Changes from plenary report to adopted text

Removed‘(b) the proportional share of the Solvency Capital Requirement of each individual related insurance or reinsurance undertaking.’

Removed(ii) the following point (c) is added:

Removed‘(c) the contribution to the group Solvency Capital Requirement of related undertakings referred in Article 228(1), where that contribution is calculated in accordance with Article 228(3) or Article 228(4).’;

Removed(75) the following Article 233a is inserted:

Removed‘Article 233a Combination of methods 1 and 2

Removed1. The group solvency of the participating insurance or reinsurance undertaking shall be the difference between the following:

Removed(a) the sum of the following:

Removed(i) for undertakings to which method 1 is applied, the own funds eligible to cover the Solvency Capital Requirement, calculated on the basis of consolidated data;

Removed(ii) for each related insurance or reinsurance undertaking to which method 2 is applied, the proportional share of the own funds eligible for its Solvency Capital Requirement;

Removed(iii) the contribution of related undertakings referred to in Article 228(1), calculated in accordance with Article 228(2) or Article 228(4); and

Removed(b) the sum of the following:

Removed(i) for undertakings to which method 1 is applied, the consolidated group Solvency Capital Requirement, calculated in accordance with Article 230(2) on the basis of consolidated data;

Removed(ii) for each insurance or reinsurance undertaking to which method 2 is applied, the proportional share of its Solvency Capital Requirement;

Removed(iii) the contribution of related undertakings referred to in Article 228(1), calculated in accordance with Article 228(3) or Article 228(4).

Removed2. For the purposes of paragraph 1, point (a) (i), and paragraph 1, point (b) (i) of this Article, holdings in related undertakings referred to in Article 228(1) shall not be included in the consolidated data.

Removed3. For the purposes of paragraph 1, point (a) (i), and paragraph 1, point (b)t (i) of this Article, holdings in related undertakings referred to in Article 220(3) to which method 2 is applied shall not be included in the consolidated data.

RemovedFor the purposes of paragraph 1, point (b) (i), of this Article, the value of holdings in undertakings referred to in Article 220(3) to which method 2 is applied, in excess of their own Solvency Capital Requirement, shall be included in the consolidated data when calculating the sensitivity of assets and liabilities to changes in the level or in the volatility of currency exchange rates (‘currency risk’). However, the value of those holdings shall not be assumed to be sensitive to changes in the level or in the volatility of market prices of equities (‘equity risk’).

Removed4. Article 233(4) shall apply mutatis mutandis for the purpose of paragraph 1, points (a)(ii) and (b)(ii), of this Article.

Removed5. Article 231 shall apply mutatis mutandis in the case of an application for permission to calculate the consolidated group Solvency Capital Requirement, as well as the Solvency Capital Requirement of insurance and reinsurance undertakings in the group, on the basis of an internal model, submitted by an insurance or reinsurance undertaking and its related undertakings, or jointly by the related undertakings of an insurance holding company.

Removed6. Participating insurance and reinsurance undertakings shall comply with their minimum consolidated group Solvency Capital Requirement, which is the minimum of the following:

Removed(a) 45 % of the sum of the consolidated group Solvency Capital Requirement referred to in paragraph 1, point (b)(i), and of the contribution referred to in paragraph 1, point (b)(iii);

Removed(b) the outcome of the calculation referred to in Article 230(2), second subparagraph.

RemovedThe minimum consolidated group Solvency Capital Requirement shall be covered by eligible basic own funds as determined in accordance with Article 98(4), calculated on the basis of consolidated data. For the purpose of that calculation, holdings in related undertakings referred to in Article 228(1) shall not be included in the consolidated data.

RemovedFor the purpose of determining whether such eligible own funds qualify to cover the minimum consolidated group Solvency Capital Requirement, the principles set out in Articles 221 to 229 shall apply mutatis mutandis. Article 139(1) and (2) shall apply mutatis mutandis.

Removed7. In determining whether the amount calculated in paragraph 1, point (b)(ii), of this Article appropriately reflects the risk profile of the group with regard to undertakings referred to in Article 220(3) to which Method 2 is applied, the supervisory authorities concerned shall pay particular attention to any specific risks existing at group level which would not be sufficiently covered because they are difficult to quantify.

RemovedWhere the risk profile of the group with regard to undertakings referred to in Article 220(3) to which Method 2 is applied deviates significantly from the assumptions underlying the aggregated group Solvency Capital Requirement referred to in Article 233(3), a capital add-on to the amount calculated in paragraph 1, point (b)(ii), of this Article may be imposed.

RemovedArticle 37(1) to (5), together with the delegated acts and implementing technical standards adopted in accordance with Article 37(6), (7) and (8), shall apply mutatis mutandis.’;

Removed(76) Article 234 is replaced by the following:

Removed‘Article 234 Delegated acts for technical principles and methods in Articles 220 to 229, the simplified approach in Article 229a, and the application of Articles 230 to 233a

RemovedThe Commission shall adopt delegated acts in accordance with Article 301a specifying the following:

Removed(a) the technical principles and methods set out in Articles 220 to 229;

Removed(b) the technical details to the simplified approach set out in Article 229a(1), as well as the criteria based on which supervisory authorities may approve the use of the simplified approach;

Removed(c) the application of Articles 230 to 233a, reflecting the economic nature of specific legal structures.

RemovedThe Commission may adopt delegated acts in accordance with Article 301a specifying the criteria based on which the group supervisor may approve the application of the simplified approach set out in Article 229a(2).’;

Removed(77) in Article 244(3), the third subparagraph is replaced by the following:

Removed‘In order to identify significant risk concentration to be reported, the group supervisor, after consulting the other supervisory authorities concerned and the group, shall impose appropriate thresholds based on Solvency Capital Requirements, technical provisions, eligible own funds, other quantitative or qualitative risk-based criteria deemed appropriate or a combination thereof.’;

Removed(78) Article 245 is amended as follows:

Removed(a) in paragraph 1, the words ‘paragraphs 2 and 3’ are replaced by the words ‘paragraphs 2, 3 and 3a’;

Removed(b) the following paragraph 3a is inserted:

Removed‘3a. In addition to intragroup transactions within the meaning of Article 13, point (19), for the purpose of paragraphs 2 and 3 of this Article, where justified, supervisory authorities may require groups to also report intragroup transactions that involve undertakings other than insurance and reinsurance undertakings, third-country insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies.’;

Removed(79) Article 246 is amended as follows:

Removed(a) paragraph 1 is replaced by the following:

Removed‘1. The requirements set out in Title I, Chapter IV, Section 2 shall apply mutatis mutandis at the level of the group. The system of governance of the group shall cover participating insurance or reinsurance undertakings, parent insurance holding companies or parent mixed financial holding companies, as well as to all related undertakings in the scope of the group within the meaning of Article 212 which is subject to group supervision in accordance with Article 213(2), points (a), (b) and (c). The system of governance of the group shall also cover all undertakings that are managed by the participating undertaking or its subsidiaries jointly with one or more undertakings that are not part of the same group.

RemovedWithout prejudice to the first subparagraph of this paragraph, the risk management and internal control systems and reporting procedures shall be implemented consistently in all the undertakings included in the scope of group supervision pursuant to Article 213(2), points (a) and (b), so that those systems and reporting procedures can be controlled at the level of the group.

RemovedMember States shall ensure that the administrative, management or supervisory body of the ultimate parent insurance or reinsurance undertaking, insurance holding company mixed financial holding company which has its head office in the Union, or the designated participating undertaking in accordance with Article 212(3), has the ultimate responsibility for the compliance, by the group to which group supervision applies in accordance with Article 213(2), points (a), (b) and (c), with the laws, regulations and administrative provisions adopted pursuant to this Directive. The administrative, management or supervisory body of each insurance and reinsurance undertaking within the group shall remain responsible for its own compliance with all requirements, as specified in Article 40 and Article 213(1), second subparagraph.

RemovedThe risk management system shall cover at least all insurance and reinsurance activities conducted within the group, as well as material non-insurance activities. It shall also cover the risks stemming from those activities to which the group is or could be exposed, and their interdependencies.

RemovedWithout prejudice to the first subparagraph of this paragraph, the risk management and internal control systems and reporting procedures shall be implemented consistently in all the undertakings included in the scope of group supervision pursuant to Article 213(2), points (a) and (b), so that those systems and reporting procedures can be controlled at the level of the group.’;

Removed(b) in paragraph 2, the following subparagraphs are added :

Removed‘The participating insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company shall regularly monitor the activities of its related undertakings, including related undertakings referred to in Article 228(1) and non-regulated undertakings. That monitoring shall be commensurate with the nature, scale and complexity of the risks that the related undertakings generate or could generate at the level of the group.

RemovedThe participating insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company shall have written policies at the level of the group, and shall ensure consistency with the group policies of the written policies of all regulated undertakings in the scope of the group. It shall also ensure that group policies are implemented in a consistent manner by all regulated undertakings in the scope of the group.’;

Removed(c) in paragraph 4, first subparagraph, the second sentence is replaced by the following:

Removed‘The own-risk and solvency assessment conducted at group level shall cover at least all insurance and reinsurance activities conducted within the group, as well as material non-insurance activities. It shall also cover the risks stemming from those activities to which the group is or could be exposed, and their interdependencies. It shall be subject to supervisory review by the group supervisor in accordance with Chapter III.’;

Removed(d) the following paragraph 5 is added:

Removed‘5. Member States shall require the participating insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company to ensure that the group has robust governance arrangements which include a clear organisational structure with well-defined, transparent and consistent lines of responsibility and segregation of duties within the group. The system of governance of the group shall endeavour to prevent conflicts of interest, or where this is not possible, shall manage them.

RemovedThe persons who effectively run an insurance or reinsurance group are the persons who effectively run the parent or participating undertaking referred to in paragraph 1, second subparagraph.

RemovedMember States shall require the participating insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company to identify the persons responsible for other key functions within the insurance or reinsurance group that is subject to group supervision in accordance with Article 213(2), points (a), (b) and (c). The administrative, management or supervisory body referred to in paragraph 1, second subparagraph, of this Article shall be responsible for the activities carried out by those persons.

RemovedWhere the persons who effectively run an insurance or reinsurance group or are responsible for other key functions are also the persons who effectively run one or several insurance or reinsurance undertakings or other related undertakings, or are responsible for other key functions within any of those undertakings, the participating undertaking shall ensure that the roles and responsibilities at group level are clearly segregated from those applicable at the level of each individual undertaking.’;

Removed(80) in Title III, the following Chapter IIA is inserted:

Removed‘CHAPTER IIA Macroprudential rules at group level

Removed1. Member States shall require participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies to draw up and maintain a liquidity risk management plan at the level of the group. Article 144a shall apply mutatis mutandis.