S.I. No. 665/2006 - European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2006

1. In relation to an insurance undertaking that, on 20 March 2002 provided insurance in one or more of the classes specified in the Annex to Directive 73/239/EEC, this Annex (as substituted by the European Communities (Non-Life Insurance) Framework (Amendment Regulations 2004 (

S.I. No. 728 of 2004

)), with the exception of subparagraphs (2) to (6) of paragraph 5, applies from the last day of the undertaking's financial year that ends during 2006.”.

GIVEN under my Official Seal,

19

th

day of December 2006.

Brian Cowen

Minister for Finance.

1

OJ No. L 35, 11/2/2003, p.1

2

OJ No. L 345, 19/12/2002, p.1

2. In these Regulations, “Principal Regulations” means the European Communities (Non-Life Insurance) Framework Regulations 1994 (

S.I. No. 359 of 1994

).

Amendment of Annex II of the Principal Regulations.

3. The Principal Regulations are amended in Annex II (inserted by Article 6 of the European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2004 (

S.I. No. 728 of 2004

)-

(a) in paragraph 4(2)-

(i) by substituting the following for clause (a)

“(a) any hidden net reserves arising out of the valuation of assets, in so far as such hidden net reserves are not, in the opinion of the Bank, of an exceptional nature;”,

and

(ii) by substituting the following for clause (c)

“(c) in the case of a mutual or mutual-type association to which variable contributions have been made and that has claims against its members for supplementary contribution, and subject to a limit of 50 per cent of the lesser of the available solvency margin, and the required solvency margin, an amount not exceeding one half of the difference between -

(i) the maximum contributions in respect of which the association has claims against its members by way of calls for supplementary contribution, and

(ii) the contribution actually called in.”,

(b) in paragraph 7

(i) by substituting the following for subparagraph (1)

“(1) The premium basis referred to in paragraph 6 of this Part and subparagraph (2) of this paragraph is to be calculated using the higher of -

(a) the gross written premiums or contributions, and

(b) the gross earned premiums or contributions received by the undertaking.”,

and

(ii) by substituting the following for subparagraph (2) other than steps 3 to 6

“(2) The solvency margin on a premium basis is to be calculated in accordance with the following steps

Step 1: Multiply the total amount of premiums or contributions derived from class 11, 12 or 13 insurance business by 0.5;

“Step 2: Add to the total obtained in step 1 the premiums or contributions (inclusive of charges ancillary to premiums or contributions) due in respect of direct business during the undertaking's immediately preceding year;”,

(c) by substituting the following for Steps 1 and 2 in paragraph 8 (1)

“Step 1 :For class 11, class 12 or class 13 insurance business multiply by 0.5 the amount representing claims, provisions and recoveries

“Step 2: Add to the total obtained in step 1 the amounts of claims paid in respect of direct business undertaken by the undertaking during the periods referred to in paragraph 6 of this Part (without deducting claims borne by reinsurers and retrocessionaires);”

(d) by substituting the following for paragraph 1(1)(b)(ii) of Part B of Annex II

“(ii) with the approval of the Bank, any hidden net reserves arising out of the valuations of assets, in so far as such hidden net reserves are not, in the opinion of the Bank of an exceptional nature.”,

and

(e) by substituting the following for Part C of Annex II

“PART C

APPLICATION OF THIS ANNEX

Annex to take effect on the last day of undertaking's financial year ending during 2006.

STATUTORY INSTRUMENTS

S.I. No. 665 of 2006

REGULATIONS

entitled

European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2006

Made by the Minister for Finance

I, Brian Cowen, Minister for Finance, in exercise of the powers conferred on me by the

European Communities Act 1972

(No. 27 of 1972), and for the purpose of giving further effect to Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002

1

, and Directive 2002/13/EC of the European Parliament and of the Council of 5 March 2002

2

, hereby make the following regulations

Citation and commencement, etc.