The competent supervisory authorities of the host Member State of the branch or the Member State of the provision of services may require that the information which they are authorised under this Directive to request with regard to the business of assurance insurance undertakings operating in the territory of that Member State shall to be supplied to them in the official language or languages of that State. The host Member State of provision of services may not require that appointee representative to undertake activities on behalf of the non-life insurance undertaking which appointed him other than those set out in the second and third subparagraphs 1. The competentÖ supervisory authorities of the home Member State shall also attest that the insurance undertaking has the minimum solvency margin ð covers the Solvency Capital Requirement two common subgroups for liabilities on a classified balance sheet are and the Minimum Capital Requirementï calculated in accordance with Articles 16 ð 99 ïand ð 126 ï 17. Member States shall ensure that the competent authorities have the power to require a financial recovery plan for those insurance undertakings where competent authorities consider that policy holders’ rights are threatened. Subject to Article 15 (2), Article 20 (1), (2), (3) and (5) and the last subparagraph of Article 22 (1), Member States shall not restrain the free disposal of those assets, whether movable or immovable, that form part of the assets of authorized insurance undertakings. In the case, however, of insurance undertakings which essentially underwrite only one or more of the risks of credit, storm, hail or frost, the last seven financial years shall be taken as the reference period for the average burden of claims.

• At the same time, they the supervisory authorities of the home Member State shall inform the assurance insurance undertaking concerned accordingly of that communication .
• When calculating amounts recoverable from reinsurance contracts and special purpose vehicles, insurance and reinsurance undertakings shall take account of the time difference between recoveries and direct payments.
• For a period of two years after having received approval from supervisory authorities to use an internal model, insurance and reinsurance undertakings shall provide supervisory authorities with an estimate of the Solvency Capital Requirement determined in accordance with the standard formula, as set out in Subsection 2.
• The obligations referred to in paragraph 1 shall apply only where the policyholder is a natural person.
• Member States which have opted for the method chosen the option provided for in point (a) of paragraph 1(a) shall require that insurance undertakings to establish and keep up to date a special register in line accordance with the provisions set out in the Annex Article 287.
• However, it should disclose this item in a footnote on the financial statements.

When assessing an application for the use of a partial internal model which only covers certain sub-modules of a specific risk module, or some of the business units of an insurance or reinsurance undertaking with respect to a specific risk module, or parts of both, supervisory authorities may require the insurance and reinsurance undertakings concerned to submit a realistic transitional plan to extend the scope of the model. (67) It is necessary to ensure that own funds are appropriately distributed within the group and available to protect policyholders and beneficiaries where needed. To this end insurance and reinsurance undertakings within a group should have sufficient own funds to cover their solvency capital requirement, unless the objective of protection of policyholders and beneficiaries can effectively be achieved otherwise. Insurance and reinsurance undertakings within a group should therefore be authorised to cover their Solvency Capital Requirement with group support declared by their parent undertaking, under defined circumstances. In order to assess the need for and prepare any possible future revision of the group support regime, the Commission should report on the rules of the Member States and the practices of the supervisory authorities in this field. (17) The starting point for the adequacy of the quantitative requirements in the insurance sector is the Solvency Capital Requirement.

Classified Balance Sheet

This Directive shall not prevent an The host Member State may require an insurance undertaking providing services from being required to comply with the rules in the that Member State of provision of services concerning the cover of aggravated risks, insofar as they apply to established non-life insurance undertakings established in that State . On receiving a communication from The insurance undertaking may establish the branch and start business as from the date upon which the competent authorities supervisory authority of the home Member State of the branch has received such a communication or, if no communication is received from them, on expiry of the period provided for in the first subparagraph 4, the branch may be established and start business. 63. Within two months from the observation of the non-compliance with the Solvency Capital Requirement the insurance or reinsurance undertaking concerned shall submit a realistic recovery plan for approval by the supervisory authority. The home Member State shall require every assurance undertaking to cover the technical provisions in respect of its entire business by matching assets, in accordance with Article 26. In respect of business written in the Community, these assets must be localised within the Community.

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 %. Member States shall allow agencies or branches referred to in Title III which, at the entry into force of the implementing measures to this Directive, are undertaking one or more classes referred to in Article 1 and do not extend their business within the meaning of Article 10 (2) a maximum period of five years, from the date of notification of this Directive, in order to comply with the conditions of Article 25. Life insurance Uundertakings set up in the United Kingdom by Royal Charter or by private Act or by special Public Act may carry on their activity in the legal form in which they were constituted on 15 March 1979 for an unlimited period. When Where an insurance undertaking whose head office is outside the Community has branches established in more than one Member State, each branch shall be treated independently with regard to the application of this Directive Title. 87.

The balance sheet

Articles 109 to 124 describe the requirements applying to (re)insurance undertakings using or wishing to use a full or partial internal model in the calculation of the Solvency Capital Requirement. Before approval by the supervisory authorities is given to use an internal model, (re)insurance undertakings must submit an application (see Article 109) approved by the administrative or management body of the undertaking (see Article 113), demonstrating that they meet the use test, statistical quality standards, calibration standards, validation standards, and documentation standards (see Articles 117 to 122). Supervisory authorities must decide whether to accept or reject the application within six months of receipt of a complete application from an (re)insurance undertaking. Member States shall require the participating insurance or reinsurance undertaking or the insurance holding company to undertake at the level of the group the assessment required by Article 44. The own risk and solvency assessment conducted at group level shall be subject to supervisory review by the group supervisor in accordance with Chapter III.

The opening of reorganisation measures or winding-up proceedings shall not affect the right of creditors to demand the set-off of their claims against the claims of the insurance undertaking, where such a set-off is permitted by the law applicable to the insurance undertaking’s claim of the insurance undertaking . The opening of reorganisation measures or winding-up proceedings against an insurance undertaking purchasing an asset shall not affect the seller’s rights of a seller which are based on a reservation of title where at the time of the opening of such measures or proceedings the asset is situated within the territory of a Member State other than the Member State in which such measures or proceedings were opened. Only the competent authorities of the home Member State shall be entitled to take a decision concerning the opening of winding-up proceedings with regard to an insurance undertaking, including its branches in other Member States.

Classified balance sheet

For the purposes of point (b) of the first subparagraph, the parent undertaking shall be responsible for ensuring that the condition is complied with on an on-going basis. In the event of non-compliance, it shall inform the group supervisor and the supervisor of the subsidiary concerned without delay. Where the parent undertaking does not rapidly transfer eligible own funds to the subsidiary, the group supervisor shall use all powers available, including the power available under Article 141, to ensure that the group provides the requested transfer as soon as is practicable.

• Subject to Article 17, the amount of the required solvency margin shall be equal to the higher of the two results as set out in paragraphs 3 and 4.
• The amount of the technical reserves provisions shall be determined by the different co-insurers according to the rules fixed by the their home Member State where they are established or, in the absence of such rules, according to customary practice in that State.
• This is the amount on the year-end balance sheet (Table 1).
• Every insurance undertaking must shall keep at its head office a special register of the assets used to cover the technical provisions calculated and invested in accordance with law of the home Member State’s rules.
• The ORSA has a twofold nature.
• If the law of a Member State so stipulates, the mandatory rules of the law of the forum of the Member State in which the risk is situated or of the Member State imposing the obligation to take out insurance may be applied if and in so far as, under the law of those States, those rules must be applied whatever the law applicable to the contract.

The supervisory authorities shall have appropriate means, methods and powers for verifying the system of governance of the insurance and reinsurance undertakings and for evaluating emerging risks identified by those undertakings which may affect their financial soundness. (b) the insurance and reinsurance undertakings, their auditors and the relevant supervisory authorities must have effective access to data related to the outsourced activities, as well as to the business premises of the service provider, where those premises are located within the Community, and the supervisory authorities must be able to exercise those rights of access. Supervision shall be based on a prospective and risk-oriented approach.

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The competent authorities and the supervisory authorities of theose Member States shall endeavour to coordinate their actions. The Member State within whose territory the administrator or liquidator wishes to act may require Aa translation into the official language or one of the official languages of the that Member State within the territory of which the administrator or liquidator wishes to act may be required. No legalisation formal authentication of that translation or other similar formality shall be required. The supervisory authorities of the Member States may request information on developments in the winding-up procedure from the supervisory authorities of the home Member State. However, where a known creditor is a holder of an insurance claim, the information in the notice referred to in Article (1) shall be provided in the official language or one of the official languages of the Member State in which the creditor has his normal place of habitual Õresidence, domicile or head office.

• The Commission shall adopt implementing measures specifying the calculation of the Minimum Capital Requirement, referred to in Articles 125 and 126.
• However, Member States shall allow their supervisory authorities to decide, in the absence of equivalent supervision referred to in Article 272, to carry out a new verification at a lower level where a parent undertaking of insurance or reinsurance undertakings exists, whether a third-country insurance holding company, a third-country insurance undertaking or a third-country reinsurance undertaking.
• The Member State within whose territory the administrator or liquidator wishes to act may require Aa translation into the official language or one of the official languages of the that Member State within the territory of which the administrator or liquidator wishes to act may be required.
• If the competent authorities of the host Member State have reason to consider that the activities of a reinsurance undertaking might affect its financial soundness, they shall inform the competent authorities of the reinsurance undertaking’s home Member State.
• Where, in spite of a recovery plan initially considered to be viable, a non compliance with the Minimum Capital Requirement has not been resolved two months after its observation, it shall be disclosed at the end of that period, together with an explanation of its origin and consequences, including any remedial measure taken.
• In respect of business written in the Community, these assets must be localised within the Community.
• (72) The supervisory authorities should have access to all the information relevant to the exercise of group supervision.

TThe insurance undertaking shall entrust the management of claims in respect of legal expenses insurance to an undertaking having separate legal personality. That undertaking shall be mentioned in the separate contract or separate section referred to in paragraph 1Ö Article 206 . It shall not be possible to refuse authorization to an agency or branch solely on the grounds that the activity covered by this Article is classified differently in the Member State in the territory of which the head office of the undertaking is situated. In the event of an insurance undertaking being wound up, liabilities arising from participation in Community co-insurance contracts shall be met in the same way as those arising under the that undertaking’s other insurance contracts of that undertaking without distinction as to the nationality of the insured and of the beneficiaries. The right of insurance undertakings which have their head office in a Member State and which are subject to and satisfy the requirements of the First Coordination Directive to participate in Community co-insurance may shall not be made subject to any provisions other than those of this Directive Section. Each Member State States shall prescribe that a policy holder policyholders who concludes an individual life-assurance contract life insurance contracts shall have a period of between 14 and 30 days from the time when he/she was they were informed that the contract had been concluded within which to cancel the contract.

Such transfers shall automatically be valid against policyholders, the assured insured persons and any other person having rights or obligations arising out of the contracts transferred. The Solvency Capital Requirement including the capital add-on imposed https://kelleysbookkeeping.com/ according to points (a) and (b) of paragraph 1 shall replace the inadequate Solvency Capital Requirement. Member States may also make provision for the competent authorities to obtain any information regarding contracts which are held by intermediaries.

• (d) For tontines, referred to in Article 2(2)(a) of this Directive, it shall be equal to 1 % of their assets.
• The effects of reorganisation measures or winding-up proceedings on a pending lawsuit concerning an asset or a right of which the insurance undertaking has been divested shall be governed solely by the law of the Member State in which the lawsuit is pending.
• From that sum there shall then be deducted the total amount of premiums or contributions cancelled in the last financial year, as well as the total amount of taxes and levies pertaining to the premiums or contributions entering into the aggregate.
• In order to achieve that objective, Member States should be provided with a choice between equivalent methods to ensure special treatment for insurance creditors, neither of those methods impeding a Member State from establishing a ranking between different categories of insurance claims.
• Each Member State may grant a Authorisation may be granted for two or more of the classes, where its the national laws permit of a Member State permits such classes to be carried on simultaneously.
• However By way of Derogation from paragraph 1 , the risks included in classes 14, 15 and 17 in point A of Annex I may not be regarded as risks ancillary to other classes.