Changes from report parliamentary committee draft to plenary report

Added‘2. Supervisory authorities shall be given all supervisory powers to take measures in relation to insurance holding companies and mixed financial holding companies that are necessary to ensure that groups to which group supervision is applied in accordance with Article 213(2), points (a), (b) and (c), comply with all the requirements laid down in this Title. Those powers shall include the general supervisory powers referred to in Article 34.

AddedWithout prejudice to their provisions on criminal law, Member States shall impose sanctions on, or adopt measures relating to, insurance holding companies and mixed financial holding companies which infringe laws, regulations or administrative provisions brought into force to transpose this Title, or in relation to the person effectively managing those companies. The supervisory authorities shall cooperate closely to ensure that such sanctions or measures are effective, in particular where the central administration or main establishment of an insurance holding company or mixed financial holding company is not located in the same Member State as its head office.’;

Added(b) the following paragraphs 2a and 2b are inserted:

Added‘2a. Where the group supervisor has established that the conditions set out in Article 213(3a) are not met or have ceased to be met, the insurance holding company or mixed financial holding company shall be subject to appropriate supervisory measures to ensure or restore, as the case may be, continuity and integrity of group supervision and to ensure compliance with the requirements laid down in this Title. In the case of a mixed financial holding company, the supervisory measures shall, in particular, take into account the effects on the financial conglomerate as a whole as well as on its related regulated undertakings.

Added2b. For the purposes of paragraphs 1 and 2a of this Article, Member States shall ensure that the supervisory measures which may be applied to insurance holding companies and mixed financial holding companies include, at least, the following:

Added(a) suspending the exercise of voting rights attached to the shares of the subsidiary insurance or reinsurance undertaking held by the insurance holding company or mixed financial holding company;

Added(b) issuing injunctions, sanctions or penalties against the insurance holding company, the mixed financial holding company or the members of the administrative, management or supervisory body of those companies;

Added(c) giving instructions or directions to the insurance holding company or mixed financial holding company to transfer to its shareholders the participations in its subsidiary insurance and reinsurance undertakings;

Added(d) designating on a temporary basis another insurance holding company, mixed financial holding company or insurance or reinsurance undertaking within the group as responsible for ensuring compliance with the requirements set out in this Title;

Added(e) restricting or prohibiting distributions or interest payments to shareholders;

Added(f) requiring insurance holding companies or mixed financial holding companies to divest from or reduce holdings in insurance or reinsurance undertakings or other related undertakings referred to in Article 228(1);

Added(g) requiring insurance holding companies or mixed financial holding companies to submit a plan on return, without delay, to compliance.

AddedThe group supervisor shall consult other supervisory authorities concerned and EIOPA before taking any of the measures referred to in the first subparagraph, where those measures affect undertakings which have their head offices in more than one Member State.’;

Added(87) Article 262 is amended as follows:

Added(a) paragraph 2 is replaced by the following:

Added‘2. Member States shall allow their supervisory authorities to apply other methods which ensure appropriate supervision of the insurance and reinsurance undertakings belonging to a group within the meaning of Article 212, and to which group supervision applies in accordance with Article 213(2), point (c). Those methods shall be agreed by the group supervisor, identified in accordance with Article 247, after consulting the other supervisory authorities concerned.

AddedThe methods referred to in the first subparagraph shall allow the objectives of the group supervision as specified in this Title to be achieved. Those objectives shall include the following:

Added(a) preserving the capital allocation and the composition of own funds of insurance and reinsurance undertakings and preventing material intra-group creation of capital where such intra-group capital creation is financed out of the proceeds of debt or other financial instruments that do not qualify as own funds items by the parent company;

Added(b) assessing and monitoring the risks stemming from undertakings both inside and outside the Union, and limiting the risk of contagion from those undertakings and from other non-regulated undertakings to insurance and reinsurance undertakings within the group, and to the subgroup the ultimate parent undertaking of which is an insurance or reinsurance undertaking, an insurance holding company or a mixed financial company that has its head office in the Union, as referred to in Article 215, where such a subgroup exists.

AddedThe methods referred to in the first subparagraph shall be appropriately justified, documented, and notified to the other supervisory authorities concerned, EIOPA and the Commission.’;

Added(b) the following paragraph 3 is added:

Added‘3. For the purposes of paragraph 2 of this Article, the supervisory authorities concerned may in particular apply one or several of the following methods to insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies that are part of a group which is subject to group supervision in accordance with Article 213(2), point (c):

Added(a) designating one insurance or reinsurance undertaking that shall be responsible for compliance with the requirements set out in this Title, where the insurance and reinsurance undertakings that belong to the group do not have a common parent undertaking in the Union;

Added(b) requiring the establishment of an insurance holding company which has its head office in the Union, or a mixed financial holding company which has its head office in the Union where the insurance and reinsurance undertakings that belong to the group do not have a common parent undertaking in the Union, and applying this Title to the insurance and (reinsurance undertakings in the group headed by that insurance holding company or mixed financial holding company;

Added(c) where several insurance and reinsurance undertakings that belong to the group form a subgroup whose parent undertaking has its head office in the Union, in addition to applying this Title to this subgroup, taking additional measures or imposing additional requirements, including requirements referred to in points (d), (e), and (f) of this subparagraph and enhanced supervision of risk concentration within the meaning of Article 244 and of intragroup transactions within the meaning of Article 245, with the aim of achieving the objective referred to in paragraph 2, second subparagraph, point (b), of this Article;

Added(d) requiring the members of the administrative, management or supervisory body of the ultimate parent undertaking in the Union to be independent from the ultimate parent undertaking outside the Union;

Added(e) prohibiting, limiting, restricting, monitoring or requiring prior notification of transactions, including dividend distributions and coupon payments on subordinated debt, where such transactions are or could be a threat to the financial or solvency position of insurance and reinsurance undertakings within the group, and involve, on the one hand, an insurance or reinsurance undertaking, an insurance holding company which has its head office in the Union or mixed financial holding company which has their head office in the Union, and, on the other hand, an undertaking belonging to the group which has its head office outside the Union; where the group supervisor in the Union is not one of the supervisory authorities of the Member State in which a related insurance or reinsurance undertaking has its head office, the group supervisor in the Union shall inform those supervisory authorities of its findings with a view to enabling them to take the appropriate measures;

Added(f) requiring information on the solvency and financial position, the risk profile, and the risk tolerance limits of parent undertakings which have their head office outside the Union, including, where applicable, reports on those topics which are submitted to the administrative, management or supervisory body or the supervisory authorities of those third-country parent undertakings.’;

Added(88) in Article 265, the following paragraph 1a is inserted:

Added‘1a. Member States shall also ensure that, where the parent undertaking of one or more insurance or reinsurance undertakings is a credit institution, an investment firm, a financial institution, a UCITS management company, an alternative investment fund manager, an institution for occupational retirement provision or a non-regulated undertaking which carries one or more of the activities referred to in Annex I to Directive 2013/36/EU where those activities constitute a significant part of its overall activity, the supervisory authorities responsible for the supervision of those insurance or reinsurance undertakings exercise general supervision over transactions between those insurance or reinsurance undertakings and the parent undertaking and its related undertakings.’;

Added(88a) in Article 267, the following paragraphs are added:

Added‘In the event of an application of the resolution tools referred to in Article 26(3) of Directive (EU) xx/xx [PO, please insert the number of the IRRD] and exercise of the resolution powers referred to in Chapter IV, Title III, of that Directive, this Title shall also apply to reinsurance undertakings and the entities referred to in Article 1(1), points (b) to (e), of that Directive.

AddedArticles 270 and 272 of this Directive shall not apply where Article 63 of Directive (EU) xx/xx [PO, please insert the number of the IRRD] applies.

AddedArticle 295 of this Directive shall not apply where Article 64 of Directive (EU) xx/xx [PO, please insert the number of the IRRD] applies.’;

Added(88b) Article 268(1), first subparagraph, is amended as follows:

Added(a) point (a) is replaced by the following:

Added‘(a) ‘competent authorities’ means either the administrative or judicial authorities of the Member States that are competent for reorganisation measures or for the winding-up proceedings, or a resolution authority as defined in Article 2(2), point (7), of Directive (EU) xx/xx [PO, please insert the number of the IRRD] in respect of reorganisation measures taken pursuant to that Directive;’;

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

Added‘(c) ‘reorganisation measures’ means measures involving any intervention by the competent authorities which are intended to preserve or restore the financial situation of an insurance undertaking and which affect pre-existing rights of parties other than the insurance undertaking itself, including the suspension of payments or enforcement measures or the reduction of claims, the application of the resolution tools referred to in Article 26(3) of Directive (EU) xx/xx [PO, please insert the number of the IRRD] and the exercise of resolution powers referred to in Chapter IV, Title III, of Directive (EU) xx/xx [PO, please insert the number of the IRRD];’;

Added(89) Article 301a is amended as follows:

Added(a) paragraph 2 is amended as follows:

Added(i) the second subparagraph is replaced by the following:

Added‘The delegation of power referred to in Articles 29, 35b and 256b shall be conferred on the Commission for a period of four years from [OP please insert date = entry into force of this amending Directive].’;

Added(ii) the following subparagraphs are added:

Added‘The delegation of power referred to in the first and second subparagraphs shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period.

AddedThe Commission shall draw up a report in respect of the delegated power by six months before the end of every four-year period.’;

Added(b) paragraph 3 is replaced by the following:

Added‘3. The delegation of power referred to in Articles 17, 29, 31, 35, 35b, 37, 50, 56, 75, 86, 92, 97, 99, 109a, 111, 114, 127, 130, 135, 143, 172, 210, 211, 216, 217, 227, 234, 241, 244, 245, 247, 248, 256, 256b, 258, 260 and 308b may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.’;

Added(c) paragraph 5 is replaced by the following:

Added‘5. A delegated act adopted pursuant to Article 17, 29, 31, 35, 35b, 37, 50, 56, 75, 86, 92, 97, 99, 109a, 111, 114, 127, 130, 135, 143, 172, 210, 211, 216, 217, 227, 234, 241, 244, 245, 247, 248, 256, 256b, 258, 260 or 308b shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of three months of notification of that act to the European Parliament and to the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by three months at the initiative of the European Parliament or of the Council.’;

Added(90) Article 304(2) is replaced by the following;

Added‘2. As of [OP please insert date = date of application of this amending Directive] life insurance undertakings may continue to apply the approach referred to in paragraph 1 of this Article only in respect of assets and liabilities to which supervisory authorities approved the application of the duration-based equity sub-module before [OP please insert date = application date of this amending Directive].’;

Added(91) the following Article 304a is inserted:

Added‘Article 304a Reviews as regards sustainability risk

Added1. EIOPA, after consulting the ESRB, shall assess, on the basis of available data and the findings of the Platform on Sustainable Finance referred to in Article 20 of Regulation (EU) 2020/852 of the European Parliament and of the Council* and the EBA in the context of its work under the mandate set out in Article 501c, point (c), of Regulation (EU) 575/2013 whether a dedicated prudential treatment of exposures related to assets or activities associated substantially with environmental or social objectives would be justified. In particular, EIOPA shall assess the potential effects of a dedicated prudential treatment of exposures related to assets and activities which are associated substantially with environmental and/or social objectives or which are associated substantially with harm to such objectives on the protection of policy holders and financial stability in the Union, including fossil fuel related assets.

AddedEIOPA shall submit a report on its findings to the Commission by 28 June 2023. Where appropriate, the report shall consider a possible prudential treatment of exposures related to assets and activities which are associated substantially with environmental or social objectives or which are associated substantially with harm to such objectives and be accompanied by an assessment of the impact of the proposed amendments on insurance and reinsurance undertakings.

Added2. EIOPA shall review at least every three years, with respect to natural catastrophe risk, the scope and the calibration of the standard parameters of the non-life catastrophe sub-module of the Solvency Capital Requirement referred to in Article 105(2) , third subparagraph, point (b). For the purpose of those reviews, EIOPA shall take into account the latest available relevant evidence on climate science and the relevance of risks in terms of the risks underwritten by insurance and reinsurance companies that use the standard formula for the calculation of the non-life catastrophe sub-module of the Solvency Capital Requirement.

AddedThe first review pursuant to the first subparagraph shall be completed by [OP please insert date = two years after entry into force of this Directive].

AddedWhere EIOPA finds, during a review pursuant to the first subparagraph, that, due to the scope or the calibration of the standard parameters of the non-life catastrophe risk sub-module, there is a significant discrepancy between the part of the Solvency Capital Requirement relating to natural catastrophes and the actual natural catastrophe risk that insurance and reinsurance undertakings face, EIOPA shall submit an opinion on natural catastrophe risk to the Commission.

AddedAn opinion on natural catastrophe risk submitted to the Commission pursuant to the third subparagraph shall consider the scope or the calibration of the standard parameters of the non-life catastrophe sub-module of the Solvency Capital Requirement in order to remedy the discrepancy found and be accompanied by an assessment of the impact of the proposed amendments on insurance and reinsurance undertakings.