Article 60 
Amendments to Directive 2002/83/EC Directive 2002/83/EC is hereby amended as follows: 1. In Article 1(1), the following point shall be added: ‘(s) “reinsurance undertaking” shall mean a reinsurance undertaking within the meaning of Article 2 point (c) of Directive 2005/68/EC of the European Parliament and of the Council of 16 November 2005 on reinsurance ( 37 )’ 2. The following Article shall be inserted: ‘Article 9a Prior consultation with the competent authorities of other Member States 1. The competent authorities of the other Member State involved shall be consulted prior to the granting of an authorisation to a life assurance undertaking, which is: (a) a subsidiary of an insurance or reinsurance undertaking authorised in another Member State; or (b) a subsidiary of the parent undertaking of an insurance or reinsurance undertaking authorised in another Member State; or (c) controlled by the same person, whether natural or legal, who controls an insurance or reinsurance undertaking authorised in another Member State. 2. The competent authority of a Member State involved responsible for the supervision of credit institutions or investment firms shall be consulted prior to the granting of an authorisation to a life assurance undertaking which is: (a) a subsidiary of a credit institution or investment firm authorised in the Community; or (b) a subsidiary of the parent undertaking of a credit institution or investment firm authorised in the Community; or (c) controlled by the same person, whether natural or legal, who controls a credit institution or investment firm authorised in the Community. 3. The relevant competent authorities referred to in paragraphs 1 and 2 shall in particular consult each other when assessing the suitability of the shareholders and the reputation and experience of directors involved in the management of another entity of the same group. They shall inform each other of any information regarding the suitability of shareholders and the reputation and experience of directors which is of relevance to the other competent authorities involved for the granting of an authorisation as well as for the ongoing assessment of compliance with operating conditions.’ 2. The following Article shall be inserted: 
‘Article 9a
Prior consultation with the competent authorities of other Member States
1. The competent authorities of the other Member State involved shall be consulted prior to the granting of an authorisation to a life assurance undertaking, which is:
(a) a subsidiary of an insurance or reinsurance undertaking authorised in another Member State; or
(a) a subsidiary of an insurance or reinsurance undertaking authorised in another Member State; or
(b) a subsidiary of the parent undertaking of an insurance or reinsurance undertaking authorised in another Member State; or
(b) a subsidiary of the parent undertaking of an insurance or reinsurance undertaking authorised in another Member State; or
(c) controlled by the same person, whether natural or legal, who controls an insurance or reinsurance undertaking authorised in another Member State.
(c) controlled by the same person, whether natural or legal, who controls an insurance or reinsurance undertaking authorised in another Member State.
2. The competent authority of a Member State involved responsible for the supervision of credit institutions or investment firms shall be consulted prior to the granting of an authorisation to a life assurance undertaking which is:
(a) a subsidiary of a credit institution or investment firm authorised in the Community; or
(a) a subsidiary of a credit institution or investment firm authorised in the Community; or
(b) a subsidiary of the parent undertaking of a credit institution or investment firm authorised in the Community; or
(b) a subsidiary of the parent undertaking of a credit institution or investment firm authorised in the Community; or
(c) controlled by the same person, whether natural or legal, who controls a credit institution or investment firm authorised in the Community.
(c) controlled by the same person, whether natural or legal, who controls a credit institution or investment firm authorised in the Community.
3. The relevant competent authorities referred to in paragraphs 1 and 2 shall in particular consult each other when assessing the suitability of the shareholders and the reputation and experience of directors involved in the management of another entity of the same group. They shall inform each other of any information regarding the suitability of shareholders and the reputation and experience of directors which is of relevance to the other competent authorities involved for the granting of an authorisation as well as for the ongoing assessment of compliance with operating conditions.’ 3. In Article 10(2), the following subparagraph shall be added: ‘The home Member State of the insurance undertaking shall not refuse a reinsurance contract concluded by the insurance undertaking with a reinsurance undertaking authorised in accordance with Directive 2005/68/EC or an insurance undertaking authorised in accordance with Directive 73/239/EEC or this Directive on grounds directly related to the financial soundness of the reinsurance undertaking or the insurance undertaking . ’ 4. In Article 15, the following paragraph shall be inserted: ‘1a. If the acquirer of the holdings referred to in paragraph 1 of this Article is an insurance undertaking, a reinsurance undertaking, a credit institution or an investment firm authorised in another Member State, or the parent undertaking of such an entity, or a natural or legal person controlling such an entity, and if, as a result of that acquisition, the undertaking in which the acquirer proposes to hold a holding would become a subsidiary or subject to the control of the acquirer, the assessment of the acquisition must be subject to the prior consultation referred to in Article 9a.’ 5. Article 16 is hereby amended as follows: (a) paragraphs 4, 5 and 6 shall be replaced by the following: ‘4. Competent authorities receiving confidential information under paragraphs 1 or 2 may use it only in the course of their duties: — to check that the conditions governing the taking-up of the business of assurance are met and to facilitate monitoring of the conduct of such business, especially with regard to the monitoring of technical provisions, solvency margins, administrative and accounting procedures and internal control mechanisms, or — to impose penalties, or — in administrative appeals against decisions of the competent authority, or — in court proceedings initiated pursuant to Article 67 or under special provisions provided for in this Directive and other Directives adopted in the field of assurance undertakings and reinsurance undertakings. 5. Paragraphs 1 and 4 shall not preclude the exchange of information within a Member State, where there are two or more competent authorities in the same Member State, or, between Member States, between competent authorities and: — authorities responsible for the official supervision of credit institutions and other financial organisations and the authorities responsible for the supervision of financial markets, — bodies involved in the liquidation and bankruptcy of assurance undertakings, reinsurance undertakings and in other similar procedures, and — persons responsible for carrying out statutory audits of the accounts of assurance undertakings, reinsurance undertakings and other financial institutions, in the discharge of their supervisory functions, and the disclosure, to bodies which administer compulsory winding-up proceedings or guarantee funds, of information necessary to the performance of their duties. The information received by those authorities, bodies and persons shall be subject to the obligation of professional secrecy laid down in paragraph 1. 6. Notwithstanding paragraphs 1 to 4, Member States may authorise exchanges of information between the competent authorities and: — the authorities responsible for overseeing the bodies involved in the liquidation and bankruptcy of assurance undertakings, reinsurance undertakings and other similar procedures, or — the authorities responsible for overseeing the persons charged with carrying out statutory audits of the accounts of insurance undertakings, reinsurance undertakings, credit institutions, investment firms and other financial institutions, or — independent actuaries of insurance undertakings and reinsurance undertakings carrying out legal supervision of those undertakings and the bodies responsible for overseeing such actuaries. Member States which have recourse to the option provided for in the first subparagraph shall require at least that the following conditions are met: — this information shall be for the purpose of carrying out the overseeing or legal supervision referred to in the first subparagraph, — information received in this context shall be subject to the conditions of professional secrecy imposed in paragraph 1, — where the information originates in another Member State, it may not be disclosed without the express agreement of the competent authorities which have disclosed it and, where appropriate, solely for the purposes for which those authorities gave their agreement. Member States shall communicate to the Commission and to the other Member States the names of the authorities, persons and bodies which may receive information pursuant to this paragraph.’; (b) paragraph 8 shall be replaced by the following: ‘8. Paragraphs 1 to 7 shall not prevent a competent authority from transmitting: — to central banks and other bodies with a similar function in their capacity as monetary authorities, — where appropriate, to other public authorities responsible for overseeing payment systems, information intended for the performance of their task, nor shall it prevent such authorities or bodies from communicating to the competent authorities such information as they may need for the purposes of paragraph 4. Information received in this context shall be subject to the conditions of professional secrecy imposed in this Article.’ 5. Article 16 is hereby amended as follows: (a) paragraphs 4, 5 and 6 shall be replaced by the following: ‘4. Competent authorities receiving confidential information under paragraphs 1 or 2 may use it only in the course of their duties: — to check that the conditions governing the taking-up of the business of assurance are met and to facilitate monitoring of the conduct of such business, especially with regard to the monitoring of technical provisions, solvency margins, administrative and accounting procedures and internal control mechanisms, or — to impose penalties, or — in administrative appeals against decisions of the competent authority, or — in court proceedings initiated pursuant to Article 67 or under special provisions provided for in this Directive and other Directives adopted in the field of assurance undertakings and reinsurance undertakings. 5. Paragraphs 1 and 4 shall not preclude the exchange of information within a Member State, where there are two or more competent authorities in the same Member State, or, between Member States, between competent authorities and: — authorities responsible for the official supervision of credit institutions and other financial organisations and the authorities responsible for the supervision of financial markets, — bodies involved in the liquidation and bankruptcy of assurance undertakings, reinsurance undertakings and in other similar procedures, and — persons responsible for carrying out statutory audits of the accounts of assurance undertakings, reinsurance undertakings and other financial institutions, in the discharge of their supervisory functions, and the disclosure, to bodies which administer compulsory winding-up proceedings or guarantee funds, of information necessary to the performance of their duties. The information received by those authorities, bodies and persons shall be subject to the obligation of professional secrecy laid down in paragraph 1. 6. Notwithstanding paragraphs 1 to 4, Member States may authorise exchanges of information between the competent authorities and: — the authorities responsible for overseeing the bodies involved in the liquidation and bankruptcy of assurance undertakings, reinsurance undertakings and other similar procedures, or — the authorities responsible for overseeing the persons charged with carrying out statutory audits of the accounts of insurance undertakings, reinsurance undertakings, credit institutions, investment firms and other financial institutions, or — independent actuaries of insurance undertakings and reinsurance undertakings carrying out legal supervision of those undertakings and the bodies responsible for overseeing such actuaries. Member States which have recourse to the option provided for in the first subparagraph shall require at least that the following conditions are met: — this information shall be for the purpose of carrying out the overseeing or legal supervision referred to in the first subparagraph, — information received in this context shall be subject to the conditions of professional secrecy imposed in paragraph 1, — where the information originates in another Member State, it may not be disclosed without the express agreement of the competent authorities which have disclosed it and, where appropriate, solely for the purposes for which those authorities gave their agreement. Member States shall communicate to the Commission and to the other Member States the names of the authorities, persons and bodies which may receive information pursuant to this paragraph.’; (a) paragraphs 4, 5 and 6 shall be replaced by the following: ‘4. Competent authorities receiving confidential information under paragraphs 1 or 2 may use it only in the course of their duties: — to check that the conditions governing the taking-up of the business of assurance are met and to facilitate monitoring of the conduct of such business, especially with regard to the monitoring of technical provisions, solvency margins, administrative and accounting procedures and internal control mechanisms, or — to impose penalties, or — in administrative appeals against decisions of the competent authority, or — in court proceedings initiated pursuant to Article 67 or under special provisions provided for in this Directive and other Directives adopted in the field of assurance undertakings and reinsurance undertakings. 5. Paragraphs 1 and 4 shall not preclude the exchange of information within a Member State, where there are two or more competent authorities in the same Member State, or, between Member States, between competent authorities and: — authorities responsible for the official supervision of credit institutions and other financial organisations and the authorities responsible for the supervision of financial markets, — bodies involved in the liquidation and bankruptcy of assurance undertakings, reinsurance undertakings and in other similar procedures, and — persons responsible for carrying out statutory audits of the accounts of assurance undertakings, reinsurance undertakings and other financial institutions, in the discharge of their supervisory functions, and the disclosure, to bodies which administer compulsory winding-up proceedings or guarantee funds, of information necessary to the performance of their duties. The information received by those authorities, bodies and persons shall be subject to the obligation of professional secrecy laid down in paragraph 1. 6. Notwithstanding paragraphs 1 to 4, Member States may authorise exchanges of information between the competent authorities and: — the authorities responsible for overseeing the bodies involved in the liquidation and bankruptcy of assurance undertakings, reinsurance undertakings and other similar procedures, or — the authorities responsible for overseeing the persons charged with carrying out statutory audits of the accounts of insurance undertakings, reinsurance undertakings, credit institutions, investment firms and other financial institutions, or — independent actuaries of insurance undertakings and reinsurance undertakings carrying out legal supervision of those undertakings and the bodies responsible for overseeing such actuaries. Member States which have recourse to the option provided for in the first subparagraph shall require at least that the following conditions are met: — this information shall be for the purpose of carrying out the overseeing or legal supervision referred to in the first subparagraph, — information received in this context shall be subject to the conditions of professional secrecy imposed in paragraph 1, — where the information originates in another Member State, it may not be disclosed without the express agreement of the competent authorities which have disclosed it and, where appropriate, solely for the purposes for which those authorities gave their agreement. Member States shall communicate to the Commission and to the other Member States the names of the authorities, persons and bodies which may receive information pursuant to this paragraph.’; (b) paragraph 8 shall be replaced by the following: ‘8. Paragraphs 1 to 7 shall not prevent a competent authority from transmitting: — to central banks and other bodies with a similar function in their capacity as monetary authorities, — where appropriate, to other public authorities responsible for overseeing payment systems, information intended for the performance of their task, nor shall it prevent such authorities or bodies from communicating to the competent authorities such information as they may need for the purposes of paragraph 4. Information received in this context shall be subject to the conditions of professional secrecy imposed in this Article.’ (b) paragraph 8 shall be replaced by the following: ‘8. Paragraphs 1 to 7 shall not prevent a competent authority from transmitting: — to central banks and other bodies with a similar function in their capacity as monetary authorities, — where appropriate, to other public authorities responsible for overseeing payment systems, information intended for the performance of their task, nor shall it prevent such authorities or bodies from communicating to the competent authorities such information as they may need for the purposes of paragraph 4. Information received in this context shall be subject to the conditions of professional secrecy imposed in this Article.’ 6. Article 20(4) shall be replaced by the following: ‘4. Member States shall not retain or introduce for the establishment of technical provisions a system of gross reserving which requires pledging of assets to cover unearned premiums and outstanding claims provisions by the reinsurer, authorised in accordance with Directive 2005/68/EC when the reinsurer is a reinsurance undertaking or an insurance undertaking authorised in accordance with Directive 73/239/EEC or this Directive. When the home Member State allows any technical provisions to be covered by claims against a reinsurer which is neither a reinsurance undertaking authorised in accordance with Directive 2005/68/EC nor an insurance undertaking authorised in accordance with Directive 73/239/EEC or this Directive, it shall set the conditions for accepting such claims.’ 6. Article 20(4) shall be replaced by the following: ‘4. Member States shall not retain or introduce for the establishment of technical provisions a system of gross reserving which requires pledging of assets to cover unearned premiums and outstanding claims provisions by the reinsurer, authorised in accordance with Directive 2005/68/EC when the reinsurer is a reinsurance undertaking or an insurance undertaking authorised in accordance with Directive 73/239/EEC or this Directive. When the home Member State allows any technical provisions to be covered by claims against a reinsurer which is neither a reinsurance undertaking authorised in accordance with Directive 2005/68/EC nor an insurance undertaking authorised in accordance with Directive 73/239/EEC or this Directive, it shall set the conditions for accepting such claims.’ 7. Article 23 is hereby amended as follows: (a) in paragraph 1(B), point (f) shall be replaced by the following: ‘(f) debts owed by reinsurers, including reinsurers' shares of technical provisions, and by special purpose vehicles referred to in Article 46 of Directive 2005/68/EC;’ (b) in paragraph 3, the first subparagraph shall be replaced by the following: ‘3. The inclusion of any asset or category of assets listed in paragraph 1 shall not mean that all these assets should automatically be accepted as cover for technical provisions. The home Member State shall lay down more detailed rules setting the conditions for the use of acceptable assets.’ 7. Article 23 is hereby amended as follows: (a) in paragraph 1(B), point (f) shall be replaced by the following: ‘(f) debts owed by reinsurers, including reinsurers' shares of technical provisions, and by special purpose vehicles referred to in Article 46 of Directive 2005/68/EC;’ (b) in paragraph 3, the first subparagraph shall be replaced by the following: ‘3. The inclusion of any asset or category of assets listed in paragraph 1 shall not mean that all these assets should automatically be accepted as cover for technical provisions. The home Member State shall lay down more detailed rules setting the conditions for the use of acceptable assets.’ 8. In Article 27(2), the following subparagraphs shall be added: ‘The available solvency margin shall also be reduced by the following items: (a) participations which the assurance undertaking holds, in: — insurance undertakings within the meaning of Article 4 of this Directive, Article 6 of Directive 73/239/EEC, or Article 1(b) of Directive 98/78/EC of the European Parliament and of the Council of 27 October 1998 on the supplementary supervision of insurance undertakings in an insurance group ( 38 ), — reinsurance undertakings within the meaning of Article 3 of Directive 2005/68/EC or a non-member country reinsurance undertakings within the meaning of Article 1(l) of Directive 98/78/EC, — insurance holding companies within the meaning of Article 1(i) of Directive 98/78/EC, — credit institutions and financial institutions within the meaning of Article 1(1) and (5) of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions ( 39 ), — investment firms and financial institutions within the meaning of Article 1(2) of Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field ( 40 ) and of Articles 2(4) and 2(7) of Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investments firms and credit institutions ( 41 ); (b) each of the following items which the assurance undertaking holds in respect of the entities defined in point (a) in which it holds a participation: — instruments referred to in paragraph 3, — instruments referred to in Article 16(3) of Directive 73/239/EEC, — subordinated claims and instruments referred to in Article 35 and Article 36(3) of Directive 2000/12/EC. Where shares in another credit institution, investment firm, financial institution, insurance or reinsurance undertaking or insurance holding company are held temporarily for the purposes of a financial assistance operation designed to reorganise and save that entity, the competent authority may waive the provisions on deduction referred to in points (a) and (b) of the third subparagraph. As an alternative to the deduction of the items referred to in (a) and (b) of the third subparagraph which the insurance undertaking holds in credit institutions, investment firms and financial institutions, Member States may allow their insurance undertakings to apply mutatis mutandis methods 1, 2, or 3 of Annex I to Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate ( 42 ). Method 1 (Accounting consolidation) shall only be applied if the competent authority is confident about the level of integrated management and internal control regarding the entities which would be included in the scope of consolidation. The method chosen shall be applied in a consistent manner over time. Member States may provide that, for the calculation of the solvency margin as provided for by this Directive, insurance undertakings subject to supplementary supervision in accordance with Directive 98/78/EC or to supplementary supervision in accordance with Directive 2002/87/EC, need not deduct the items referred to in (a) and (b) of the third subparagraph of this Article which are held in credit institutions, investment firms, financial institutions, insurance or reinsurance undertakings or insurance holding companies which are included in the supplementary supervision. For the purposes of the deduction of participations referred to in this paragraph, participation shall mean a participation within the meaning of Article 1(f) of Directive 98/78/EC. 8. In Article 27(2), the following subparagraphs shall be added: ‘The available solvency margin shall also be reduced by the following items: (a) participations which the assurance undertaking holds, in: — insurance undertakings within the meaning of Article 4 of this Directive, Article 6 of Directive 73/239/EEC, or Article 1(b) of Directive 98/78/EC of the European Parliament and of the Council of 27 October 1998 on the supplementary supervision of insurance undertakings in an insurance group ( 38 ), — reinsurance undertakings within the meaning of Article 3 of Directive 2005/68/EC or a non-member country reinsurance undertakings within the meaning of Article 1(l) of Directive 98/78/EC, — insurance holding companies within the meaning of Article 1(i) of Directive 98/78/EC, — credit institutions and financial institutions within the meaning of Article 1(1) and (5) of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions ( 39 ), — investment firms and financial institutions within the meaning of Article 1(2) of Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field ( 40 ) and of Articles 2(4) and 2(7) of Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investments firms and credit institutions ( 41 ); (a) participations which the assurance undertaking holds, in: — insurance undertakings within the meaning of Article 4 of this Directive, Article 6 of Directive 73/239/EEC, or Article 1(b) of Directive 98/78/EC of the European Parliament and of the Council of 27 October 1998 on the supplementary supervision of insurance undertakings in an insurance group ( 38 ), — reinsurance undertakings within the meaning of Article 3 of Directive 2005/68/EC or a non-member country reinsurance undertakings within the meaning of Article 1(l) of Directive 98/78/EC, — insurance holding companies within the meaning of Article 1(i) of Directive 98/78/EC, — credit institutions and financial institutions within the meaning of Article 1(1) and (5) of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions ( 39 ), — investment firms and financial institutions within the meaning of Article 1(2) of Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field ( 40 ) and of Articles 2(4) and 2(7) of Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investments firms and credit institutions ( 41 ); (b) each of the following items which the assurance undertaking holds in respect of the entities defined in point (a) in which it holds a participation: — instruments referred to in paragraph 3, — instruments referred to in Article 16(3) of Directive 73/239/EEC, — subordinated claims and instruments referred to in Article 35 and Article 36(3) of Directive 2000/12/EC. (b) each of the following items which the assurance undertaking holds in respect of the entities defined in point (a) in which it holds a participation: — instruments referred to in paragraph 3, — instruments referred to in Article 16(3) of Directive 73/239/EEC, — subordinated claims and instruments referred to in Article 35 and Article 36(3) of Directive 2000/12/EC. Where shares in another credit institution, investment firm, financial institution, insurance or reinsurance undertaking or insurance holding company are held temporarily for the purposes of a financial assistance operation designed to reorganise and save that entity, the competent authority may waive the provisions on deduction referred to in points (a) and (b) of the third subparagraph. As an alternative to the deduction of the items referred to in (a) and (b) of the third subparagraph which the insurance undertaking holds in credit institutions, investment firms and financial institutions, Member States may allow their insurance undertakings to apply mutatis mutandis methods 1, 2, or 3 of Annex I to Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate ( 42 ). Method 1 (Accounting consolidation) shall only be applied if the competent authority is confident about the level of integrated management and internal control regarding the entities which would be included in the scope of consolidation. The method chosen shall be applied in a consistent manner over time. Member States may provide that, for the calculation of the solvency margin as provided for by this Directive, insurance undertakings subject to supplementary supervision in accordance with Directive 98/78/EC or to supplementary supervision in accordance with Directive 2002/87/EC, need not deduct the items referred to in (a) and (b) of the third subparagraph of this Article which are held in credit institutions, investment firms, financial institutions, insurance or reinsurance undertakings or insurance holding companies which are included in the supplementary supervision. For the purposes of the deduction of participations referred to in this paragraph, participation shall mean a participation within the meaning of Article 1(f) of Directive 98/78/EC. 9. Article 28(2) is hereby amended as follows: (a) point (a) shall be replaced by the following: ‘(a) first result: a 4 % fraction of the mathematical provisions relating to direct business and reinsurance acceptances gross of reinsurance cessions shall be multiplied by the ratio, for the last financial year, of the mathematical provisions net of reinsurance cessions to the gross total mathematical provisions. That ratio may in no case be less than 85 %. Upon application, with supporting evidence, by the insurance undertaking to the competent authority of the home Member State and with agreement of that authority, amounts recoverable from the special purpose vehicles referred to in Article 46 of Directive 2005/68/EC may be deducted as reassurance.’; (b) in point (b), the first subparagraph shall be replaced by the following: ‘(b) second result: for policies on which the capital at risk is not a negative figure, a 0,3 % fraction of such capital underwritten by the assurance undertaking shall be multiplied by the ratio, for the last financial year, of the total capital at risk retained as the undertaking's liability after reinsurance cessions and retrocessions to the total capital at risk gross of reinsurance; that ratio may in no case be less than 50 %. Upon application, with supporting evidence, by the insurance undertaking to the competent authority of the home Member State and with the agreement of that authority, amounts recoverable from the special purpose vehicles referred to in Article 46 of Directive 2005/68/EC may be deducted as reassurance.’ 9. Article 28(2) is hereby amended as follows: (a) point (a) shall be replaced by the following: ‘(a) first result: a 4 % fraction of the mathematical provisions relating to direct business and reinsurance acceptances gross of reinsurance cessions shall be multiplied by the ratio, for the last financial year, of the mathematical provisions net of reinsurance cessions to the gross total mathematical provisions. That ratio may in no case be less than 85 %. Upon application, with supporting evidence, by the insurance undertaking to the competent authority of the home Member State and with agreement of that authority, amounts recoverable from the special purpose vehicles referred to in Article 46 of Directive 2005/68/EC may be deducted as reassurance.’; ‘(a) first result: a 4 % fraction of the mathematical provisions relating to direct business and reinsurance acceptances gross of reinsurance cessions shall be multiplied by the ratio, for the last financial year, of the mathematical provisions net of reinsurance cessions to the gross total mathematical provisions. That ratio may in no case be less than 85 %. Upon application, with supporting evidence, by the insurance undertaking to the competent authority of the home Member State and with agreement of that authority, amounts recoverable from the special purpose vehicles referred to in Article 46 of Directive 2005/68/EC may be deducted as reassurance.’; ‘(a) first result: a 4 % fraction of the mathematical provisions relating to direct business and reinsurance acceptances gross of reinsurance cessions shall be multiplied by the ratio, for the last financial year, of the mathematical provisions net of reinsurance cessions to the gross total mathematical provisions. That ratio may in no case be less than 85 %. Upon application, with supporting evidence, by the insurance undertaking to the competent authority of the home Member State and with agreement of that authority, amounts recoverable from the special purpose vehicles referred to in Article 46 of Directive 2005/68/EC may be deducted as reassurance.’; (b) in point (b), the first subparagraph shall be replaced by the following: ‘(b) second result: for policies on which the capital at risk is not a negative figure, a 0,3 % fraction of such capital underwritten by the assurance undertaking shall be multiplied by the ratio, for the last financial year, of the total capital at risk retained as the undertaking's liability after reinsurance cessions and retrocessions to the total capital at risk gross of reinsurance; that ratio may in no case be less than 50 %. Upon application, with supporting evidence, by the insurance undertaking to the competent authority of the home Member State and with the agreement of that authority, amounts recoverable from the special purpose vehicles referred to in Article 46 of Directive 2005/68/EC may be deducted as reassurance.’ ‘(b) second result: for policies on which the capital at risk is not a negative figure, a 0,3 % fraction of such capital underwritten by the assurance undertaking shall be multiplied by the ratio, for the last financial year, of the total capital at risk retained as the undertaking's liability after reinsurance cessions and retrocessions to the total capital at risk gross of reinsurance; that ratio may in no case be less than 50 %. Upon application, with supporting evidence, by the insurance undertaking to the competent authority of the home Member State and with the agreement of that authority, amounts recoverable from the special purpose vehicles referred to in Article 46 of Directive 2005/68/EC may be deducted as reassurance.’ ‘(b) second result: for policies on which the capital at risk is not a negative figure, a 0,3 % fraction of such capital underwritten by the assurance undertaking shall be multiplied by the ratio, for the last financial year, of the total capital at risk retained as the undertaking's liability after reinsurance cessions and retrocessions to the total capital at risk gross of reinsurance; that ratio may in no case be less than 50 %. Upon application, with supporting evidence, by the insurance undertaking to the competent authority of the home Member State and with the agreement of that authority, amounts recoverable from the special purpose vehicles referred to in Article 46 of Directive 2005/68/EC may be deducted as reassurance.’ 10. The following Article shall be inserted: ‘Article 28a Solvency margin for assurance undertakings conducting reinsurance activities 1. Each Member State shall apply to insurance undertakings whose head office is situated within its territory, the provisions of Articles 35 to 39 of Directive 2005/68/EC in respect of their reinsurance acceptance activities, where one of the following conditions is met: (a) the reinsurance premiums collected exceed 10 % of their total premium; (b) the reinsurance premiums collected exceed EUR 50 000 000; (c) the technical provisions resulting from their reinsurance acceptances exceed 10 % of their total technical provisions. 2. Each Member State may choose to apply to assurance undertakings referred to in paragraph 1 of this Article and whose head office is situated within its territory the provisions of Article 34 of Directive 2005/68/EC in respect of their reinsurance acceptance activities, where one of the conditions laid down in the said paragraph 1 is met. In that case, the respective Member State shall require that all assets employed by the assurance undertaking to cover the technical provisions corresponding to its reinsurance acceptances shall be ring-fenced, managed and organised separately from the direct assurance activities of the assurance undertaking, without any possibility of transfer. In such a case, and only as far as their reinsurance acceptance activities are concerned, assurance undertakings shall not be subject to Articles 22 to 26. Each Member State shall ensure that their competent authorities verify the separation provided for in the second subparagraph.’ 10. The following Article shall be inserted: 
‘Article 28a
Solvency margin for assurance undertakings conducting reinsurance activities
1. Each Member State shall apply to insurance undertakings whose head office is situated within its territory, the provisions of Articles 35 to 39 of Directive 2005/68/EC in respect of their reinsurance acceptance activities, where one of the following conditions is met:
(a) the reinsurance premiums collected exceed 10 % of their total premium;
(a) the reinsurance premiums collected exceed 10 % of their total premium;
(b) the reinsurance premiums collected exceed EUR 50 000 000;
(b) the reinsurance premiums collected exceed EUR 50 000 000;
(c) the technical provisions resulting from their reinsurance acceptances exceed 10 % of their total technical provisions.
(c) the technical provisions resulting from their reinsurance acceptances exceed 10 % of their total technical provisions.
2. Each Member State may choose to apply to assurance undertakings referred to in paragraph 1 of this Article and whose head office is situated within its territory the provisions of Article 34 of Directive 2005/68/EC in respect of their reinsurance acceptance activities, where one of the conditions laid down in the said paragraph 1 is met.
In that case, the respective Member State shall require that all assets employed by the assurance undertaking to cover the technical provisions corresponding to its reinsurance acceptances shall be ring-fenced, managed and organised separately from the direct assurance activities of the assurance undertaking, without any possibility of transfer. In such a case, and only as far as their reinsurance acceptance activities are concerned, assurance undertakings shall not be subject to Articles 22 to 26.
Each Member State shall ensure that their competent authorities verify the separation provided for in the second subparagraph.’ 11. Article 38(4) shall be replaced by the following: ‘4. Member States shall ensure that the competent authorities have the power to decrease the reduction, based on reinsurance, to the solvency margin as determined in accordance with Article 28 where: (a) the nature or quality of reinsurance contracts has changed significantly since the last financial year; (b) there is no, or a limited, risk transfer under the reinsurance contracts.’ 11. Article 38(4) shall be replaced by the following: ‘4. Member States shall ensure that the competent authorities have the power to decrease the reduction, based on reinsurance, to the solvency margin as determined in accordance with Article 28 where: (a) the nature or quality of reinsurance contracts has changed significantly since the last financial year; (b) there is no, or a limited, risk transfer under the reinsurance contracts.’
Article 61 
Right acquired by existing reinsurance undertakings 1. Reinsurance undertakings subject to this Directive which were authorised or entitled to conduct reinsurance business in accordance with the provisions of the Member States in which they have their head offices before 10 December 2005 shall be deemed to be authorised in accordance with Article 3. However, they shall be obliged to comply with the provisions of this Directive concerning the carrying on of the business of reinsurance and with the requirements set out in Article 6(a), (c), (d), Articles 7, 8 and 12 and Articles 32 to 41 as from 10 December 2007. 2. Member States may allow reinsurance undertakings referred to in paragraph 1 which at 10 December 2005 do not comply with Articles 6(a), 7, 8 and Articles 32 to 40 a period until 10 December 2008 in order to comply with such requirements.
Article 62 
Reinsurance undertakings closing their activity 1. Reinsurance undertakings which by 10 December 2007 have ceased to conduct new reinsurance contracts and exclusively administer their existing portfolio in order to terminate their activity shall not be subject to this Directive. 2. Member States shall draw up the list of the reinsurance undertakings concerned and they shall communicate that list to all the other Member States.
Article 63 
Transitional period for Articles 57(3) and 60(6) A Member State may postpone the application of the provisions of Article 57(3) of this Directive amending Article 15(3) of Directive 73/239/EEC and of the provision of Article 60(6) of this Directive until 10 December 2008.
Article 64 
Transposition 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 10 December 2007. They shall forthwith communicate to the Commission the texts of those measures. When Member States adopt those measures, they shall contain a reference to this Directive or 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 65 
Entry into force This Directive shall enter into force on the day following its publication in the Official Journal of the European Union .
Article 66 
Addressees This Directive is addressed to the Member States. Done at Strasbourg, 16 November 2005.