S.I. No. 23/1996 - European Communities (Insurance Undertakings: Accounts) Regulations, 1996

1. (1) Accounts shall comply so far as practicable with the provisions of Parts I and III of this Schedule as if the undertakings included in the consolidation (in this Part referred to as "the group") were a single undertaking.

(2) In particular, for the purpose of note 13 to the balance sheet format (which is set out in Chapter 2 of Part I of this Schedule) and paragraphs 18(6) and 19 of Part III of this Schedule as it applies to group accounts—–

(a) any subsidiary undertakings of the parent undertaking not included in the consolidation shall be treated as subsidiary undertakings of the group, and

(b) if the parent undertaking is itself a subsidiary undertaking, the group shall be treated as a subsidiary undertaking of any parent undertaking of that undertaking, and the reference to fellow-subsidiary undertakings shall be construed accordingly.

2. (1) Subject to the exceptions authorised or required by this paragraph, all the subsidiary undertakings of the parent undertaking shall be included in the consolidation.

(2) A subsidiary undertaking may be excluded from consolidation if its inclusion is not material for the purpose of giving a true and fair view, but two or more undertakings may be excluded only if they are not material taken together.

(3) In addition, a subsidiary undertaking may be excluded from consolidation where—–

(a) severe long-term restrictions substantially hinder the exercise of the rights of the parent undertaking over the assets or management of that undertaking, or

(b) the information necessary for the preparation of group accounts cannot be obtained without disproportionate expense or undue delay, or

(c) the interest of the parent undertaking is held exclusively with a view to subsequent resale and the undertaking has not previously been included in consolidated group accounts prepared by the parent undertaking.

(4) Subject to sub-paragraph (6), where the activities of one or more subsidiary undertakings are so different from those of other undertakings to be included in the consolidation that their inclusion would be incompatible with the obligation to give a true and fair view, those undertakings shall be excluded from consolidation.

(5) Any application of sub-paragraph (4) and the reasons therefor shall be disclosed in the notes on the group accounts.

(6) Sub-paragraph (4) shall not apply merely because some of the undertakings are industrial, some commercial and some provide services or because they carry on industrial or commercial activities involving different products or provide different services.

3. (1) The group balance sheet and group profit and loss account shall incorporate in full the information contained in the individual accounts of the parent undertaking and subsidiary undertakings included in the group accounts, subject to the adjustments authorised or required by the following provisions of this Schedule.

(2) Group accounts shall be drawn up as at the same date as the annual accounts of the parent undertaking.

(3) If the financial year of a subsidiary undertaking included in the group accounts differs from that of the parent undertaking, the group accounts shall be made up

(a) from the accounts of the subsidiary undertaking for its financial year last ending before the end of the parent undertaking's financial year, provided that year ended no more than three months before that of the parent undertaking,

(b) where an undertaking's balance sheet date precedes the group balance sheet by more than three months, but not more than six months, that undertaking shall be included in the group accounts on the basis of interim accounts drawn up as at the group balance sheet date.

4. (1) The methods of consolidation shall be applied consistently from one financial year to the next.

(2) If it appears to the directors of a parent undertaking that there are special reasons for departing from the principle specified in sub-paragraph (1) they may so depart, but particulars of the departure, the reasons for it and its effect on the balance sheet and profit or loss of the parent undertaking and subsidiaries as a whole shall be disclosed in the notes to the accounts.

5. (a) Group accounts shall show the assets, liabilities, state of affairs as at the end of the financial year and profit or loss of the parent undertaking and its subsidiary undertakings dealt with in the group accounts as if they were a single undertaking and, in particular, shall show—–

(i) debts and claims between the undertakings dealt with in the group accounts shall be eliminated from those accounts,

(ii) income and expenditure relating to transactions between the undertakings dealt with in the group accounts shall be eliminated from those accounts,

(iii) where profits and losses resulting from transactions between the undertakings dealt with in the group accounts are included in the book value of assets, they shall be eliminated from those accounts,

(b) clauses (i) to (iii) of sub-paragraph (a) need not be complied with where the amounts involved are not material for the purpose of giving a true and fair view as required by Regulation 10.

6. If the composition of the undertakings dealt with in the group accounts has changed significantly in the course of a financial year, the group accounts shall include information which makes the comparison of successive sets of group accounts meaningful.

CHAPTER 2 2

Accounting/Valuation

Acquisition and merger accounting

7. The following provisions of this Chapter shall apply where an undertaking becomes a subsidiary undertaking of the parent undertaking and that event is referred to in those provisions as an "acquisition", and references to the "undertaking acquired" shall be construed accordingly.

8. An acquisition shall be accounted for by the acquisition method of accounting unless the conditions for accounting for it as a merger are met and the merger method of accounting is adopted.

9. (1) The acquisition method of accounting is as set out in this paragraph.

(2) The identifiable assets and liabilities of the undertaking acquired shall be included in the consolidated balance sheet at their fair values as at the date of acquisition.

(3) The income and expenditure of the undertaking acquired shall be brought into the group accounts only as from the date of the acquisition.

(4) (a) There shall be set off against the acquisition cost of the interest in the shares of the undertaking held by the undertakings dealt with in the group accounts the interest of undertakings dealt with in the group accounts in the adjusted capital and reserves of the undertaking acquired.

(b) In clause (a) of this sub-paragraph "the adjusted capital and reserves of the undertaking acquired" means its capital and reserves at the date of the acquisition after adjusting the identifiable assets and liabilities of the undertaking to fair values as at that date.

(5) The resulting amount if positive shall be treated as goodwill, and if negative as a negative consolidation difference.

(6) Where in applying the acquisition method of accounting—–

(a) there is no record of –

(i) the fair values as at the date of acquisition of the identifiable assets and liabilities of the undertaking acquired, or

(ii) the acquisition cost of the interest in the shares of the acquired undertaking by the undertakings dealt with in the group accounts,

or

(b) such records cannot be obtained without unreasonable expense or delay,

then the values of the identifiable assets and liabilities and the acquisition cost shall be taken to be the values and cost ascribed to them in the earliest available record made after the acquisition of that subsidiary undertaking.

(7) In this paragraph

"the acquisition cost" means the amount of any cash consideration and the fair value of any other consideration, together with such amount (if any) in respect of fees and other expenses of the acquisition as the parent undertaking may determine;

the "identifiable assets and liabilities" in relation to the undertaking acquired means the assets and liabilities which are capable of being disposed of or discharged separately, without disposing of a business of the undertaking.

10. (1) The conditions for accounting for an acquisition as a merger are as follows

(a) that at least 90 per cent of the nominal value of the relevant shares in the undertaking acquired is held by or on behalf of the undertakings dealt with in the group accounts,

(b) that the proportion referred to in clause (a) of this sub-paragraph was attained pursuant to an arrangement providing for the issue of equity shares by the undertakings dealt with in the group accounts, and

(c) that the fair value of any consideration other than the issue of equity shares given pursuant to the arrangement by the undertakings dealt with in the group accounts did not exceed 10 per cent of the nominal value of the equity shares issued.

(2) In sub-paragraph (1)(a) "relevant shares in an undertaking acquired" means those shares carrying unrestricted rights to participate both in distributions and in the assets of the undertaking upon liquidation.

11. (1) The merger method of accounting is set out in this paragraph.

(2) The assets and liabilities of the undertaking acquired shall be brought into the group accounts at the figures at which they stand in the undertaking's accounts, subject to any adjustment authorised or required by this Part of the Schedule.

(3) The income and expenditure of the undertaking acquired shall be included in the group accounts for the entire financial year, including the period before the acquisition.

(4) The group accounts shall show corresponding amounts relating to the previous financial year as if the undertaking acquired had been included in the consolidation throughout that year.

(5) There shall be set off against the aggregate of—

(a) the appropriate amount in respect of shares issued by the undertakings dealt with in the group accounts in consideration for the acquisition of shares in the undertaking acquired, and

(b) the fair value of any other consideration for the acquisition of shares in the undertaking acquired, determined as at the date when those shares were acquired,

the nominal value of the issued share capital of the undertaking acquired held by the undertakings dealt with in the group accounts.

(6) The resulting amount by virtue of this paragraph shall be shown as an adjustment to the consolidated reserves.

12. (1) Where a group of undertakings is acquired, paragraphs 8 to 11 apply with the following adaptations.

(2) Reference to shares of the undertaking acquired shall be construed as references to shares of the parent undertaking of the group.

(3) Other references to the undertaking acquired shall be construed as references to the group, and references to the assets and liabilities, income and expenditure and capital and reserves of the undertaking acquired shall be construed as references to the assets and liabilities, income and expenditure and capital and reserves of the group after making the set-offs and other adjustments required by this Part of the Schedule in the case of group accounts.

Valuation

13. (1) In determining the amounts to be included in the group accounts, Regulations 7 and 8 and the valuation rules contained in Part II of this Schedule shall apply and shall be applied consistently within those accounts.

(2) Sub-paragraph (1) shall not apply to those liabilities items the valuation of which by the insurance undertakings included in group accounts is based on the application of provisions specific to insurance undertakings nor to those assets items changes in the values of which also affect or establish policyholders' rights.

(3) Where sub-paragraph (2) applies, that fact shall be disclosed in the notes to the group accounts.

14. (1) Subject to sub-paragraph (2) a parent undertaking shall apply the same methods of valuation in drawing up group accounts as it applies in drawing up its annual accounts.

(2) Subject to paragraph 13, sub-paragraph (1) shall not apply where, in the opinion of the directors, a departure from the provisions of that paragraph is necessary for the purpose of Regulation 10 (5) (i).

(3) Any application of sub-paragraph (2) and the reasons therefor shall be disclosed in the notes to the group accounts.

15. (1) Where assets and liabilities to be included in the group accounts have been valued or otherwise determined by undertakings according to accounting rules differing from those used for the group accounts, the values or amounts shall be adjusted so as to accord with the rules used for the group accounts.

(2) If it appears to the directors of the parent undertaking that there are special reasons for departing from sub-paragraph (1) they may do so, but particulars of any such departure, the reasons for it and its effect shall be given in a note to the accounts.

(3) The adjustments referred to in this paragraph need not be made if they are not material for the purpose of giving a true and fair view.

16. Any differences of accounting rules as between a parent undertaking's individual accounts for a financial year and its group accounts shall be disclosed in a note to the latter accounts and the reasons for the difference given.

17. Amounts which in the particular context of any provision of this Part of the Schedule are not material may be disregarded for the purposes of that provision.

Differences in Tax Treatment

18. Account shall be taken in the group accounts of any difference arising on consolidation between the tax chargeable for the financial year and for preceding financial years and the amount of tax paid or payable in respect of those years, provided that it is probable that an actual charge to tax will arise within the foreseeable future for one of the undertakings dealt with in the group accounts.

Minority interests

19. (1) The formats set out in Part I of this Schedule shall have effect in relation to group accounts with the modifications set out in this paragraph.

(2) In the Balance Sheet Format (which is set out in Chapter 2 of Part I of this Schedule) a further item headed "Minority interests" shall be added as Liabilities item Aa and under that item shall be shown the amount of capital and reserves attributable to shares in subsidiary undertakings included in the consolidation held by or on behalf of persons other than the parent undertaking and its subsidiary undertakings.

(3) In the profit and loss account format (which is set out in Chapter 2 of Part I of this Schedule) a further item headed "Minority interests" shall be added as item 10(a) in the non-technical account and under the said item 10(a) there shall be shown the amount of any profit or loss on ordinary activities attributable to shares in subsidiary undertakings included in the consolidation held by or on behalf of persons other than the parent undertaking and its subsidiary undertakings.

(4) In the profit and loss account format (which is set out in Chapter 2 of Part I of this Schedule) a farther item headed "Minority interests" shall be added in as item 13(a) in the non-technical account and under the said item 13(a) there shall be shown the amount of any profit or loss on extraordinary activities attributable to shares in subsidiary undertakings included in the consolidation held by or on behalf of persons other than the parent undertaking and its subsidiary undertakings.

(5) For the purposes of paragraph 3 of Part I of this Schedule (power to combine items) the additional items required by the foregoing provisions of this paragraph shall be treated as items to which a letter is assigned

(6) Investment income and charges attributable to life assurance shall be shown in the technical account. Investment income and charges attributable to non-life business may be disclosed in the non-technical account.

Joint ventures

20. (1) Where a parent undertaking or one of its subsidiaries dealt with in the group accounts manages another undertaking jointly with one or more undertakings not dealt with in the group accounts, that other undertaking (in this paragraph referred to as "the joint venture") may be dealt with in the group accounts by the method of proportional consolidation if it is neither a body corporate nor a subsidiary undertaking of the parent undertaking.

(2) The provisions of this Part relating to the preparation of group accounts shall, with any necessary modifications, apply to proportional consolidation under this paragraph.

Associated Undertakings

21. (1) In this Part of the Schedule "associated undertaking" means an undertaking in which an undertaking dealt with in the group accounts has a participating interest and over whose operating and financial policy it exercises a significant influence, and which is not—

(a) a subsidiary undertaking of the parent undertaking, or

(b) a joint venture dealt with in accordance with paragraph 20.

(2) Where an undertaking holds 20 per cent. or more of the voting rights in another undertaking, it shall be presumed to exercise such an influence over it unless the contrary is shown.

(3) Paragraphs (3) and (4) of Regulation 11 shall apply for determining whether sub-paragraph (2) applies.

22. (1) The interest of an undertaking dealt with in the group accounts in an associated undertaking, and the amount of profit or loss attributable to such an interest, shall be shown in the group accounts by way of the equity method of accounting including dealing with any goodwill arising in accordance with paragraphs 2 to 4 of Part II of this Schedule.

(2) Where the associated undertaking is itself a parent undertaking, the net assets and profits or losses to be taken into account are those of the parent and its subsidiary undertakings, after making any consolidation adjustments.

(3) The equity method of accounting need not be applied if the amounts in question are not material for the purpose of giving a true and fair view.

Participating interest

23. (1) In this paragraph—

"participating interest" means a qualifying capital interest held by one undertaking in another on a long term basis for the purpose of securing a contribution to that undertaking's own activities by the exercise of control or influence arising from or related to that interest;

"qualifying capital interest", means—

(a) in relation to an undertaking with share capital, an interest in shares comprised in the allotted share capital of that undertaking,

(b) in relation to an undertaking with capital but no share capital, an interest conferring rights to share in the capital of the undertaking,

(c) in relation to an undertaking without capital, interests—

(i) conferring any right to share in the profits or liability to contribute to the losses of the undertaking, or

(ii) giving rise to an obligation to contribute to the debts or expenses of the undertaking in the event of a winding up,

and includes an interest which is convertible into a qualifying capital interest as well as an option to acquire any such qualifying capital interest.

(2) Where an undertaking holds a qualifying capital interest in another undertaking and such an interest represents 20 per cent. or more of all such interests in the other undertaking it shall be presumed to hold that interest on the basis and for the purpose mentioned in sub-paragraph (1) unless the contrary is shown.

(3) The percentage of qualifying capital interests held in an undertaking with share capital shall be the percentage that the nominal value of the shares held represents of the nominal value of the allotted share capital of that undertaking.

(4) For the purpose of this paragraph an interest held on behalf of an undertaking shall be treated as held by it.

(5) For the purpose of this paragraph as it applies in relation to "participating interest" in Regulation 11(1)(c) (subsidiary undertaking)—

(a) there shall be attributed to an undertaking any interests held by any of its subsidiary undertakings, and

(b) the references in sub-paragraph (1) of this paragraph to the purpose and activities of an undertaking include the purpose and activities of any of its subsidiary undertakings and of the group as a whole.

(6) In the balance sheet and profit and loss formats set out in Part I of this Schedule as applied to group accounts by this Part of the Schedule "participating interest" does not include an interest in a group undertaking.

24. (1) The formats in Part I of this Schedule shall have effect in relation to group accounts with the following modifications.

(2) In the balance sheet format (which is set out in Chapter 2 of Part I of this Schedule) assets item C.II.3 (Participating Interests) shall be replaced by two items headed "Interests in associated undertakings" and "Other participating interests".

(3) In the profit and loss account format (which is set out in Chapter 2 of Part I of this Schedule) the following items, namely

(a) item I.2(a) of the technical account-non-life insurance;

(b) item II.2(a) of the technical account-life assurance business, and

(c) item III.3(a) of the non-technical account shall be replaced by two items, "income from interests in associated undertakings" and "income from other participating interests".

CHAPTER 3

Information required by way of notes to the group accounts

25. Without prejudice to Regulation 10, the notes to the group accounts shall also set out the information required by the following provisions of this Chapter.

26. (1) In relation to the resulting amounts referred to in paragraph 9(5) and 11(6), there shall be stated in the notes to the group accounts the methods used in calculating those amounts and the reasons for any significant difference between such amounts for the financial year to which the group accounts refer and those for the preceding financial year.

(2) In relation to acquisitions taking place in the financial year, there shall be stated in the notes to the group accounts the following

(a) the name and registered office of the undertaking acquired, or where a group was acquired, the name and registered office of the parent undertaking of that group, and

(b) whether the acquisition has been accounted for by the acquisition or the merger method of accounting.

27. Where sums originally denominated in currencies, other than the currency in which the group accounts are drawn up, have been brought into account under any items shown in the balance sheet or profit and loss account, the basis on which those sums have, for the purposes of the accounts, been converted into the currency in which the group accounts are drawn up shall be stated.

28. In respect of the aggregate of the amounts shown in the group balance sheet under the heading "Creditors" there shall be stated the following

(a) the aggregate amount of any debts included under that heading which are payable or repayable otherwise than by instalments and fall due for payment or repayment after the end of the period of five years beginning with the day next following the end of the financial year,

(b) the aggregate amount of any debts so included which are payable or repayable by instalments any of which fall due for payment after the end of that period,

(c) the aggregate amount of any debts included under that heading in respect of which any security has been given, and

(d) an indication of the nature of the securities so given.

29. (1) The following information shall be given with respect to the employees of the undertakings dealt with in the group accounts

(a) the average number of persons employed in the financial year, by the undertakings dealt with in the group accounts, and

(b) the average number of persons employed within each category of persons employed by those undertakings.

(2) In respect of all persons employed by the undertakings dealt with in the group accounts during the financial year who are taken into account in determining the relevant annual number for the purposes of sub-paragraph (1)(a), there shall also be stated the aggregate amount of staff costs, save in so far as this amount is stated in the group profit and loss account.

(3) The categories of persons employed by the undertakings included in the group accounts by reference to which the number required to be disclosed by sub-paragraph (1)(b) is to be determined shall be such as the directors of the parent undertaking may select, having regard to the manner in which the activities of the undertakings dealt with in the group accounts are organised.

(4) For the purposes of clauses a and (b) of sub-paragraph (1) the average number of persons employed by the undertakings dealt with in the group accounts shall be determined by adding together the averages, for each such undertaking, calculated by the method set out in paragraph 27(3) of Part III of this Schedule.

(5) The average number of persons employed during the financial year by an undertaking proportionally consolidated pursuant to paragraph 21 of this Part, calculated by the manner specified in sub-paragraph (4), shall also be stated.

30. (1) In the case of group accounts, the pension commitments referred to in paragraph 18(4) of Part III of this Schedule and the emoluments and compensation referred to in paragraph 58 (6) of the Schedule to the 1986 Act shall be to such commitments, emoluments and compensation relating to directors or past directors of the parent undertaking in respect of duties relating to the parent undertaking, to any of its subsidiary undertakings, to any undertakings proportionally consolidated in accordance with paragraph 21 of this Part or to associated undertakings.

(2) Section 191 of the Principal Act shall not apply to group accounts prepared in accordance with these Regulations.

31. (1) Subject to sub-paragraph (2), sections 41 to 43 of the Act of 1990 shall apply to group accounts prepared under these Regulations.

(2) The particulars of any transaction, arrangement or agreement referred to in those sections, entered into with a director of the parent undertaking by an undertaking proportionally consolidated in accordance with paragraph 21 of this Part of this Schedule, or an associated undertaking, shall be similarly stated.

32. (1) (a) The information set out in sub-paragraphs (2), (3) and (4) shall be stated in relation to each undertaking dealt with in the group accounts.

(b) For the purpose of clause a, the information required by sub-paragraph (3)(a) does not include such interests in the parent undertaking.

(2) The names and registered offices of the undertakings included in the group accounts shall be set out therein.

(3) (a) The aggregate of the qualifying capital interests held in that undertaking by the undertakings dealt with in the group accounts as a proportion of the total of such interests shall be stated for the purposes of paragraph 25.

(b) In this sub-paragraph "qualifying capital interest" has the meanings assigned to it in paragraph 23.

(c) For the purpose of this sub-paragraph, paragraph 23(3) shall apply in determining the percentage of qualifying capital interests held in an undertaking with share capital.

(4) (a) There shall be set out for the purposes of paragraph 25 a note indicating by virtue of which of the provisions of Regulation 11 has the undertaking been dealt with in the group accounts.

(b) The information required by clause c of this sub-paragraph may be omitted where the undertaking has been dealt with in the group accounts by virtue of Regulation 11(1)(a), and where the proportion of capital and the proportion of voting rights held are the same.

33. The information set out in sub-paragraphs (2), (3) and (4) of paragraph 32 shall also be given in respect of each undertaking which has been excluded from the group accounts by virtue of the application of paragraph 2.

34. (1) The information set out in sub-paragraphs (2) and (3) of paragraph 32 shall be stated in relation to each associated undertaking.

(2) The information required by sub-paragraph (1) shall also be stated in relation to associated undertakings, the interest in which has been dealt with in accordance with paragraph 22 (3).

35. (1) The information set out in sub-paragraphs (2) and (3) of paragraph 32 shall be stated in relation to each undertaking that has been proportionally consolidated in accordance with paragraph 20.

(2) The nature of the joint management of each joint venture, to which paragraph 20 applies, proportionally consolidated shall also be stated.

36. (1) The information set out in sub-paragraphs (2) and (3) of paragraph 32 shall be stated in relation to each undertaking (in this paragraph referred to as an "undertaking of substantial interest"), other than those referred to in paragraphs 32 to 35 in which undertakings dealt with in the group accounts and undertakings not dealt with by virtue of the application of sub-paragraphs (4) to (6) of paragraph 2, or persons acting in their own name but on behalf of such undertakings, between them hold a qualifying capital interest representing 20 per cent. or more of such interests.

(2) There shall also be stated in relation to each undertaking of substantial interest, the amount of its capital and reserves and its profit or loss for its latest financial year for which accounts have been adopted.

(3) The information required by sub-paragraphs (1) and (2) may be omitted, where for the purposes of Regulation 10(5), it is of negligible importance.

(4) The information concerning capital and reserves and the profit or loss required by sub-paragraph (2) may also be omitted where the undertaking concerned is not required to attach its balance sheet to its annual return and where the qualifying capital interest held as described in sub-paragraph (1) is less than 50 per cent.

(5) For the purpose of this paragraph, paragraph 23(3) shall apply in determining the percentage of qualifying capital interest held in an undertaking with share capital.

GIVEN under my Official Seal, this 5th day of February 1996

Richard Bruton

Minister for Enterprise and Employment.

EXPLANATORY NOTE

These Regulations give effect to the Council Directive on the annual accounts and consolidated accounts of insurance undertakings (91/674/EEC, O.J. No. L374/7). This Directive provides for the application of the fourth and seventh company law directives to insurance companies, taking account of specific features of the accounts of insurance companies.

The fourth directive (78/660/EEC, O.J. No. L222/11) provides for co-ordinated national legislation concerning presentation of accounts and uniform valuation of assets and liabilities brought to account by all undertakings within the European Union, aimed at providing comparable sets of accounts within a range of options. It was implemented by the

Companies (Amendment) Act, 1986

(No. 25 of 1986). The seventh directive (83/349/EEC, O.J. L1 93/1) provided for co-ordinated national legislation concerning consolidated accounts. It was implemented by the European Communities (Companies: Group Accounts) Regulations, 1992 (No. 201 of 1992).

These Regulations require insurance undertakings to prepare and to publish annually accounts (balance sheet, profit and loss account and notes), in accordance with the provisions of these Regulations. They also require (with provision for exceptions) insurance undertakings which have subsidiary undertakings or non-insurance holding companies, the most important of whose subsidiaries are insurance undertakings, to prepare and to publish group accounts in accordance with the provisions of these Regulations.

The Regulations contain provisions governing the preparation of accounts, including group accounts, the content of those accounts, their format and the valuation of items to be included. They specify information to be included in the notes to the accounts.

S.I. No. 23 of 1996.

EUROPEAN COMMUNITIES (INSURANCE UNDERTAKINGS: ACCOUNTS) REGULATIONS, 1996

Arrangement of Regulations

Regulations

Page

1.

Citation and Construction.

1

2.

Interpretation.

1

3.

Application.

4

4.

Modifications.

4

5.

Drawing up of accounts.

5

6.

Format of accounts

7

7.

Accounting principles.

10

8.

Departure from Accounting Principles.

11

9.

Publication of accounts in full or abbreviated form.

11

10.

Group Accounts.

13

11.

Subsidiary undertaking.

15

12.

Wholly-owned subsidiaries.

19

13.

Financial holding undertakings.

21

14.

Directors' report.

21

15.

Non-application of Principal Act.

22

16.

Auditors' Report.

23

17.

Documents to be annexed to annual return of parent undertaking.

23

18.

Publication of accounts in full or abbreviated form.

24

19.

Offences.

25

20.

Repeals and Amendments.

27

Schedule

Page

Part I

The required formats for accounts.

Chapter 1

General Rules

28

Chapter 2

Section A - the balance sheet.

Section B - the profit and loss account.

31

43

Part II

Valuation Rules.

Chapter 1

Chapter 2

Chapter 3.

Historical Cost Accounting Rules.

Current Value Accounting Rules.

General Rules.

55

61

68

Part III

Notes to the Accounts.

75

Part IV

Form and Content of Group Accounts.

Chapter 1

Chapter 2

Chapter 3

General Rules.

Accounting/Valuation.

Information required by way of Notes to the Group Accounts.

91

95

106

S.I. No. 23 of 1996.

EUROPEAN COMMUNITIES (INSURANCE UNDERTAKINGS: ACCOUNTS) REGULATIONS 1996

I, Richard Bruton, Minister for Enterprise and Employment, in exercise of the powers conferred on me by

section 3

of the

European Communities Act, 1972

(No. 27 of 1972), and for the purpose of giving effect to Council Directive No 91/674/EEC of 23 December, 1991

a

hereby make the following Regulations

a

O.J. No. L374, 31/12/1991, p.7.

1 Citation and Construction

1.

(1) These Regulations may be cited as the European Communities (Insurance Undertakings: Accounts) Regulations, 1996.

(2) These Regulations shall be construed as one with the Companies Acts, 1963 to 1990.

2 Interpretation

2.

(1) In these Regulations, unless the context otherwise requires—–

"accounts" means the balance sheet, profit and loss account and any notes on the accounts or statements forming part of the accounts, whether or not required by law;

"the Act of 1986" means the

Companies (Amendment) Act, 1986

(No. 25 of 1986);

"the Act of 1990" means the

Companies Act, 1990

(No. 33 of 1990);

"annual return" means the annual return made to the registrar of undertakings under the Principal Act;

"associated undertaking" has the meaning assigned by paragraph 21 of Chapter 2 of Part IV of the Schedule;

"company" means an undertaking as defined in Regulation 3;

"the Directive" means Council Directive 91/674/EEC of 23 December, 1991;

"group accounts" means the accounts prepared in accordance with Regulations 10 to 18;

"holding company", in relation to one or more undertakings that are subsidiaries of another undertaking means that other undertaking;

"individual accounts" means the accounts prepared in accordance with Regulations 5 to 9;

"the Minister" means the Minister for Enterprise and Employment;

"parent undertaking" means an undertaking that has one or more subsidiary undertakings;

"participating interest" shall be construed in accordance with paragraph 23 of Part IV of the Schedule.

"the Principal Act" means the

Companies Act, 1963

;

"subsidiary" shall be construed in accordance with Regulation 11;

"undertaking" means an undertaking to which these Regulations apply by virtue of Regulation 3.

(2) In these Regulations, unless the context otherwise requires, a reference to a balance sheet or profit and loss account shall include a reference to any notes or documents annexed to the accounts in question giving information which is required by any provision of the Companies Acts, 1963 to 1990, or these Regulations and required or allowed by any such provision to be given in a note or document annexed to an undertaking's accounts.

(3) In these Regulations—–

(a) a reference to directors shall be construed, in the case of an undertaking which does not have a board of directors, as a reference to the corresponding persons appropriate to such undertaking;

(b) a reference to voting rights in an undertaking means the rights conferred on shareholders in respect of their shares or, in case of an undertaking not having a share capital, on members, to vote at general meetings of the undertaking on all, or substantially all, matters;

(c) in relation to an undertaking which does not have general meetings at which matters are decided by the exercise of voting rights, the references to holding a majority of the voting rights in an undertaking shall be construed as references to having the right under the constitution of the undertaking to direct the overall policy of the undertaking to alter the terms of its constitution.

(4) A word or expression that is used in these Regulations and is also used in the Council Directive has, unless the context otherwise requires, the same meaning in these Regulations as it has in the Council Directive.

(5) In these Regulations, unless the context otherwise requires—–

(a) a reference to a Regulation or a Schedule is to a Regulation of or a Schedule to these Regulations unless it is indicated that a reference to some other enactment is intended.

(b) a reference to a paragraph or a sub-paragraph is to a paragraph or sub-paragraph of the provision in which the reference occurs, unless it is indicated that reference to some other provision is intended.

3 Application

3.

These Regulations shall, except where otherwise provided for, only apply—–

(a) to undertakings to which the European Communities (Non-Life Insurance) Regulations, 1976 (

S.I. No. 115 of 1976

), the European Communities (Non-Life Insurance) Framework Regulations, 1994 (

S.I. No. 359 of 1994

) or the European Communities (Life Assurance) Regulations, 1984 (

S.I. No. 57 of 1984

), the European Communities (Life Assurance) Framework Regulations, 1994 (

S.I. No. 360 of 1994

) apply and shall also apply to undertakings carrying on reinsurance business, and

(b) in respect of individual and group accounts of undertakings drawn up in respect of every financial year beginning on or after 1 January, 1995.

4 Modifications

4.

(1) For the purposes of enabling the Directive to have full effect, the Minister may, with the consent or on the application of any undertaking, issue a direction in writing that specified provisions of these Regulations shall apply to that undertaking with such modifications as may be specified in the direction.

(2) A direction under paragraph (1) may be subject to such conditions as the Minister considers appropriate to impose.

(3) A direction under paragraph (1) may be revoked at any time by the Minister and the Minister may at any time vary the direction on the application or with the consent of the undertaking to which it relates.

(4) A direction under paragraph (1) shall, subject to paragraph (3), apply for such period as shall be stated in the direction.

5 Drawing up of accounts

5.

(1) Subject to paragraph (2), every balance sheet and profit and loss account of an undertaking laid before the annual general meeting of the undertaking pursuant to section 148 of the Principal Act, shall comply with the following requirements and section 149 (other than subsection (5) and, in so far as it relates to the said subsection (5), subsection (7)) of that Act shall not apply to any such balance sheet or profit and loss account

(a) every such balance sheet and profit and loss account shall comply with the provisions of the Schedule,

(b) every such balance sheet of an undertaking shall give a true and fair view of the state of affairs of the undertaking as at the end of its financial year and every such profit and loss account of an undertaking shall give a true and fair view of the profit or loss of the undertaking for the financial year,

(c) where a balance sheet or profit and loss account drawn up in accordance with sub-paragraph (a) would not provide sufficient information to comply with sub-paragraph (b), any necessary additional information shall be provided in such balance sheet or profit and loss account or in a note to the accounts,

(d) where, owing to special circumstances, the preparation of accounts of an undertaking in compliance with sub-paragraph (a) would prevent those accounts from complying with sub-paragraph (b) (even if additional information were provided under sub-paragraph (c)) the directors of the undertaking shall depart from the requirements of the said Schedule in preparing those accounts in so far as is necessary in order to comply with that sub-paragraph,

(e) where the directors of an undertaking depart from the requirements of this Regulation, they shall attach a note to the accounts of the undertaking giving details of the particular departures made, the reasons therefor and the effect of those departures on the accounts,

and, accordingly, in the Companies Acts, 1963 to 1990, in relation to an undertaking to which these Regulations apply—–

(i) references to the said section 149 shall be construed as references to that section as modified by the provisions of these Regulations, and

(ii) references to the Sixth Schedule of the Principal Act shall be construed as references to the corresponding provisions of the Schedule to these Regulations.

(2) Paragraph (1) shall not apply to the profit and loss account of an undertakings if–

(a) the undertaking is a parent undertaking, and

(b) the undertaking is required to prepare and does prepare group accounts in accordance with these Regulations, and

(c) the notes to the undertaking's individual balance sheet show the profit and loss for the financial year determined in accordance with these Regulations.

(3) Where, in the case of an undertaking, advantage is taken of paragraph (2), that fact shall be disclosed in a note to the individual and group accounts of the undertaking.

(4) The requirements of the Schedule and the Companies Acts, 1963 to 1990, as to the matters to be included in the accounts of an undertaking or in notes to those accounts shall be subject to the requirement specified in sub-paragraph (

b

) of paragraph (1) and, accordingly, where a balance sheet or profit and loss account of an undertaking drawn up in accordance with the first mentioned requirements would not provide sufficient information to comply with the said sub-paragraph, any necessary additional information shall be provided in such balance sheet or profit and loss account or in a note to the accounts.

6 Format of accounts

6.

(1) Subject to the provisions of this Regulation—–

(a) every balance sheet of an undertaking shall show the items listed in the balance sheet format set out in Chapter 2 of Part I of the Schedule, and

(b) every profit and loss account of an undertaking shall show the items listed in the profit and loss account format so set out,

in the order and under the headings and sub-headings given in the format concerned.

(2) Paragraph (1) shall not be construed as requiring the heading or sub-heading for any item in the balance sheet, or profit and loss account, of an undertaking to be distinguished by any letter or number assigned to that item in the formats set out in the Schedule.

(3) Where the balance sheet or profit and loss account of an undertaking has been prepared by reference to the options set out in the Schedule, the directors of the undertaking shall adopt the same options in preparing the accounts for subsequent financial years unless, in their opinion, there are special reasons for a change.

(4) Where any change is made in the format adopted in preparing a balance sheet, or profit and loss account, of an undertaking, the reasons for the change, together with full particulars of the change, shall be given in a note to the accounts in which the new format is first adopted.

(5) Any item required in accordance with the Schedule to be shown in the balance sheet, or profit and loss account, of an undertaking, may be shown in greater detail than that required by the format adopted.

(6) In respect of every item shown in the balance sheet, or profit and loss account, of an undertaking, the corresponding amount for the financial year immediately preceding that to which the balance sheet or profit and loss account refers shall also be shown and, if that corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the balance sheet or profit and loss account relates, the former amount shall be adjusted, and particulars of the adjustment and the reasons therefor shall be given in a note to the accounts.

(7) Subject to paragraph (8), a heading or sub-heading corresponding to an item listed in the balance sheet format or the profit and loss account format of an undertaking, shall not be included in the balance sheet or profit and loss account, as the case may be, if there is no amount to be shown for that item in respect of the financial year to which the balance sheet or profit and loss account relates.

(8) Paragraph (7) shall not apply in any case where an amount can be shown for the item in question in respect of the financial year immediately preceding that to which the balance sheet or profit and loss account relates, and that amount shall be shown under the heading or sub-heading required by paragraph (1).

(9) Subject to the provisions of these Regulations and the provisions of the Schedule, amounts in respect of items representing assets or income may not be set off in the accounts of an undertaking against amounts in respect of items representing liabilities or expenditure, as the case may be, or vice versa.

(10) The balance sheet, or profit and loss account, of an undertaking may include an item representing or covering the amount of any asset or liability or income or expenditure not otherwise covered by any of the items listed in the format adopted but the following shall not be treated as assets in the balance sheet of an undertaking

(a) preliminary expenses.

(b) expenses of, and commission on, any issue of shares or debentures, and

(c) costs of research.

(11) Every profit and loss account of an undertaking shall show the amount of the profit or loss of the undertaking on ordinary activities before taxation.

7 Accounting Principles

7.

Subject to Regulation 8, the amounts to be included in the accounts of an undertaking in respect of the items shown shall be determined in accordance with the following principles

(a) the undertaking shall be presumed to be carrying on business as a going concern,

(b) accounting policies shall be applied consistently from one financial year to the next,

(c) subject to the provisions of the Schedule, the amount of any item in the accounts shall be determined on a prudent basis and in particular—

(i) only profits which have arisen by the balance sheet date shall be included in the profit and loss account, and

(ii) all liabilities and losses which have arisen or are likely to arise in respect of the financial year to which the accounts relate, or a previous financial year, shall be taken into account, including those liabilities and losses which only become apparent between the balance sheet date and the date on which the accounts are signed in pursuance of section 156 of the Principal Act,

(d) all income and charges relating to the financial year to which the accounts relate shall be taken into account without regard to the date of receipt or payment, and

(e) in determining the aggregate amount of any item the amount of each individual asset or liability that falls to be taken into account shall be determined separately.

8 Departure from Accounting Principles

8.

If it appears to the directors of an undertaking that there are special reasons for departing from any of the principles specified in Regulation 7, they may so depart, but particulars of the departure, the reasons for it and its effect on the balance sheet and profit and loss account of the undertaking shall be stated in a note to the accounts, for the financial year concerned, of the undertaking.

9 Publication of accounts in full or abbreviated form

9.

(1) Where an undertaking publishes its full accounts, it shall also publish with those accounts any report in relation to those accounts by the auditors of the undertaking under section 193 of the Act of 1990.

(2) Where an undertaking publishes abbreviated accounts relating to any financial year, it shall also publish a statement indicating -

(a) that the accounts are not the accounts copies of which are required to be annexed to the annual return,

(b) whether the copies of the accounts so required to be so annexed have in fact been so annexed,

(c) whether the auditors of the undertaking have made a report under section 193 of the Act of 1990, in respect of the accounts of the undertaking which relate to any financial year with which the abbreviated accounts purport to deal,

(d) whether the report of the auditors under the said section 193 contained any qualifications as to the matters mentioned in that section.

(3) Where an undertaking publishes abbreviated accounts, it shall not publish with those accounts any such report of the auditors as is mentioned in paragraph (2) (c).

(4) Where an undertaking publishes its full individual accounts for a financial year it shall indicate if group accounts have been prepared and if so where those group accounts can be obtained.

(5) Every undertaking to which these Regulations apply shall–

(a) make available its full or abbreviated accounts in accordance with paragraphs (1) to (5) for public inspection at its head office, and

(b) make available to the public copies of its accounts on request at a price which does not exceed the cost of making the copy.

(6) In this Regulation –

"abbreviated accounts", in relation to an undertaking, means any balance sheet or profit and loss account, or summary or abstract of a balance sheet or profit and loss account, relating to a financial year of the undertaking which is published by the undertaking otherwise than as part of the full accounts of the undertaking for that financial year and, in relation to a parent undertaking, includes an account in any form purporting to be a balance sheet or profit and loss account, or a summary or abstract of a balance sheet or profit and loss account, of the group consisting of the parent undertaking and its subsidiaries;

"full accounts" means the individual or group accounts required to be annexed to the annual return;

"publish", in relation to a document, includes issue, circulate or otherwise make it available for public inspection in a manner calculated to invite the public generally, or any class of members of the public, to read the document, and cognate words shall be constructed accordingly.

10 Group accounts

10.

(1) This Regulation applies to a parent undertaking whether or not it is itself a subsidiary of another undertaking.

(2) Undertakings to which this Regulation applies shall not be entitled to take advantage of—

(a) subsections (2) or (3) of section 151 of the Principal Act in relation to the form of group accounts, or

(b) section 154 of the Principal Act in relation to the preparation of group accounts.

(3) Every parent undertaking to which this Regulation applies shall, subject to paragraph (5), prepare group accounts at the end of its financial year dealing with the state of affairs and profit or loss of the undertaking and its subsidiaries (including those in liquidation and those with registered offices outside the State) in accordance with the provisions of Parts I to III of the Schedule, as modified by Part IV of the Schedule, and every such group accounts shall be laid before the next annual general meeting of the undertaking at the same time as the individual accounts of the undertaking are so laid and shall be annexed to the annual return of the undertaking.

(4) The report of the auditors on the group accounts laid before the annual general meeting shall be annexed to the annual return referred to in paragraph (3).

(5) (a) The group accounts laid before the annual general meeting of an undertaking shall give a true and fair view of the state of affairs and profit or loss of the undertaking and subsidiaries dealt with thereby as a whole, so far as concerns members of the undertaking.

(b) The group accounts shall comprise the consolidated balance sheet dealing with the state of affairs of the parent and its subsidiaries as a whole, the consolidated profit and loss account dealing with the profit and loss of the parent and its subsidiaries as a whole and the notes on the accounts giving the information required by these Regulations or otherwise provided by the undertaking.

(c) Where group accounts drawn up in accordance with paragraph (3) would not provide sufficient information to comply with sub-paragraph (

a

), any necessary additional information shall be given in the group accounts or in a note to the accounts.

(d) Where, owing to special circumstances, the preparation of group accounts in compliance with paragraph (3) would prevent those accounts from complying with sub-paragraph (a) (even if additional information were given under sub-paragraph (c)), the directors of the parent undertaking shall depart from the requirements of Parts I, II, III and IV (other than paragraph 2 of Part IV) of the Schedule in preparing these accounts in so far as it is necessary in order to comply with paragraph 3.

(e) Where the directors of a parent undertaking depart from the requirements of these Regulations in compliance with sub-paragraph (d), they shall attach a note to the group accounts of the undertaking giving details of the particular departures made, the reasons therefor and the effect of those departures on the accounts.

(6) Where any document annexed to the annual return under this Regulation or Regulation 11, 12 or 13 is in a language other than the English language or the Irish language, there shall be annexed to any such document a translation in the English language or Irish language certified in the prescribed manner to be a correct translation.

(7) The annual and group accounts, if any, of a subsidiary undertaking excluded from group accounts by virtue of the application of paragraph 2 of Part IV of the Schedule shall be attached to the group accounts, or annexed to the annual return, of the parent undertaking.

(8) Paragraph (7) shall not apply where the subsidiary undertaking has otherwise annexed the relevant accounts referred to in that paragraph to its annual return.

11 Subsidiary undertaking

11.

(1) For the purpose of Regulations 10 to 19 and Part IV of the Schedule, an undertaking shall be deemed to be a subsidiary of another, if, but only if—

(a) that other—

(i) holds a majority of the shareholders' or members' voting rights in the undertaking, or

(ii) is a shareholder or member of it and controls the composition of its board of directors, or

(iii) is a shareholder or member of it and controls alone, pursuant to an agreement with other shareholders or members, a majority of the shareholders' or members' voting rights;

or

(b) that other has the right to exercise a dominant influence over it -

(i) by virtue of provisions contained in its memorandum or articles, or

(ii) by virtue of a control contract;

or

(c) that other has a participating interest in it and –

(i) that other actually exercises a dominant influence over it, or

(ii) that other and the subsidiary undertaking are managed on a unified basis;

or

(d) the undertaking is a subsidiary of any undertaking which is that other's subsidiary undertaking.

(2) In determining whether one undertaking controls the composition of the board of directors of another for the purposes of paragraph (1)(a)(ii), subsection (2) of section 155 of the Principal Act shall apply to undertakings subject to these Regulations as it applies to undertakings subject to that section.

(3) For the purpose of paragraph (1) (a)—

(a) subject to paragraphs (c) and (d), any shares held or power exercisable -

(i) by any person as a nominee for that other, or

(ii) by, or by a nominee for, a subsidiary undertaking of that other, not being the subsidiary undertaking whose shares or board of directors are involved,

shall be treated as held or exercisable by that other,

(b) any shares held or power exercisable by that other or a subsidiary undertaking of that other, on behalf of a person or undertaking that is neither that other nor a subsidiary undertaking of that other shall be treated as not held or exercisable by that other,

(c) any shares held or power exercisable by that other, or a nominee for that other or its subsidiary undertaking shall be treated as not held or exercisable by that other if they are held as aforesaid by way of security provided that such power or the rights attaching to such shares are exercised in accordance with instructions received from the person providing the security,

(d) any shares held or power exercisable by that other or a nominee for that other or its subsidiary undertaking shall be treated as not held or exercisable by that other if the ordinary business of that other or its subsidiary undertaking, as the case may be, includes the lending of money and the shares are held as aforesaid by way of security provided that such power or the rights attaching to such shares are exercised in the interests of the person providing the security.

(4) For the purposes of clauses (i) and (ii) of paragraph (1)(a), the total of the voting rights of the shareholders or members in the subsidiary undertaking shall be reduced by the following—

(a) the voting rights attached to shares held by the subsidiary undertaking in itself, and

(b) the voting rights attached to shares held by the subsidiary undertaking by any of its subsidiary undertakings, and

(c) the voting rights attached to shares held by a person acting in his own name but on behalf of the subsidiary undertaking or one of its subsidiary undertakings.

(5) For the purposes of paragraph (1)(b) an undertaking shall not be regarded as having the right to exercise a dominant influence over another undertaking unless it has a right to give directions with respect to the operating and financial policies of that other undertaking which its directors are obliged to comply with.

(6) In paragraph (1)(b) "control contract" means a contract in writing conferring such a right which —

(a) is of a kind authorised by the memorandum or articles of the undertaking in relation to which the right is exercisable, and

(b) is permitted by the law under which that undertaking is established.

(7) Paragraph (5) shall not be read as affecting the construction of the expression "actually exercises a dominant influence" in paragraph (1)(c).

12 Wholly-owned subsidiaries

12.

(1) Paragraph (3) of Regulation 10 shall not apply to a parent undertaking (in this Regulation referred to as "the exempted parent undertaking") which is itself a wholly-owned subsidiary of another undertaking established in a member state of the European Union (in this Regulation referred to as "the parent undertaking") if the requirements set out in paragraph (3) of this Regulation are complied with; provided that the fact that the advantage of this Regulation is being availed of shall be disclosed in a note to the accounts of the insurance parent undertaking annexed to its annual return under the Principal Act.

(2) In this Regulation, an undertaking shall be deemed to be a wholly-owned subsidiary of another if—

(a) that other parent undertaking holds all the shares in the exempted parent undertaking, or

(b) that other holds 90 per cent. or more of the shares in the undertaking and the remaining shareholders in or members of the undertaking have approved the exemption.

(3) The requirements referred to in paragraph (1) are as follows

(a) the undertaking and its subsidiaries shall be dealt with in group accounts prepared by the parent undertaking;

(b) the group accounts and the group annual report of the parent undertaking shall be prepared and audited in accordance with the Directive or Council Directive No. 83/349/EEC

b

of 13 June 1983, as the case may be;

b

O.J. No. L193, 18/7/1994, p. 1.

(c) there shall be annexed to the annual return of the exempted parent next after the group accounts have been prepared in accordance with sub-paragraph (a) —

(i) the group accounts referred to in sub-paragraph (b),

(ii) the group annual report referred to in sub-paragraph (b), and

(iii) the report of the person responsible for auditing the accountsreferred to in sub-paragraph (b).

(d) the notes on the annual accounts of the undertaking shall disclose —

(i) the name and registered office of the parent undertaking that draws up the group accounts referred to in sub-paragraph (

b

), and

(ii) the exemption from the obligation to draw up group accounts and a group annual report.

(4) The exemption in paragraph (1) shall not apply to a parent undertaking any of whose shares, debentures or other debt instruments are listed on a stock exchange in any member state of the European Union.

(5) The Minister may require that additional information shall be provided in the consolidated accounts of the parent undertaking or the individual accounts of the undertaking referred to in paragraph (1) in accordance with Article 9 of Council Directive No. 83/349/EEC.

(6) This Regulation shall also apply to a parent undertaking which is not for the purposes of paragraph (2) a wholly-owned subsidiary of another undertaking where—

(a) the parent undertaking is itself a subsidiary of a parent undertaking established in a member state of the European Union, and

(b) the shareholders or members holding in total 10 per cent or more of the nominal value of the shares of the parent undertaking concerned have not at any time that is not later than six months before the end of the financial year in question requested the preparation of group accounts by that parent undertaking in respect of that financial year.

13 Financial holding undertakings

13.

(1) The obligation to prepare group accounts in accordance with Regulation 10 shall also apply to a parent undertaking, including a parent undertaking to whom Regulation 3 does not apply —

(a) which does not itself carry on any material business apart from the acquisition, management and disposal of interests in subsidiaries, and

(b) whose principal subsidiaries are wholly or mainly undertakings to which these Regulations apply.

(2) In paragraph (1), the management of interests in subsidiaries include the provision of service to such subsidiaries and a parent undertaking's principal subsidiaries are those subsidiaries of the undertaking whose results or financial position would principally affect the figures shown in the group accounts.

14 Directors' report

14.

(1) In the case of a parent undertaking preparing group accounts in accordance with these Regulations, the report of the directors of that undertaking under section 158 of the Principal Act, shall contain, in addition to the information specified in that section, the following information

(a) a fair review of the development of the business of the parent undertaking and its subsidiary undertakings taken as a group during the financial year ending with the relevant balance sheet date;

(b) particulars of any important events affecting the parent undertaking or any of its subsidiary undertakings which have occurred since the end of that year;

(c) an indication of likely future developments in the business of the parent undertaking and its subsidiary undertakings, taken as a group;

(d) an indication of the activities, if any, of the parent undertaking and its subsidiary undertakings, taken as a group, in the field of research and development, and

(e) the number and nominal value of shares in the parent undertaking held by the undertaking itself, by its subsidiary undertakings or by a person acting in his or her own name but on behalf of the undertaking or subsidiary.

(2) The information required by sub-paragraph (1)(e) may be given in the notes to the group accounts.

(3) This report shall be annexed to the group's annual report.

15 Non-application of Principal Act

15.

Subsections (1) and (2) of section 150, sections 151 (1) and 152, subsections (4) and (5) of section 158 and section 191 of the Principal Act shall not apply to an undertaking to which Regulation 10 applies and, for the purpose of this Regulation, the reference to subsection (1) in subsection (4) of section 150 shall be construed as a reference to Regulation 10.

16 Auditors' report

16.

It shall be the duty of the auditors of a parent undertaking, in preparing the report on group accounts required by section 193 of the Act of 1990, to consider whether the information given in the report of the directors on the state of affairs of the parent undertaking and its subsidiary undertakings, as a group, relating to the financial year concerned is consistent with the group accounts for that year and the auditors shall state in their report whether, in their opinion, such information is consistent with those accounts.

17 Documents to be annexed to annual return of parent undertaking

17.

(1) Subject to the provisions of these Regulations, copies of the following documents shall be documents to be annexed to the annual return of a parent undertaking

(a) the group accounts, in respect of the period to which the return relates, drawn up by the parent undertaking in accordance with these Regulations;

(b) the report of the directors, in respect of the period to which the return relates, required by Regulation 14;

(c) the auditors report, in respect of the period to which the return relates, referred to in Regulation 16;

and each such copy document shall be certified both by a director and the secretary of the parent undertaking to be a true copy of such accounts or reports, as the case may be.

(2) Where any document annexed to the annual return under this Regulation is in a language other than the English language or the Irish language, there shall be annexed to each such document a translation in the English language or the Irish language certified in the prescribed manner to be a correct translation.

18 Publication of accounts in full or abbreviated form

18.

(1) Where a parent undertaking publishes its full group accounts, the auditors' report under Regulation 16 in respect of those accounts shall also be published by the parent undertaking.

(2) Where a parent undertaking publishes abbreviated group accounts relating to any financial year, it shall also publish a statement indicating —

(a) that the group accounts are not the group accounts, copies of which are required by these Regulations to be annexed to the annual return,

(b) whether the copies of the group accounts so required to be annexed have in fact been so annexed,

(c) whether the auditors of the parent undertaking have made a report under section 193 of the Act of 1990 in respect of the group accounts of the parent undertaking which relate to any financial year with which the abbreviated group accounts purport to deal,

(d) whether the report of the auditors under section 193 of the Act of 1990 contained any qualifications.

(3) Where a parent undertaking publishes abbreviated group accounts, it shall not publish with those accounts the report of the auditors mentioned in sub-paragraph (2)(c) of this Regulation.

(4) In this Regulation —

"abbreviated group accounts", in relation to a parent undertaking, means any group balance sheet or group profit and loss account, or summary or abstract of a group balance sheet or group profit and loss account, relating to a financial year of the parent undertaking which is published by the parent undertaking otherwise than as part of the full group accounts of the parent undertaking and its subsidiary undertakings for that financial year;

"full group accounts", in relation to a parent undertaking, means group accounts and the report of the directors of the parent undertaking referred to in Regulation 14.

"publish", in relation to a document, includes issue, circulate or otherwise make it available for public inspection in a manner calculated to invite the public generally, or any class of members of the public, to read the document, and cognate words shall be construed accordingly.

19 Offences

19.

(1) If an undertaking to which these Regulations apply fails after the making of these Regulations, to comply with a provision of these Regulations, the undertaking and every officer of the undertaking who is in default shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £1,000.

(2) (a) If any person, being a director of an undertaking to which these Regulations apply, fails, after the making of these Regulations, to take all reasonable steps to secure compliance with a requirement of these Regulations, that person shall be guilty of an offence and shall be liable on summary conviction to imprisonment for a term not exceeding 12 months, or, at the discretion of the court, to a fine not exceeding £1,000, or to both.

(b) In any proceedings against a person for an offence under this paragraph, it shall be a defence for a director to prove that he or she had reasonable grounds to believe and did believe that a competent and reliable person was charged with the duty of ensuring that the provisions of these Regulations were complied with and that the latter person was in a position to discharge that duty, and a person shall not be liable to be sentenced to imprisonment for an offence under the said paragraph (2) unless, in the opinion of the court, the offence was committed wilfully.

(3) If after the making of these Regulations, any person in any balance sheet, profit and loss account, report, note or other document required by or for the purposes of any provision of these Regulations wilfully makes a statement false in any material particular, knowing it to be false, that person shall be guilty of an offence and shall be liable on summary conviction, to imprisonment for a term not exceeding 12 months or to a fine not exceeding £1,000 or to both.

(4) In this section "director" and "officer" includes any person in accordance with whose instruction or directions the directors of the undertakings are accustomed to act.

20 Repeals and Amendments

20.

(1) Section 7(4) of the Assurance Companies Act, 1909, (c 49) and section 128(4)(b) of the Principal Act are hereby repealed.

(2) The Act of 1986 is hereby amended—

(a) in section (2) by the substitution of the following subsection for subsection (3)

"(3) Sections 3 to 6, 8 to 12, 17, 18 and 24 of this Act do not apply in relation to undertakings to which the European Communities (Insurance Undertakings: Accounts) Regulations 1996 (No. 23 of 1996) apply by virtue of regulation 3 of those Regulations."

(b) In subsection (1) of section 7 by the insertion of the following sub-paragraph after sub-paragraph (ii) (inserted by the European Communities (Credit Institutions: Accounts) Regulations, 1992 (

S.I. No. 294 of 1992

)) of paragraph (a)

"(iii) in the case of an undertaking to which subsection (3) of section 2 of this Act applies, a copy of the balance sheet and profit and loss account of the undertaking drawn up in accordance with the European Communities (Insurance Undertakings: Accounts) Regulations, 1996."

SCHEDULE

FORM AND CONTENTS OF ACCOUNTS OF INSURANCE UNDERTAKINGS

PART 1

THE REQUIRED FORMATS FOR ACCOUNTS

CHAPTER 1

GENERAL RULES