IE
S.I. No. 366/2007 - European Communities (Insurance and Reinsurance Groups Supplementary Supervision) Regulations 2007
Table of Provisions (22)
Statutory Text (22 Articles)
1. This Schedule applies to whenever an insurance holding company or a third country insurer or reinsurer is the parent undertaking of
(
a
) one or more insurers or reinsurers that are established in the State, and
(
b
) one or more insurers or reinsurers that are established in other Member States.
Bank to co-operate with competent authorities of other Member States.
2. The Bank shall co-operate as necessary with the competent authorities of other Member States to ensure that the method referred to in this Schedule is applied in a consistent manner in a case to which this Part applies.
Frequency of supplementary supervision.
3. In calculating the solvency margin of an insurer or reinsurer referred to in paragraph 1, the Bank shall exercise supplementary supervision with the same frequency as is prescribed by the Non-Life Insurance Directive, the Insurance Undertakings Accounting Directive, the Life Assurance Directive and the Reinsurance Directive.
Bank may waive calculation.
4. (1) The Bank may waive the calculation provided for by this Schedule in relation to an insurer or reinsurer referred to in paragraph 1
(
a
) if
(i) the insurer or reinsurer is a related undertaking of another insurer or reinsurer, and
(ii) the insurer or reinsurer is taken into account in making the calculation for that other insurer or reinsurer, as provided for by this Schedule, or
(
b
) if
(i) the insurer or reinsurer and one or more other insurers or reinsurers that are established in the State have as their parent undertaking the same insurance holding company, or third country insurer or reinsurer, and
(ii) the insurer or reinsurer is taken into account in making the calculation for one of those other undertakings, as provided for by this Schedule, or
(
c
) if
(i) the insurer or reinsurer and one or more other insurers or reinsurers established in other Member States have as their parent undertaking the same insurance holding company, or the same third country insurer or reinsurer, and
(ii) an agreement conferring on the competent authority of another Member State responsibility for exercising supplementary supervision of the insurer or reinsurer has been entered into in accordance with Regulation 5.
(2) In the case of successive participations (for example, an insurance holding company or a third country insurer or reinsurer that is itself owned by another insurance holding company or a third country insurer or reinsurer), the calculations provided for by this Schedule are, if the Bank so directs, to be applied only at the level of the ultimate parent undertaking of the insurer or reinsurer that is an insurance holding company or a third country insurer or reinsurer.
Calculations to be made at level of relevant insurance holding company or third country insurer or reinsurer.
5. (1) Calculations analogous to those specified in Schedule 1 to these Regulations are to be made at the level of the relevant insurance holding company or third country insurer or reinsurer.
(2) In making those calculations, the general principles and methods prescribed by Schedule 1 to these Regulations are to be applied at the level of the relevant insurance holding company or third country insurer or reinsurer.
(3) For the purpose only of making such a calculation, the parent undertaking is to be treated as if it were an insurer or reinsurer that
(
a
) in the case of an insurance holding companyis subject to a zero solvency requirement, or
(
b
) in the case of a third country insurer or reinsureris subject to a solvency requirement calculated according to the principles of paragraph 14 of Schedule 1 to these Regulations, or
(
c
) as regards the elements eligible for calculating the relevant solvency marginis subject to the same conditions as those prescribed by Annex II to the Non-Life (Framework)Regulations, Annex II to the Life Assurance Regulations or Schedule 1 to the Reinsurance Regulations, as the case requires.
What happens if the necessary information is unavailable.
6. If
(
a
) information concerning a related insurer or reinsurer that has its registered office in another Member State, or in a third country, is required for making a calculation required by this Schedule, and
(
b
) that information is for any reason not available to the Bank,
the book value of the insurer or reinsurer in the participating undertaking is to be deducted from the elements that would otherwise be eligible for making the calculation. In that case, the unrealised gains arising from the participation may not be treated as an element that is eligible for making the calculation.
GIVEN under my Official Seal,
31 May 2007
BRIAN COWEN
Minister for Finance
EXPLANATORY NOTE
(This note is not a part of the Instrument and does not purport to be a legal interpretation)
These Regulations consolidate the European Communities (Supplementary Supervision of Insurance Undertakings in an Insurance Group) Regulations, 1999 (
S.I. No. 399 of 1999
) and the European Communities (Supplementary Supervision of Insurance Undertakings in an Insurance Group) (Amendment) Regulations 2004 (S.I. 731 of 2004) which introduced additional regulatory requirements for insurance companies which are part of an insurance group. These requirements include an obligation to provide information to the supervisory authorities on intra-group transactions and, in certain cases, to demonstrate compliance with additional solvency tests.
They also give effect to provisions in Directive 2005/68/EC of the European Parliament and of the Council of 16 November 2005 on reinsurance and amends Directive 98/78/EC of the European Parliament and of the Council in order to ensure that reinsurance undertakings in an insurance or reinsurance group are subject to supplementary supervision in the same manner as insurance undertakings which are currently part of an insurance group.
1 OJ L330, 5/12/1998, p. 1, as amended by Directive 2002/87/EC of the European Parliament and of he Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate: OJ L 035, 11/02/2003, p. 1
2 OJ L222, 14/8/1978, p. 11.
3 OJ L 035, 11/02/2003, p. 1
4 OJ L145, 30/4/2005, p. 1.
5 OJ L228, 16/8/1973, p. 3
6 OJ L330, 5.12.98, p. 1.
7 Inserted by
S.I. No. 731 of 2004
.
7. For the purposes of this Schedule, the value of assets and liabilities is to be assessed according to the relevant provisions of the Non-Life Insurance Regulations, the Life Assurance Regulations or the Reinsurance Regulations, as the case requires, and the Insurance Undertakings Account Regulations.
PART 2 APPLICATION OF CALCULATION METHODS
Calculations for related insurers and related reinsurers.
8. (1) The adjusted solvency of an insurer or a reinsurer is to be calculated in accordance with the general principles and methods prescribed by this Schedule.
(2) If the relevant insurer or reinsurer is related to more than one other insurer or reinsurer, the related insurers or reinsurers are to be treated as a single integrated unit and the adjusted solvency calculation is to be applied to that unit.
(3) If there are successive participations (for example, when an insurer or reinsurer is a participating undertaking in another insurer or reinsurer that is also a participating undertaking in an insurer or reinsurer), the adjusted solvency calculation is to be carried out at the level of each participating insurer or reinsurer that has at least one related insurer or reinsurer.
Circumstances in which Bank can waive calculation of adjusted solvency of insurer or reinsurer.
9. The Bank may waive the requirement for calculating the adjusted solvency of an insurer or reinsurer
(
a
) if the insurer or reinsurer is a related undertaking of another insurer or reinsurer that is itself established in the State, and that related undertaking is taken into account in calculating the adjusted solvency of the participating insurer or reinsurer, or
(
b
) if
(i) the insurer or reinsurer is a related undertaking of an insurance holding company or asset management company, and
(ii) the insurance holding company or asset management company has its registered office in the State, and
(iii) the insurer or reinsurer is taken into account when calculating the adjusted solvency of the insurance holding company or asset management company.
Further circumstances in which Bank can waive calculation of adjusted solvency of insurer or reinsurer.
10. The Bank may also waive the requirement to calculate the adjusted solvency of an insurer or reinsurer if
(
a
) it is related to another insurer or reinsurer, or to an insurance holding company, that has its registered office in another Member State, and
(
b
) the Bank has agreed with the competent authority of that other Member State that that authority should exercise supplementary supervision over the insurer or reinsurer.
Restriction on giving waivers under paragraphs 9 and 10.
11. The Bank may give a waiver under paragraph 9 or 10 only if it is satisfied that the elements eligible for calculating the solvency margins of the insurers or reinsurers to be included in the calculation are adequately distributed between those insurers or reinsurers.
Power of Bank to direct account to be taken of solvency situation assessed by competent authority of other Member State.
12. In calculating the adjusted solvency of a related insurer or reinsurer that has its registered office in another Member State (other than that of the insurer or reinsurer in respect of which the calculation is being made), the calculation to be made in respect of the insurer or reinsurer must, if the Bank so directs, take account of the solvency situation as assessed by the relevant competent authority of that other Member State.
Situation of intermediate insurance holding company to be taken into account in certain cases.
13. (1) When calculating the adjusted solvency of an insurer or reinsurer that holds a participation in a related insurer or related reinsurer, or in a third country insurer or third country reinsurer, through an insurance holding company, the financial situation of the insurance holding company is to be taken into account.
(2) For the purpose only of making the calculation referred to in subparagraph (1), the insurance holding company is to be treated as if it were an insurer or reinsurer that has a zero solvency requirement and is subject to the same conditions as those prescribed by Annex II to the Non-Life Insurance (Framework) Regulations, Annex II to the Life Assurance Regulations or Schedule 1 to the Reinsurance Regulations in respect of elements eligible for calculating the solvency margin.
Special provisions for calculating adjusted solvency of participating insurer or reinsurer in third country insurer or reinsurer.
14. (1) When calculating the adjusted solvency of an insurer or reinsurer that is a participating undertaking in a third country insurer or third country reinsurer
(
a
) the third country insurer or third country reinsurer is, for the purpose only of making the calculation, to be treated as if it were a related insurer or related reinsurer, and
(
b
) the general principles and methods prescribed by this Schedule are to be applied to that third country insurer or third country reinsurer.
(2) However, if the laws of the country in which the third country insurer or third country reinsurer has its registered office
(
a
) require that insurer or reinsurer to be licensed, registered or otherwise authorised, and
(
b
) impose on that insurer or reinsurer a solvency requirement at least as stringent as that prescribed by Annex II to the Non-Life Insurance (Framework) Regulations, Annex II to the Life Assurance Regulations or Schedule 1 to the Reinsurance Regulations, taking into account the elements of cover of that requirement,
the Bank may direct that the calculation for that insurer or reinsurer must take into account the solvency requirement and the elements necessary to satisfy that requirement, as prescribed by those laws.
Related credit institutions, investment firms and financial institutions.
15. When calculating the adjusted solvency of an insurer or reinsurer that is a participating undertaking in a prescribed credit institution, prescribed investment firm or financial institution, the rules prescribed by Annex II to the Non-Life Insurance (Framework) Regulations, Annex II to the Life Assurance Regulations or Schedule 1 to the Reinsurance Regulations apply (including the provisions permitting the Bank under certain conditions to allow the use of alternative methods and to allow participations not to be deducted).
What happens if the necessary information is unavailable.
16. If
(
a
) information that concerns a related undertaking that has its registered office in another Member State, or in a third country, is required for calculating the adjusted solvency of an insurer or reinsurer, and
(
b
) that information is for any reason not available to the Bank,
the book value of that undertaking in the participating insurer or reinsurer must be deducted from the elements that would otherwise be eligible for calculating the adjusted solvency margin. In that case, the unrealised gains arising from the participation may not be treated as an element that is eligible for making that calculation.
Method for calculating adjusted solvency situation of participating insurer or reinsurerMethod 1: Deduction and aggregation method.
17. (1) The adjusted solvency situation for the participating insurer or reinsurer is the difference between
(
a
) the sum of
(i) the elements eligible for calculating the solvency margin of the participating insurer or reinsurer, and
(ii) the proportional share of the participating insurer or reinsurer in the elements eligible for calculating the solvency margin of the related insurer or reinsurer, and
(
b
) the sum of
(i) the book value in the participating insurer or reinsurer of the related insurer or reinsurer, and
(ii) the solvency requirement of the participating insurer or reinsurer, and
(iii) the proportional share of the solvency requirement of the related insurer or reinsurer.
(2) If the participation in the related insurer or reinsurer consists wholly or partly of an indirect ownership
(
a
) the figure referred to in subparagraph (1)(
b
)(i) must incorporate the value of such indirect ownership, taking into account the relevant successive interests, and
(
b
) the items referred to in subparagraph (1)(
a
)(ii) and (
b
)(iii) must include the corresponding proportional shares of the elements eligible for calculating the solvency margin of the related insurer or reinsurer.
Method for calculating adjusted solvency situation of participating insurer or reinsurerMethod 2: Requirement deduction method.
18. (1) The adjusted solvency of the participating insurer or reinsurer is the difference between
(
a
) the sum of the elements eligible for calculating the solvency margin of the participating insurer or reinsurer, and
(
b
) the sum of—
(i) the solvency requirement of the participating insurer or reinsurer, and
(ii) the proportional share of the solvency requirement of the related insurer or reinsurer.
(2) When valuing the elements eligible for calculating the solvency margin, participations must be valued by the equity method, in accordance with the option set out in Article 59(2)(
b
) of the Company Accounts Directive.
Method for calculating adjusted solvency situation of participating insurer or reinsurerMethod 3: Accounting consolidation-based method.
19. (1) The adjusted solvency of the participating insurer or reinsurer must be calculated on the basis of the relevant consolidated accounts.
(2) The adjusted solvency of the participating insurer or reinsurer is the difference between
(
a
) the elements eligible for calculating the solvency margin on the basis of consolidated data, and
(
b
) either—
(i) the sum of the solvency requirement of the participating insurer or reinsurer and the proportional shares of the solvency requirements of the related insurers or reinsurers, based on the percentages used for the establishment of the consolidated accounts, or
(ii) the solvency requirement calculated on the basis of consolidated data.
(3) The Life Assurance Regulations, the Non-Life Insurance (Framework) Regulations, the Reinsurance Regulations and the Insurance Undertakings Account Regulations apply to the calculation of the elements eligible for calculating the solvency margin and of the solvency requirement based on consolidated data.
SCHEDULE 2 SUPPLEMENTARY SUPERVISION OF SUBSIDIARIES OF INSURANCE HOLDING COMPANIES, THIRD COUNTRY INSURERS AND THIRD COUNTRY REINSURERS
Application of this Schedule.
20. (1) The following Regulations are revoked
(
a
) the European Communities (Supplementary Supervision of Insurance Undertakings in an Insurance Group) Regulations 1999 (
S.I. No. 399 of 1999
);
(
b
) the European Communities (Supplementary Supervision of Insurance Undertakings in an Insurance Group) (Amendment) Regulations 2004 (
S.I. No. 731 of 2004
).
(2) Part 2 of Schedule 2 to the
Central Bank Act 1942
(as substituted by
section 31
of the
Central Bank and Financial Services Authority of Ireland Act 2003
) is amended
(
a
) by deleting the item relating to the European Communities (Supplementary Supervision of Insurance Undertakings in an Insurance Group) Regulations 1999 (
S.I. No. 399 of 1999
), and
(
b
) by inserting the following item at the end of the Part
“S.I. No. of 2007
European Communities (Insurance and Reinsurance Groups Supplementary Supervision) Regulations 2007
The whole instrument”
(3) The
Central Bank and Financial Services Authority of Ireland Act 2003
is amended by repealing Part 17 of Schedule 2.
Transitional provision
21. If any act or matter was begun or was in existence under the Regulations revoked by Regulation 20 but was not completed before the commencement of these Regulations and that act or matter could have been begun or come into existence under these Regulations, that act or matter may be continued as if it had been done or come into existence under these Regulations.
SCHEDULE 1 CALCULATION OF THE ADJUSTED SOLVENCY OF INSURERS AND REINSURERS
PART 1 CALCULATION METHOD AND GENERAL PRINCIPLES
Method to be used in calculating adjusted solvency of insurers and reinsurers.
Notice of the making of this Statutory Instrument was published in
“Iris Oifigiúil” of
3
rd July
, 2007.
I, BRIAN COWEN, Minister for Finance, in exercise of the powers conferred on me by
section 3
of the
European Communities Act 1972
(No. 27 of 1972), as amended by the
European Communities (Amendment) Act 1993
(No. 25 of 1993), and for the purpose of giving effect to Directive No. 98/78/EC
1
of the European Parliament and of the Council of 27 October 1998 on the supplementary supervision of insurance undertakings in an insurance group and to Directive 2005/68/EC of the European Parliament and of the Council of 16 November 2005 on reinsurance, hereby make the following Regulations
PART 1 PRELIMINARY PROVISIONS
Citation and commencement.