoral  legislation  and  necessary  for 
the directives to operate in the context of new authorities for example, renaming the level 3 
committees to the new authorities and ensuring the appropriate gateways for the exchange 
of information are present; and 

•  Additional amendments to the Solvency II Directive. 

This amending directive is proposed to amend the following legislation: 

•  Directive 2003/71/EC: Prospectus Directive 

•  Directive 2009/138/EC: Solvency II Directive 

For detailed explanations of the categories of amendments see the Explanatory Memorandum 
to Commission proposal COM(2009) 576 final of 26 September 2009. 

6.1 Further amendments to the Solvency II Directive 

To adjust existing level 2 empowerments to the Lisbon Treaty 

Given the recent entry into force of the Lisbon Treaty, the Solvency II directive needs to be 
adjusted to take account of the new Treaty. Existing level 2 empowerments which qualify as 
delegated  acts  according  to  Article  290  TFEU  should  therefore  be  transformed  into 
empowerments for delegated acts. Appropriate control procedures should be foreseen. 

Transitional Requirements 

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http://ec.europa.eu/internal_market/finances/committees/index_en.htm#package 

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It  is  necessary  to  provide  for  the  specification  of  transitional  requirements  for  a  number  of 
reasons. There should be a smooth transition to the new regime, market disruption should be 
avoided,  and  impacts  on  the  range  of  important  insurance  products  should  be  able  to  taken 
into account. It should also be possible for proper consideration to be given to significant and 
valuable industry-wide information to be obtained from the quantitative impact study (QIS5). 
Transitional  requirements  should  therefore  be  possible  in  relation  to  valuation,  governance, 
supervisory  reporting  and  public  disclosure,  the  determination  and  classification  of  own 
funds, the standard formula for the calculation of the Solvency Capital Requirement and the 
choice of methods and assumptions for the calculation of technical provisions, including the 
determination  of  the  relevant  risk-free  interest  rate  term  structure.  It  is  also  necessary  to 
enable  level  2  measures  to  specify  transitional  arrangements  in  relation  to  the  treatment  of 
third country regimes in order to acknowledge that some third countries may need more time 
to  adapt  and  implement  a  solvency  regime  that  would  fully  satisfy  the  criteria  for  being 
recognised  as  equivalent.  It  should  be  possible  for  the  transitional  requirements  set  out  in 
Directive  2009/138/EC,  as  amended  by  this  Directive,  to  have  their  non  essential  elements 
further  specified  in  delegated  acts.  While  the  maximum  periods  for  the  transitional 
requirements are to be set out in Directive 2009/138/EC, the actual time period selected in any 
delegated  act  may  be  for  a  lesser  period  and  should  be  proportionate  to  the  particular  basis 
upon which the transitional requirements is demonstrated to be necessary in order to facilitate 
the application of the new regime. The transitional requirements should be at least equivalent, 
in  effect,  to  the  existing  framework  on  insurance  and  reinsurance  directives  and  should  not 
result  in  more  favourable  treatment  for  insurance  and  reinsurance  undertakings,  or  lower 
protection  for  policy  holders,  than  currently  exists.  The  transitional  requirements  should 
encourage undertakings to move towards compliance with the particular requirements of the 
new regime as soon as possible. 
Amending level 2 empowerments 
In  order  to  allow  for  greater  convergence  on  procedures  for  supervisory  approvals  already 
provided for in Solvency II of undertaking specific parameters, model change policies, special 
purpose vehicles and the setting and removal of capital add-ons, the Commission should be 
empowered to adopt measures by means of delegated acts specifying procedure in these areas. 
It  is  also  necessary  to  ensure  cross-sectoral  consistency  to  enable  level  2  measures  in  the 
context of investments in repackaged loans to not only specify requirements but also specify 
the consequences of breaching those requirements. 

To  include  the  European  Cooperative  Society  (SCE)  in  the  list  of  permissible  forms  of 
insurance and reinsurance undertakings 

In order to enable European cooperatives to provide insurance and reinsurance services, it is 
necessary  to  extend  the  list  of  permissible  legal  forms  of  insurance  and  reinsurance 
undertakings  to  include  the  European  Cooperative  Society  (SCE)  as  defined  in  Regulation 
(EC) No.1435/20033. 

Euro amount of the absolute floor of the MCR 

An amendment is necessary to reflect the adaptation to the Euro amount of the MCR floor for 
captive  reinsurance  undertakings.  This  arises  out  of  the  periodic  adjustment  of  the  existing 
capital requirement floors for such undertakings to take account of inflation.4 

Extension of two months to implementation date 

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OJ L 207, 18.8.2003, p. 1. 
OJ C 63 of 18/03/2009, p. 11. 

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In order to better align the start of the various new reporting, calculation and other obligations 
of the Solvency II regime with the date (31 December) which marks the end of the financial 
year  of  the  majority  of  insurance  undertakings,  amendments  which  extend  the  relevant 
transposition, repeal and application dates by 2 months are necessary.  

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2011/0006 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Directives 2003/71/EC and 2009/138/EC in respect of the powers of the 
European Insurance and Occupational Pensions Authority and the European Securities 
and Markets Authority 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 50, 53, 62, and 114 thereof, 

Having regard to the proposal from the Commission5, 

After transmission of the draft legislative act to the national parliaments, 

Having regard to the opinion of the European Economic and Social Committee6, 

Having regard to the opinion of the European Central Bank7, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

On  23  September  2009,  the  Commission  adopted  proposals  for  three  Regulations 
establishing  the  European  System  of  Financial  Supervisors  including  the  creation  of 
the three European Supervisory Authorities (ESA). 

In order for the European System of Financial Supervisors (ESFS) to work effectively, 
changes  to  Union  legislation  in  the  field  of  operation  of  the  three  Authorities  are 
necessary. Such changes concern the definition of the scope of certain powers of the 
ESAs,  the  integration  of  certain  powers  in  existing  processes  established  in  relevant 
Union legislation and amendments to ensure a smooth and effective functioning of the 
ESA in the context of the ESFS. 

The  establishment  of  three  ESAs  should  be  accompanied  by  the  development  of  a 
single rule book to ensure consistent harmonisation and uniform application and thus 
contribute  to  a  more  effective  functioning  of  the  internal  market.  The  regulations 
establishing the ESFS provide that the ESAs may develop draft technical standards in 
the  areas  specifically  set  out  in  the  relevant  legislation,  to  be  submitted  to  the 

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OJ C […], […], p. […].[This should be footnote 1] 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 

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Commission for adoption in accordance with Articles 290 and 291 of the Treaty on the 
Functioning  of  the  European  Union  (TFEU)  by  means  of  delegated  or  implementing 
acts. Whereas Directive …/…. [Omnibus I] has identified a first set of such areas, this 
Directive should identify a further set of areas, in particular for Directive 2003/71/EC 
and Directive 2009/138/EC, without prejudice to adding further areas in the future.  

(4) 

(5) 

The relevant legislation should define those areas where the ESAs are empowered to 
develop  draft  technical  standards  and  how  such  standards  should  be  adopted.  The 
relevant  legislation  should  lay  down  the  elements,  conditions  and  specifications  as 
detailed in Article 290 TFEU in the case of delegated acts. 

The identification of areas for technical standards should strike an appropriate balance 
between  building  a  single  set  of  harmonised  rules  and  avoiding  unduly  complicated 
regulation  and  enforcement.  The  only  areas  selected  should  be  those  in  which 
consistent  technical  rules  will  contribute  significantly  and  effectively  to  the 
achievement  of  the  objectives  of  the  relevant  legislation,  while  ensuring  that  policy 
decisions  are taken  by  the European Parliament, the Council  and the  Commission in 
accordance with their usual procedures. 

(6)  Matters  subject  to  technical  standards  should  be  genuinely  technical,  where  their 
development  requires  the  expertise  of  supervisory  experts.  The  technical  standards 
adopted as delegated acts should further develop, specify and determine the conditions 
for consistent harmonisation of the rules included in basic instruments adopted by the 
European  Parliament  and  the  Council,  supplementing  or  amending  certain  non-
essential elements of the legislative act. On the other hand, technical standards adopted 
as  implementing  acts  should  set  conditions  for  the  uniform  application  of  legally 
binding Union acts. Technical standards should not involve policy choices.  

(7) 

In  the  case  of  regulatory  technical  standards  it  is  appropriate  to  introduce  the 
procedure provided for in Articles 10 to 14 of Regulation (EU) No …/2010 [EBA], of 
Regulation (EU) No …/2010 [ESMA], and of Regulation (EU) No …/2010 [EIOPA]. 
Implementing technical standards should be adopted in accordance with the procedure 
provided for in Article 15 of Regulation (EU) No …/2010 [EBA], of Regulation (EU) 
No  …/2010  [ESMA],  and  of  Regulation  (EU)  No  …/2010  [EIOPA].  The  European 
Council endorsed the four-level 'Lamfalussy' approach to make the regulatory process 
for  Union  financial  legislation  more  efficient  and  transparent.  The  Commission  is 
empowered  to  adopt  level-2  measures  in  many  areas,  and  a  large  number  of  level-2 
Commission  regulations  and  directives  are  in  force.  In  cases  where  the  technical 
standards  are  designed  to  further  develop,  specify  or  determine  the  conditions  of 
application  of  such  level-2  measures,  they  should  be  adopted  only  once  the  relevant 
level-2  measures  has  been  adopted  and  should  respect  the  content  of  that  level-2 
measure. 

(8) 

Binding  technical  standards  contribute  to  a  single  rulebook  for  financial  services 
legislation as endorsed by the European Council in its conclusions of June 2009. To 
the extent that certain requirements in Union legislative acts are not fully harmonised, 
and  in  accordance  with  the  precautionary  principle  on  supervision,  binding  technical 
standards developing, specifying or determining the conditions of application for those 
requirements should not prevent Member States from requiring additional information 
or imposing more stringent requirements. Technical standards should therefore allow 

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Member States to do so in specific areas, where those legislative acts provide for such 
discretion. 

As  set  out  in  the  regulations  establishing  the  ESFS,  before  submitting  the  technical 
standards to the Commission, the ESA should, where appropriate, conduct open public 
consultations relating to them and analyse the potential related costs and benefits. 

It  should  be  possible  for  technical  standards  to  provide  for  transitional  measures 
subject  to  adequate  deadlines,  if  the  costs  of  immediate  implementation  would  be 
excessive compared to the benefits involved. 

(9) 

(10) 

(11)  The  Regulations  establishing 

.../  2010  [EIOPA],  where 

the  ESFS  provide  for  a  mechanism 

to  settle 
disagreements  between  competent  national  authorities.  Where  a  competent  authority 
disagrees with the procedure or content of an action or inaction by another competent 
authority in areas specified in legal acts of the Union in accordance with  Regulation 
(EU) No .../ 2010 [EBA], Regulation (EU) No .../ 2010 [ESMA] and Regulation (EU) 
legislation  requires  cooperation, 
the  relevant 
No 
coordination  or  joint  decision-making  by  competent  national  authorities  from  more 
than  one  Member  State,  the  ESA,  at  the  request  of  one  of  the  competent  authorities 
concerned, should be able to assist the authorities in reaching an agreement within the 
time limit set by the ESA which should take into account any relevant time limits in 
the  relevant  legislation,  and  the  urgency  and  complexity  of  the  disagreement.  In  the 
event that such disagreement persists, the ESA should be able to settle the matter. 

(12)  The regulations establishing the ESAs require that the cases where the mechanism to 
settle disagreements between competent national authorities may be applied are to be 
specified  in  the  sectoral  legislation.  This  Directive  should  identify  a  first  set  of  such 
cases  and  should  be  without  prejudice  to  adding  further  cases  in  the  future.  This 
Directive should not prevent the ESAs from acting in accordance with other powers or 
fulfilling  tasks  specified  in  their  establishing  regulations,  including  non-binding 
mediation and contributing to the consistent, efficient and effective application of legal 
acts  of  the  Union.  Moreover,  in  those  areas  where  some  form  of  non-binding 
mediation is already established in the relevant legal act, or where there are time limits 
for  joint  decisions  to  be  taken  by  one  or  more  competent  national  authorities, 
amendments are needed to ensure clarity and minimum disruption of the  process  for 
reaching  a  joint  decision,  but  also  that  where  necessary,  the  ESAs  should  be  able  to 
resolve  disagreements.  The  binding  procedure  for  the  settlement  of  disagreements  is 
designed  to  solve  situations  where  competent  supervisors  cannot  resolve,  among 
themselves, procedural or substantive issues relating to compliance with legal acts of 
the Union. 

(13)  This Directive should therefore identify situations where a procedural or a substantive 
issue of compliance with Union law may need to be resolved and the supervisors may 
not  be  able  to  resolve  the  matter  on  their  own.  In  such  a  situation,  one  of  the 
supervisors involved should be able to raise the issue with the competent ESA. That 
ESA should act in accordance with the procedure set out in its establishing regulation 
and in this Directive. It should be able to require the competent authorities concerned 
to  take  specific  action  or  to  refrain  from  action  in  order  to  settle  the  matter  and  to 
ensure compliance with Union law, with binding effects on the competent authorities 
concerned.  In  cases  where  the  relevant  legal  act  of  the  Union  confers  discretion  on 

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Member States, decisions taken by a ESA should not replace the exercise of discretion 
by the competent authorities in compliance with Union law. 

(14)  Directive  2009/138/EC  of  the  European  Parliament  and  of  the  Council  of  25 
November  2009  on  the  taking  up  and  pursuit  of  the  business  of  insurance  and 
reinsurance  (Solvency  II)8  provides  for  joint  decisions  as  regards  the  approval  of 
applications  to  use  an  internal  model  at  group  and  subsidiary  levels,  the  approval  of 
applications to make a subsidiary subject to Articles 238 and 239 of that Directive and 
the identification of the group supervisor on a different basis from the criteria set out 
in  Article  247  of  that  Directive.  In  all  of  these  areas,  an  amendment  should  clearly 
state  that  in  the  event  of  disagreement,  the  European  Insurance  and  Occupational 
Pensions Authority (EIOPA) may resolve the disagreement using the process outlined 
in Regulation …/… [EIOPA]. This approach would make it clear that disagreements 
can be resolved and cooperation strengthened before a decision is made or issued to an 
institution.  EIOPA's  role  in  resolving  disagreements  is  to  mediate  between  the 
conflicting views of the supervisory authorities rather than to substitute judgements in 
the  matters  concerned.  The  fact  that  EIOPA  has  acted  to  mediate  a  specific 
disagreement  should  not  be  understood  as  meaning  that  EIOPA  should  have  an 
ongoing role in the supervision of the subject matter of the application. 

(15)  The  new  supervisory  architecture  established  by  the  ESFS  will  require  national 
supervisory  authorities  to  cooperate  closely  with  the  ESAs.  Amendments  to  the 
relevant  legislation  should  ensure  there  are  no  legal  obstacles  to  the  information 
sharing  obligations  included  in  the  regulations  proposed  by  the  Commission 
establishing the ESAs.  

(16) 

(17) 

In areas where the Commission is currently empowered by Directive 2009/138/EC to 
adopt implementing measures where these measures are non-legislative acts of general 
application to supplement or amend certain non-essential elements of that Directive in 
the  sense  of  Article  290  TFEU,  the  Commission  should  be  empowered  to  adopt 
delegated acts in accordance with that Article.  

In  order  to  allow  for  the  consistent  calculation  of  technical  provisions  by  insurance 
and  reinsurance  undertakings  under  Directive  2009/138/EC,  it  is  necessary  for  a 
central body to derive, publish, and update certain technical information related to the 
risk-free  interest  rate  term  structure,  which  takes  account  of  observations  in  the 
financial market, and for the body to be able to do this on a regular basis. Given the 
technical  and  insurance  related  nature  of  these  tasks,  they  should  be  carried  out  by 
EIOPA. 

(18) 

In  order  to  ensure  that  certain  technical  inputs  to  the  Solvency  Capital  Requirement 
(SCR) using the standard formula are provided on a harmonised basis, for instance to 
allow  for  harmonised  approaches  toward  the  use  of  ratings,  specific  tasks  should  be 
assigned  to  EIOPA.  The  detailed  manner  for  the  exercise  of  such  tasks  should  be 
further specified in measures to be adopted by delegated act. 

(19) 

In order to ensure a harmonised approach under Directive 2009/138/EC in determining 
where  an  extension  to  the  recovery  period  in  cases  of  breaches  of  the  SCR  is 

8 

OJ L 335, 17.12.2009 p. 1-155 

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permitted,  the  conditions  which  constitute  "an  exceptional  fall  in  the  financial 
markets"  should  be  specified.  EIOPA,  upon  request  from  the  supervisory  authority 
concerned, should be responsible for determining whether those conditions have been 
fulfilled  and  the  Commission  should  be  empowered  to  adopt  measures  by  means  of 
delegated acts specifying the relevant procedures to be followed. 

(20) 

In order to ensure cross-sectoral consistency and to remove the misalignment between 
the interests of firms that "repackage" loans into tradable securities and other financial 
instruments  (originators)  and  the  interests  of  insurance  or  reinsurance  undertakings 
that invest in such securities or instruments, the Commission should be empowered to 
adopt measures by means of delegated act in the context of investments in repackaged 
loans under Directive 2009/138/EC, specifying not only the requirements but also the 
consequences of breaching those requirements. 

(21) 

In  order  to  allow  for  greater  convergence  on  procedures  for  supervisory  approvals 
provided  for  in  Directive  2009/138/EC  of  undertaking  specific  parameters,  model 
change policies, special purpose vehicles and the setting and removal of capital add-
ons, the Commission should be empowered to adopt measures by means of delegated 
act specifying procedure in these areas.  

(22)  The  development  of  international  convergence  toward  risk-based  solvency  regimes 
should  be  encouraged.  In  order  to  acknowledge  that  some  third  countries  may  need 
more  time  to  adapt  and  implement  a  solvency  regime  that  would  fully  satisfy  the 
criteria  for  being  recognised  as  equivalent,  it  is  necessary  to  enable  Commission 
measures  adopted  by  means  of  delegated  act  to  specify  transitional  arrangements  in 
relation  to  the  treatment  of  such  third  country  regimes,  particularly  where  a  public 
commitment  to  converge  to  a  regime  equivalent  to  Directive  2009/138/EC  has  been 
made. 

(23) 

In  order  to  enable  the  European  Cooperative  Society,  established  in  Council 
Regulation  (EC)  No  1435/2003  of  22  July  2003  on  the  Statute  for  a  European 
Cooperative  Society  (SCE)9,  to  provide  insurance  and  reinsurance  services,  it  is 
necessary  to  extend  the  list  of  permissible  legal  forms  of  insurance  and  reinsurance 
undertakings  under  Directive  2009/138/EC  to  include  the  European  Cooperative 
Society (SCE). 

(24)  The  amounts  in  euro  of  the  Minimum  Capital  Requirement  floor  for  captive 
reinsurance  undertakings  should  be  adapted.  Such  an  adaptation  arises  out  of  the 
periodic adjustment of the existing capital requirement floors for such undertakings to 
take account of inflation.10 

(25) 

In  order  to  better  reflect  the  date  which  marks  the  end  of  the  financial  year  for  the 
majority of insurance undertakings (31 December) and to enable a smoother transition 
between  the  old  and  new  regimes,  the  relevant  transposition,  repeal  and  application 
dates in Directive 2009/138/EC should be extended by two months. 

9 
10 

OJ L 207, 18.8.2003, p. 1. 
OJ C 63, 18.03.2009, p. 11. 

EN 

11 

   EN 

 
                                                 
(26)  Certain  implementing  powers  designed  under  Article  202  of  the  Treaty  establishing 
the  European  Community  (EC  Treaty)  should  be  replaced  with  the  appropriate 
provisions in accordance with Article 290 TFEU.  

(27)  The alignment of comitology procedures to the TFEU and, in particular, to Article 290 
thereof,  should  be  effected  on  a  case-by-case  basis.  In  order  to  take  account  of  the 
technical  developments  in  the  financial  markets  and  to  specify  the  requirements  laid 
down  in  the  directives  amended  by  this  Directive,  the  Commission  should  be 
empowered  to  adopt  delegated  acts  in  accordance  with  Article  290  TFEU.  In 
particular,  the  delegated  acts  should  be  adopted  in  respect  of  details  concerning 
governance  requirements,  valuation,  supervisory  reporting  and  public  disclosure,  the 
determination and classification of own funds, the standard formula for the calculation 
of the Solvency Capital Requirement (including any consequential changes in the area 
of capital add-ons) and the choice of methods and assumptions for the calculation of 
technical provisions. 

(28)  The  European  Parliament  and  the  Council  should  have  two  months  from  the  date  of 
notification to object to a delegated act. At the initiative of the European Parliament or 
the Council, it should be possible to prolong that period by one month with regard to 
significant  areas  of  concern.  It  should  also  be  possible  for  the  European  Parliament 
and  the  Council  to  inform  the  other  institutions  of  their  intention  not  to  raise 
objections.  Such  early  approval  of  delegated  acts  is  particularly  appropriate  when 
deadlines need to be met, for example where there are timetables in the basic act for 
the Commission to adopt delegated acts. 

(29) 

In  order  to  allow  for  a  smooth  transition  under  Directive  2009/138/EC  to  a  new 
regime, it is necessary to provide for transitional requirements relating to governance 
requirements, valuation, supervisory reporting and public disclosure, the determination 
and  classification  of  own  funds,  the  standard  formula  for  the  calculation  of  the 
Solvency  Capital  Requirement  (including  any  consequential  changes  in  the  area  of 
capital  add-ons)  and  the  choice  of  methods  and  assumptions  for  the  calculation  of 
technical  provisions.  Where  such  changes  are  made  at  the  level  of  the  individual 
undertaking,  corresponding  and  consequential  changes  should  be  made  to  the 
calculation  of  group  solvency,  and  supervisory  reporting  and  public  disclosure  at 
group  level.  Where  such  changes  concern  group  supervisory  reporting  and  group 
public  disclosure,  the  appropriate  transitional  provisions  should  apply  mutatis 
mutandis at group level. In relation to group solvency, Article 218(2) and (3) provide 
the  basis  for  solvency  requirements  for  supervision  in  cases  of  application  of  group 
supervision  mentioned  in  Article  213.  The  methods  and  principles  for  calculating 
group solvency referred to in Article 218 are set out in more detail in Articles 220 to 
235. Those methods and calculations apply (whether directly or by analogy) to cases 
of application of group supervision mentioned in Article 218. To the extent that such 
group  solvency  rules  make  reference  to  solvency  rules  at  the  level  of  the  individual 
undertaking  and  where  a  transitional  solvency  regime  is  applied  at  individual  level 
corresponding adaptations may need to be made to the group solvency rules.  

(30)  The  transitional  requirements  should  aim  at  avoiding  market  disruption  and  limiting 
interferences  with  existing  products  as  well  as  ensuring  the  availability  of  insurance 
products.  The  provisions  of  transitional  requirements  should  also  allow  proper 
consideration to be taken of the significant and valuable industry -wide information to 
be obtained from the quantitative impact study (QIS5). The transitional provisions set 

EN 

12 

   EN 

 
out  in  Directive  2009/138/EC  should  further  specify  non-essential  elements  to  be 
determined by delegated acts. While the maximum periods for the transitional 
provisions are to be set out in Directive 2009/138/EC, the actual time period selected 
in  any  delegated  act  may  be  for  a  shorter  period  and  should  reflect  the  specific 
characteristics of the provisions and facilitate the application of the new regime. The 
transitional  requirements  should  at  least  be  equivalent,  in  effect,  to  the  existing 
framework  on  insurance  and  reinsurance  directives  and  should  not  result  in  more 
favourable  treatment for  insurance and  reinsurance undertakings, or  lower protection 
for policy holders, than currently exists. In terms of solvency requirements, this means 
that  these  should  during  any  possible  transitional  period  be  no  higher  than  the 
Solvency  Capital  Requirement  and  no  lower  than  the  sum  of  the  Minimum  Capital 
Requirement  and  fifty  per  cent  of  the  difference  between  the  Solvency  Capital 
Requirement  and  the  Minimum  Capital  Requirement.  The  transitional  requirements 
should  encourage  undertakings  to  move  towards  compliance  with  the  particular 
requirements of the new regime as soon as possible.  

(31)  Since the objectives of this Directive, namely improving the functioning of the internal 
market  by  means  of  ensuring  a  high,  effective  and  consistent  level  of  prudential 
regulation  and  supervision,  protecting  policy  holders  and  beneficiaries  and  thereby 
businesses and consumers, protecting the integrity, efficiency and orderly functioning 
of  financial  markets,  maintaining  the  stability  of  the  financial  system,  and 
strengthening  international  supervisory  coordination,  cannot  be  sufficiently  achieved 
by  the  Member  States  and  can,  therefore,  by  reason  of  scale  of  the  action,  be  better 
achieved  at  Union  level,  the  Union  may  adopt  measures,  in  accordance  with  the 
principle  of  subsidiarity  as  set  out  in  Article  5  of  the  Treaty  on  European  Union.  In 
accordance  with  the  principle  of  proportionality,  as  set  out  in  that  Article,  this 
Directive should not go beyond what is necessary in order to achieve those objectives.  

(32)  The Commission should, by 1 January 2014, report to the European Parliament and to 
the Council on the submission by the ESA of the draft technical standards provided for 
in this Directive and present any appropriate proposals. 

(33)  Directives 2003/71/EC and 2009/138/EC should therefore be amended accordingly, 

EN 

13 

   EN 

 
HAVE ADOPTED THIS DIRECTIVE: 

Directive 2003/71/EC is amended as follows:  

Article 1 

(1) 

In Article 5(4), the third subparagraph is replaced by the following:  

"Where the final terms of the offer are neither included in the base prospectus, nor in 
a supplement, the final terms shall be made available to investors and filed with the 
competent  authority  of  the  home  Member  State,  as  well  as  communicated,  by  the 
issuer, offeror or person asking for the admission to trading on a regulated market, to 
the competent authority of the host Member State(s) and to the European Securities 
and  Markets  Authority  (ESMA)  when  each  public  offer  is  made  as  soon  as 
practicable  and,  where  possible,  in  advance  of  the  beginning  of  the  public  offer  or 
admission to trading. The final terms shall only contain information that relates to the 
securities  note  and  shall  not  be  used  to  supplement  the  base  prospectus.  Article 
8(1)(a) shall apply in such cases." 

(2) 

Article 11(3) is replaced by the following:  

"3. Powers are delegated to the Commission to adopt regulatory technical standards 
to specify the information to be incorporated by reference.  

The  regulatory  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Articles 10 to 14 of Regulation …/… [ESMA].  

ESMA  shall  develop  draft  regulatory  technical  standards  for  submission  to  the 
Commission by 1 January 2014 at the latest."  

(3) 

Article 13(7) is replaced by the following:  

"7. Powers are delegated to the Commission to adopt regulatory technical standards 
to  specify  the  procedures  for  the  approval  of  the  prospectus  and  the  conditions  in 
accordance with which time limits may be adjusted.  

The  regulatory  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 10 to 14 of Regulation …/… [ESMA].  

ESMA  shall  develop  draft  regulatory  technical  standards  for  submission  to  the 
Commission by 1 January 2014 at the latest."  

(4) 

Article 14(8) is replaced by the following:  

"8. Powers are delegated to the Commission to adopt regulatory technical standards 
specify the provisions relating to the publication of the prospectus in paragraphs 1 to 
4. 

The  regulatory  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Articles 10 to 14 of Regulation …/… [ESMA].  

EN 

14 

   EN 

 
ESMA  shall  develop  draft  regulatory  technical  standards  for  submission  to  the 
Commission by 1 January 2014 at the latest."  

(5) 

Article 15(7) is replaced by the following:  

"7. Powers are delegated to the Commission to specify the provisions concerning the 
dissemination  of  advertisements  announcing  the  intention  to  offer  securities  to  the 
public  or  the  admission  to  trading  on  a  regulated  market,  in  particular  before  the 
prospectus  has  been  made  available  to  the  public  or  before  the  opening  of  the 
subscription, and specify the provisions laid down in paragraph 4.  

The  regulatory  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Articles 10 to 14 of Regulation …/… [ESMA].  

ESMA  shall  develop  draft  regulatory  technical  standards  for  submission  to  the 
Commission by 1 January 2014 at the latest."  

Article 2 

Directive 2009/138/EC is amended as follows: 

(1) 

Article 17(3) is replaced by the following: 

"3. The Commission may adopt delegated acts, in accordance with Article 301a and 
subject to the conditions of Articles 301b and 301c, relating to the extension of the 
list of forms set out in Annex III." 

(2) 

Article 31 is amended as follows: 

(a) 

Paragraph 4 is replaced by the following: 

"4. The Commission shall adopt delegated acts, in accordance with Article 301a and 
subject  to  the  conditions  of  Articles  301b  and  301c,  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." 

(b) 

The following paragraph 5 is added:  

"5.  Powers  are  conferred  on  the  Commission  to  adopt  implementing  technical 
standards to determine the conditions of application of paragraph 2 as supplemented 
by  the  delegated  acts  referred  to  in  paragraph  4  concerning  the  matters  covered  by 
those  delegated  acts,  specifically  with  regard  to  the  templates  and  structure  of  the 
disclosures.  

The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

The  European  Insurance  and  Occupational  Pensions  Authority  (EIOPA)  shall 
develop draft implementing technical standards for submission to the Commission by 
31 December 2011 at the latest." 

EN 

15 

   EN 

 
(3) 

In Article 33, the following third paragraph is added: 

"Where a request for cooperation in relation to an on-site verification in accordance 
with  this  Article  has  been  rejected  or  has  not  been  acted  upon  within  a  reasonable 
period of time, the supervisory authorities may refer the matter to EIOPA and request 
its assistance in accordance with Article 19 of Regulation …/2010 [EIOPA]. In that 
case, EIOPA may act in accordance with the powers conferred on it by that Article."  

(4) 

Article 35 is amended as follows: 

(a) 

Paragraph 6 is replaced by the following:: 

"6. The Commission shall adopt delegated acts, in accordance with Article 301a and 
subject  to  the  conditions  of  Articles  301b  and  301c,  specifying  the  information 
referred  to  in  paragraphs  1  to  4,  with  a  view  to  ensuring  to  the  appropriate  extent 
convergence of supervisory reporting." 

(b) 

The following paragraph 7 is added: 

"7.  Powers  are  conferred  on  the  Commission  to  adopt  implementing  technical 
standards  to  determine  the  conditions  of  application  of  paragraphs  1  and  4  as 
supplemented  by  the  delegated  acts  adopted  under  paragraph  6,  specificallywith 
regard  to  the  templates  and  procedures  for  the  submission  of  information  to  the 
include,  where  appropriate, 
supervisory  authorities.  The  procedures  may 
requirements for approval.  

The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA  shall  develop  draft  implementing  technical  standards  for  submission  to  the 
latest." 
Commission 

December 

2011 

the 

by 

31 

at 

(5) 

Article 37 is amended as follows: 

(a) 

paragraph 6 is replaced with the following: 

"6. The Commission shall adopt delegated acts, in accordance with Article 301a and 
subject  to  the  conditions  of  Articles  301b  and  301c,  laying  down  further 
specifications  for  the  circumstances  under  which  a  capital  add-on  may  be  imposed 
and the methodologies for the calculation thereof and the process of decisions to set, 
calculate and remove capital add-ons." 

(b) 

The following paragraph 7 is added: 

"7.  Powers  are  conferred  on  the  Commission  to  adopt  implementing  technical 
standards to determine the conditions of application of this Article as supplemented 
by  the  delegated  acts  referred  to  in  paragraph  6  concerning  the  matters  covered  by 
those  delegated  acts,  specifically  with  regard  to  the  process  of  decisions  to  set, 
calculate and remove capital add-ons referred to in the delegated acts adopted under 
paragraph 6.  

EN 

16 

   EN 

 
 
The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA shall develop draft implementing technical standards for submission to the 
Commission by 31 December 2011." 

(6) 

In Article 38(2), the following subparagraph is added: 

"Where  a  request  for  cooperation  in  relation  to  an  on-site  inspection  in  accordance 
with this paragraph has been rejected or has not been acted upon within a reasonable 
period of time, the supervisory authorities may refer the matter to EIOPA and request 
its assistance in accordance with Article 19 of Regulation …/2010 [EIOPA]. In that 
case, EIOPA may act in accordance with the powers conferred on it by that Article." 

(7) 

Article 50 is replaced by the following: 

"Article 50 
Delegated acts 

1. 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, to further specify the following: 

(a) 

the  elements  of  the  systems  referred  to  in  Articles  41,  44,  46  and  47,  and  in 
particular  the  areas  to  be  covered  by  the  asset–liability  management  and 
investment policy, as referred to in Article 44(2), of insurance and reinsurance 
undertakings; 

EN 

17 

   EN 

 
 
 
(b) 

the functions referred to in Articles 44, 46, 47 and 48; 

(c) 

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

(d) 

the  conditions  under  which  outsourcing,  in  particular  to  service  providers 
located in third countries, may be performed. 

2. 

Where necessary to ensure appropriate convergence of the assessment referred to in 
point (a) of Article 45(1), the Commission may adopt delegated acts, in accordance 
with Article 301a and subject to the conditions of Articles 301b and 301c, to further 
specify the elements of that assessment." 

(8) 

In the third subparagraph of Article 51(2) the date "31 October 2017" is replaced by 
the date "31 December 2017". 

(9) 

Article 52 is replaced by the following: 

"Article 52 
Information for and reports by the European Insurance and Occupational Pensions Authority 

1. 

Member  States  shall  require  the  supervisory  authorities  to  provide  the  following 
information to EIOPA 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; 

(ii) for life insurance undertakings; 

(iii) for non-life insurance undertakings; 

(iv) for insurance undertakings pursuing both life and non-life activities; 

(v) for reinsurance undertakings; 

(b) 

for each of the disclosures set out in point (a) of this paragraph, the proportion 
of  capital  add-ons  imposed  under  points  (a),  (b)  and  (c)  of  Article  37(1) 
respectively. 

2. 

EIOPA shall publicly disclose, on an annual basis, the following information: 

(a) 

for  all  Member  States  together,  the  total  distribution  of  capital  add-ons, 
measured as a percentage of the Solvency Capital Requirement, for each of the 
following: 

(i) all insurance and reinsurance undertakings; 

(ii) life insurance undertakings; 

EN 

18 

   EN 

 
(iii) non-life insurance undertakings; 

(iv) insurance undertakings pursuing both life and non-life activities; 

(v) reinsurance undertakings; 

(b) 

(c) 

for each Member State separately, the distribution of capital add-ons, measured 
as  a  percentage  of  the  Solvency  Capital  Requirement,  covering  all  insurance 
and reinsurance undertakings in that Member State; 

for each of the disclosures referred to in points (a) and (b) of this paragraph, the 
proportion  of  capital  add-ons  imposed under points (a), (b) and  (c) of Article 
37(1) respectively. 

3. 

EIOPA  shall  provide  the  information  referred  to  in  paragraph  2  to  the  European 
Parliament,  the  Council  and  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." 

(10)  Article 56 is replaced by the following: 

"Article 56 
Solvency and financial condition report: delegated acts and implementing acts 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject  to  the  conditions  of  Articles  301b  and  301c,  further  specifying  the 
information which must be disclosed and the means by which this is to be achieved. 

Powers are conferred on the Commission to adopt implementing technical standards 
to determine the conditions of application of Articles 53, 54 and 55 as supplemented 
by  the  delegated  acts  referred  to  in  this  Article  concerning  the  matters  covered  by 
those  delegated  acts,  specifically  with  regard  to  the  templates  for  the  public 
disclosure .  

The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA  shall  develop  draft  implementing  technical  standards  for  submission  to  the 
Commission by 31 December 2011 at the latest. " 

(11)  Article 58(8) is replaced by the following: 

"8. The Commission shall adopt delegated acts, in accordance with Article 301a and 
subject  to  the  conditions  of  Articles  301b  and  301c,  further  specifying  the 
adjustments of the criteria set out in Article 59(1), in order to take account of future 
developments and to ensure the uniform application of Articles 57 to 63." 

(12) 

In Article 69, the second paragraph is replaced by the following: 

EN 

19 

   EN 

 
"Such  disclosure  shall  be  made  only  where  necessary  for  reasons  of  prudential 
control.  Member  States  shall,  however,  provide  that  information  received  under 
Articles  65  and  Article  68(1),  and  information  obtained  by  means  of  on-site 
verification referred to in Article 33, may only be disclosed with the express consent 
of the supervisory authority from which the information originated or the supervisory 
authority of the Member State in which the on-site verification was carried out." 

(13)  Article 71 is amended as follows:  

(a) 

Paragraph 2 is replaced by the following: 

"2.  Member  States  shall  ensure  that  in  the  exercise  of  their  duties  supervisory 
authorities  have  regard  to  the  convergence  in  respect  of  supervisory  tools  and 
supervisory  practices  in  the  application  of  the  laws,  regulations  and  administrative 
requirements  adopted  pursuant  to  this  Directive.  For  that  purpose,  Member  States 
shall ensure that: 

(a) 

the supervisory authorities participate in the activities of the EIOPA; 

(b) 

(c) 

the supervisory authorities follow the guidelines and recommendations of 
the EIOPA and provide reasons where they fail to do so; 

national mandates conferred on the supervisory authorities do not inhibit 
the  performance  of  their  duties  as  members  of  the  EIOPA  under  this 
Directive."  

(b) 

Paragraph 3 is deleted. 

(14)  Article 75 is amended as follows: 

(a) 

 Paragraph 2 is replaced by the following:  

"2. The Commission shall adopt delegated acts, in accordance with Article 301a and 
subject  to  the  conditions  of  Articles  301b  and  301c,  to  set  out  the  methods  and 
assumptions  to  be  used  in  the  valuation  of  assets  and  liabilities  as  laid  down  in 
paragraph 1." 

(b) 

The following paragraph 3 is added: 

"3.  Powers  are  conferred  on  the  Commission  to  adopt  implementing  technical 
standards to: 

(a) 

determine  the  conditions  of application of  paragraph  1 as  supplemented 
by the delegated acts referred to in paragraph 2 in relation to the matters 
covered by those delegated acts, as regards: 

(i) 

valuation  approaches  where  quoted  market  prices  are  either  not 
available or not consistent with paragraphs 1 and 2; 

EN 

20 

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(ii) 

the  consistency  of  international  accounting  standards  as  endorsed 
by  the  Commission  in  accordance  with  Regulation  (EC)  No 
1606/2002 with the valuation approach set out in this Article; 

(b)  determine  the conditions of application  of paragraph  1  as supplemented 
by the delegated acts referred to in paragraph 2, in relation to the matters 
covered by those delegated acts, specifically with regard to the methods 
and  assumptions  to  be  used  in  the  valuation  of  assets  and  liabilities  as 
laid  down  in  paragraph  1  including  alternative  valuation  methods  to  be 
used  where  international  accounting  standards,  as  endorsed  by  the 
Commission  in  accordance  with  Regulation  (EC)  No  1606/2002  of  the 
European  Parliament  and  of  the  Council11,  are  either  temporarily  or 
permanently  not  consistent  with  the  valuation  approach  set  out  in  this 
Article. 

The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA shall develop draft implementing technical standards for submission to the 
Commission by 31 December 2011." 

(15)  The following Article 77a is inserted: 

Article 77a  
"Technical information produced by the European Insurance and Occupational Pensions 
Authority 

EIOPA  shall  publish  technical  information  including  the  relevant  risk-free  interest 
rate  term  structure.  Where  EIOPA  observes  an  illiquidity  premium  in  the  financial 
markets  in  periods  of  stressed  liquidity,  information  relating  to  the  illiquidity 
premium,  including  its  size  shall  also  be  published.  EIOPA  shall  carry  out  the 
observation  of  the  illiquidity  premium  and  the  derivation  of  the  information  on  a 
transparent, objective and reliable basis. Information for  all  these purposes  shall be 
derived  according  to  methods  and  assumptions  which  may  include  formulae,  or 
determinations made by EIOPA. 

The information referred to in the first paragraph shall be published for each relevant 
currency  on  at  least  a  quarterly  basis  in  a  manner  which  is  consistent  with  the 
methodologies referred to in Article 86."  

(16)  Article 86 is replaced by the following: 

11 

OJ L 243, 11.9.2002, p. 1. 

EN 

21 

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"Article 86 
Delegated acts and implementing acts 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, laying down the following:  

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

actuarial and statistical methodologies to calculate the best estimate referred to 
in Article 77(2); 

the  methodologies,  principles  and  techniques  for  the  determination  of  the 
relevant risk-free interest rate structure to be used to calculate the best estimate 
referred to in Article 77(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 specific circumstances in which it would be appropriate to 
use  approximations,  including  case-by-case  approaches,  to  calculate  the  best 
estimate;  

(g) 

the  methodologies  to  be  used  when  calculating  the  counterparty  default 
adjustment referred to in Article 81 designed to capture expected losses due to 
default of the counterparty;  

(h)  where  necessary,  simplified  methods  and  techniques  to  calculate  technical 
provisions, in order to ensure the actuarial and statistical methods referred to in 
points (a) and (d) are proportionate to the nature, scale and complexity of the 
risks  supported  by  insurance  and  reinsurance  undertakings  including  captive 
insurance and reinsurance undertakings; 

(i) 

the  detailed  criteria  for  the  elements  of  technical  information,  the  calculation 
the  formulae  and 
methods  and  assumptions,  and  where  appropriate 
determinations, according to which the information is to be derived by EIOPA 
as referred to in Article 77a.. 

Powers are conferred on the Commission to adopt implementing technical standards 
to  determine  the  conditions  of  application  of  Article  77(2)  as  supplemented  by  the 
delegated  acts  referred  to  in  points  (a)  to  (h)  of  the  first  paragraph  of  this  Article, 
concerning the matters covered by those delegated acts.  

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The  implementing  technical  standards  referred  to  in  the  first  paragraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA  shall  develop  draft  implementing  technical  standards  for  submission  to  the 
Commission by 31 December 2011." 

(17)  Article 92 is amended as follows:  

(a)  The title is replaced by the following: 

"Article 92 
Delegated acts and implementing acts" 

(b)  Paragraph 1 is replaced by the following: 

"1. The Commission shall adopt delegated acts, in accordance with Article 301a and 
subject to the conditions of Articles 301b and 301c, specifying the following: 

(a) 

(b) 

the criteria and procedure for granting supervisory approval of ancillary 
own funds in accordance with Article 90; 

the  treatment  of  participations,  within  the  meaning  of  the  third 
subparagraph  of  Article 212(2),  in  financial  and  credit  institutions  with 
respect to the determination of own funds."  

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(c)  Paragraph 3 is replaced by the following: 

"3.  Powers  are  conferred  on  the  Commission  to  adopt  implementing  technical 
standards to determine the conditions of Article 90 as supplemented by the delegated 
acts referred to in paragraph 1(a)  of  this Article concerning  the matters  covered by 
those  delegated  acts,  specifically  with  regard  to  the  procedure  to  be  followed  for 
granting supervisory approval of ancillary own funds.  

The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA  shall  develop  draft  implementing  technical  standards  for  submission  to  the 
Commission by 31 December 2011." 

(18)  Article 97 is replaced by the following:  

"Article 97 
 Delegated acts and implementing acts 

1. 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, laying down the following: 

(a) 

(b) 

a  list  of own-fund items, including those referred  to in Article 96, deemed to 
fulfil the criteria, set out in Article 94, 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 (a); 

The  Commission  shall  regularly  review  and,  where  appropriate  update,  the  list 

referred to in point (a) of paragraph 1 in light of market developments.  

2. 

Powers are conferred on the Commission to adopt implementing technical standards 
to  determine  the  conditions  of  application  of  Articles  93  to  96  as  supplemented  by 
the delegated acts referred to in paragraph 1 of this Article, concerning the matters 
covered  by  those  delegated  acts,  specifically  with  regard  to  the  classification 
methods.  

The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA  shall  develop  draft  implementing  technical  standards  for  submission  to  the 
Commission by 31 December 2011." 

(19)  Article 99 is replaced by the following: 

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"Article 99 
Delegated acts and implementing acts  

1. 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, laying down: 

(a) 

the quantitative limits referred to in Article 98(1) and (2); 

(b) 

the  adjustments  that  should  be  made  to  reflect  the  lack  of  transferability  of 
those  own-fund  items  that  can  only  be  used  to  cover  losses  arising  from  a 
particular segment of liabilities or from particular risks (ring-fenced funds). 

2. 

Powers are conferred on the Commission to adopt implementing technical standards 
to  determine  the  conditions  of  application  of  Article  98  as  supplemented  by  the 
delegated  acts  referred  to  in  paragraph  1  of  this  Article  concerning  the  matters 
covered by those delegated acts, specifically with regard to adjustments in relation to 
ring-fenced funds.  

The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA  shall  develop  draft  implementing  technical  standards  for  submission  to  the 
Commission by 31 December 2011." 

(20)  The following Article 109a is inserted: 

"Article 109a 
Harmonised technical inputs to standard formula: role of European Insurance and 
Occupational Pensions Authority 

1. 

For  the  purposes  of  evaluating  risk  mitigation  techniques  as  referred  to  in  Article 
101(5)  facilitating  the  calculation  of  the  market  risk  module  referred  to  in  Article 
105(5)  and,  where  appropriate,  facilitating  the  counterparty  default  risk  module 
referred to in Article 105(6), EIOPA shall: 

(a) 

assess the eligibility of external credit assessment institutions and allocate their 
credit assessments to an objective scale of credit quality steps; 

(b)  publish lists of regional governments and local authorities, exposures to whom 

are to be treated as exposures to central government;  

(c) 

specify the equity index referred to in Article 106(2), calculate the symmetric 
adjustment referred to in Article 106 and publish both sets of information on a 
regular basis; 

(d) 

specify  the  adjustments  to  be  made  for  currencies  pegged  to  the  euro  in  the 
currency risk sub-module referred to in Article 105(5). 

2. 

For the purpose of facilitating the calculation of the health underwriting risk module 
referred to in Article 105(4), EIOPA shall calculate and publish standard deviations 
in relation to specific national legislative measures of  Member States which permit 

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the  sharing  of  claims  payments  in  respect  of  health  risk  amongst  insurance  and 
reinsurance undertakings and which meet specified criteria." 

(21)  Article 111 is replaced by the following: 

"Article 111 
Delegated acts and implementing acts" 

1. 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, providing for the following: 

(a) 

(b) 

a standard formula in accordance with the provisions of Articles 101 and 103 
to 109;  

any  sub-modules  necessary  or  covering  more  precisely  the  risks  which  fall 
under  the  respective  risk  modules  referred  to  in  Article  104  as  well  as  any 
subsequent updates; 

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(c) 

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, 105 and 304, the symmetric adjustment 
mechanism  and  the  appropriate  period  of  time,  expressed  in  the  number  of 
months,  as  referred  to  in  Article  106,  and  the  appropriate  approach  for 
integrating  the  method  referred  to  in  Article  304  in  the  Solvency  Capital 
Requirement as calculated in accordance with the standard formula; 

(d) 

the correlation parameters, including, where necessary, those set out in Annex 
IV, and the procedures for updating those parameters; 

(e)  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  to  adjust  the  calculation  of  the  Solvency 
Capital Requirement; 

(f) 

(g) 

(h) 

(i) 

(j) 

(k) 

(l) 

the qualitative criteria that the risk-mitigation techniques referred to in point (e) 
must fulfil 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 107, including the percentage referred to 
in Article 107(3); 

the  methods  and  adjustments  to  be  used  to  reflect  the  reduced  scope  for  risk 
diversification of insurance and reinsurance undertakings related to ring-fenced 
funds; 

the method to be used when calculating the adjustment for the loss-absorbing 
capacity of technical provisions or deferred taxes, as laid down in Article 108; 

the subset of standard parameters in the life, non-life and health underwriting 
risk  modules  that  may  be  replaced  by  undertaking-specific  parameters  as  set 
out in Article 104(7); 

criteria in relation to the standardised methods to be used by the insurance or 
reinsurance  undertaking  to  calculate  the  undertaking-specific  parameters 
referred  to  in  point (j),  and  any  criteria  with  respect  to  the  completeness, 
accuracy,  and  appropriateness  of  the  data  used  that  must  be  met  before 
supervisory  approval  is  given  together  with  the  procedure  to  be  followed  for 
such approval; 

the simplified calculations provided for specific sub-modules and risk modules, 
as  well  as  the  criteria  that  insurance  and  reinsurance  undertakings,  including 
captive  insurance  and  reinsurance  undertakings,  shall  be  required  to  fulfil  in 
order  to  be  entitled  to  use  each  of  those  simplifications,  as  set  out  in 
Article 109; 

(m) 

the  approach  to  be  used  with  respect  to  related  undertakings  within  the 
meaning of Article 212 in the calculation of the Solvency Capital Requirement, 
in  particular  the  calculation  of  the  equity  risk  sub-module  referred  to  in 

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Article 105(5), taking into account the likely reduction in the volatility of the 
value  of  those  related  undertakings  arising  from  the  strategic  nature  of  those 
investments  and  the  influence  exercised  by  the  participating  undertaking  on 
those related undertakings; 

(n) 

the detailed criteria for the eligibility of external credit assessment institutions 
and for the association of credit assessments to a scale of credit quality referred 
to in Article 109a(1)(a);  

(o) 

the detailed criteria for the equity index referred to in Article 109a(1)(c) ; 

(p) 

(q) 

the  detailed  criteria  for  the  adjustments  for  currencies  pegged  to  the  euro  for 
the  purpose  of  facilitating  the  calculation  of  the  currency  risk  sub-module 
referred to in Article 109a(1)(d);  

the detailed criteria that the national legislative measures arrangements shall 
meet, and the requirements for the calculation of the standard deviation for the 
purpose of facilitating the calculation of the health underwriting risk module 
referred to in Article 109a(2) 

2. 

The  Commission  may  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, laying down quantitative limits 
and  asset  eligibility  criteria.  Those  delegated  acts  shall  apply  to  assets  covering 
technical  provisions,  excluding  assets  held  in  respect  of  life  insurance  contracts 
where  the  investment  risk  is  borne  by  the  policy  holders.  Those  measures  shall  be 
reviewed  by  the  Commission  in  the  light  of  developments  in  the  standard  formula 
and financial markets. 

3. 

Powers are conferred on the Commission to adopt implementing technical standards 
to determine: 

(a) 

the  conditions  of  application  of  Articles  101  to  110  as  supplemented  by  the 
delegated  acts  referred  to  in  paragraph  1(a)  to  (m),  concerning  the  matters 
covered by those delegated acts; and 

(b) 

the  standardised  methods  to  be  used  to  calculate  the  undertaking  specific 
parameters as referred to in paragraph 1(j).  

The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA  shall  develop  draft  implementing  technical  standards  for  submission  to  the 
Commission by 31 December 2011." 

(22)  Article 114 is replaced by the following: 

" Article 114 
Delegated acts and implementing acts 

1. 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, setting out the following: 

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(a) 

the procedure to be followed for the approval of an internal model;  

(b) 

(c) 

(d) 

the  adaptations  to  be  made  to  the  standards  set  out  in  Articles  120  to  125  in 
light of the limited scope of the application of the partial internal model; 

the procedures to approve major changes to an internal model and changes to 
the policy for changing an internal model referred to in Article 115; 

approaches,  including,  where  appropriate,  default  techniques  which  allow  a 
partial  internal  model  to  be  fully  integrated  into  the  Solvency  Capital 
Requirement  standard  formula  and  requirements  for  the  use  of  alternative 
techniques. 

powers are conferred on the Commission to adopt implementing technical standards 
to determine the conditions of application of Articles 112 to 126 as supplemented by 
the delegated acts referred to in paragraph 1 of this Article, concerning the matters 
covered  by  those  delegated  acts,  specifically  with  regard  to  the  procedures, 
adaptations  and  alternative  techniques  referred  to  in  that  paragraph 
.  The 
implementing  technical  standards  referred  to  in  the  second  subparagraph  shall  be 
adopted  in  accordance  with  Article  15  of  Regulation  …/…  [EIOPA].  EIOPA  shall 
develop draft implementing technical standards for submission to the Commission by 
31 December 2011." 

(23)  Article 127 is replaced by following: 

"Article 127 
Delegated acts and implementing acts 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject  to the  conditions of Articles 301b and 301c, with respect to Articles 120 to 
126, regarding the use of internal models throughout the Union. 

Powers are conferred on the Commission to adopt implementing technical standards 
to determine the conditions of application of Articles 120 to 126, as supplemented by 
the delegated acts referred to in the first paragraph, concerning the matters covered 
by those delegated acts.  

The  implementing  technical  standards  referred  to  in  the  second  paragraph  shall  be 
adopted  in  accordance  with  Article  15  of  Regulation  …/…  [EIOPA].  EIOPA  shall 
develop draft implementing technical standards for submission to the Commission by 
31 December 2011." 

(24)  Article 129(1)(d)(iii) is replaced by the following: 

"(iii)  EUR  3  200  000  for  reinsurance  undertakings,  except  in  the  case  of  captive 
reinsurance undertakings, in which case the Minimum Capital Requirement shall be 
not less than EUR 1 100 000," 

(25) 

In the second subparagraph of Article 129(3) the date "31 October 2014" is replaced 
by the date "31 December 2014". 

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(26) 

In  Article  129(5),  the  date  "31  October  2017"  is  replaced  by  the  date  "31  December 
2017", 

(27)  Article 130 is replaced by the following: 

"Article 130 
Delegated acts 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, specifying the calculation of the 
Minimum Capital Requirement, referred to in Articles 128 and 129." 

(28) 

In  the  first  paragraph  of  Article  131,  the  dates  "31  October  2012"  and  "31  October 
2013"  are  replaced  by  the  dates  "31  December  2012"  and  "31  December  2013 
respectively". 

(29)  Article 135 is replaced by the following: 

"Article 135 
Delegated acts 

1. 

The  Commission  may  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject  to  the  conditions  of  Articles  301b  and  301c,  specifying  qualitative 
requirements in the following areas: 

(a) 

(b) 

the  identification,  measurement,  monitoring,  managing  and  reporting  of  risks 
arising from investments in relation to the first subparagraph of Article 132(2); 

the identification, measurement monitoring, managing and reporting of specific 
risks arising from investment in derivative instruments and assets referred to in 
the second subparagraph of Article 132(4).  

2. 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, laying down: 

(a) 

the requirements that need to be met by undertakings that repackage loans into 
tradable securities and other financial instruments (originators) in order for an 
insurance or reinsurance undertaking to be allowed to invest in such securities 
or instruments issued after 1 January 2011, including requirements that ensure 
that the originator retains a net economic interest of no less than 5 %; 

(b)  qualitative  requirements  that  must  be  met  by  insurance  or  reinsurance 

undertakings that invest in such securities or instruments; 

(c) 

the consequences of breaching the requirements laid down under points (a) and 
(b) of this paragraph, including, where appropriate, and notwithstanding Article 
101(3), measures which impose a proportionate additional capital charge." 

(30)  Article 138 (4) is amended as follows: 

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(a)  The first subparagraph shall be replaced by the following: 

"In the event of an exceptional fall in financial markets, as determined by EIOPA in 
accordance with this paragraph, the supervisory authority may extend the period set 
out  in  the  second  sub-paragraph  of  paragraph  3  by  an  appropriate  period  of  time 
taking into account all relevant factors." 

(b)  The following fourth and fifth sub-paragraphs are added: 

"Without  prejudice  to  the  powers  of  the  EIOPA  under  Article  18  of  Regulation 
…/…,  for  the  purposes  of  this  paragraph,  EIOPA  shall,  following  a  request  by  the 
supervisory  authority  concerned,  address  an  individual  decision  to  the  requesting 
supervisory  authority  declaring  the  existence  of  an  exceptional  fall  in  financial 
markets. An exceptional fall in financial markets exists, where one or more insurance 
or  reinsurance  undertakings  are  unable  to  meet  one  of  the  requirements  set  out  in 
paragraph 3 of this Article within the time period defined therein as a consequence of 
a  fall  in  financial  markets  which  is  unforeseen,  sharp  and  steep,  which  is  different 
from the downturns that occur as part of the economic cycle and which has already 
affected seriously and adversely the financial situation of one or more insurance and 
reinsurance undertakings collectively representing a substantial part of the insurance 
or reinsurance market in one or more Member States. 

EIOPA shall at least once a month review whether the conditions referred to in the 
fourth subparagraph still apply as of the date of the review and repeal that decision 
where one or more of the conditions referred to in the fourth subparagraph on which 
the  decision  was  based  is  no  longer  fulfilled.  To  this  end  EIOPA  shall  address  an 
individual  decision  to  the  supervisory  authority  concerned  declaring  that  an 
exceptional fall in financial markets has ceased to exist.." 

(31)  Article 143 is replaced by the following: 

" Article 143 
Delegated acts 

1. 

2. 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, specifying the procedures to be 
followed  by  EIOPA  when  determining  the  existence  of  an  exceptional  fall  in  the 
financial  markets,  and  the  factors  to  be  taken  into  account  for  the  purpose  of  the 
application  of  Article 138(4)  including  the  maximum  appropriate  period  of  time, 
expressed in total number of months, which shall be the same for all insurance and 
reinsurance undertakings as referred to in the first subparagraph of Article 138(4). 

Where it is necessary to enhance convergence, the Commission may adopt delegated 
acts, in accordance with Article 301a and subject to the conditions of Articles 301b 
and  301c,  laying  down  further  specifications  with  respect  to  the  recovery  plan 
referred  to  in  Article 138(2),  the  finance  scheme  referred  to  in  Article 139(2)  and 
with respect to Article 141, taking due care to avoid pro-cyclical effects."  

(32)  The following subparagraph is inserted after the first subparagraph of Article 155(3): 

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"In addition, the supervisory authority of the host Member State may refer the matter 
to  EIOPA  and  request  its  assistance  in  accordance  with  Article  19  of  Regulation 
…/2010  [EIOPA].  In  that  case,  EIOPA  may  act  in  accordance  with  the  powers 
conferred on it by that Article." 

(33)  The following subparagraph is inserted after the first subparagraph of Article 158(2): 

"In addition, the supervisory authority of the host Member State may refer the matter 
to  EIOPA  and  request  its  assistance  in  accordance  with  Article  19  of  Regulation 
…/2010  [EIOPA].  In  that  case,  EIOPA  may  act  in  accordance  with  the  powers 
conferred on it by that article." 

(34)  Article 172 is amended as follows: 

(35) 

(a) paragraph 1 is replaced by the following: 

"1.  The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a 
and  subject  to  the  conditions  of  Articles  301b  and  301c,  specifying  the  criteria  to 
assess  whether  the  solvency  regime  of  a  third  country  applied  to  reinsurance 
activities of undertakings with their head office in that third country is equivalent to 
that laid down in Title I…." 

(b) 

the following new paragraphs 4, 5 and 6 are added: 

"4. By way of derogation from paragraph 3 and the second subparagraph of Article 
134(1),  the  same  treatment  as  in  Article  172(3)  and  the  second  subparagraph  of 
Article  134(1)  shall  be  accorded,  for  a  transitional  period,  to  reinsurance  contracts 
concluded with undertakings having their head office in a third country the solvency 
regimes of which are unlikely, by 31 December 2012, to fully meet the criteria for 
assessing  equivalence,  referred  to  in  paragraph  1.  The  transitional  period  shall  last 
for  a  maximum  of  5  years  from  the  date  referred  to  in  the  first  sub-paragraph  of 
Article  309(1).This  derogation  shall  only  apply  where  the  Commission  has  made  a 
decision in accordance with paragraph 6 that specified conditions have been met by 
the third country.  

5. The Commission may adopt delegated acts, in accordance with Article 301a and 
subject  to  the  conditions  of  Articles  301b  and  301c,  specifying  in  relation  to 
paragraph  4  the  length  of  the  transitional  period  which  may  be  shorter  than  the 
maximum  of  5  years  and  the  conditions  which  are  to  be  met  by  the  third  country. 
Those conditions shall cover commitments given by the supervisory authorities, their 
convergence  to  an  equivalent  regime  over  a  set  period  of  time,  the  existing  or 
intended content of the regime, and matters of cooperation, exchange of information 
and professional secrecy obligations. 

6. The Commission may, in accordance with the regulatory procedure referred to in 
Article 301(2), decide in respect of solvency regimes referred to in paragraph 4 that 
the conditions set out in Article 174(4) and the delegated act have been met by the 
third country. 

Those decisions shall be regularly reviewed." 

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(36)  Article 210 (2) is replaced by the following: 

"2. The Commission may adopt delegated acts, in accordance with Article 301a and 
subject  to  the  conditions  of  Articles  301b  and  301c,  specifying  the  provisions  of 
paragraph 1 with respect to the monitoring, management and control of risks arising 
from finite reinsurance activities." 

(37)  Article 211 is amended as follows 

(a)  Paragraphs 2 and 3 are replaced by the following: 

"2. The Commission shall adopt delegated acts, in accordance with Article 301a and 
subject to the conditions of Articles 301b and 301c, laying down the following:  

(a) 

the scope of authorisation; 

(b)  mandatory conditions to be included in all contracts issued; 

(c) 

(d) 

(e) 

fit  and  proper  requirements  as  referred  to  in  Article  42  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) 

solvency requirements. 

The  Commission  may  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, laying down the procedures for 
supervisory  approval  of  special  purpose  vehicles  and,  where  the  special  purpose 
vehicle  which  assumes  risk  from  an  insurance  or  reinsurance  undertaking  is 
established in a Member State which is not the Member State in which the insurance 
or  reinsurance  undertaking  is  authorised,  the  procedures  for  cooperation  and 
exchange of information between supervisory authorities. 

3. Special purpose vehicles authorised prior to 31 December 2012 shall be subject to 
the  law  of  the  Member  State  that  authorised  the  special  purpose  vehicle.  However, 
any new activity commenced by such a special purpose vehicle after that date shall 
be subject to paragraphs 1 and 2." 

(b)  The following paragraph 4 is added: 

"4.  Powers  are  conferred  on  the  Commission  to  adopt  implementing  technical 
standards to determine the conditions of application of this Article as supplemented 
by  the  delegated  acts  referred  to  in  paragraph  2  concerning  the  matters  covered  by 
those  delegated  acts,  specifically  with  regard  to  the  procedure  to  be  followed  for 

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granting  supervisory  approval  of  special  purpose  vehicles  and  the  procedures  for 
cooperation and exchange of information between supervisory authorities.  

The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA  shall  develop  draft  implementing  technical  standards  for  submission  to  the 
Commission by 31 December 2011." 

(38)  Article 216(7) is replaced by the following: 

"7.  The  Commission  may  adopt  delegated  acts,  in  accordance  with  Article  301a 
and subject to the conditions of Articles 301b and 301c, specifying the circumstances 
under which the decision referred to in paragraph 1 can be made." 

(39)  Article 217(3) is replaced by the following: 

"3. The Commission may adopt delegated acts, in accordance with Article 301a and 
subject  to  the  conditions  of  Articles  301b  and  301c,  specifying  the  circumstances 
under which the decision referred to in paragraph 1 can be made." 

(40) 

In Article 227(2), the second subparagraph is replaced by the following: 

"In  so  doing,  the  group  supervisor  shall  consult  the  other  supervisory  authorities 
concerned and EIOPA before taking a decision on equivalence." 

(41)  Article 227( 3) is replaced by the following: 

"3. The Commission may adopt delegated acts, in accordance with Article 301a and 
subject to the conditions of Articles 301b and 301c, specifying the criteria to assess 
whether  the  solvency  regime  in  a  third  country  is  equivalent  to  that  laid  down  in 
Title I, Chapter VI.” 

(42) 

In Article 227 the following paragraphs 6 and 7 are added: 

"6.  By  way  of  derogation  from  the  second  subparagraph  of  paragraph  1,  Member 
States may for a transitional period provide that the group solvency calculation take 
into  account,  as  regards  the  undertaking  referred  to  in  that  subparagraph,  the 
Solvency Capital Requirement and the own funds eligible to satisfy that requirement 
as laid down by the third country concerned. The transitional period shall last for a 
maximum  of  5  years  from  the  date  referred  to  in  the  first  sub-paragraph  of  Article 
309(1). This derogation shall only apply where the Commission has made a decision 
in accordance with paragraph 7 that specified conditions have been met by the third 
country.  

7. The Commission may adopt delegated acts, in accordance with Article 301a and 
subject  to  the  conditions  of  Articles  301b  and  301c,  specifying  in  relation  to 
paragraph  6  the  length  of  the  transitional  period  which  may  be  shorter  than  the 

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maximum  of  5  years  and  the  conditions  which  are  to  be  met  by  the  third  country. 
Those conditions shall cover commitments given by the supervisory authorities, their 
convergence  to  an  equivalent  regime  over  a  set  period  of  time,  the  existing  or 
intended content of the regime, and matters of cooperation, exchange of information 
and professional secrecy obligations. 

8.  The  Commission  may  adopt  a  decision  in  respect  of  solvency  regimes  of  third 
countries, referred to in paragraph 6 that the conditions set out in paragraph 4 and the 
delegated act have been met by the third country. 

Those decisions shall be adopted after consultation with the European Insurance and 
Occupational Pensions Committee and in accordance with the regulatory procedure 
referred to in Article 301(2). The decisions shall be reviewed regularly." 

(43)  Article 231(3) to (6) are replaced by the following:  

"3. During the period referred to in paragraph 2, the group supervisor and any of the 
other  supervisory  authorities  concerned  may  consult  EIOPA.  EIOPA  shall  also  be 
consulted where the participating undertaking so requests. 

Where EIOPA is consulted, all supervisory authorities concerned shall be informed 
and the period referred to in paragraph 2 shall be extended by two months. 

4. The group supervisor shall provide the applicant with a document setting out the 
fully reasoned joint decision referred to in paragraph 2.  

Where  EIOPA  has  been  consulted  in  accordance  with  paragraph  3,  the  supervisory 
authorities  concerned  shall  duly  consider  such  advice  before  taking  their  joint 
decision.  The  group  supervisor  shall  provide  the  applicant  with  a  document  setting 
out the fully reasoned joint decision and an explanation of any significant deviation 
from the advice adopted by EIOPA. 

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 EIOPA has been consulted, its advice. 

The group supervisor shall provide the applicant and the other supervisory authorities 
concerned with a document setting out its fully reasoned decision and an explanation 
of any significant deviation from any advice adopted by EIOPA. 

That  decision  shall  be  recognised  as  determinative  and  applied  by  the  supervisory 
authorities concerned. 

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6. If, at the end of the periods referred to in paragraphs 2 and 3, respectively, any of 
the supervisory authorities concerned has referred the matter to EIOPA in accordance 
with  Article  19  of  Regulation  …/…  [EIOPA],  the  group  supervisor  shall  defer  its 
decision  and  await  any  decision  that  EIOPA  may  take  in  accordance  with  Article 
19(3)  of  that  Regulation,  and  shall  take  its  decision  in  conformity  with  EIOPA's 
decision. 

The  periods  referred  to  in  paragraphs  2  and  3  respectively  shall  be  deemed  the 
conciliation period within the meaning of Article 19(2) of that Regulation.  

EIOPA shall take its decision within one month. The matter shall not be referred to 
EIOPA after the end of the periods referred to in paragraphs 2 and 3 respectively or 
after a joint decision has been reached." 

(44)  Article 234 is replaced by the following: 

" Article 234 
Delegated acts 

The  Commission  shall  adopt  delegated  acts  in  accordance  with  Article  301a  and 
subject  to  the  conditions  of  Articles  301b  and  301c  specifying  the  technical 
principles and methods set out in Articles 220 to 229 and the application of Articles 
230 to 233 to ensure uniform application within the Union." 

(45)  Article 237 is amended as follows:  

(a) 

Paragraphs 3, 4 and 5 are replaced by the following: 

"3.  During  the  period  referred  to  in  paragraph  2,  in  the  case  of  diverging  views 
concerning  the  approval  of  the  application  referred  to  in  paragraph  1,  the  group 
supervisor or any of the other supervisory authorities concerned may consult EIOPA. 
Where EIOPA is consulted, all supervisory authorities concerned shall be informed 
and the period referred to in paragraph 2 shall be extended by one month. 

Where EIOPA has been consulted, the supervisory authorities concerned shall duly 
consider such advice before taking their joint decision. 

4.  The  supervisory  authority  having  authorised  the  subsidiary  shall  provide  to  the 
applicant  the  joint  decision  referred  to  in  paragraphs  2  and  3,  shall  state  the  full 
reasons and shall, where EIOPA has been consulted, contain an explanation of any 
significant deviation from the advice adopted by EIOPA. The joint decision shall be 
recognised  as  determinative  and  shall  be  applied  by  the  supervisory  authorities 
concerned. 

5. In the absence of a joint decision of the supervisory authorities concerned within 
the  periods  set  out  in  paragraphs  2  and  3,  the  group  supervisor  shall  take  its  own 
decision with regard to the application. 

In taking its decision, the group supervisor shall duly consider the following: 

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(a) 

(b) 

any  views  and  reservations  of  the  supervisory  authorities  concerned 
expressed during the applicable period; 

any reservations of the other supervisory authorities within the college of 
supervisors expressed during the applicable period; 

(c)  where the EIOPA has been consulted, its advice. 

The  decision  shall  state  the  full  reasons  and  shall  contain  an  explanation  of  any 
significant  deviation  from  the  reservations  of  the  other  supervisory  authorities 
concerned  and  any  advice  of  EIOPA.  The  group  supervisor  shall  provide  the 
applicant  and  the  other  supervisory  authorities  concerned  with  a  copy  of  the 
decision." 

(b) 

The following paragraph 6 is added: 

"6. Where, at the end of the periods referred to in paragraphs 2 and 3 of this Article, 
respectively, any of the supervisory authorities concerned has referred the matter to 
EIOPA in accordance with Article 19 of Regulation …/… [EIOPA], the supervisory 
authority concerned shall defer its decision and await any decision that EIOPA may 
take in accordance with Article 19(3) of that Regulation, and shall take its decision in 
conformity with EIOPA's decision.  

The  periods  referred  to  in  paragraphs  2  and  3,  respectively,  shall  be  deemed  the 
conciliation  period  within  the  meaning  of  Article  19(2)  of  that  Regulation.  EIOPA 
shall take its decision within one month. The matter shall not be referred to EIOPA 
after the end of the periods referred to in paragraphs 2 and 3, respectively, or after a 
joint decision has been reached." 

(46)  Article 238(5) is replaced by the following:  

"5.  Where  the  supervisory  authority  and  the  group  supervisor  disagree,  either 
supervisor  may,  within  one  month  from  the  proposal  of  the  supervisory  authority, 
refer the matter to EIOPA and request its assistance in accordance with Article 19 of 
Regulation  …/…  [EIOPA].  In  that  case,  EIOPA  may  act  in  accordance  with  the 
powers conferred to it by that Article, and shall take its decision within two months 
of such referral. The matter shall not be referred to EIOPA after the end of the one 
month period referred to in this subparagraph or after an agreement has been reached 
within the college in accordance with paragraph 4 of this Article. 

The  supervisory  authority  having  authorised  that  subsidiary  shall  defer  its  decision 
and await any decision that EIOPA may take in accordance with Article 19(3) of that 
Regulation, and shall take its decision in conformity with EIOPA's decision.  

The decision shall state the full reasons on which it is based. 

The decision shall be submitted to the subsidiary and to the college of supervisors." 

(47) 

In Article 239 the following paragraph 4 is added:  

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"4.  Where  the  supervisory  authority  and  the  group  supervisor  disagree  on  the 
approval  of  the  recovery  plan  at  the  end  of  the  four  months  period  referred  to  in 
paragraph 1 of this Article or on the approval of the proposed measures at the end of 
the one month period referred to in paragraph 2 of this Article, either supervisor may, 
at  the  end  of  the  applicable  period,  refer  the  matter  to  EIOPA  and  request  its 
assistance in accordance with Article 19 of Regulation …/… [EIOPA]. In that case, 
EIOPA  may  act  in  accordance  with  the  powers  conferred  to  it  by  that  Article,  and 
shall  take  its  decision  within  one  month  of  such  referral.  The  matter  shall  not  be 
referred  to  EIOPA  after  the  end  of  the  applicable  period  referred  to  in  this 
subparagraph  or  after  an  agreement  has  been  reached  within  the  college  in 
accordance with the second subparagraph of paragraph 1 or the second subparagraph 
of paragraph 2 of this Article. 

The  supervisory  authority  having  authorised  that  subsidiary  shall  defer  its  decision 
and await any decision that EIOPA may take in accordance with Article 19(3) of that 
regulation, and shall take its final decision in conformity with EIOPA's decision.  

The decision shall state the full reasons on which it is based. 

The decision shall be submitted to the subsidiary and to the college of supervisors." 

(48)  Article 241 is replaced by the following: 

" Article 241 
Subsidiaries of an insurance or reinsurance undertaking: 
delegated acts 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, specifying: 

(a) 

(b) 

(c) 

the  criteria  to  be  applied  when  assessing  whether  the  conditions  stated  in 
Article 236 are satisfied; 

the  criteria  to  be  applied  when  assessing  what  should  be  considered  an 
emergency situation under Article 239(2);  

the  procedures  to  be  followed  by  supervisory  authorities  when  exchanging 
information,  exercising  their  rights  and  fulfilling  their  duties  in  accordance 
with Articles 237 to 240." 

(49) 

In  Article  242(1),  the  date  "31  October  2014"  is  replaced  by  the  date  "31  December 
2014".  

(50) 

In  Article  242(2),  the  date  "31  October  2015"  is  replaced  by  the  date  "31  December 
2015". 

(51)  Article 244 (4) is replaced by the following: 

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"4.  The  Commission  may  adopt  delegated  acts  in  accordance  with  Article  301a 
and subject to the conditions of Articles 301b and 301c 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." 

(52)  Article 245 (4) is replaced by the following: 

"4.  The  Commission  may  adopt  delegated  acts  in  accordance  with  Article  301a 
and subject to the conditions of Articles 301b and 301c 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." 

(53)  Article 247(4) to (7) is replaced by the following:  

"4. During the three-month period referred to in the third subparagraph of paragraph 
3,  any  of  the  supervisory  authorities  concerned  may  request  that  EIOPA  be 
consulted. Where EIOPA is consulted, that period shall be extended by two months. 

5. Where EIOPA is consulted, the supervisory authorities concerned shall duly take 
into  account  EIOPA's  advice  before  taking  their  joint  decision.  The  joint  decision 
shall  state  the  full  reasons  and  shall  contain  an  explanation  of  any  significant 
deviation from any advice given by EIOPA. 

6. In the absence of a joint decision derogating from the criteria set out in paragraph 
2 of this Article, the task of group supervisor shall be exercised by the supervisory 
authority identified in accordance with paragraph 2 of this Article. However, if at the 
end of the periods set out in paragraphs 3 and 4 of this Article any of the supervisors 
concerned  have  referred  the  matter  to  EIOPA  in  accordance  with  Article  19  of 
Regulation …/… [EIOPA], they shall await the decision of EIOPA.  

The  periods  referred  to  in  paragraphs  3  and  4,  respectively,  shall  be  deemed  the 
conciliation  period  within  the  meaning  of  Article  19(2)  of  that  Regulation.  EIOPA 
shall take its decision within one month. The matter shall not be referred to EIOPA 
after a joint decision has been reached. 

The  task  of  group  supervisor  shall  be  exercised  by  the  supervisory  authority 
identified  in  the  decision  taken  by  EIOPA.  The  decision  shall  be  submitted  to  the 
group and to the college of supervisors. 

7. EIOPA shall inform the European Parliament, the Council and the Commission of 
any  major  difficulties  with  the  application  of  paragraphs  2,  3  and  6  on  at  least  an 
annual basis. 

In  the  event  that  any  major  difficulties  arise  from  the  application  of  the  criteria  set 
out in paragraphs 2 and 3 of this Article, the Commission shall adopt delegated acts, 
in  accordance  with  Article  301a  and  subject  to  the  conditions  of  Articles  301b  and 
301c, specifying those criteria." 

(54)  Article 248 is amended as follows: 

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(a) 

The following subparagraph is added to paragraph 2: 

"Where the group supervisor fails to carry out the tasks referred to in paragraph 1 or 
where  the  members  of  the  college  do  not  cooperate  to  the  extent  required  in  this 
paragraph,  any  of  the  supervisory  authorities  concerned  may  refer  the  matter  to 
EIOPA  and  request  its  assistance  in  accordance  with  Article  19  of  Regulation 
…/2010  [EIOPA].  In  that  case,  EIOPA  may  act  in  accordance  with  the  powers 
conferred on it by Article 11 of that Regulation." 

(b) 

The  second  and  third  subparagraphs  of  paragraph  4  are  replaced  by  the 
following: 

"Where  diverging  views  concerning  the  coordination  arrangements  arise,  any 
member of the college of supervisors may refer the matter to EIOPA. 

After  consulting  the  supervisory  authorities  concerned,  the  group  supervisor  shall 
duly consider any advice produced by EIOPA within two months of receipt thereof 
before  taking  its  final  decision.  The  decision  shall  state  the  full  reasons  and  shall 
contain an explanation of any significant deviation from any advice given by EIOPA. 
The group supervisor shall transmit the decision to the other supervisory authorities 
concerned." 

(c) 

Paragraphs 6 and 7 are replaced by the following: 

"6.  Powers  are  conferred  on  the  Commission  to  adopt  implementing  technical 
standards concerning the operational functioning of colleges.  

Those implementing technical standards shall be adopted in accordance with Article 
15 of Regulation …/… [EIOPA]. EIOPA shall develop draft implementing technical 
standards by 31 December 2011 and develop reviewed draft standards for submission 
to the Commission at least every three years. 

7. 
The  Commission  shall  adopt  delegated  acts  in  accordance  with  Article  301a 
and subject to the conditions of Articles 301b and 301c for the coordination of group 
supervision  for  the  purposes  of  paragraphs  1  to  6,  including  the  definition  of 
"significant branch". 

(55) 

In Article 249, the following paragraph 1a is inserted: 

"1a.  Where  a  supervisory  authority  has  not  communicated  relevant  information  or
a  request  for  cooperation,  in  particular  to  exchange  relevant  information,  has 
been  rejected  or  has  not  been  acted  upon  within  a  reasonable  time,  the  supervisory 
authorities may refer the matter to EIOPA and request its assistance.  

Where the matter is referred to EIOPA, without prejudice to the provisions of Article 
258 TFEU, EIOPA may act in accordance with the powers conferred on it by Article 
19 of Regulation (EU) No …/2010 [EIOPA]." 

(56)  Article 249 is amended as follows:  

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(a)  Paragraph 3 is replaced by the following: 

"3.  The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a 
and subject to the conditions of Articles 301b and 301c, 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  delegated  acts,  in  accordance  with  Article  301a  and 
subject to the conditions of Articles 301b and 301c, specifying the items essential or 
relevant  for  supervision  at  group  level  with  a  view  to  enhancing  convergence  of 
supervisory reporting." 

(b)  The following paragraph 4 is added: 

"4.  Powers  are  conferred  on  the  Commission  to  adopt  implementing  technical 
standards to determine the conditions of application of this Article as supplemented 
by the delegated acts referred to in paragraph 3 of this Article concerning the matters 
covered  by  those  delegated  acts,  specifically  with  regard  to  the  templates  and 
procedures for the submission of information to the group supervisor as well as the 
procedure for the cooperation and the exchange of information between supervisory 
authorities as laid down in this Article.  

The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA shall develop draft implementing technical standards to the Commission by 
31 December 2011." 

(57)  Article 254(2) is replaced by the following: 

" 2. 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.  Articles  35  and
308a(1) shall apply mutatis mutandis." 

(58) 

In Article 255(2), the following fourth subparagraph is added: 

"Where the request to another supervisory authority to have a verification carried out 
in  accordance  with  this  paragraph  has  been rejected  or  has  not  been  acted  within  a 
reasonable  period  of  time,  or  where  a  request  of  the  supervisory  authority  which 
made  the  request  to  participate  in  the  verification  under  the  third  subparagraph  has 
been  rejected  or  has  not  been  acted  upon  within  a  period  of  reasonable  time,  the 
requesting authority may refer the matter to EIOPA and may request its assistance in 
accordance  with  Article  19  of  Regulation  …/2010  [EIOPA].  In  that  case,  EIOPA 
may act in accordance with the powers conferred on it by that Article." 

(59)  Article 256 is amended as follows: 

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41 

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(a)  Paragraph 1 is replaced by the following: 

" 1. Member States shall require participating insurance and reinsurance undertakings 
or  insurance  holding  companies  to  disclose  publicly,  on  an  annual  basis,  a 
report on the solvency and financial condition at the level of the group. Articles 
51, 53, 54, 55 and 308a(4) shall apply mutatis mutandis." 

(b)  Paragraph 4 is replaced by the following: 

"4.  The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  301a 
and  subject  to  the  conditions  of  Articles  301b  and  301c,  further  specifying  the 
information which must be disclosed and the means by which this is to be achieved 
as regards the single solvency and financial condition report." 

(c)  The following paragraph 5 is added: 

"5.  Powers  are  conferred  on  the  Commission  to  adopt  implementing  technical 
standards to determine the conditions of application of this Article as supplemented 
by the delegated acts referred to in paragraph 4 of this Article, concerning the matters 
covered  by  those  delegated  acts,  specifically  with  regard  to  the  templates  for  the 
disclosure of the group solvency and financial report as laid down in this Article.  

The  implementing  technical  standards  referred  to  in  the  first  subparagraph  shall  be 
adopted in accordance with Article 15 of Regulation …/… [EIOPA].  

EIOPA  shall  develop  draft  implementing  technical  standards  for  submission  to  the 
Commission by 31 December 2011." 

(60)  Article 258 (3) is replaced by the following: 

"The  Commission  may  adopt  delegated  acts,  in  accordance  with  Article  301a  and 
subject  to  the  conditions  of  Articles  301b  and  301c,  for  the  coordination  of 
enforcement measures referred to in paragraphs 1 and 2." 

(61)  Article 259 is replaced by the following: 

" Article 259 
Reporting of EIOPA 

1. 

2. 

EIOPA shall report to the European Parliament annually in accordance with Article 
35 of Regulation…/...[EIOPA]  

EIOPA  shall  report,  inter  alia,  on  all  relevant  and  significant  experiences  of  the 
supervisory activities and cooperation between supervisors in the framework of Title 
III, and, in particular: 

(a) 

the  process  of  the  nomination  of  the  group  supervisor,  the  number  of  group 
supervisors and geographical spread; 

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(b) 

the  working  of  the  college  of  supervisors,  in  particular  the  involvement  and 
commitment  of  supervisory  authorities  where  they  are  not  the  group 
supervisor. 

3. 

EIOPA may, for the purposes of paragraph 1 of this Article, also report on the main 
lessons drawn from the reviews referred to in Article 248(6), where appropriate." 

(62)  Article 260 is amended as follows: 

(a) 

In paragraph 1, the second subparagraph is replaced by the following: 

"The  verification  shall  be  carried  out  by  the  supervisory  authority  which  would  be 
the  group  supervisor  if  the  criteria  set  out  in  Article  247(2)  were  to  apply,  at  the 
request  of  the  parent  undertaking  or  of  any  of  the  insurance  and  reinsurance 
undertakings authorised in the Union or on its own initiative, unless the Commission 
had  concluded  previously  in  respect  of  the  equivalence  of  the  third  country 
concerned. In so doing, that supervisory authority shall consult the other supervisory 
authorities concerned and EIOPA, before taking a decision." 

(b) 

Paragraph 2 is replaced by the following: 

"2. The Commission may adopt delegated acts, in accordance with Article 301a and 
subject to the conditions of Articles 301b and 301c, specifying the criteria to assess 
whether  the  prudential  regime  in  a  third  country  for  the  supervision  of  groups  is 
equivalent to that laid down in this Title.  

(c) the following paragraph 4 is added 

"4. By way of derogation from Article 261(1), the first paragraph of Article 262(1) 
and  the  second  paragraph  of  Article  263,  Member  States  may,  for  a  transitional 
period,  rely  on  the  group  supervision  exercised  by  the  third-country  supervisory 
authorities. The transitional period shall last for a maximum of 5 years from the date 
referred  to  in  the  first  sub-paragraph  of  Article  309(1).This  derogation  shall  only 
apply  where  the  Commission  has  made  a  decision  in  accordance  with  paragraph  5 
that specified conditions have been met by the third country. " 

(d) the following paragraph 5 is added: 

"5. The Commission may adopt delegated acts, in accordance with Article 301a and 
subject  to  the  conditions  of  Articles  301b  and  301c,  specifying  in  relation  to 
paragraph  4  the  length  of  the  transitional  period  which  may  be  shorter  than  the 
maximum  of  5  years  and  the  conditions  which  are  to  be  met  by  the  third  country. 
Those conditions shall cover commitments given by the supervisory authorities, their 
convergence  to  an  equivalent  regime  over  a  set  period  of  time,  the  existing  or 
intended content of the regime, and matters of cooperation, exchange of information 
and professional secrecy obligations. 

(e) the following paragraph 6 is added: 

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"6. The Commission may adopt, a decision in respect of prudential regimes of third 
countries referred to in paragraph 4 that the conditions set out in paragraph 4 and the 
delegated act have been met by the third country. 

Those  decisions  shall  be  adopted  after  consultation  of  the  European  Insurance  and 
Occupational Pensions Committee and in accordance with the regulatory procedure 
referred to in Article 301(2). The decisions shall be reviewed regularly." 

(63) 

In  Article  262  the  first  subparagraph  of  paragraph  1  is  amended  as  follows: 

"1. In the absence of equivalent supervision referred to in Article 260, Member States 
shall apply either of the following to insurance and reinsurance undertakings: 

(64) 

(a) Articles 218 to 235, Article 244 to 258 and Article 308a(9) mutatis mutandis  

(65) 

(b) one of the methods set out in paragraph 2." 

(66) 

In  the  first  paragraph  of  Article  300,  the  date  "31  October  2012"  is  replaced  by  the 
date "31 December 2012".  

(67)  Article 301 (3) is deleted. 

(68)  The following articles 301a, 301b and 301c are inserted: 

"Article 301a 
Exercise of the delegation 

1. 

2. 

3. 

1. 

The powers to adopt delegated acts referred to in Articles 17, 31, 35, 37, 50, 56, 58, 
75, 86, 92, 97, 99, 111, 114, 127, 130, 135, 143, 172, 210, 211, 216, 217, 227, 234, 
241,  244,  245,  247,  248,  249,  256,  258,  260  and  308b  shall  be  conferred  on  the 
Commission for a period of 5 years following the entry into force of this Directive.  

The Commission shall draw up a report in respect of the delegated power at the latest 
6  months  before  the  end  of  the  5  year  period.  The  delegation  of  powers  shall  be 
automatically  extended  for  periods  of  an  identical  duration,  unless  the  European 
Parliament or the Council revokes it in accordance with Article 301b. 

As soon as it adopts a delegated act, the Commission shall notify it simultaneously to 
the European Parliament and to the Council. 

The  power  to  adopt  delegated  acts  is  conferred  on  the  Commission  subject  to  the 
conditions laid down in Articles 301b and 301c.. 

Article 301b 
Revocation of the delegation 

The delegation of power referred to in Articles 17, 31, 35, 37, 50, 56, 58, 75, 86, 92, 
97, 99, 111, 114, 127, 130, 135, 143, 172, 210, 211, 216, 217, 227, 234, 241, 244, 

EN 

44 

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2. 

3. 

1. 

2. 

3. 

245,  247,  248,  249,  256,  258  260  and  308b  may  be  revoked  at  any  time  by  the 
European Parliament or by the Council. 

The institution which has commenced an internal procedure for deciding whether to 
revoke a delegation of power shall inform the other legislator and the Commission at 
the  latest  one  month  before  the  final  decision  is  taken,  stating  the  delegated  power 
which could be subject to revocation and the reasons for a revocation. 

The decision of revocation shall put an end to the delegation of the power specified 
in that decision. It shall take effect immediately or at a later date specified therein. It 
shall  not  affect  the  validity  of  the  delegated  acts  already  in  force.  It  shall  be 
published in the Official Journal of the European Union. 

Article 301c 
Objections to delegated acts 

The European Parliament and the Council may object to the delegated act within a 
period of two months from the date of notification. At the initiative of the European 
Parliament or the Council, that period shall be extended by one month. 

If, on expiry of the period referred to in paragraph 1, neither the European Parliament 
nor the Council has objected to the delegated act, it shall be published in the Official 
Journal of the European Union and shall enter into force on the date stated therein.  

The  delegated  act  may  be  published  in  the  Official  Journal  of  the  European  Union 
and enter into force before the expiry of that period if the European Parliament and 
the  Council  have  both  informed  the  Commission  of  their  intention  not  to  raise 
objections.  

If either the European Parliament or the Council objects to the delegated act within 
the  period  referred  to  in  paragraph  1,  it  shall  not  enter  into  force.  The  institution 
which objects shall state the reasons for objecting to the delegated act." 

(69) 

In  Article  304(2),  the  date  "31  October  2015"  is  replaced  by  the  date  "31  December 
2015". 

(70)  The following Article 308a is inserted: 

"SECTION 3 

Transitional measures specified by delegated acts 

Article 308a 

Transitional provisions 

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45 

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1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

Where  the  Commission  has  adopted  a  delegated  act  in  accordance  with  Article 
308b(1), Article 35(5) shall not apply for a maximum period of five years from the 
date referred to in the first sub-paragraph of Article 309(1).  

Where  the  Commission  has  adopted  a  delegated  act  in  accordance  with  Article 
308b(2),  the  condition  referred  to  in  Article  37(1)(a)  that  the  supervisory  authority 
has  concluded  that  the  risk  profile  of  the  insurance  or  reinsurance  undertaking  has 
deviated  significantly  from  the  assumptions  underlying  the  Solvency  Capital 
Requirement as calculated using the standard formula shall not apply for a maximum 
period  of  10  years  from  the  date  referred  to  in  the  first  sub-paragraph  of  Article 
309(1). Equally, the requirement in Article 37(2) that capital add-ons imposed under 
point  a)  of  Article  37(1)  are  to  be  calculated  in  such  a  way  so  as  to  ensure  the 
undertaking complies  with  Article 101(3)  shall not apply for a maximum period of 
10 years from the date referred to in the first sub-paragraph of Article 309(1). 

Where  the  Commission  has  adopted  a  delegated  act  in  accordance  with  Article 
308b(3), Article 41(1) and Article 41(3) shall not apply for a maximum period of 3 
years from the date referred to in the first sub-paragraph of Article 309(1). 

Where  the  Commission  has  adopted  a  delegated  act  in  accordance  with  Article 
308b(4), Article 51(1) shall not apply for a maximum period of 3 years from the date 
referred to in the first sub-paragraph of Article 309(1).  

Where  the  Commission  has  adopted  a  delegated  act  in  accordance  with  Article 
308b(5),  Article  75(1)  shall  not  apply  for  a  maximum  period  of  10  years  from  the 
date referred to in the first sub-paragraph of Article 309(1). 

Where  the  Commission  has  adopted  a  delegated  act  in  accordance  with  Article 
308b(6), Article 76(2), Article 76(3) and Article 76(5) shall not apply for a maximum 
period  of  10  years  from  the  date  referred  to  in  the  first  sub-paragraph  of  Article 
309(1). 

Where  the  Commission  has  adopted  a  delegated  act  in  accordance  with  Article 
308b(7), Article 94 shall not apply for a maximum period of 10 years from the date 
referred to in the first sub-paragraph of Article 309(1). 

Where  the  Commission  has  adopted  a  delegated  act  in  accordance  with  Article 
308b(8), the  first paragraph  of Article  100, Article 101(3), Article 102, and Article 
104 shall not apply for a maximum period of 10 years from the date referred to in the 
first sub-paragraph of Article 309(1). 

Where  the  Commission  has  adopted  a  delegated  act  in  accordance  with  Article 
308b(9),  Article  218(2)  and  (3)  shall  not  apply  for  a  maximum  period  of  10  years 
from the date referred to in the first sub-paragraph of Article 309(1) . 

(71)  The following Article 308b is inserted: 

EN 

Article 308b 

Delegated Acts 

46 

   EN 

 
The Commission may adopt delegated acts, in accordance with Article 301a and subject to the 
conditions of Articles 301b and 301c, regarding the following : 

(a)  with regard to Article 308a(1), specifying the length of the transitional period 
which may be shorter than the maximum of 3 years, specifying any phasing of 
the  transitional  period,  and  specifying  the  transitional  requirements  as  to  the 
systems  and  structures  undertakings  shall  have  in  place  to  comply  with 
information required to be provided for supervisory purposes and requiring that 
insurance  and  reinsurance  undertakings  comply  at  least  with  the  laws, 
regulations and administrative provisions related to production of accounts and 
periodic  submission  of  returns  which  are  adopted  pursuant  to  Article  13 
Directive of 2002/83/EC, Article 11 of Directive 84/641/EC and Article 17 of 
Directive 2005/68/EC. 

(b)  with regard to Article 308a(2), specifying the length of the transitional period 
which may be shorter than 10 years, specifying any phasing of the transitional 
period,  specifying  a  requirement  to  take  the  assumptions  underlying  a 
transitional Solvency Capital Requirement referred to in Article 308b(8) rather 
than the Solvency Capital Requirement into account when concluding whether 
the conditions for imposing a capital add-on under Article 37(1)(a) are met and 
specifying the calculation of the capital add-on by reference to the calibration 
and  confidence 
transitional  Solvency  Capital 
requirement  rather  than  those  of  the  standard  formula  Solvency  Capital 
Requirement;  

level  attributes  of 

that 

(c)  with regard to Articles 308a(3), the length of the transitional period which may 
be shorter than the maximum of 3 years, the phasing of the transitional period 
and the transitional requirements as to the system of governance and the extent 
to which the systems, functions, and requirements referred to in Articles 41 to 
49 to be complied with by insurance and reinsurance undertakings during the 
transitional  period  and  requiring  that  insurance  and  reinsurance  undertakings 
comply  at  least  with  the  laws,  regulations  and  administrative  provisions 
requiring  sound  administrative  procedures  and  internal  control  which  are 
adopted pursuant to Article 10 of Directive 2002/83/EC, Article 9 of Directive 
84/641/EC and Article 15 of Directive 2005/68/EC.  

(d)  with regard to Article 308a(4), the length of the transitional period which may 
be shorter than the maximum of 3 years, any phasing of the transitional period, 
and  any  transitional  requirements  as  to  the  content  and  timing  of  the 
information  which  must  be  publicly  disclosed  by  insurance  and  reinsurance 
undertakings  and  requiring  that  insurance  and  reinsurance  undertakings  be  at 
least  required  to  disclose  a  report  containing  a  high  level  summary  of  the 
information listed in Article 51(1).  

(e)  with regard to Article 308a(5) the length of the transitional period which may 
be  shorter  than  the  maximum  of  10  years,  any  phasing  of  the  transitional 
period, any specification of the assets and liabilities which shall be subject to 
transitional requirements as to valuation and the transitional requirements as to 
the methods and assumptions to be used in the valuation of the specified assets 
and  liabilities  and  requiring  that  insurance  and  reinsurance  undertakings 
comply  at  least  with  the  Member  State's  laws,  regulations  and  administrative 

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47 

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provisions for valuation of such assets and liabilities which were applicable on 
31 December 2012; 

(f)  with regard to Article 308a(6) , the length of the transitional period which may 
be shorter than the maximum of 10 years, the phasing of the transitional period 
and  the  transitional  requirements  as  to  the  methodologies  and  assumptions  to 
be used in the calculation of technical provisions and which will apply during 
the 
insurance  and  reinsurance 
undertakings  comply  at  least  with  the  laws,  regulations  and  administrative 
provisions  for  the  establishment  of  technical  provisions  which  are  adopted 
pursuant  to  Article  20  of  Directive  2002/83/EC,  Article  15  of  Directive 
73/239/EEC and Article 32 of Directive 2005/68/EC; 

transitional  period  and  requiring 

that 

(g)  with regard to Articles 308a(7), the length of the transitional period which may 
be shorter than the maximum of 10 years, the phasing of the transitional period, 
the  specification  of  the  own  fund  items  subject  to  the  transitional,  and  the 
transitional requirements as to the classification of own fund items, which will 
apply  to  those  specified  own  funds  items  and  requiring  that  during  the 
transitional period insurance and reinsurance undertakings comply at least with 
the laws, regulations and administrative provisions adopted pursuant to Article 
27 of Directive 2002/83/EC, Article 16 of Directive 73/239/EEC and Article 36 
of Directive 2005/68/EC in respect of those own fund items; 

(h) with regard to Articles 308a(8), the length of the transitional period which may be 
shorter  than  the  maximum  of  10  years,  any  phasing  of  the  transitional  period 
and any transitional requirements as to the calculation and use of a transitional 
Solvency  Capital  Requirement.  The  calculation  of  the  transitional  Solvency 
Capital  requirement  may  include  modifications  to  the  stresses,  scenarios, 
correlation  coefficients  and  parameters  of  the  Solvency  Capital  Requirement 
standard  formula  that  would  otherwise  apply.  The  delegated  act  shall  also 
require that insurance and reinsurance undertakings comply with a transitional 
Solvency  Capital  Requirement  that  is  no  higher  than  the  Solvency  Capital 
Requirement and no lower than the sum of the Minimum Capital Requirement 
and fifty per cent of the difference between the Solvency Capital Requirement 
and the Minimum Capital Requirement; 

(i)  with  regard  to  Article  308a(9),  changes  which  relate  to  the  choice  of 
calculation method and general principles in calculating group solvency set out 
in Article 220 to 229 and Articles 230 to 233 and Article 235 in relation to the 
methods  for  calculating  group  solvency.  The  delegated  acts  may  also  set  out 
the changes which relate to the calculation of group solvency under supervision 
at  group  level  as  referred  to  in  Article  213(2)(c),  where  the  equivalent 
supervision  is  absent  as  referred  to  in  Article  262.  Those  changes  to  the 
calculation  of  group  own  funds  and  the  group  solvency  capital  requirement 
shall  be  consequential  to  any  transitional  requirements  on  own  funds 
classification and the Solvency Capital Requirement which apply at the level of 
individual insurance or reinsurance undertakings during the transitional period 
as  referred  to  in  Article  308a(7)  and  Article  308a(8)  The  delegated  act  shall 
require  that  insurance  and  reinsurance  undertakings  ensure  that  eligible  own 
funds,  taking  account  of  the  transitional  provisions  in  Article  308a(7),  are 
available  in  the  group.  Those  eligible  own  funds  shall  be  at  least  equal  to  a 

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48 

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group Solvency Capital Requirement which shall be calculated by reference to 
the  calculation  method  of  the  transitional  Solvency  Capital  Requirement 
referred to in Article 308a(8) or the amount of the transitional Solvency Capital 
Requirement;  

(j)  with  regard  to  Article  254(2)),  changes  which  relate  to  the  information  to  be 
reported to the authorities responsible for exercising group supervision which 
are consequential to the requirements for supervisory reporting at the level of 
individual  insurance  or  reinsurance  undertakings  which  apply  during  the 
transitional period referred to in Article 308a(1))  

(k)  with regard to Article 256(1) changes which relate to the content and timing of 
the information which must be publicly disclosed and which are consequential 
to the requirements for public disclosure at the level of individual insurance or 
reinsurance undertakings which apply during the transitional period as referred 
to in Article 308a(4)." 

(72) 

In Article 309(1), the first subparagraph is replaced by the following:  

"Member  States  shall  adopt  and  publish  the  laws,  regulations  and  administrative 
provisions necessary to comply with Articles 4, 10, 13, 18, 23, 26 to 32, 34to 49, 51 
to 55, 67, 68, 71, 72, 74 to 85, 87 to 91, 93 to 96, 98,100 to 110, 112, 113, 115 to 
126, 128, 129, 131-134, 136-142, 144, 146, 148, 162 to 167, 172, 173, 178, 185, 190, 
192,  210  to  233,  235-240,  243  to  258,  260  to  263,  265,  266,  303  and  304  and 
Annexes III and IV by 31 December 2012.  

Member States shall apply those provisions from 1 January 2013." 

(73) 

In Article 310, the date "1 November 2012" in the first paragraph is replaced by the 
date "1 January 2013".  

(74)  The second paragraph of Article 311 is replaced by the following:  

"Articles 1, 2, 3, 5 to 9, 11, 12, 14 to 17, 19-22, 24, 25, 33, 57 to 66, 69, 70, 73, 143, 
145, 147, 149 to 161, 168 to 171, 174 to 177, 179 to 184, 186 to 189, 191, 193 to 
209,  267  to  300,  302,  305-  to  08  and  Annexes  I  and  II,  V,  VI  and  VII  shall  apply 
from 1 January 2013." 

(75) 

In Annex III, part A, point 28 is replaced by the following: 

"28. in any event and as an alternative to the forms of non-life insurance undertaking 
listed in points (1) to (27) and (29), the form of a European Company (SE) as defined 
in Council Regulation (EC) No 2157/2001(1)" 

(76) 

In Annex III, part A, the following point 29 is added: 

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"29. in any event and as an alternative to the forms of non-life insurance undertaking 
listed  in  points  (1)  to  (28),  the  form  of  a  European  Cooperative  Society  (SCE)  as 
defined in Council Regulation (EC) No 1435/2003(*)." 

* 

OJ L 207, 18.8.2003, p. 1. 

(77) 

In Annex III, part B, point 28 is replaced by the following: 

"28.  in  any  event  and  as  an  alternative  to  the  forms  of  life  insurance  undertaking 
listed in points (1) to (27) and (29), the form of a European Company (SE) as defined 
in Regulation (EC) No 2157/2001" 

(78) 

In Annex III, part B, point 29 is added: 

"29.  in  any  event  and  as  an  alternative  to  the  forms  of  life  insurance  undertaking 
listed  in  points  (1)  to  (28),  the  form  of  a  European  Cooperative  Society  (SCE)  as 
defined in Regulation (EC) No 1435/2003." 

(79) 

In Annex III, part C, point 28 is replaced by the following: 

"28. in any event and as an alternative to the forms of reinsurance undertaking listed 
in points (1) to (27) and (29), the form of a European Company (SE) as defined in 
Regulation (EC) No 2157/2001" 

(80) 

In Annex III, part C, point 29 is added: 

"29. in any event and as an alternative to the forms of reinsurance undertaking listed 
in points (1) to (28), the form of a European Cooperative Society (SCE) as defined in 
Regulation (EC) No 1435/2003." 

(81)  The correlation table in Annex VII is amended as follows: 

(a)  Under "This Directive", Article 13(27) is inserted as corresponding to Article 

5, point (d) of directive 73/239/EEC. 

(b)  Under "This Directive", the references to Article 210(1)(f) and Article 210(1) 
(g)  shall  be  replaced  respectively  with  references  to  Article  212(1)  (f)  and 
Article 212(1)(g). 

Article 3 
Transposition 

1. 

Member  States  shall  adopt  and  publish  the  laws,  regulations  and  administrative 
provisions necessary to comply with Article 1(1), Article 2(3), Article 2(6), Article 
2(8),  Article  2(9)  Article  2(12),  Article  2(13),  Article  2(24),  Article  2(25),  Article 
2(28), Article 2(30), Article 2(32), Article 2(33), , Article 2(39), Article (41) to (42), 
Article  2(44)  to  2(46),  Article  2(52)  to  (54),  Article  2(56),  Article  2(58),  Article 

EN 

50 

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2(61) to (62), Article 2(67), Article 2(69), Article 2(70), and Article 2(71) to 2(80) of 
this Directive by 31 December 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. 

They shall apply those provisions from 1 January 2013.  

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  shall  be  accompanied  by  such  a  reference  on  the  occasion  of  their 
official  publication.  Member  States  shall  determine  how  such  reference  is  to  be 
made. 

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 4 
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.  Articles  2(15)  and  2(20)  shall  apply  from  1 
January 2013. 

Article 5 
Addressees 

This Directive is addressed to the Member States. 

Done at Brussels,  

For the European Parliament 
The President 
[…] 

For the Council 
The President 
[…] 

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