Changes from report parliamentary committee draft to plenary report

Added‘For the purposes of paragraph 2, second subparagraph, point (d), of this Article, the notional Minimum Capital Requirement of an insurance holding company and of a mixed financial holding company shall be equal to 35 % of its notional Solvency Capital Requirement, where the notional Solvency Capital Requirement is calculated in accordance with Article 226(1), second subparagraph.’;

Added(iii) the fourth subparagraph is deleted;

Added(c) the following paragraph 3 is added:

Added‘3. Participating insurance and reinsurance undertakings shall comply with their minimum consolidated group Solvency Capital Requirement, which is the lowest of the following:

Added(a) 45 % of the outcome of the calculation referred to in paragraph 1, second subparagraph, point (b);

Added(b) the outcome of the calculation referred to in paragraph 2, second subparagraph.

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

AddedFor the purposes 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.’;

Added(73) in Article 232, first subparagraph, introductory wording, the words ‘referred to in Article 37(1), points (a) to (d),’ shall be replaced by the words ‘referred to in Article 37(1), points (a) to (e)’;

Added(74) Article 233 is amended as follows:

Added(a) in paragraph 1, point (b) is replaced by the following:

Added‘(b) the value in the participating insurance or reinsurance undertaking of related undertakings referred to in Article 220(3) and in Article 228(1) and the aggregated group Solvency Capital Requirement, as provided for in paragraph 3.’;

Added(b) paragraph 2 is amended as follows:

Added(i) point (b) is replaced by the following:

Added‘(b) the proportional share of the participating insurance or reinsurance undertaking in the own funds eligible for the Solvency Capital Requirement of each individual related insurance or reinsurance undertaking.’;

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

Added‘(c) the contribution to the group eligible own funds of related undertakings referred in Article 228(1), where that contribution is calculated in accordance with Article 228(2) or Article 228(4);

Added(c) paragraph 3 is amended as follows:

Added(i) point (b) is replaced by the following:

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

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

Added‘(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).’;

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

Added‘Article 233a Combination of methods 1 and 2

Added1. The group solvency of the participating insurance or reinsurance undertaking shall be the difference between the following:

Added(a) the sum of the following:

Added(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;

Added(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;

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

Added(b) the sum of the following:

Added(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;

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

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

Added2. 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.

Added3. 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.

AddedFor 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’).

Added4. Article 233(4) shall apply mutatis mutandis for the purpose of paragraph 1, points (a)(ii) and (b)(ii), of this Article.

Added5. 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.

Added6. Participating insurance and reinsurance undertakings shall comply with their minimum consolidated group Solvency Capital Requirement, which is the minimum of the following:

Added(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);

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

AddedThe 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.

AddedFor 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.

Added7. 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.

AddedWhere 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.

AddedArticle 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.’;

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

Added‘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

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

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

Added(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;

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

AddedThe 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).’;

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

Added‘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.’;

Added(78) Article 245 is amended as follows:

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

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

Added‘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.’;

Added(79) Article 246 is amended as follows: