Changes from report parliamentary committee draft to plenary report

Added3. The group pre-emptive recovery plan, and any plan drawn up for an individual subsidiary insurance or reinsurance undertaking, shall contain the elements specified in Article 5.

AddedThe group pre-emptive recovery plan shall identify whether there are obstacles to the implementation of remedial actions within the group, including at the level of individual entities covered by the plan, and whether there are substantial practical or legal impediments to the prompt transfer of own funds or the repayment of liabilities or assets within the group.

Added4. Supervisory authorities may require subsidiary insurance or reinsurance undertakings or the entities referred to in Article 1(1), points (c) and (d), to draw up and submit pre-emptive recovery plans when no group pre-emptive recovery plan exists.:

Added▐4a Upon the request of the supervisory authority, the group supervisor shall require the ultimate parent insurance or reinsurance undertaking or insurance holding company heading the group, to resubmit pre-emptive recovery plans if the supervisory authority demonstrates that any concerned entity is not sufficiently considered by a group pre-emptive recovery plan in light of the significance of the entity in question in the Member State concerned and in light of the obligations that comparable undertakings in that Member State are subject to.

Added5. The group supervisor shall, provided that the confidentiality requirements laid down in Articles 64 are in place, transmit the group pre-emptive recovery plans to:

Added(a) EIOPA;

Added(b) the relevant supervisory authorities which are members of or participate in the supervisory college as referred to in Article 248(3) of Directive 2009/138/EC;

Added(c) the group resolution authority;

Added(d) the resolution authorities of the subsidiaries.

Added6. The administrative, management or supervisory body of the entity drawing up the group pre-emptive recovery plan pursuant to paragraph 1 or paragraph 4 shall assess and approve the group pre-emptive recovery plan before submitting it to the group supervisor for review.

Added6a. Member states shall ensure that financial conglomerates that are subject to Directive 2002/87/EC of the European Parliament and of the Council are permitted to draft one single pre-emptive recovery plan for the whole group. The group supervisor of the insurance activities shall coordinate with the group supervisor of the credit institution or investment firm. If a supervisory authority competent for a specific conglomerate considers a particular business field not covered by the single pre-emptive recovery plan for the whole group, it may require the group to draft a dedicated recovery plan for the credit, insurance or investment firm which is active in that particular business field.

AddedReview and assessment by the group supervisor of group pre-emptive recovery plans

Added1. The group supervisor shall, after having consulted the relevant supervisory authorities which are members of or participate in the supervisory college as referred to in Article 248(3) of Directive 2009/138/EC, review the group pre-emptive recovery plan and assess the extent to which it satisfies the requirements and criteria laid down in Articles 6 and this Article. That assessment shall be made in accordance with the procedure established in Article 6 and with this Article and shall take into account the potential impact of the remedial actions on policy holders, the real economy and financial stability in all the Member States where the group operates.

Added2. The group supervisor shall endeavour to reach a joint decision, as referred to in Article 17, within the college of supervisors on:

Added(a) the review and assessment of the group pre-emptive recovery plan and whether a recovery plan on an individual basis is to be drawn up for insurance and reinsurance undertakings that are part of the group, as laid down in Article 7(3);

Added(b) the application of the measures referred to in Article 6, paragraphs (3) and (4).

AddedResolution plans

Added1. Member States shall ensure that resolution authorities, after having consulted the supervisory authority, draw up a resolution plan for each insurance and reinsurance undertaking that meets the criteria laid down in paragraph 2, that is not part of a group subject to resolution planning pursuant to Articles 10 and 11. The resolution plan shall provide for the resolution actions which the resolution authority may take where the insurance or reinsurance undertaking meets the conditions for resolution referred to in Article 19(1) or Article 20(3).

Added1a. The resolution plan shall also contain a preliminary assessment of the feasibility and credibility of the winding up under normal insolvency proceedings or of resolution actions.

Added2. Resolution authorities shall draw up resolution plans for each insurance and reinsurance undertaking that is subject to pre-emptive recovery planning requirements provided they assess that the public interest would be positive in the event of a failure or for which a critical function exists. This assessment should be made on the basis of the resolution objectives and criteria such as size, business model, risk profile, interconnectedness, substitutability and ▐cross-border activity▐.

AddedNotwithstanding the previous subparagraph, resolution authorities shall subject to resolution planning at least the five riskiest undertakings of the Member State’s life and non-life and reinsurance market respectively, where the non-life market share is based on gross written premiums and the life market share is based on gross technical provisions▐. The riskiness of an insurance or reinsurance undertaking shall be assessed by the resolution authority, in particular on the basis of their size, business model, risk profile, interconnectedness, substitutability and cross-border activity.

AddedLow-risk profile undertakings shall not be subject to resolution planning requirements▐.

Added3. Where the insurance or reinsurance undertaking concerned carries out significant cross-border activities, home resolution authorities shall▐ provide the draft resolution plan to host supervisory or resolution authorities. The host supervisory or resolution authority may examine the draft resolution plan to identify any actions in the draft resolution plan which may adversely impact policy holders, the real economy or the financial stability in its Member State and make recommendations to the home resolution authority with regard to those matters. Where the home supervisory authority fails to properly take into account the recommendation from the host supervisory authority, the host supervisory authority may refer the matter to EIOPA.

Added4. When specifying the options for application of resolution tools and powers, resolution plans shall take into consideration relevant resolution scenarios, including the scenario where the failure of the insurance and reinsurance undertaking is idiosyncratic or occurs at a time of broader financial instability or system wide events.

AddedResolution plans shall not assume any extraordinary public financial support or the use ▐of any financing arrangements or public intervention aimed at ensuring the protection of policy holders and the financial stability of Member States.

Added5. Resolution authorities shall review, and where necessary update, resolution plans of insurance and reinsurance undertakings, in particular if the undertaking risks experiencing a significant deterioration of its financial position and after any material change to the legal or organisational structure of the insurance or reinsurance undertaking or to its business or its financial position that could have a material effect on the effectiveness of the plan or otherwise necessitate a revision of the resolution plan.

AddedInsurance and reinsurance undertakings and supervisory authorities shall promptly communicate to the resolution authorities any event that necessitates a revision or update of the resolution plan.

Added6. Without prejudice to Article 4, resolution plans shall set out options for applying the resolution tools and resolution powers to the insurance or reinsurance undertaking. Resolution plans shall contain, quantified whenever appropriate and possible, all of the following:

Added(a) a summary of the key elements of the plan;

Added(b) a summary of the material changes to the undertaking that have occurred after the latest resolution-related information was filed;

Added(c) a demonstration of how critical functions and core business lines could be legally and economically separated, to the extent necessary, from other functions so as to ensure continuity upon the failure of the undertaking;

Added(d) an identification of those assets which would be expected to qualify as collateral;

Added(e) an estimation of the timeframe for executing each material aspect of the plan;

Added(f) a detailed description of the assessment of resolvability carried out in accordance with Article 13;

Added(g) a description of any measures required pursuant to Article 15 to address or remove impediments to resolvability identified as a result of the assessment carried out in accordance with Article 13;

Added(h) an explanation as to how the resolution options could be financed without the assumption of any extraordinary public financial support besides, where available, the use of insurance guarantee schemes or of any financing arrangements;

Added(i) a detailed description of the different resolution strategies that could be applied in light of the different possible scenarios and the applicable timescales;

Added(j) a description of critical interdependencies;

Added(k) an analysis of the impact of the resolution plan on the employees of the undertaking, including an assessment of any associated costs, and a description of envisaged procedures to consult staff during the resolution process, taking into account national systems for dialogue with social partners where applicable;

Added(l) a plan for communicating with the media and the public;

Added(m) a description of essential operations and systems necessary for maintaining the continuous functioning of the undertaking’s operational processes;

Added(n) where applicable, any opinion expressed by the undertaking in relation to the resolution plan.

AddedInformation referred to in point (a) shall be disclosed to the insurance and reinsurance undertaking concerned.

Added7. The resolution authority shall transmit the resolution plans and any changes thereto to the supervisory authorities concerned.

Added8. EIOPA shall develop draft regulatory technical standards further specifying, without prejudice to Article 4, the contents of the resolution plan and the criteria to be used by resolution authorities to identify critical functions and carry out public interest assessments.

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.

Added▐

AddedGroup resolution plans

Added1. Member States shall ensure that group resolution authorities draw up group resolution plans to be activated in case the ultimate parent undertaking or one of the material undertakings within the group risks experiencing a significant deterioration of its financial position. Groups whose parent undertaking is excluded from resolution planning under Article 9 shall not be subject to group resolution planning.

Added2. The group resolution plan shall:

Added(a) set out the resolution actions that are to be taken in respect of each entity where measures will be necessary to ensure the continuity of critical functions;

Added(b) examine the extent to which the resolution tools referred to in Article 26(3) could be applied and the resolution powers exercised in a coordinated manner and identify any potential impediments to a coordinated resolution;

Added(c) where a group contains entities incorporated in third countries, identify appropriate arrangements for cooperation and coordination with the relevant authorities of those third countries and the implications for resolution within the Union;

Added(d) identify measures, including the legal and economic separation of particular functions or business lines, that are necessary to facilitate group resolution, taking into account intra-group interdependencies;

Added(e) identify available sources of funding to finance the group resolution actions and, where the use of insurance guarantee schemes or of any financing arrangement would be required, set out principles for sharing responsibility for that financing between sources of funding in different Member States. The group resolution plan shall not assume any extraordinary public financial support;

Added(f) contain the elements laid down in Article 9(6).

Added3. The group resolution authority shall transmit group resolution plans and any changes thereto to the supervisory authorities concerned.

Added3a. Member States shall ensure that the resolution authorities shall draft one single resolution plan for the whole group, where the group subject to the resolution plan is a financial conglomerate subject to Directive 2002/87/EC of the European Parliament and of the Council. The group resolution authority of the insurance undertakings shall coordinate with the group resolution authority of the credit institution or investment firm.

Added4. EIOPA shall develop draft regulatory technical standards specifying the contents of group resolution plans, taking into account the diversity of business models of groups in the internal market.