Changes from report parliamentary committee draft to plenary report

Added3. Provided that the substantive obligations under the contract, including payment and delivery obligations, and provision of collateral, continue to be performed, a crisis prevention measure, or a crisis management measure, including any event directly linked to the application of such a measure, shall not, per se, make it possible for anyone to:

Added(a) exercise any termination, suspension, modification, netting or set-off rights, including in relation to a contract entered into by:

Added(i) a subsidiary, where the obligations under the contract are guaranteed or otherwise supported by a group entity;

Added(ii) any group entity, where the contract contains cross-default provisions;

Added(b) obtain possession, exercise control or enforce any security over any property of the insurance or reinsurance undertaking or the entity referred to in Article 1(1), points (b) to (e), concerned or any group entity in relation to a contract which contains cross-default provisions;

Added(c) affect any contractual rights of the insurance or reinsurance undertaking or the entity referred to in Article 1(1), points (b) to (e), concerned or any group entity in relation to a contract which contains cross-default provisions.

Added4. Paragraphs 1, 2 and 3 shall not affect the right of a person to take an action as referred to in paragraph 3, points (a), (b) or (c) where that right arises by virtue of an event other than the crisis prevention measure, the crisis management measure, or by virtue of any event directly linked to the application of such a measure.

Added5. A suspension or restriction under Articles 47 or 48 shall not constitute non-performance of a contractual obligation for the purposes of paragraphs 1 and 3 of this Article and of Article 49(1).

Added6. The provisions contained in this Article shall be considered to be overriding mandatory provisions within the meaning of Article 9 of Regulation (EC) No 593/2008 of the European Parliament and of the Council.

AddedPower to suspend certain obligations

Added1. Member States shall ensure that resolution authorities have the power to suspend any payment or delivery obligations pursuant to any contract to which an undertaking under resolution is a party from the publication of a notice of the suspension in accordance with Article 63(3) until midnight in the Member State of the resolution authority of the undertaking under resolution at the end of the business day following that publication.

Added2. A payment or delivery obligation that would have been due during the suspension period referred to in paragraph 1 shall be due immediately upon expiry of the suspension period.

Added3. Where an undertaking under resolution’s payment or delivery obligations under a contract are suspended in accordance with paragraph 1, the payment or delivery obligations of the undertaking under resolution’s counterparties under that contract shall be suspended for the same period of time.

Added4. Any suspension under paragraph 1 shall not apply to payment and delivery obligations owed to the following:

Added(a) systems and operators of systems designated in accordance with Directive 98/26/EC;

Added(b) CCPs authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country CCPs recognised by ESMA pursuant to Article 25 of that Regulation.

Added5. When exercising a power under this Article, resolution authorities shall have regard to the impact the exercise of that power might have.

AddedThe resolution authorities shall set the scope of that power having regard to the circumstances of each case.

AddedPower to restrict the enforcement of security interests

Added1. Member States shall ensure that resolution authorities have the power to restrict secured creditors of an undertaking under resolution from enforcing security interests in relation to any assets of that undertaking from the publication of a notice of the restriction in accordance with Article 63(3) until midnight in the Member State of the resolution authority of the undertaking under resolution at the end of the business day following that publication.

Added2. Any restriction under paragraph 1 shall not apply to:

Added(a) security interest of systems or operators of systems designated for the purposes of Directive 98/26/EC;

Added(b) CCPs authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country central counterparties recognised by ESMA pursuant to Article 25 of that Regulation.

Added3. Where Article 60 applies, resolution authorities shall ensure that any restrictions imposed pursuant to the power referred to in paragraph 1 of this Article are consistent for all group entities in relation to which a resolution action is taken.

AddedPower to temporarily suspend termination rights

Added1. Member States shall ensure that resolution authorities have the power to suspend the termination rights of any party to a contract with an undertaking under resolution from the publication of the notice in accordance with Article 63(3) until midnight in the Member State of the resolution authority of the undertaking under resolution at the end of the business day following that publication, provided that the payment and delivery obligations and the provision of collateral continue to be performed.

Added2. Member States shall ensure that resolution authorities have the power to suspend the termination rights of any party to a contract with a subsidiary of an undertaking under resolution where any of the following applies:

Added(a) the obligations under that contract are guaranteed or are otherwise supported by the undertaking under resolution;

Added(b) the termination rights under that contract are based solely on the insolvency or financial condition of the undertaking under resolution;

Added(c) in the case of a transfer power that has been or may be exercised in relation to the undertaking under resolution, either:

Added(i) all the assets and liabilities of the subsidiary relating to that contract have been or may be transferred to and assumed by the recipient; or

Added(ii) the resolution authority provides in any other way adequate protection for such obligations.

AddedThe suspension of the termination rights shall take effect from the publication of the notice in accordance with Article 63(3) until midnight in the Member State where the subsidiary of the undertaking under resolution is established on the business day following that publication.

Added3. Any suspension under paragraph 1 or 2 shall not apply to:

Added(a) systems or operators of systems designated for the purposes of Directive 98/26/EC; or

Added(b) CCPs authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country central counterparties recognised by ESMA pursuant to Article 25 of that Regulation.

Added4. A person may exercise a termination right under a contract before the end of the period referred to in paragraph 1 or 2 where that person receives notice from the resolution authority that the rights and liabilities covered by the contract shall not be:

Added(a) transferred to another entity; or

Added(b) subject to write-down or conversion in accordance with Article 34(1), point (a).

Added5. Where a resolution authority exercises the power specified in paragraph 1 or 2 of this Article to suspend termination rights, and where no notice has been given pursuant to paragraph 4 of this Article, those termination rights may be exercised on the expiry of the period of suspension, subject to Article 46, as follows:

Added(a) where the rights and liabilities covered by the contract have been transferred to another entity, a counterparty may exercise those termination rights in accordance with the terms of that contract only on the occurrence of any continuing or subsequent enforcement event by the recipient;

Added(b) where the rights and liabilities covered by the contract remain with the undertaking under resolution and the resolution authority has not applied the write-down or conversion tool to that contract for the purpose laid down in Article 34(1), point (a) , a counterparty may exercise those termination rights in accordance with the terms of that contract on the expiry of a suspension referred to in paragraph 1 of this Article.

AddedContractual recognition of resolution stay powers

Added1. Member States shall require insurance and reinsurance undertakings and entities referred to in Article 1(1), points (b) to (e), to include in any financial contract which they enter into and which is governed by third-country law, terms by which the parties recognise that the financial contract may be subject to the exercise of powers by the resolution authority to suspend or restrict rights and obligations under Articles 47, 48, and 49, and recognise that they are bound by the requirements of Article 46.

Added2. Member States may also require that ultimate parent undertakings ensure that their third-country subsidiaries which are insurance and reinsurance undertakings or entities referred to in Article 1(1) points (b) to (e), include, in the financial contracts referred to in paragraph 1, terms to exclude that the exercise of the power of the resolution authority to suspend or restrict rights and obligations of the ultimate parent undertaking, in accordance with paragraph 1, constitutes a valid ground for early termination, suspension, modification, netting, exercise of set-off rights or enforcement of security interests on those contracts.

Added3. Paragraph 1 shall apply to any financial contract which:

Added(a) creates a new obligation, or materially amends an existing obligation after the entry into force of the provisions adopted at national level to transpose this Article;

Added(b) provides for the exercise of one or more termination rights or rights to enforce security interests to which Article 46, 47, 48 or 49 would apply if the financial contract were governed by the laws of a Member State.

Added4. The fact that an insurance or reinsurance undertaking or an entity as referred to in Article 1(1), points (b) to (e), does not include in its financial contracts the contractual terms referred to in paragraph 1 of this Article shall not prevent the resolution authority from applying the powers referred to in Articles 46, 47, 48 or 49 in relation to that financial contract.

Added5. EIOPA shall develop draft regulatory technical standards to specify the contents of the contractual term referred to in paragraph 1, taking into account the different business models of insurance and reinsurance undertakings and entities.

AddedEIOPA shall submit those draft regulatory technical standards to the Commission by [PO – add 18 months after entry into force].

AddedPower is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

AddedPower to temporarily suspend redemption rights

Added1. Member States shall ensure that resolution authorities have the power to temporarily restrict or suspend redemption rights of policy holders in relation to life insurance contracts written by the undertaking under resolution, provided that the substantive obligations under the contracts, and in particular payment obligations for the benefit of policy holders, beneficiaries or injured parties, continue to be performed.

Added2. The power referred to in paragraph 1 shall only be used as long as necessary to facilitate the application of one or more of the resolution tools referred to in Article 26(3). That power shall be valid for the period of time specified in the notice of suspension published in accordance with Article 63(3).

AddedExercise of the resolution powers

Added1. Member States shall ensure that resolution authorities are able to exercise control over the undertaking under resolution, so as to:

Added(a) operate and conduct the activities and services of the undertaking under resolution with all the powers of its shareholders and administrative, management or supervisory body;

Added(b) manage and dispose of the assets and property of the undertaking under resolution.

AddedThe control referred to in the first subparagraph may be exercised directly by the resolution authority or indirectly by a person or persons appointed by the resolution authority. Member States shall ensure that voting rights conferred by shares or other instruments of ownership of the undertaking under resolution cannot be exercised during the period of resolution.