Changes from plenary report to adopted text

Removed(75) Insurance holding companies and mixed financial holding companies can be parent undertakings of insurance or reinsurance groups. In that case, the application of group supervision is required on the basis of the consolidated situation of such holding companies. As the insurance or reinsurance undertakings controlled by such holding companies are not always able to ensure compliance with the requirements on group supervision, it is necessary to ensure that group supervisors have the appropriate supervisory and enforcement powers to ensure compliance by groups with Directive 2009/138/EC. Therefore, similar to amendments to Directive 2013/36/EU of the European Parliament and of the Council introduced by Directive (EU) 2019/878 of the European Parliament and of the Council for credit and financial institutions, group supervisors should have a minimum set of powers over holding companies, including the general supervisory powers that are applicable to insurance and reinsurance undertakings for the purpose of group supervision.

Removed(76) Where insurance and reinsurance undertakings are part of a group whose parent undertaking has its head office in a third country that is not deemed equivalent or temporarily equivalent in accordance with Article 260 of Directive 2009/138/EC, exercising group supervision is more challenging. Group supervisors may decide to apply so-called “other methods” in accordance with Article 262 of that Directive. However, those methods are not clearly defined and the objectives that those other methods should achieve are uncertain. Therefore, the purpose of the other methods should be further specified, including a minimum set of measures that group supervisors should consider.

Removed(77) Commission Delegated Regulation (EU) 2019/981 introduced a preferential treatment for long-term investments in equity. The duration-based equity risk submodule, which also aims at reflecting the lower risk of investing over a longer time horizon, but is of very limited use in the Union, is subject to criteria that are stricter than those applicable to long-term equity investments. Therefore, the new prudential category of long-term equity investments appears to obviate the need for the existing duration-based equity risk submodule. As there is no need to keep two distinct preferential treatments which have the same objective of rewarding long-term investments, the duration-based equity risk submodule should be deleted. However, in order to avoid a situation whereby those amendments lead to adverse effects, a grandfathering clause should be provided for with respect to insurers which are currently applying the duration-based equity risk submodule.

Removed(78) Achieving the environmental and climate ambitions of the Green Deal requires the channelling of large amounts of investments from the private sector, including from insurance and reinsurance companies, towards sustainable investments. The provisions of Directive 2009/138/EC on the capital requirements should not impede sustainable investments by insurance and reinsurance undertakings but should reflect the full risk of investments in environmentally harmful activities. While there is not sufficient evidence at this stage on risk differentials between environmentally or socially harmful and other investments, such evidence may become available over the next years. In order to ensure an appropriate assessment of the relevant evidence, EIOPA should monitor and report by 2023 on the evidence on the risk profile of environmentally or socially harmful investments. Where appropriate, EIOPA’s report should advise on changes to Directive 2009/138/EC and to the delegated and implementing acts adopted pursuant to that Directive. EIOPA may also inquire whether it would be appropriate that certain environmental risks, other than climate change-related, should be taken into account and how. For instance, if evidence so suggests, EIOPA could analyse the need for extending scenario analyses as introduced by this Directive in the context of climate change-related risks to other environmental risks.

Removed(79) Climate change is affecting and will affect at least over the next decades the frequency and severity of natural catastrophes which are likely to further aggravate due to environmental degradation and pollution. This may also change the exposure of insurance and reinsurance undertakings to natural catastrophe risk and render invalid the standard parameters for natural catastrophe risk set out in Delegated Regulation (EU) 2015/35. In order to ensure that there is no persistent discrepancy between the standard parameters for natural catastrophe risk and the actual exposure of insurance and reinsurance companies to such risks, EIOPA should review regularly the scope of the natural catastrophe risk module and the calibrations of its standard parameters. For that purpose, EIOPA should take into account the latest available evidence from climate science and, where discrepancies are found, it should submit an opinion to the Commission accordingly.

Removed(80) The requirements set out in Article 308b(12) of Directive 2009/138/EC should be amended to ensure consistency with the banking framework and a level playing field in the treatment of exposures to Member States' central governments or central banks denominated and funded in the domestic currency of any Member State. For this purpose, a grandfathering regime for such exposures should be introduced to exempt the relevant exposures from spread and market concentration risk capital charges, provided that the exposures were incurred before 1 January 2020.

Removed(81) In some cases, insurance or reinsurance groups heavily rely on the use of the transitional measure on the risk-free interest rates and of the transitional measure on technical provisions. This may misrepresent the actual solvency position of the group. Therefore, insurance or reinsurance groups should be required to disclose the impact on their solvency position of assuming that own funds stemming from those transitional measures are not available to cover the group Solvency Capital Requirement. Supervisory authorities should also have the power to take appropriate measures so that the use of the measures appropriately reflects the financial position of the group. Those measures should however not affect the use by related insurance or reinsurance undertakings of those transitional measures when calculating their individual Solvency Capital Requirement.

Removed(82) Directive 2009/138/EC provides for transitional measures for the risk-free interest rates and on technical provisions which are subject to supervisory approval and which apply with respect to contracts that give rise to the insurance and reinsurance obligations that were concluded before 2016. While the transitional measures should encourage undertakings to move as timely as possible towards compliance with that Directive, the application of transitional measures approved for the first time long after 2016 are likely to slow down the path to compliance with that Directive. Such approval of the use of those transitional measures should therefore be restricted to cases where an insurance or reinsurance undertaking becomes for the first time subject to the rules of Directive 2009/138/EC and, where an undertaking has accepted a portfolio of insurance or reinsurance contracts and the transferring undertaking applied a transitional measure with respect to the obligations relating to that portfolio, before the transfer.

Removed(83) The United Kingdom became a third country on 1 February 2020 and Union law ceased to apply to and in the United Kingdom on 31 December 2020. Given that Directive 2009/138/EC has several provisions that address the specifics of particular Member States, where such provisions specifically concern the United Kingdom, they have become obsolete and should therefore be deleted.

Removed(83a) The calibrations used for the delegated acts and implementing acts adopted by the Commission are often based on data that is heavily influenced by the inclusion of data from the United Kingdom market. Therefore, all calibrations that are input for the calculations of the Solvency Capital Requirement and the Minimum Capital Requirement should be reviewed to determine whether they are dependent on UK data and, where applicable, UK data should be eliminated from the relevant data sets, unless no other data is available.

Removed(84) Directive 2009/138/EC should therefore be amended accordingly,

RemovedHAVE ADOPTED THIS DIRECTIVE:

RemovedAmendments to Directive 2009/138/EC

RemovedDirective 2009/138/EC is amended as follows:

Removed(1) in Article 2(3), point (a) (iv) is replaced by the following:

Removed‘(iv) types of permanent health insurance not subject to cancellation currently existing in Ireland;’;

Removed(2) in Article 4(1), points (a), (b) and (c) are replaced by the following:

Removed‘(a) the undertaking’s annual gross written premium does not exceed EUR 15 000 000;

Removed(b) the total of the undertaking’s technical provisions, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred in Article 76, does not exceed EUR 50 000 000;’;

Removed(c) where the undertaking belongs to a group, the total of the technical provisions of the group defined as gross of the amounts recoverable from reinsurance contracts and special purpose vehicles does not exceed EUR 50 000 000;’(3) Article 6 is amended as follows:

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

Removed‘(a) the assistance is provided in the event of an accident or breakdown involving a road vehicle when the accident or breakdown occurs in the territory of the Member State of the undertaking providing cover or neighbouring countries;’;

Removed(b) paragraph 2 is replaced by the following:

Removed‘2. In the cases referred to in paragraph 1, (b)(i) and (b)(ii), the condition that the accident or breakdown must have happened in the territory of the Member State of the undertaking providing cover shall not apply where the beneficiary is a member of the body providing cover and the breakdown service or conveyance of the vehicle is provided simply on presentation of a membership card, without any additional premium being paid, by a similar body in the country concerned on the basis of a reciprocal agreement.’;

Removed(c) paragraph 3 is deleted;

Removed(4) in Article 8, point (3) is deleted;

Removed(5) Article 13 is amended as follows:

Removed(a) in point (7), point (b) is deleted;

Removed(b) the following points (10a), (10aa), (10b), (10c) and (10d) are inserted:

Removed‘(10a) ‘low-risk profile undertaking’ means an insurance and reinsurance undertaking that meets the conditions set out in Article 29a and has been classified as such in accordance with Article 29b;

Removed(10aa) ‘significant cross-border activities’ means insurance and reinsurance activities carried out by an insurance or reinsurance undertaking under the freedom of establishment or the freedom to provide services in a host Member State, which exceed 15 % or EUR 30 000 000 of the annual gross written premium income of the undertaking, measured with reference to the last available financial statement of the undertaking;

Removed(10b) ‘audit firm’ means an audit firm within the meaning of Article 2, point (3), of Directive 2006/43/EC of the European Parliament and of the Council*;

Removed(10c) ‘statutory auditor’ means a statutory auditor within the meaning of Article 2, point (2) of Directive 2006/43/EC of the European Parliament and of the Council*;

Removed(10d) ‘low-risk profile group’ means a group that complies with the conditions laid down in Article 213a and has been classified as such by the group supervisor pursuant to paragraph 2 of that Article;

Removed* Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC (OJ L 157, 9.6.2006, p. 87).’;

Removed(c) points (15) and (16) are replaced by the following:

Removed‘(15) ‘parent undertaking’ means a parent undertaking as referred to in Article 22(1) and (2) of Directive 2013/34/EU of the European Parliament and of the Council*, as well as an undertaking which supervisory authorities shall consider as parent undertaking in accordance with Article 212 of this Directive;

Removed‘(16) ‘subsidiary undertaking’ means any subsidiary undertaking as referred to in Article 22(1) and (2) of Directive 2013/34/EU, including subsidiaries thereof, as well as an undertaking which supervisory authorities are to consider as subsidiary undertaking in accordance with Article 212 of this Directive;

Removed* Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19).’;

Removed(d) in point (18), the words ‘Article 1 of Directive 83/349/EEC’ are replaced by the words ‘Article 22(1) and (2) of Directive 2013/34/EU’;

Removed(e) point (19) is replaced by the following:

Removed‘(19) ‘intra-group transaction’ means any transaction by which an insurance or reinsurance undertaking, a third-country insurance or reinsurance undertaking, an insurance holding company or a mixed financial holding company relies, either directly or indirectly, on other undertakings within the same group or on any natural or legal person linked to the undertakings within that group by close links, for the fulfilment of an obligation, whether or not contractual, and whether or not for payment;’;

Removed(f) point (22) is amended as follows:

Removed(i) in point (a), the words ‘Article 4(1)(14) of Directive 2004/39/EC’ are replaced by the words ‘Article 4(1), point (21), of Directive 2014/65/EU of the European Parliament and of the Council*;

Removed___________________________________

Removed* Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, (OJ L 173, 12.6.2014, p. 349).’;

Removed(ii) in point (b)(i), the words ‘Directive 2004/39/EC’ are replaced by the words ‘Directive 2014/65/EU’;

Removed(g) point (25) is amended as follows:

Removed(i) in point (a), the words ‘Article 4 (1), (5) and (21) of Directive 2006/48/EC’ are replaced by the words ‘Article 4(1), points (1), (18) and (26), of Regulation (EU) No 575/2013 of the European Parliament and of the Council*;

Removed______________________________

Removed* Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, (OJ L 176, 27.6.2013, p. 338).’;

Removed(ii) in point (c), the words ‘Directive 2004/39/EC’ are replaced by the words ‘Directive 2014/65/EU’;

Removed(h) point (27) is amended as follows:

Removed(i) in point (c), point (ii) is replaced by the following:

Removed‘(ii) a net turnover, within the meaning of Article 2, point (5), of Directive 2013/34/EU, of EUR 13 600 000;’;

Removed(ii) the words ‘Directive 83/349/EEC’ are replaced by the words ‘Directive 2013/34/EU’;

Removed(i) the following points (41) and (41a) are added:

Removed‘(41) ‘regulated undertaking’ means ‘regulated entity’ within the meaning of Article 2(4) of Directive 2002/87/EC or an institution for occupational retirement provision within the meaning of Article 6(1) of Directive (EU) 2016/2341;

Removed(41a) ‘crypto-asset’ means a crypto-asset as defined in Article 3, point (6), of Regulation (EU) 2023/1114 of the European Parliament and of the Council*.’;

Removed____________________