INSURANCE BUSINESS (SUPERVISION OF INSURANCE AND REINSURANCE UNDERTAKINGS IN A GROUP) REGULATIONS

SUBSIDIARY LEGISLATION 403.17

INSURANCE BUSINESS (SUPERVISION

OF INSURANCE AND REINSURANCE

UNDERTAKINGS IN A GROUP) REGULATIONS

1st January, 2016 *

LEGAL NOTICE 410 of 2015, as amended by Legal Notices 63 of 2017

and 278 of 2021.

(1) The title of these regulations is the Insurance Business

(Supervision of Insurance and Reinsurance Undertakings in a

Group) Regulations.

(2) The purpose of these regulations is to implement in part

Title III of the Solvency II Directive.

(1) In these regulations, unless the context otherwise

requires -

"the Act" means the Insurance Business Act;

"authorised insurance undertaking" means an undertaking whose

head office is in Malta, which has received authorisation pursuant

to article 7 of the Act to carry on direct general business and, or

long term business, and includes an undertaking authorised to carry

on direct and reinsurance business;

"authorised reinsurance undertaking " means an undertaking

whose head office is in Malta, which has received authorisation

pursuant to article 7 of the Act to carry on business restricted to

reinsurance;

"col lege o f supervisor s " m ean s a permanent but flexible

structure for the cooperation, coordination and facilitation of

decision making concerning the supervision of a group;

"Directive 2002/87/EC" means Directive 2002/87/EC of the

European Parliament and of the Council of the 16 December 2002

on the supplementary supervision of credit institutions, insurance

undertakings and investment firms in a financial conglomerate and

amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/

EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/

EC and 2000/12/EC of the European Parliament and of the Council,

as amended from time to time;

"European insurance undertaking" means an undertaking having

its head office in a Member State or an EEA State, other than

Malta, pursuing the activity of direct insurance within the meaning

of Article 2 of the Solvency II Directive, which has received

authorisation in accordance with Article 14 of the Solvency II

Directive;

"European regulatory authority" means the supervisory authority

or supervisory authorities as defined in Article 13 of the Solvency

II Directive, designated by a Member State or EEA State, other

*see regulation 1(3) of these Regulations as originally promulgated.

than Malta, empowered by law or regulation to supervise insurance

or reinsurance undertakings;

"European reinsurance undertaking " means an undertaking

having its head office in a Member State or an EEA State, other

than Malta, pursuing business restricted to reinsurance within the

meaning of Article 2 of the Solvency II Directive which has

received authorisation in accordance with Article 14 of the

Solvency II Directive;

"group" means a group of undertakings that

(a) consists of a participating undertaking, its subsidiaries

and the entities in which the participating undertaking

or its subsidiaries hold a participation, as well as

undertakings linked to each other by a relationship as

set out in Article 22 of Directive 2013/34/EU of the

European Parliament and of the Council of 26 June

2013 on the annual financial statements, consolidated

financial statements and related reports of certain

types of undertakings, amending Directive 2006/43/

EC of the European Parliament and of the Council and

repealing Council Directives 78/660/EEC and 83/349/

EEC; or

(b) is based on the establishment, contractually or

otherwise, of strong and sustainable financial

relationships among those undertakings, and that may

include mutual or mutual-type associations, provided

that

(i)

one of those undertakings effectively exercises,

through centralised coordination, a dominant

influence over the decisions, including financial

decisions, of the other undertakings that are part

of the group; and

(ii)

the establishment and dissolution of such

relationships for the purposes of Title III of the

Solvency II Directive are subject to prior

approval by the group supervisor,

where the undertaking exercising the centralised coordination shall

be considered as the parent undertaking, and the other undertakings

shall be considered as subsidiaries;

"group supervisor" means the supervisory authority responsible

for group supervision in accordance with Article 247 of the

Solvency II Directive;

"insurance holding company" means a parent undertaking, which

is not a mixed financial holding company and the main business of

which is to acquire and hold participations in subsidiary

undertakings, where those subsidiary undertakings are exclusively

or mainly authorised insurance undertakings, authorised

reinsurance undertakings, European insurance undertakings,

European reinsurance undertakings, or third country insurance

undertakings or third country reinsurance undertakings, at least one

of such subsidiary undertakings being an authorised insurance

undertaking, an authorised reinsurance undertaking, a European

insurance undertaking or a European reinsurance undertaking;

"intra-group transaction" means any transaction by which an

authorised insurance undertaking, an authorised reinsurance

undertaking, a European insurance undertaking or a European

reinsurance undertaking, relies, either directly or indirectly, on

other undertakings within the same group or on any natural or legal

person linked to the undertakings within the same group by close

links, for the fulfilment of an obligation, whether or not

contractual, and whether or not for payment;

"Malta Solvency II parent" means a parent undertaking with

head office in Malta which is

(a) an authorised insurance undertaking or an authorised

reinsurance undertaking which is a participating

undertaking in at least one authorised insurance

undertaking, authorised reinsurance undertaking,

European

insurance

undertaking,

European

reinsurance undertaking, third country insurance

undertaking or third country reinsurance undertaking;

(b) an insurance holding company; or

(c) a mixed financial holding company;

"method 1" means the method of calculating group solvency as

described in regulation 22;

"method 2" means the method of calculating group solvency as

described in regulation 25;

"mixed-activity insurance holding company" means a parent

undertaking, other than an authorised insurance undertaking, an

authorised reinsurance undertaking, a European insurance

undertaking, a European reinsurance undertaking, a third country

insurance undertaking, a third country reinsurance undertaking, an

insurance holding company or a mixed financial holding company,

which includes at least one authorised insurance undertaking,

authorised reinsurance undertaking, European insurance

undertaking or European reinsurance undertaking among its

subsidiary undertakings;

"mixed financial holding company" means a mixed financial

holding company as defined in Article 2(15) of Directive 2002/87/

EC;

"overseas regulatory authority" means an authority in a country

or territory outside Malta, that is not a Member State or EEA State,

which exercises any regulatory or supervisory function in relation

to financial services corresponding to a function of the competent

authority as defined in the Malta Financial Services Authority Act;

"parent undertaking" has the same meaning as assigned to it by

article 2 of the Companies Act, and for the purposes of these

regulations includes any undertaking which, in the opinion of the

competent authority, effectively exercises a dominant influence

over another undertaking;

"participating undertaking" means an undertaking which is either

a parent undertaking or other undertaking which holds a

participation or an undertaking linked with another undertaking by

a relationship as set out in Article 22 of Directive 2013/34/EU of

the European Parliament and of the Council of 26 June 2013 on the

annual financial statements, consolidated financial statements and

related reports of certain types of undertakings, amending Directive

2006/43/EC of the European Parliament and of the Council and

repealing Council Directives 78/660/EEC and 83/349/EEC;

"participation" means the ownership, direct or by way of control,

of 20% or more of the voting rights or capital of an undertaking,

and for the purposes of these regulations, includes, the holding,

directly or indirectly of voting rights or capital in an undertaking,

over which, in the opinion of the competent authority, a significant

influence is effectively exercised;

"related undertaking " means either a subsidiary or another

undertaking in which a participation is held, or an undertaking

linked with another undertaking by a relationship as set out in

Articles 22(7), (8), and (9) of Directive 2013/34/EU of the

European Parliament and of the Council of 26 June 2013 on the

annual financial statements, consolidated financial statements and

related reports of certain types of undertakings, amending Directive

2006/43/EC of the European Parliament and of the Council and

repealing Council Directives 78/660/EEC and 83/349/EEC;

"Solvency II Directive" means Directive 2009/138/EC of the

European Parliament and of the Council of 25 November 2009 on

t he taki ng -u p and pu rsui t of t he b usi ness o f In surance and

Reinsurance (Solvency II) (recast), as amended from time to time,

and includes any delegated acts and any technical standards that

have been or may be issued thereunder;

"subsidiary undertaking " means an undertaking within the

meaning of article 2 of the Companies Act, and for the purposes of

these regulations, includes, any undertaking over which, in the

opinion of the competent authority, a parent undertaking effectively

exercises a dominant influence;

"third country" means a country which is not a Member State or

EEA State,

and other words and expressions which are also used in the Act

shall, in these regulations, have the same meaning as in the Act.

(2) The provisions of these regulations shall be applicable in

addition to the Commission Delegated Regulation (EU) 2015/35 10

October 2014 supplementing Directive 2009/138/EC of the

European Parliament and of the Council on the taking-up and

pursuit of the business of Insurance and Reinsurance (Solvency II).

PART I

Group Supervision: Cases of Application, Scope and Levels

(1) For the purpose of these regulations, supervision at the

level of the group shall apply to every authorised insurance

undertaking and authorised reinsurance undertaking which is part

of a group.

(2) Where the competent authority is the group supervisor of a

group, or where it is one of the authorities responsible for the

supervision of an individual insurance or reinsurance undertaking

in a group and is not the group supervisor, group supervision shall

apply in the following cases, where

(a) either

(i)

an authorised insurance undertaking or an

authorised reinsurance undertaking which is a

participating undertaking in at least one other

authorised insurance undertaking, authorised

reinsurance undertaking, European insurance

undertaking European reinsurance undertaking,

third country insurance undertaking or third

country reinsurance undertaking, in accordance

with regulations 9 to 43; or

(ii) a European insurance undertaking or a European

reinsurance undertaking which is a participating

undertaking in at least an authorised insurance

undertaking or an authorised reinsurance

undertaking, in accordance with regulations 9 to

43; or

(b) an authorised insurance undertaking or an authorised

reinsurance undertaking, the parent undertaking of

which is an insurance holding company or a mixed

financial holding company which has its head office in

Malta or in another Member State or EEA State, in

accordance with regulations 9 to 43; or

(c) an authorised insurance undertaking or an authorised

reinsurance undertaking, the parent undertaking of

which is an insurance holding company or a mixed

financial holding company which has its head office in

a third country, or is a third country insurance

undertaking or a third country reinsurance

undertaking, in accordance with regulations 44 to 47;

or

(d) an authorised insurance undertaking or an authorised

reinsurance undertaking, the parent undertaking of

which is a mixed-activity insurance holding company,

in accordance with regulation 48.

(3) For the avoidance of doubt, the provisions of the Act,

regulations or Insurance Rules issued thereunder, concerning the

supervision of an authorised insurance undertaking or an authorised

reinsurance undertaking taken individually shall continue to apply

to such an undertaking, except where it is otherwise provided under

these regulations.

(1) Where a mixed financial holding company is subject to

equivalent provisions under the Solvency II Directive and under

Di r e c t i ve 2 0 02 / 87 /E C , in pa rt i c u la r i n t e r m s of r isk - b a s e d

supervision, and where the competent authority is the group

supervisor of the group, the authority may, after consulting other

European regulatory authorities concerned, apply only the relevant

provisions of Directive 2002/87/EC to that mixed financial holding

company.

(2) Where a mixed financial holding company is subject to

equivalent provisions under the Solvency II Directive and under

Directive 2013/36/EU of the European Parliament and of the

Council of 26 June 2013 on access to the activity of credit

institutions and the prudential supervision of credit institutions and

investment firms, in particular in terms of risk-based supervision,

and where the competent authority is the group supervisor of the

group, the authority may, in agreement with the consolidating

supervisor in the banking and investment services sector, apply

only the provisions of the Directive relating to the most significant

sector as determined in accordance with Article 3(2) of Directive

2002/87/EC.

(3) Where the competent authority is the group supervisor of

the group, it shall inform the European Banking Authority,

established by Regulation (EU) No 1093/2010 of the European

Parliament and of the Council of 24 November 2010, and EIOPA,

of the decisions taken under sub-regulations (1) and (2).

Where the competent authority is the group supervisor of a

group, it may, after consultation with other European regulatory

authorities concerned, decide not to carry out supervision of the

risk concentration, intra-group transactions, or both, as referred to

in regulation 33, only in the following cases

(a) in the cases referred to in regulation 3(2)(a) and (b),

where the participating insurance or reinsurance

undertaking or the insurance holding company or

mixed financial holding company which has its head

office in Malta, or in another Member State or EEA

State, is either a related undertaking of, or is itself a

regulated entity or a mixed financial holding company

which is subject to supplementary supervision in

accordance with Article 5(2) of Directive 2002/87/EC,

at the level of that participating insurance or

reinsurance undertaking or that insurance holding

company or mixed financial holding company;

(b) where the ultimate parent insurance or reinsurance

undertaking or insurance holding company or mixed

financial holding company which has its head office in

Malta, or in another Member State or EEA State, as

referred to in regulation 7, is a subsidiary undertaking

of an undertaking which is subject to supplementary

supervision in accordance with Article 5(2) of

Directive 2002/87/EC, at the level of that ultimate

parent undertaking or company.

(1) Without prejudice to regulation 42 and in so far as

insurance holding companies or mixed financial holding companies

are concerned, the exercise of group supervision by the competent

authority in accordance with regulations 3, 4 and 5, shall not imply

that the competent authority is required to play a supervisory role

in relation to the third country insurance undertaking, third country

reinsurance undertaking, the insurance holding company, mixed

financial holding company or the mixed-activity insurance holding

company, taken individually.

(2) Where the competent authority is the group supervisor of a

group, it may decide on a case-by-case basis not to include an

undertaking in the group supervision referred to in regulations 3, 4,

and 5, where

(a) the undertaking is situated in a third country, where

there are legal impediments to the transfer of the

necessary information, without prejudice to the

provisions of regulation 21;

(b) the undertaking which should be included is of

negligible interest with respect to the objectives of

group supervision; or

(c) the inclusion of the undertaking would be

inappropriate or misleading with respect to the

objectives of the group supervision.

(3) Where several undertakings of the same group, taken

individually, may be excluded pursuant to sub-regulation (2)(b),

such undertakings shall nevertheless be included where,

collectively, they are of non-negligible interest.

(4) Where the competent authority is the group supervisor of

the group and is of the opinion that an insurance or reinsurance

undertaking is not to be included in the group supervision, based on

sub-regulation (2)(b) or (c), it shall consult other regulatory

authorities concerned in the supervision of the group, before taking

a decision in accordance with sub-regulation (2).

(5) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor,

and the group supervisor has decided, in accordance with Article

214 of the Solvency II Directive, not to include that authorised

insurance undertaking or authorised reinsurance undertaking in the

group supervision, the competent authority may require the

undertaking which is at the head of the group to provide any

information which may facilitate the competent authority’s

supervision of the excluded authorised insurance undertaking or

authorised reinsurance undertaking.

Where the participating insurance or reinsurance

undertaking or the insurance holding company or the mixed

financial holding company, referred to in regulation 3(2)(a) and

(b), is itself a subsidiary undertaking of another authorised

insurance undertaking, authorised reinsurance undertaking,

European insurance undertaking or European reinsurance

undertaking, or of another insurance holding company or mixed

financial holding company which has its head office in Malta, or in

another Member State or EEA State, regulation 9 to 43 shall apply

only at the level of the ultimate parent insurance or reinsurance

undertaking, insurance holding company or mixed financial

INSURANCE BUSINESS (SUPERVISION OF INSURANCE

AND REINSURANCE UNDERTAKINGS IN A GROUP)

holding company which has its head office in Malta, or in another

Member State or EEA State.

(1) The competent authority may subject the ultimate

Malta Solvency II parent to group supervision, where

(a) the ultimate parent undertaking at Union level referred

to in regulation 7, has its head office in a Member

State or EEA State, other than Malta;

(b) the ultimate parent undertaking at Union level referred

to in regulation 7, has not obtained permission in

accordance with Articles 237 or 243 of the Solvency II

Directive, for the ultimate Malta Solvency II parent,

which is its subsidiary, to be subject to regulations 29

and 30; and

(c) the competent authority is one of the authorities

responsible for the supervision of an individual

insurance or reinsurance undertaking in a group and is

not the group supervisor.

(2)

The competent authority shall

(a) before taking the decision to exercise supervision in

accordance with sub-regulation (1), consult both the

group supervisor and the ultimate parent undertaking

at Union level; and

(b) where such a decision has been taken, explain its

decision to both the group supervisor and the ultimate

parent undertaking at Union level.

(3) Where the competent authority is the group supervisor of a

group and a decision has been taken to subject the ultimate parent

insurance or reinsurance undertaking, insurance holding company

or mixed financial holding company to group supervision, pursuant

to Article 216(1) of the Solvency II Directive, the competent

authority shall inform the college of supervisors in accordance with

article 32B(3)(a) of the Act.

(4)

(a) Where the competent authority is one of the authorities

respo nsi bl e for th e su pervi sio n of an i nd iv idu al

insurance or reinsurance undertaking in a group and is

not the group supervisor, and takes a decision in

accordance with regulation 8(1) and (2) or concludes

an agreement in accordance with regulation 8(11) to

(13), regulations 9 to 43 shall apply mutatis mutandis,

subject to paragraph (b) and to sub-regulations (1)(b),

(5) to (10) of this regulation.

(b) The decision or agreement referred to in paragraph (a)

is subject to the decision which the competent

authority may take, to restrict group supervision of the

ultimate Malta Solvency II parent to one or more of

the following

(i)

Articles 218 to 243 of Title III, Chapter II,

Section 1 of the Solvency II Directive;

(ii) Articles 244 and 245 of Title III, Chapter II,

Section 2 of the Solvency II Directive;

(iii) Article 246 of Title III, Chapter II, Section 3 of

the Solvency II Directive.

(5) Where the competent authority decides to apply Articles

218 to 243 of the Solvency II Directive to the ultimate Malta

Solvency II parent or concludes an agreement in accordance with

sub-regulations (11) to (13), the choice of method made in

accordance with Article 220 of the Solvency II Directive by the

group supervisor in respect of the ultimate parent undertaking at

Union level referred to in Article 215 of the Solvency II Directive,

shall be recognised as determinative and applied by the competent

authority.

(6) Where the competent authority decides to apply Articles

218 to 243 of the Solvency II Directive to the ultimate Malta

Solvency II parent or concludes an agreement in accordance with

su b-regu lati ons ( 11) to (1 3), the co mp etent aut hority shall

recognise as determinative and apply any permission granted in

a c c or d a n c e w i t h A r ti c l e s 2 3 1 o r 2 3 3( 5 ) of t he S o l v e n c y I I

Directive, to the ultimate parent undertaking at Union level referred

to in regulation 7 to calculate the group Solvency Capital

Requirement, as well as the Solvency Capital Requirement of

insurance undertakings and reinsurance undertakings in the group,

on the basis of an internal model.

(7) In the situation referred to in sub-regulation (6), where the

competent authority considers that the risk profile of the ultimate

Malta Solvency II parent deviates significantly from the internal

model approved at Union level, and as long as that undertaking

does not properly address the concerns of the competent authority,

the competent authority may decide to impose a capital add-on to

the group Solvency Capital Requirement of that undertaking

resulting from the application of such model or, in exceptional

circumstances, where such capital add-on would not be appropriate,

to require that undertaking to calculate its group Solvency Capital

Requirement on the basis of the standard formula.

(8) The competent authority shall explain the decisions taken

in accordance with sub-regulations (6) or (7) to both the Malta

Solvency II parent and the group supervisor.

(9) Where the competent authority is the group supervisor of a

group and a decision has been taken pursuant to Article 216(4) of

the Solvency II Directive, the competent authority shall inform the

college of supervisors in accordance with article 32B(3)(a) of the

Act.

(10) Where the competent authority decides to apply Articles

218 to 243 of the Solvency II Directive to the ultimate Malta

Solvency II parent that undertaking shall not be permitted to

introduce, in accordance with regulations 27 to 32, an application

for permission to subject any of its subsidiaries to Articles 238 and

239 of the Solvency II Directive.

(11) Where the competent authority makes a decision in

accordance with sub-regulation (1), the competent authority may

conclude an agreement with the European regulatory authorities in

other Member States or EEA States where another related ultimate

parent undertaking at national level, other than Malta, is present,

with a view to carrying out group supervision at the level of a

subgroup covering Malta and such other Member States or EEA

States.

(12) Where the competent authority has concluded an agreement

as referred to in sub-regulation (11), group supervision shall not be

carried out at the level of any ultimate parent undertaking referred

to Article 216 of the Solvency II Directive, present in Member

States or EEA States, other than the Member States or EEA States

where the subgroup referred to in sub-regulation (11) is located.

(13) Where an agreement is concluded in accordance with sub-

r e g u l a t i o n ( 11 ) , t h e c o m p e t e n t a u t h o r i t y s h a l l e x p l a i n t h e

agreement to the group supervisor and to the ultimate parent

undertaking at Union level.

(14) Where the competent authority is the group supervisor of a

group and an agreement to carry out group supervision at subgroup

level in the Member States or EEA States concerned, has been

concluded pursuant to Article 217 of the Solvency II Directive, the

competent authority shall inform the college of supervisors in

accordance with article 32B(3)(a) of the Act.

PART II

Financial Position

(1) Supervision of the group solvency shall be exercised in

accordance with sub-regulations (2) and (3), and regulations 34 to

43. (2) In the case referred to in regulation 3(2)(a)(i), a

participating insurance or reinsurance undertaking in a group, shall

ensure that eligible own funds are available in the group which are

always at least equal to the group Solvency Capital Requirement as

calculated in accordance with regulations 12 to 25.

(3) In the case referred to in regulation 3(2)(b), an authorised

insurance undertaking or an authorised reinsurance undertaking in

a group, shall ensure that eligible own funds available in the group

are always at least equal to the group Solvency Capital

Requirement as calculated in accordance with regulation 26.

(4) An undertaking referred to in sub-regulations (2) and (3),

shall have procedures in place to identify deteriorating financial

conditions within the group and shall notify the group supervisor,

without delay, when such deterioration occurs.

(5) An undertaking, as referred to in sub-regulations (2) and

(3), shall

(a) immediately inform the group supervisor, as soon as

such undertaking observes that the group Solvency

Capital Requirement is no longer complied with, or

where there is the risk of non-compliance within the

following three months;

(b) within two months from the observation of non-

compliance with the group Solvency Capital

Requirement, submit a realistic recovery plan for

approval by the group supervisor;

(c) take the necessary measures to achieve within six

months from the observation of non-compliance with

the group Solvency Capital Requirement, which period

may be extended for a further three months by the

group supervisor, the re-establishment of the level of

eligible own funds covering the group Solvency

Capital Requirement or the reduction of the risk

profile to ensure compliance with the group Solvency

Capital Requirement;

(d) submit a progress report to the group supervisor every

three months, setting out the measures taken and the

progress made to re-establish the level of own funds

covering the group Solvency Capital Requirement or

to reduce the risk profile to ensure compliance with the

group Solvency Capital Requirement, in the event of

exceptional adverse situations affecting such

undertaking, as declared by EIOPA, and where

appropriate in consultation with the European

Systematic Risk Board.

(6) Where the competent authority is the group supervisor of a

group, the authority

(a) shall require an authorised insurance undertaking or an

authorised reinsurance undertaking, a European

insurance undertaking or a European reinsurance

undertaking, in a group, which has informed the

competent authority as soon as it was observed that the

group Solvency Capital Requirement is no longer

complied with, or where there is a risk of non-

compliance in the following three months, to take the

necessary measures to achieve, within six months from

the observation of non-compliance with the Solvency

Capital Requirement, the re-establishment of the level

of eligible own funds covering the Solvency Capital

Requirement or the reduction of its risk profile to

ensure compliance with the Solvency Capital

Requirement;

(b) may, if appropriate extend the period of six months

referred to in paragraph (a) by three months;

(c) may, in the event of exceptional adverse situations

affecting any of the authorised insurance undertaking,

authorised

reinsurance

undertaking,

European

insurance undertaking or European reinsurance

undertaking, in a group, extend the period set out in

paragraph (b) by a maximum period of seven years,

taking into account all relevant factors, including the

average duration of the technical provisions;

(d) may, request EIOPA to declare the existence of

exceptional adverse situations, if any, of the authorised

insurance

undertaking,

authorised

reinsurance

undertaking, European insurance undertaking or

European reinsurance undertaking, in a group,

representing a significant share of the market or of the

affected lines of business are unlikely to meet one of

the requirements set out in paragraph (a);

(e) shall cooperate with EIOPA

(i)

to assess on a regular basis whether the

conditions referred to in sub-regulation (7) still

apply;

(ii) to declare when an exceptional adverse situation

has ceased to exist;

(f)

shall require any affected undertaking to submit a

progress report setting out the measures taken and the

progress made to re-establish the level of eligible own

funds covering the group Solvency Capital

Requirement or to reduce the risk profile to ensure

compliance with the group Solvency Capital

Requirement;

(g) shall withdraw the extension referred to in paragraph

(c) where that progress report shows that there was no

significant progress in achieving the re-establishment

of the level of eligible own funds covering the group

Solvency Capital Requirement or the reduction of the

risk profile to ensure compliance with the group

Solvency Capital Requirement between the date of the

observation of non-compliance of the group Solvency

Capital Requirement and the date of the submission of

the progress report.

(7) For the purposes of this regulation, "exceptional adverse

situations" exist where the financial situation of an authorised

insurance undertaking, an authorised reinsurance undertaking, a

European insurance undertaking or a European reinsurance

undertaking, representing a significant share of the market or of the

affected lines of business, is seriously or adversely affected by one

or more of the following conditions

(a) a fall in financial markets which is unforeseen, sharp

and steep;

(b) a persistent low interest rate environment;

(c) a high-impact catastrophic event.

(1) The group solvency calculations referred to in

regulation 9(2) and (3), shall be carried out at least annually by the

participating insurance or reinsurance undertaking referred to in

regulation 9(2), by the insurance holding company or by the mixed

financial holding company referred to in regulation 9(3).

(2) The relevant data for, and the results of, the calculations

referred to in regulation 9(2) and (3) shall be submitted to the group

supervisor

(a) by the participating insurance or reinsurance

undertaking referred to in regulation 9(2); or

(b) by the insurance holding company or the mixed

financial holding company referred to in regulation

9(3), or by such other undertaking in the group as may

be identified by the group supervisor, after consulting

the competent authority, the European regulatory

authorities concerned and the group itself, where the

group is not headed by an authorised insurance

undertaking, an authorised reinsurance undertaking, a

European insurance undertaking or a European

reinsurance undertaking.

(3)

(a) The authorised insurance undertaking and authorised

reinsurance undertaking referred to in regulation 9(2),

and the insurance holding company and mixed

financial holding company, referred to in regulation

9(3) shall monitor the group Solvency Capital

Requirement on an ongoing basis.

(b) Where the risk profile of the group deviates

significantly from the assumptions underlying the last

reported group Solvency Capital Requirement, the

group Solvency Capital Requirement shall be

recalculated without delay and reported to the group

supervisor.

Where the competent authority is the group supervisor of a

group, the authority

(a) shall ensure that the calculations referred to in Article

218(2) and (3) of the Solvency II Directive are carried

out at least annually, by the participating insurance or

reinsurance undertaking, by the insurance holding

company or by the mixed financial holding company;

(b) shall conduct supervisory reviews in accordance with

Articles 247 to 259 of the Solvency II Directive, to

determine

whether

insurance

or

reinsurance

undertakings in the group are complying with Articles

218(2) and (3) of the Solvency II Directive;

(c) shall inform the other European regulatory authorities

within the college of supervisors, which shall analyse

the situation of the group, as soon as a participating

undertaking in the group informs the competent

authority, that it is no longer in compliance with the

Solvency Capital Requirement, or that there is a risk of

non-compliance in the following three months;

(d) shall, where the group is not headed by an insurance

undertaking or reinsurance undertaking, consult the

undertakings in the group and the European regulatory

authorities concerned in the supervision of the group,

before identifying an undertaking other than an

insurance holding company or a mixed financial

holding company to supply relevant data for, and the

results, of, the calculations referred to in Articles

218(2) and (3) of the Solvency II Directive;

(e) may, where there is evidence to suggest that the risk

profile of the group has altered significantly since the

date on which the group Solvency Capital

Requirement was last reported, require a recalculation

of the group Solvency Capital Requirement.

(1) The calculation of the solvency at the level of the

group of the authorised insurance undertakings and authorised

reinsurance undertakings referred to in regulation 3(2)(a), shall be

carried out

(a) in accordance with the technical principles in

regulations 13 to 26; and

(b) in accordance with method 1, unless the group

supervisor has determined under Article 220(2) of the

Solvency II Directive that method 2 or a combination

of method 1 and method 2 shall be applied.

(2) Where the competent authority is the group supervisor of a

group, the authority shall consult the group and the other European

regulatory authorities concerned in the supervision of the group,

before taking a decision in accordance with sub-regulation (1)(b)

on requiring the particular group to use method 2 or a combination

of method 1 and method 2, for the calculation of the solvency at the

level of the group, where the exclusive application of method 1

would not be appropriate.

(3) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor,

the competent authority shall apply the method chosen by the group

supervisor for the ultimate parent insurance or reinsurance

undertaking, insurance holding company or mixed financial

holding company at Union level, in relation to

(a) group supervision at national level in accordance with

regulation 8(1); and

(b) supervision at sub-group level in accordance with

regulation 8(11).

(1) The calculation of the group solvency shall take into

account the proportional share held by the participating

undertaking in its related undertakings.

(2) Subject to sub-regulation (3), for the purposes of sub-

regulation (1), the proportional share shall comprise either of the

following

(a) where method 1 is used, the percentages used for the

establishment of the consolidated accounts; or

(b) where method 2 is used, the proportion of the

subscribed capital that is held, directly or indirectly,

by the participating undertaking.

(3)

Notwithstanding sub-regulation (2) and regardless of the

method used

(a) where the related undertaking is a subsidiary

undertaking and does not have sufficient eligible own

funds to cover its Solvency Capital Requirement

(i)

the total solvency deficit of the subsidiary

undertaking shall be taken into account; or

(ii) a proportional share of that solvency deficit shall

be taken into account, if the group supervisor so

determines in accordance with sub-regulations

(4) or (5);

(b) the proportional share shall be determined by the

group supervisor if such a determination is made in

accordance with sub-regulation (6).

(4) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor,

and is of the opinion that the responsibility of the parent

undertaking owning a share of the capital is strictly limited to that

share of the capital, the group supervisor may nevertheless allow

for the solvency deficit of the subsidiary undertaking to be taken

into account on a proportional basis.

(5) Where the competent authority is the group supervisor of a

group, and in the opinion of a European regulatory authority

concerned the responsibility of the parent undertaking owning a

share of the capital is strictly limited to that share of the capital, the

competent authority may nevertheless allow for the solvency

deficit of the subsidiary undertaking to be taken into account on a

proportional basis.

(6) Where the competent authority is the group supervisor of a

group, the authority shall, after consulting the European regulatory

authority concerned and the group itself, determine the

proportional share which shall be taken into account in the

calculation of group solvency, in any of the following cases

(a) where there are no capital ties between some of the

undertakings in a group;

(b) where a European regulatory authority has determined

that the holding, directly or indirectly, of voting rights

or capital in an undertaking qualifies as a participation

because, in its opinion, a significant influence is

effectively exercised over that undertaking;

(c) where a European regulatory authority has determined

that an undertaking is a parent undertaking of another

because, in the opinion of that regulatory authority, it

effectively exercises a dominant influence over that

other undertaking.

(1) The own funds eligible for the Solvency Capital

Requirement shall not be taken into account more than once among

the different insurance or reinsurance undertakings, in a group, in

the calculation of the group solvency.

INSURANCE BUSINESS (SUPERVISION OF INSURANCE

AND REINSURANCE UNDERTAKINGS IN A GROUP)

(2) For the purposes of sub-regulation (1), when calculating the

group solvency and where method 1 and method 2 do not provide

for it, the following amounts shall be excluded

(a) the value of any asset of the participating insurance or

reinsurance undertaking, which represents the

financing of own funds eligible for the Solvency

Capital Requirement of one of its related insurance or

reinsurance undertakings;

(b) the value of any asset of a related insurance or

reinsurance undertaking of the participating insurance

or reinsurance undertaking which represents the

financing of own funds eligible for the Solvency

Capital Requirement of that participating insurance or

reinsurance undertaking;

(c) the value of any asset of a related insurance or

reinsurance undertaking of the participating insurance

or reinsurance undertaking, which represents the

financing of own funds eligible for the Solvency

Capital Requirement of any other related insurance or

reinsurance undertaking of that participating insurance

or reinsurance undertaking.

(3) Without prejudice to sub-regulation (2), the following may

be included in the calculation only in so far as they are eligible for

covering the Solvency Capital Requirement of the related

undertaking concerned

(a) surplus funds falling under Article 91(2) of the

Solvency II Directive arising in a related insurance or

reinsurance undertaking carrying on long term

business, of the participating insurance or reinsurance

undertaking for which the group solvency is

calculated;

(b) any subscribed but not paid-up capital of a related

insurance or reinsurance undertaking of the

participating insurance or reinsurance undertaking for

which the group solvency is calculated.

(4) Notwithstanding sub-regulation (3), the following shall in

any event be excluded from the calculation

(a) subscribed but not paid-up capital which represents a

potential obligation on the part of the participating

undertaking;

(b) subscribed but not paid-up capital of the participating

insurance or reinsurance undertaking, which

represents a potential obligation on the part of a

related insurance or reinsurance undertaking;

(c) subscribed but not paid-up capital of a related

insurance or reinsurance undertaking which represents

a potential obligation on the part of another related

insurance or reinsurance undertaking of the same

participating insurance or reinsurance undertaking.

(5) Where the competent authority considers that certain own

funds eligible for the Solvency Capital Requirement of a related

insurance or reinsurance undertaking other than those referred to in

sub-regulations (3) and (4), cannot effectively be made available to

cover the Solvency Capital Requirement of the participating

insurance or reinsurance undertaking for which the group solvency

is calculated, those own funds may be included in the calculation

only in so far as they are eligible for covering the Solvency Capital

Requirement of that related undertaking.

(6) The sum of the own funds referred to in sub-regulations (3)

to (5), shall not exceed the Solvency Capital Requirement of the

related insurance or reinsurance undertaking.

(7) Any eligible own funds of a related insurance or

reinsurance undertaking of the participating insurance or

reinsurance undertaking for which the group solvency is calculated

that are subject to prior authorisation from the competent authority

or the relevant European regulatory authority in accordance with

Article 90 of the Solvency II Directive, shall be included in the

calculation only in so far as they have been duly authorised by the

competent authority or the relevant European regulatory authority,

responsible for the supervision of that related undertaking.

(1) When calculating group solvency, no account shall be

taken of any own funds eligible for the Solvency Capital

Requirement arising out of reciprocal financing between the

participating insurance or reinsurance undertaking and any of the

following

(a) a related undertaking;

(b) a participating undertaking;

(c) another related undertaking of any of its participating

undertakings.

(2) When calculating group solvency, no account shall be taken

of any own funds eligible for the Solvency Capital Requirement of

a related insurance or reinsurance undertaking of the participating

insurance or reinsurance undertaking for which the group solvency

is calculated where the own funds concerned arise out of reciprocal

financing with any other related undertaking of that participating

insurance or reinsurance undertaking.

(3) Reciprocal financing shall be deemed to exist at least where

an insurance or reinsurance undertaking, or any of its related

undertakings, holds shares in, or makes loans to, another

undertaking which, directly or indirectly, holds own funds eligible

for the Solvency Capital Requirement of the first undertaking.

The value of the assets and liabilities shall be assessed in

accordance with Insurance Rules issued under article 18D of the

Act.

(1) Where an authorised insurance undertaking or an

authorised reinsurance undertaking has more than one related

insurance or reinsurance undertaking, the group solvency

calculation shall be carried out by including each of those related

insurance or reinsurance undertakings.

(2) Where the related insurance or reinsurance undertaking has

its head office in a Member State or EEA State other than that of

the authorised insurance undertaking or authorised reinsurance

undertaking for which the group solvency calculation is carried out,

the calculation is to take into account, in respect of the related

undertaking, of the Solvency Capital Requirement and the own

funds eligible to satisfy that requirement as laid down in that other

Member State or EEA State.

(1) When calculating the group solvency of an authorised

insurance undertaking or an authorised reinsurance undertaking, in

a group, which holds a participation in

(a) a related insurance undertaking;

(b) a related reinsurance undertaking;

(c) a related third-country insurance undertaking; or

(d) a related third-country reinsurance undertaking,

through an insurance holding company or a mixed financial

holding company, the situation of such an insurance holding

company or mixed financial holding company shall be taken into

account.

(2) For the sole purpose of that calculation, the intermediate

insurance holding company or intermediate mixed financial

holding company shall be treated as if it were an insurance or

reinsurance undertaking, subject to the rules laid down in Articles

100 to 127 of the Solvency II Directive, in respect of the Solvency

Capital Requirement and were subject to the same conditions as are

laid down in Articles 87 to 99 of the Solvency II Directive, in

respect of own funds eligible for the Solvency Capital

Requirement.

(3) In cases where an intermediate insurance holding company

or intermediate mixed financial holding company holds

subordinated debt or other eligible own funds subject to limitation

in accordance with Article 98 of the Solvency II Directive, they

shall be recognised as eligible own funds up to the amounts

calculated by application of the limits set out in the said Article to

the total eligible own funds outstanding at group level as compared

to the Solvency Capital Requirement at group level.

(4) Any eligible own funds of an intermediate insurance

holding company or intermediate mixed financial holding

company, which would require prior authorisation from the

competent authority or the European regulatory authority

concerned, in accordance with Article 90 of the Solvency II

Directive if they were held by an authorised insurance undertaking,

an authorised reinsurance undertaking, a European insurance

undertaking or a European reinsurance undertaking, may be

included in the calculation of the group solvency only in so far as

they have been duly authorised by the group supervisor, or by the

competent authority where it is the group supervisor of a group.

(1) When calculating the group solvency of an authorised

insurance undertaking or an authorised reinsurance undertaking

which is a participating undertaking in a third-country insurance

undertaking or third-country reinsurance undertaking, in

accordance with method 2, such third-country insurance or

reinsurance undertaking shall, solely for the purposes of that

calculation, be treated as a related insurance or reinsurance

undertaking.

(2) Notwithstanding sub-regulation (1), where the third country

i n w h i c h t h a t u n d e r t a k i n g h a s i t s h e a d o ff i c e i s s u b j e c t t o

authorisation and has a solvency regime at least equivalent to that

specified in Articles 75 to 135 of the Solvency II Directive, the

competent authority may provide that the calculation in sub-

regulation (1) shall take into account, as regards that undertaking,

the Solvency Capital Requirement and the own funds eligible to

s a t i s f y t h a t r e q u i r e m e n t a s l ai d d o w n b y t h e t h i r d c o u n t r y

concerned.

(3) Where the competent authority is the group supervisor of a

group and no delegated act has been adopted in accordance with

Article 227(4) or (5) of the Solvency II Directive, the competent

authority shall at the request of the participating undertaking, or on

its own initiative, make the verification of whether the third

country solvency regime is at least equivalent to Articles 75 to 135

of the Solvency II Directive.

(4) Where the competent authority is the group supervisor of a

group, the authority shall

(a) consult the other European regulatory authorities

concerned in the supervision of the group before

taking a decision on equivalence under sub-regulation

(3), with the assistance of EIOPA in accordance with

Article 33(2) of Regulation (EU) No 1094/2010;

(b) take the decision on equivalence in accordance with

the criteria set out in any delegated acts adopted under

Article 227(3) of the Solvency II Directive; and

(c) ensure that its decision in relation to a third country is

not contradicting any decision taken vis-à-vis that

third country previously, except where it is necessary

to take into account significant changes to the

supervisory regime laid down in Articles 75 to 135 of

the Solvency II Directive and to the supervisory

regime in the third country.

(5) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor,

and disagrees with the decision taken in accordance with sub-

paragraph (2) of Article 227(2) of the Solvency II Directive, the

competent authority may refer the matter to EIOPA and request its

assistance in accordance with Article 19 of Regulation (EU) No

1094/2010 within three months after notification of the decision by

the group supervisor.

(6)

Where the European Commission adopts delegated acts in

accordance with Article 227(5) of the Solvency II Directive,

determining the provisional equivalence of the supervisory regime

of a third country, that regime shall be considered equivalent for

the purposes of sub-regulation (2), and sub-regulations (3) to (5)

shall not apply.

When calculating the group solvency of an authorised

insurance undertaking or an authorised reinsurance undertaking,

which is a participating undertaking in a credit institution,

investment firm or financial institution, the participating insurance

and reinsurance undertaking shall

(a) apply methods 1 or 2 set out in Annex I to Directive

2002/87/EC mutatis mutandis, provided that, method 1

set out in that Annex shall be applied only where the

group supervisor or where the competent authority is

the group supervisor of a group, the competent

authority, as applicable, is satisfied as to the level of

integrated management and internal control regarding

the undertakings which would be included in the scope

of consolidation, and provided always that the method

chosen shall be applied in a consistent manner over

time; or

(b) deduct any participation as referred to in paragraph (a)

from the own funds eligible for the group solvency of

the participating undertaking, where the group

supervisor or the competent authority as group

supervisor so decides, either at the request of the

participating undertaking or on its own initiative.

Where the information necessary for calculating the group

solvency of an authorised insurance undertaking or an authorised

reinsurance undertaking, in a group, concerning a related

undertaking with its head office in a Member State or EEA State, or

in a third country, is not available to the competent authority, where

it is the group supervisor of a group

(a) the book value of that related undertaking in the

participating insurance or reinsurance undertaking

shall be deducted from the own funds eligible for the

group solvency; and

(b) the unrealised gains connected with such participation

shall not be recognised as own funds eligible for the

group solvency.

(1) The calculation of the group solvency of the

participating insurance or reinsurance undertaking, shall be carried

out on the basis of the consolidated accounts.

(2) The group solvency of the participating insurance or

reinsurance undertaking is the difference between the following

(a) the own funds eligible to cover the Solvency Capital

Requirement, calculated on the basis of consolidated

data; and

(b) the Solvency Capital Requirement at group level

calculated on the basis of consolidated data.

(3) The rules laid down in Articles 87 to 127 of the Solvency II

Directive shall apply for the calculation of the own funds eligible

for the Solvency Capital Requirement and of the Solvency Capital

Requirement at group level based on consolidated data.

(4) The Solvency Capital Requirement at group level based on

consolidated data ( "consolidated group Solvency Capital

Requirement ") shall be calculated on the basis of either the

standard formula or an approved internal model, in a manner

consistent with the general principles contained in Articles 87 to

97, 100 to 102 and 112 to 127 of the Solvency II Directive.

(5) The consolidated group Solvency Capital Requirement

shall have as a minimum the sum of the following

(a) the Minimum Capital Requirement as referred to in

Article 129 of the Solvency II Directive, of the

participating insurance or reinsurance undertaking;

and

(b) the proportional share of the Minimum Capital

Requirement of the related insurance and reinsurance

undertakings.

(6) That minimum shall be covered by eligible basic own funds

as determined in Article 98(4) of the Solvency II Directive.

(7) For the purposes of determining whether such eligible own

funds qualify to cover the minimum consolidated group Solvency

Capital Requirement, the principles set out in Articles 221 to 229 of

the Solvency II Directive shall apply mutatis mutandis. Article

139(1) and (2) of the Solvency II Directive shall also apply mutatis

mutandis.

(1) An application for permission to calculate the

consolidated group Solvency Capital Requirement, as well as the

Solvency Capital Requirement of an authorised insurance

undertaking, an authorised reinsurance undertaking, a European

insurance undertaking or a European reinsurance undertaking, in a

group, on the basis of an internal model, submitted by such an

undertaking and its related undertakings, or jointly by the related

undertakings of an insurance holding company, shall be submitted

to the group supervisor or to the competent authority where it is the

group supervisor of a group, as applicable.

(2) Where the competent authority is the group supervisor of a

group, upon receipt of an application as referred to in sub-

regulation (1), it shall inform

(a) the other members of the college of supervisors; and

(b) EIOPA,

of the receipt of application. The competent authority as group

supervisor shall forward the complete application, including the

documentation submitted under sub-regulation (1) by the undertaking,

to the other members of the college of supervisors and EIOPA without

delay. The competent authority may request EIOPA to provide

technical assistance pursuant to point (b) of Article 8(1) of Regulation

(EU) No 1094/2010, with respect to the decision on the application.

(3) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor

(a) it shall cooperate with other European regulatory

authorities concerned, to decide whether or not to

grant the permission referred to in sub-regulation (1)

and to determine the terms and conditions, if any, to

which such permission is subject;

(b) it shall do everything within its power to reach a joint

decision on the application within six months from the

date of receipt of the complete application by the

group supervisor; and

(c) it may, within the six-month period referred to in

paragraph (b) or before a joint-decision has been

reached, refer the matter to EIOPA in accordance with

Article 19 of Regulation (EU) No 1094/2010, and the

decision of the group supervisor which is taken in

conformity with EIOPA’s decision, shall be recognised

as determinative and shall be applied by the competent

authority.

(4) Where EIOPA does not take a decision as referred to in the

second sub-paragraph of Article 231(3) of the Solvency II Directive, in

accordance with Article 19(3) of Regulation (EU) No 1094/2010, the

group supervisor shall take the final decision and that decision shall

be recognised as determinative and applied by the competent

authority.

(5) Where the competent authority is the group supervisor of a

group

(a) if within the six-month period referred to in Article

231(3) of the Solvency II Directive or before a joint-

decision has been reached, any of the European

regulatory authorities concerned has referred the

matter to EIOPA in accordance with Article 19 of

Regulation (EU) No 1094/2010, the competent

authority shall defer its decision and await any

decision that EIOPA may take in accordance with

Article 19(3) of that Regulation, and shall take its

decision in conformity with EIOPA’s decision. That

decision shall be recognised as determinative and

applied by the European regulatory authorities

concerned; and

(b) where EIOPA does not take a decision, as referred to in

the second sub-paragraph of Article 231(3) of the

Solvency II Directive, in accordance with Article 19(3)

of Regulation (EU) No 1094/2010, the competent

authority shall take a final decision, and that decision

shall be recognised as determinative and shall be

applied by the European regulatory authorities

concerned.

(6) Where the competent authority is the group supervisor of a

group, the authority shall

(a) where the competent authority and the European

regulatory authorities concerned have reached a joint

decision, provide the applicant referred to in sub-

regulation (1) with a document setting out the full

reasons; and

(b) in the absence of the adoption of a joint decision

within six months from the receipt of the complete

application sent by it, make its own decision on the

application, taking into account any views and

reservations of the other European regulatory

authorities concerned expressed during that six-month

period and shall provide the applicant referred to in

sub-regulation (1) and the other European regulatory

authorities concerned, with a document setting out its

fully reasoned decision which shall be recognised as

determinative and shall be applied by the European

regulatory authorities concerned.

(7) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor,

in the absence of the adoption of a joint decision within six months

from the date of receipt of the complete application by the group,

the decision of the group supervisor on the application, shall be

recognised as determinative.

(8) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor,

and it considers that the risk profile of an authorised insurance

undertaking or an authorised reinsurance undertaking deviates

significantly from the assumptions underlying the internal model

approved at group level, and that undertaking has not properly

addressed the concerns of the competent authority, the competent

authority may

(a) in accordance with Article 37 of the Solvency II

Directive, impose a capital add-on to the Solvency

Capital Requirement of that insurance or reinsurance

undertaking resulting from the application of such

internal model;

(b) in exceptional circumstances, where such capital add-

on imposed under paragraph (a) would not be

appropriate, require the undertaking concerned to

calculate its Solvency Capital Requirement on the

basis of the standard formula referred to in Articles 87

to 97 of the Solvency II Directive; or

(c) where the competent authority has exercised its

discretion under paragraph (b), to require an

authorised insurance undertaking or an authorised

reinsurance undertaking to calculate its Solvency

Capital Requirement on the basis of the standard

formula, impose a capital add-on to the Solvency

Capital Requirement in accordance with Article

37(1)(a) and (c) of the Solvency II Directive.

(9) The competent authority shall explain any decision referred

to in sub-regulation (8) to the authorised insurance undertaking or

authorised reinsurance undertaking concerned and the other

members of the college of supervisors.

(1) Where the competent authority is the group supervisor

of a group , the auth ority shall, in determ ining whether the

consolidated group Solvency Capital Requirement appropriately

reflects the risk profile of the group, pay attention to any case

where the circumstances referred to in Article 37(1)(a) to (d) of the

Solvency II Directive may arise at group level, in particular where

(a) a specific risk existing at group level would not be

sufficiently covered by the standard formula or the

internal model used, because it is difficult to quantify;

(b) a capital add-on to the Solvency Capital Requirement

of the related insurance or reinsurance undertakings is

imposed by the European regulatory authorities

concerned, in accordance with Article 37 and Article

231(7) of the Solvency II Directive.

(2) Where the competent authority is the group supervisor of a

group, the authority may, where the risk profile of the group is not

adequately reflected, impose a capital add-on to the consolidated

group Solvency Capital Requirement.

(3) Article 37(1) to (5) of the Solvency II Directive, together

with the delegated acts and implementing technical standards taken

in accordance with Article 37(6), (7) and (8) of the Solvency II

Directive, shall apply mutatis mutandis.

(1) The group solvency of the participating insurance or

reinsurance undertaking shall be the difference between the

following

(a) the aggregated group eligible own funds, as provided

for in sub-regulation (2);

(b) the value in that participating insurance or reinsurance

undertaking of the related insurance or reinsurance

undertakings and the aggregated group Solvency

Capital Requirement, as provided for in sub-regulation

(3).

(2) The aggregated group eligible own funds are the sum of the

following

(a) the own funds eligible for the Solvency Capital

Requirement of the participating insurance or

reinsurance undertaking;

(b) the proportional share of the participating insurance or

reinsurance undertaking in the own funds eligible for

the Solvency Capital Requirement of the related

insurance or reinsurance undertakings.

(3) The aggregated group Solvency Capital Requirement is the

sum of the following

(a) the Solvency Capital Requirement of the participating

insurance or reinsurance undertaking;

(b) the proportional share of the Solvency Capital

Requirement of the related insurance or reinsurance

undertakings.

(4) Where, in a group, the participation in the related insurance

or reinsurance undertakings consists, wholly or in part, of an

indirect ownership, the value in the participating insurance or

reinsurance undertaking of the related insurance or reinsurance

undertakings shall incorporate the value of such indirect

ownership, taking into account the relevant successive interests,

and the items referred to in sub-regulations (2)(b) and (3)(b) shall

include the corresponding proportional shares, respectively, of the

own funds eligible for the Solvency Capital Requirement of the

related insurance or reinsurance undertakings and of the Solvency

Capital Requirement of the related insurance or reinsurance

undertakings.

(5) Any application for permission to calculate the Solvency

Capital Requirement of authorised insurance undertakings,

authorised reinsurance undertakings, European insurance

undertakings or European reinsurance undertakings in the group,

on the basis of an internal model, submitted by the insurance or

reinsurance undertaking concerned and its related undertakings, or

jointly by the related undertakings of an insurance holding

company or mixed financial holding company, shall be submitted to

the group supervisor, or where the competent authority is the group

supervisor of a group, the competent authority, as applicable, and in

such a case the provisions of regulation 23 shall apply mutatis

mutandis.

(6) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor

(a) in determining whether the aggregated group Solvency

Capital Requirement, as set out in sub-regulation (3),

appropriately reflects the risk profile of the group, it

shall pay particular attention to any specific risks

existing at group level which would not be sufficiently

covered, because they are difficult to quantify;

(b) it may impose a capital add-on to the aggregated group

Solvency Capital Requirement, where the risk profile

of the group deviates significantly from the

assumptions underlying the aggregated group

Solvency Capital Requirement.

(7) Article 37(1) to (5) of the Solvency II Directive, together

with the delegated acts and implementing technical standards taken

in accordance with Article 37(6), (7) and (8) of the Solvency II

Directive, shall apply mutatis mutandis.

(1) Where the competent authority is the group supervisor

of a group, the authority shall, where authorised insurance

undertakings, authorised reinsurance undertakings, European

insurance undertakings or European reinsurance undertakings are

subsidiaries of an insurance holding company or of a mixed

financial holding company, ensure that the calculation of the

solvency of the group is carried out at the level of the insurance

holding company or the mixed financial holding company applying

Article 220(2) to Article 233 of the Solvency II Directive.

(2) For the purpose of that calculation, the insurance holding

company or mixed financial holding company shall be treated as if

it were an insurance or reinsurance undertaking subject to the rules

laid down in Articles 100 to 127 of the Solvency II Directive as

regards the Solvency Capital Requirement and subject to the same

conditions as laid down in Article 87 to 99 of the Solvency II

Directive as regards the own funds eligible for the Solvency Capital

Requirement.

(1) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor,

and an authorised insurance undertaking or an authorised

reinsurance undertaking is the subsidiary undertaking of an

authorised insurance undertaking, an authorised reinsurance

undertaking, a European insurance undertaking or a European

reinsurance undertaking, Articles 238 and 239 of the Solvency II

Directive shall apply, where all of the following conditions are

satisfied

(a) the subsidiary undertaking, in relation to which the

group supervisor, has not made a decision under

Article 214(2) of the Solvency II Directive is included

in the group supervision carried out by the group

supervisor at the level of the parent undertaking in

accordance with Articles 212 to 266 of the Solvency II

Directive;

(b) the risk-management processes and internal control

mechanisms of the parent undertaking cover the

subsidiary undertaking and the parent undertaking

satisfies the competent authority regarding the prudent

management of the subsidiary;

(c) the parent undertaking has received the agreement

referred to in Article 246(4) of the Solvency II

Directive;

(d) the parent undertaking has received the agreement

referred to in Article 256(2) of the Solvency II

Directive;

(e) an application for permission to be subject to Articles

238 and 239 of the Solvency II Directive has been

submitted by the parent undertaking and a favourable

decision has been made on such application in

accordance with the procedure set out in Article 237 of

the Solvency II Directive.

(2) Where the competent authority is the group supervisor of a

group, and an authorised insurance undertaking or an authorised

reinsurance undertaking, a European insurance undertaking or a

European reinsurance undertaking is the subsidiary undertaking of

an authorised insurance undertaking, an authorised reinsurance

undertaking, a European insurance undertaking or a European

reinsurance undertaking, Articles 238 and 239 of the Solvency II

Directive shall apply, where all of the following conditions are

satisfied

(a) the subsidiary undertaking, in relation to which the

competent authority has not made a decision under

Article 214(2) of the Solvency II Directive, is included

in the group supervision carried out by the group

supervisor at the level of the parent undertaking in

accordance with these regulations;

(b) the risk-management processes and internal control

mechanisms of the parent undertaking cover the

subsidiary undertaking and the parent undertaking

satisfies the other responsible authorities in the group

regarding the prudent management of the subsidiary;

(c) the parent undertaking has received the agreement

referred to in Article 246(4) of the Solvency II

Directive;

(d) the parent undertaking has received the agreement

referred to in Article 256(2) of the Solvency II

Directive;

(e) an application for permission to be subject to Articles

238 and 239 of the Solvency II Directive has been

submitted by the parent undertaking and a favourable

decision has been made on such application in

accordance with the procedure set out in Article 237 of

the Solvency II Directive.

(1) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor,

and where the subsidiary undertaking is an authorised insurance

undertaking or an authorised reinsurance undertaking, an

application for permission to subject that subsidiary undertaking to

the rules laid down in Articles 238 and 239 of the Solvency II

Directive, shall be submitted to the competent authority by its

parent undertaking. The competent authority shall, without delay,

inform the other members of the college of supervisors and forward

the complete application to them.

(2) For the purposes of sub-regulation (1), the competent

authority shall work together with other European regulatory

authorities concerned, within the college of supervisors, in full

cooperation, to decide whether or not to grant the permission

sought and to determine the other terms and conditions, if any, to

which such permission should be subjected.

(3) A joint decision by all the European regulatory authorities,

i n c l u d i n g t h e c o m p e t e n t a u t h o r i t y, w i t h i n t h e c o l l e g e o f

supervisors, shall be made within three months from the date of

receipt of the complete application.

(4) Where EIOPA does not take a decision in accordance with

Article 19 of Regulation (EU) No 1094/2010 and where the competent

authority is the group supervisor, the competent authority shall take

the final decision. The decision by the competent authority acting as

group supervisor shall be recognised as determinative and shall be

applied by all the regulatory authorities concerned.

(5) If, in accordance with Articles 41(2) and (3) and Articles

44(1) and (3) of Regulation (EU) No 1094/2010, the decision

proposed by the panel is rejected, the final decision taken by the

group supervisor shall be recognised as determinative and shall be

applied by all the regulatory authorities concerned.

(6) Where the competent authority is the group supervisor of

the group

(a) if within the three-month period or before a joint

decision has been reached, as referred to in Article 273

of the Solvency II Directive, any of the European

regulatory authorities concerned has referred the

matter to EIOPA in accordance with Article 19 of

Regulation (EU) No 1094/2010, the competent

authority shall defer its decision and await any

decision that EIOPA may take in accordance with

Article 19(3) of that Regulation, and shall take its

decision in conformity with EIOPA's decision. That

decision shall be recognised as determinative and shall

be applied by the European regulatory authorities

concerned; and

(b) if, in accordance with Articles 41(2) and (3) and

Articles 44(1) and (3) of Regulation (EU) No 1094/

2010, the decision proposed by the panel is rejected,

the competent authority shall take a final decision and

that decision shall be recognised as determinative and

shall be applied by the European regulatory authorities

concerned.

(7) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor

(a) if a joint decision referred to in sub-regulation (3) has

been reached, it shall provide the applicant referred to

in sub-regulation (1), with the decision stating the full

reasons, and such joint decision shall be recognised as

determinative and shall be applied by the regulatory

authorities concerned;

(b) in the absence of a joint decision in accordance with

sub-regulation (3), the decision of the group

supervisor with regard to the application shall be

recognised as determinative and applied by all the

regulatory authorities concerned.

(8)

Where the competent authority is the group supervisor of a

group

(a) in the absence of a joint decision of the European

regulatory authorities concerned within the three-

month period set out in Article 237(2) of the Solvency

II Directive, the competent authority shall take its own

decision with regard to the application referred to in

Article 237(1) of the Solvency II Directive;

(b) during the three-month period referred to in paragraph

(a), the competent authority shall duly consider any

views and reservations of the European regulatory

authority concerned which authorised the subsidiary

undertaking and any reservations of the other

European regulatory authorities within the college of

supervisors.

(9) A decision taken in accordance with sub-regulation (8),

shall state the full reasons and shall contain an explanation of any

significant deviation from the reservations of the other European

regulatory authorities concerned, and shall provide the applicant

and the other European regulatory authorities concerned with a

copy of the decision taken by the competent authority, which

decision shall be recognised as determinative and shall be applied

by the European regulatory authorities concerned.

(1) Where the subsidiary undertaking is an authorised

insurance undertaking or an authorised reinsurance undertaking,

without prejudice to regulation 23, the Solvency Capital

Requirement of the subsidiary shall be calculated in accordance

with sub-regulations (2) and (4) to (7).

(2) Where the Solvency Capital Requirement of the subsidiary

undertaking is calculated on the basis of an internal model

approved at group level in accordance with regulation 23 and the

competent authority considers that the risk profile of the subsidiary

undertaking, deviates significantly from this internal model, and as

long as that undertaking does not properly address the concerns of

the competent authority, the competent authority may, in the cases

referred to in Article 37 of the Solvency II Directive

(a) propose to set a capital add-on to the Solvency Capital

Requirement of that subsidiary undertaking resulting

from the application of such model; or

(b) in exceptional circumstances where such capital add-

on would not be appropriate, to require that

undertaking to calculate its Solvency Capital

Requirement on the basis of the standard formula.

(3) Where the Solvency Capital Requirement of the subsidiary

undertaking is calculated on the basis of the standard formula and

the competent authority considers that the risk profile of the

subsidiary undertaking, deviates significantly from the assumptions

underlying the standard formula, and as long as that undertaking

does not properly address the concerns of the competent authority,

the competent authority may, in exceptional circumstances, propose

that the undertaking replace a subset of the parameters used in the

standard formula calculation by parameters specific to that

undertaking when calculating the long-term business of insurance,

general business of insurance and health underwriting risk

modules, as set out in Article 110 of the Solvency II Directive, or in

the cases referred to in Article 37 of the Solvency II Directive, to

set a capital add-on to the Solvency Capital Requirement of that

subsidiary undertaking.

(4)

In the cases referred to in sub-regulations (2) and (3)

(a) the competent authority shall discuss its proposal

within the college of supervisors and communicate the

grounds for such proposals to both the subsidiary

undertaking and the college of supervisors; and

(b) the college of supervisors shall do everything within

its power to reach an agreement on the proposal of the

competent authority or on other possible measures and

the agreement reached shall be recognised as

determinative and shall be applied by the competent

authority and by the European regulatory authorities

concerned.

(5) Where the competent authority and the group supervisor

disagree, any one of them may, within one month from the proposal

of the competent authority and before an agreement has been

reached within the college of supervisors in accordance with sub-

regulation (4), refer the matter to EIOPA and request its assistance

in accordance with Article 19 of Regulation (EU) No 1094/2010.

(6)

In the circumstances referred to in sub-regulation (5)

(a) the competent authority shall defer its decision and

await any decision that EIOPA may take in accordance

with Article 19 of that Regulation;

(b) the competent authority shall take its decision in

conformity with EIOPA’s decision and shall state the

full reasons on which it is based; and

(c) the decision taken by the competent authority shall be

submitted to the subsidiary undertaking and to the

college of supervisors.

(7) In the cases referred to in Article 238(2) and (3) of the

Solvency II Directive, where the competent authority is the group

supervisor of a group, and where the competent authority and the

European regulatory authority having authorised the subsidiary

undertaking disagree, the competent authority may, within one

month from the proposal and before an agreement has been reached

within the college of supervisors in accordance with Article 238(4)

of the Solvency II Directive, refer the matter to EIOPA and request

its assistance in accordance with Article 19 of Regulation (EU) No

1094/2010.

(1) Where the subsidiary undertaking is an authorised

insurance undertaking or an authorised reinsurance undertaking, in

the event of non-compliance with the Solvency Capital

Requirement and without prejudice to article 16 of the Act, the

competent authority shall, without delay, forward to the college of

supervisors the recovery plan submitted by the subsidiary

undertaking, in order to achieve, within six months from the

observation of non-compliance with the Solvency Capital

Requirement, the re-establishment of the level of eligible own

funds or the reduction of its risk profile to ensure compliance with

the Solvency Capital Requirement.

(2) The college of supervisors shall do everything within its

power to reach an agreement on the proposal of the competent

authority in accordance with sub-regulation (1), regarding the

approval of the recovery plan within four months from the date on

which non-compliance with the Solvency Capital Requirement was

first observed.

(3) In the absence of an agreement in accordance with sub-

regulation (2), the competent authority shall decide whether the

recovery plan should be approved, taking due account of the views

and reservations of the other European regulatory authorities within

the college of supervisors.

(4) Where the subsidiary undertaking is an authorised

insurance undertaking or an authorised reinsurance undertaking and

the competent authority identifies, in accordance with Article 136

of the Solvency II Directive, deteriorating financial conditions

(a) it shall notify the college of supervisors without delay

of the proposed measures to be taken, provided that, in

emergency situations, the measures to be taken shall

be discussed within the college of supervisors;

(b) the college of supervisors shall do everything within

its power to reach an agreement on the proposed

measures to be taken within one month of notification;

and

(c) in the absence of such agreement referred to in

paragraph (b), the competent authority shall decide

whether the proposed measures shall be approved,

taking due account of the views and reservations of the

other European regulatory authorities within the

college of supervisors.

(5) In the event of non-compliance with the Minimum Capital

Requirement by a subsidiary undertaking, which is an authorised

insurance or reinsurance undertaking and without prejudice to

article 18 of the Act, the competent authority shall

(a) without delay, forward to the college of supervisors

the short-term finance scheme submitted to it by the

subsidiary undertaking, in order to achieve, within

three months from the date on which non-compliance

with the Minimum Capital Requirement was first

observed, the re-establishment of the level of eligible

own funds covering the Minimum Capital

Requirement or the reduction of its risk profile to

ensure compliance with the Minimum Capital

Requirement; and

(b) shall also inform the college of supervisors of any

measures taken to enforce the Minimum Capital

Requirement at the level of the subsidiary.

(6) The competent authority as one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor,

or the group supervisor, as applicable, may refer the matter to

EIOPA and request its assistance in accordance with Article 19 of

Regulation (EU) No 1094/2010 where they disagree regarding

either of the following

(a) on the approval of the recovery plan, including any

extension of the recovery period, within the four-

month period referred to in sub-regulation (2); or

(b) on the approval of the proposed measures, within the

one-month period referred to in sub-regulation (4)(b).

(7) Where the competent authority is the group supervisor of a

group, in the circumstances referred to in Article 239 of the

Solvency II Directive, when the European regulatory authority

having authorised the subsidiary undertaking and the competent

authority disagree, any one of them may refer the matter to EIOPA

and request its assistance in accordance with Article 19 of

Regulation (EU) No 1094/2010, regarding either of the following

(a) on the approval of the recovery plan, including any

extension of the recovery period, within the four-

month period referred to in Article 239(1) of the

Solvency II Directive; or

(b) on the approval of the proposed measures, within the

one-month period referred to in Article 239 (2) of the

Solvency II Directive.

(8)

The matter shall not be referred to EIOPA

(a) after the end of the four-month or the one-month

period respectively referred to in sub-regulation (7)(a)

and (b);

(b) after an agreement has been reached within the college

of supervisors in accordance with Article 239(1) and

(2) of the Solvency II Directive; and

(c) in the case of emergency situations as referred to in

Article 239(2) of the Solvency II Directive.

(9) Where the subsidiary undertaking is an authorised

insurance undertaking or an authorised reinsurance undertaking the

competent authority shall

(a) defer its decision and await any decision that EIOPA

may take in accordance with Article 19(3) of

Regulation (EU) No 1094/2010;

(b) take its final decision in conformity with EIOPA’s

decision, and state the full reasons on which that

decision is based, which decision shall be recognised

as determinative and shall be applied by the European

regulatory authorities concerned; and

(c) submit the decision referred to in paragraph (b) to the

subsidiary undertaking and to the college of

supervisors.

(1) Regulations 29 and 30 shall no longer be applicable

where

(a) the condition referred to in Article 236(a) of the

Solvency II Directive is no longer complied with;

(b) the condition referred to in Article 236(b) of the

Solvency II Directive is no longer complied with and

the group does not restore compliance with this

condition in an appropriate period of time; or

(c) the conditions referred to in Article 236(c) and (d) of

the Solvency II Directive are no longer complied with.

(2) In the case referred to in sub-regulation (1)(a), where the

competent authority is the group supervisor of a group, and it

decides, after consulting the college of supervisors, to no longer

include the subsidiary undertaking in the group supervision it

carries out, it shall immediately inform the European regulatory

authority concerned and the parent undertaking.

(3) For the purposes of Article 236(b), (c) and (d) of the

Solvency II Directive, the parent undertaking shall

(a) be responsible for ensuring that the conditions are

complied with on an ongoing basis;

(b) in the event of non-compliance, it shall inform,

without delay, the competent authority, where the

authority is the group supervisor of a group, and the

European regulatory authority of the subsidiary

undertaking concerned; and

(c) present a plan to restore compliance within an

appropriate period of time to the competent authority,

where the authority is the group supervisor of a group,

and to the European regulatory authority of the

subsidiary undertaking concerned.

(4) Without prejudice to sub-regulation (3), where the

competent authority is the group supervisor of a group, the

authority shall

(a) verify at least annually, on its own initiative, that the

conditions referred to in regulation 27(2)(b), (c) and

(d) continue to be complied with; and

(b) also perform such verification upon request from the

European regulatory authority concerned, where the

latter has significant concerns related to the ongoing

compliance with those conditions.

(5) Where the verification performed identifies weaknesses,

and where the competent authority is the group supervisor of a

group, the authority shall require the parent undertaking to present

a plan to restore compliance within an appropriate period of time.

(6) Where the competent authority is the group supervisor of a

group, and after consulting the college of supervisors, the authority

determines that the plan referred to in sub-regulations (3)(b) or (5),

is insufficient or subsequently that it is not being implemented

within the agreed period of time, the competent authority shall

conclude that the conditions referred to in regulation 27(2) are no

longer being complied with and it shall immediately inform the

European regulatory authority concerned.

(7) Where the parent undertaking submits a new application

and obtains a favourable decision in accordance with the procedure

set out in regulation 27, the provisions of regulations 29 and 30

shall apply again.

Articles 236 to 242 of the Solvency II Directive shall apply

mutatis mutandis to an authorised insurance undertaking, an

authorised reinsurance undertakings, a European insurance

undertaking or a European reinsurance undertaking, which is a

subsidiary undertaking of an insurance holding company or a

mixed financial holding company.

(1) Supervision of the risk concentration at group level

and supervision of intra-group transactions shall be exercised in

accordance with sub-regulations (2) and (3), regulation 34 and

Articles 247 to 259 of the Solvency II Directive.

(2) Subject to sub-regulation (4), an authorised insurance

undertaking, an authorised reinsurance undertaking, an insurance

holding company and a mixed financial holding company, shall

report, on a regular basis, and at least annually to the group

supervisor

(a) any significant risk concentration at the level of the

group, unless regulation 5(b) applies;

(b) all significant intra-group transactions by authorised

insurance undertakings, authorised reinsurance

undertakings, European insurance undertakings and

European reinsurance undertakings, within a group,

including those performed with a natural person with

close links to an undertaking in the group, unless

regulation 5(b) applies; in addition, where an intra-

group transaction is very significant, it shall be

reported as soon as practicable.

(3) The risk concentrations and intra-group transactions

referred to in sub-regulation (2), shall be subject to supervisory

review by the group supervisor.

(4) The necessary information referred to in sub-regulation

(2)(a) and (b) shall be submitted to the group supervisor

(a) by the authorised insurance undertaking or authorised

reinsurance undertaking which is at the head of the

group; or

(b) where the group is not headed by an authorised

insurance undertaking or an authorised reinsurance

undertaking, by the insurance holding company, or by

the mixed financial holding company, or by the

authorised

insurance

undertaking,

authorised

reinsurance

undertaking,

European

insurance

undertaking or European reinsurance undertaking in

the group, as may be identified by the group

supervisor, after consulting the competent authority,

the other European regulatory authorities concerned

and the group.

(5) Where the competent authority is the group supervisor of a

group, the authority shall

(a) carry out a supervisory review of the

risk

concentrations and intra-group transactions;

(b) identify, taking into account the specific group and

risk management structure of the group, the type of

risks and intra-group transactions which insurance and

reinsurance undertakings, in the group, shall report to

the competent authority in all circumstances;

(c) impose appropriate thresholds based on solvency

capital requirements, technical provisions, or both, in

order to identify which significant risk concentrations

and significant intra-group transactions shall be

reported;

(d) where the group is not headed by an insurance or

reinsurance undertaking, identify the insurance

holding company, mixed financial holding company,

authorised

insurance

undertaking,

authorised

reinsurance

undertaking,

European

insurance

undertaking or European reinsurance undertaking, in a

group, responsible for submitting the information

required under Articles 244(2) and 245(2) of the

Solvency II Directive;

(e) review the risk concentrations of a group and intra-

group transactions at group level, and in particular

monitor the possible risk of contagion within the

group, the risk of a conflict of interests and the level or

volume of risks.

(6) The competent authority shall consult the group and the

other European regulatory authorities concerned in the supervision

of the group whilst carrying out the activities referred to in sub-

regulation (5)(b) to (d).

(7) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor,

and the competent authority is consulted by the group supervisor in

relation to the supervision of risk concentration at group level or

the reporting of intra-group transactions, the competent authority

shall, when giving its opinion about the type of risks to be reported,

take into account the specific group and risk management structure

of the group.

(1) The requirements set out in Articles 40 to 49 of the

Solvency II Directive shall apply mutatis mutandis, at the level of

the group.

(2) Without prejudice to sub-regulation (1), the risk

management and internal control systems and reporting procedures

shall be implemented consistently in all the undertakings included

in the scope of group supervision pursuant to regulation 3(2)(a) and

(b) so that those systems and reporting procedures can be

controlled at the level of the group.

(3) Without prejudice to sub-regulation (1), the group internal

control mechanisms shall include at least the following

(a) adequate mechanisms as regards group solvency to

identify and measure all material risks incurred and to

appropriately relate eligible own funds to risks;

(b) sound reporting and accounting procedures to monitor

and manage the intra-group transactions and the risk

concentration.

(4) The systems and reporting procedures referred to in sub-

regulations (1) to (3) shall be subject to supervisory review by the

group supervisor or in accordance with the rules laid down in

regulations 35 to 43.

(5) A participating insurance undertaking or reinsurance

undertaking, or the insurance holding company or the mixed

financial holding company, shall undertake at the level of the group

the assessment required by Article 45 of the Solvency II Directive.

The own-risk and solvency assessment conducted at group level

shall be subject to supervisory review by the group supervisor in

accordance with regulations 35 to 43.

(6) Where the calculation of the solvency at the level of the

group is carried out in accordance with method 1, as referred to in

regulation 22, the participating insurance or reinsurance

undertaking, or the insurance holding company or the mixed

financial holding company, shall provide to the group supervisor a

proper understanding of the difference between the sum of the

Solvency Capital Requirements of all the related insurance or

reinsurance undertakings of the group and the group consolidated

Solvency Capital Requirement.

(7) The participating insurance or reinsurance undertaking, the

i nsurance ho ldi ng com pany or the m ixed financial holding

company, may, subject to the agreement of the group supervisor,

undertake any assessments required pursuant to Article 45 of the

Solvency II Directive at the level of the group and at the level of

any subsidiary undertaking in the group at the same time, and may

produce a single document covering all the assessments.

(8) Where the group exercises the option provided in sub-

regulation (7), it shall submit the document to all the European

regulatory authorities concerned at the same time, and the exercise

of that option shall not exempt the subsidiaries concerned from the

obligation to ensure that the requirements of Article 45 of the

Solvency II Directive are met.

(9) Where the competent authority is the group supervisor of a

group, the authority shall

(a) review the risk management and internal control

systems and reporting procedures implemented by the

group in accordance with Article 246(1) and (2) of the

Solvency II Directive;

(b) review the own-risk and solvency assessment

conducted at group level by the group; and

(c) consult the members of the college of supervisors and

duly take into account their views and reservations

before granting an agreement to a request from a

participating insurance or reinsurance undertaking,

insurance holding company or mixed financial holding

company to undertake its own-risk and solvency

assessment in accordance with Article 45 of the

Solvency II Directive, at the level of the group and at

the level of any subsidiary in the group at the same

time, and produce a single document covering all such

assessments.

PART III

Measures to facilitate group supervision

(1) The group supervisor designated from among the

competent authority and the European regulatory authorities

concerned, shall be responsible for coordination and exercise of

group supervision.

(2) Where the competent authority is the supervisor of all the

insurance undertakings and reinsurance undertakings in a group,

the competent authority shall be the group supervisor of the group.

(3) In all other cases and subject to Article 247(3) of the

Solvency II Directive

(a) where the group is headed by an authorised insurance

undertaking or an authorised reinsurance undertaking,

the competent authority shall be the group supervisor

of the group;

(b) where the group is not headed by an insurance or

reinsurance undertaking, the competent authority is the

group supervisor of a group in any of the following

circumstances

(i)

where an insurance undertaking or reinsurance

undertaking has an insurance holding company

or a mixed financial holding company as a

parent, and the competent authority has

authorised that insurance undertaking or

reinsurance undertaking;

(ii) where the group contains two or more insurance

undertakings or reinsurance undertakings which

have their head offices in Member States or EEA

States, and such undertakings have the same

insurance holding company or mixed financial

holding company as a parent, and one of such

undertakings has been authorised by the

competent authority, and the insurance holding

company or mixed financial holding company

has its head office in Malta;

(iii) where the group is headed by two or more

insurance holding companies or mixed financial

holding companies which have their head offices

in different Member States or EEA States, and

there is an insurance undertaking or reinsurance

undertaking in the group in each of those

Member States or EEA States, and the competent

authority has authorised the insurance

undertaking or reinsurance undertaking with the

largest balance sheet total;

(iv) where two or more insurance undertakings or

reinsurance undertakings which have their head

offices in Member States or EEA States, have

the same insurance holding company or mixed

financial holding company as their parent, and

none of those undertakings has been authorised

in the Member State or EEA State in which the

insurance holding company or mixed financial

holding company has its head office, and the

competent authority has authorised the insurance

undertaking or reinsurance undertaking with the

largest balance sheet total; or

(v) where the group is a group without a parent

undertaking, or in any circumstances not

referred to in sub-paragraphs (i) to (iv), and the

competent authority has authorised the insurance

undertaking or reinsurance undertaking with the

largest balance sheet total.

(4) Where another European regulatory authority has been

designated as the group supervisor in accordance with Article 247

of the Solvency II Directive, the competent authority shall

recognise that supervisory authority as the group supervisor of the

group.

(1) Notwithstanding regulation 35

(a) the competent authority is the group supervisor of a

group, if all the supervisory authorities concerned take

a joint decision that the competent authority shall be

the group supervisor; and

(b) the competent authority must recognise a joint

decision taken by all the supervisory authorities

concerned that a supervisory authority other than the

competent authority shall be the group supervisor of a

group.

(2) The competent authority may request the other supervisory

authorities concerned to consider whether

(a) the criteria specified in Article 247(2) of the Solvency

II Directive are appropriate for determining which

supervisory authority shall be the group supervisor;

and

(b) a supervisory authority other than the supervisory

authority satisfying those criteria shall be the group

supervisor.

(3) The competent authority may make a request referred to in

sub-regulation (2) not more than once a year.

(4) Where the supervisory authorities responsible for the

supervision of an insurance or reinsurance undertaking are

considering, at the request of the competent authority or of another

supervisory authority, whether the criteria are appropriate or

whether a particular supervisory authority shall be the group

supervisor

(a) the competent authority shall do everything in its

power to reach a joint decision on the request within a

period of three months commencing on the date of the

request;

(b) the competent authority shall permit the group

concerned to give its opinion on the request;

(c) the competent authority may refer the matter to

EIOPA, in accordance with Article 19 of Regulation

(EU) No 1094/2010, within a period of three months

commencing with the date of the request;

(d) where the matter is referred to EIOPA, the competent

authority shall take a joint decision in accordance with

any decision taken by EIOPA, and where the

competent authority is designated as group supervisor

of a group, the competent authority shall submit the

joint decision to the group and to the college of

supervisors stating the full reasons;

(e) where the matter is not referred to EIOPA or EIOPA

takes no such decision on such a referral, the

competent authority may take a joint decision with the

other European regulatory authorities that

(i)

the criteria referred to in Article 247(2) of the

Solvency II Directive are inappropriate, taking

into account the structure of the group and the

relative importance of the activities of

authorised insurance undertakings, authorised

reinsurance undertakings, European insurance

undertakings,

and

European

reinsurance

undertakings, in the different countries; and

(ii) a supervisory authority, other than the

supervisory authority satisfying the criteria,

shall be the group supervisor; and

(f)

where the joint decision designates the competent

authority as the group supervisor of a group, the

competent authority shall submit the joint decision to

the group and to the college of supervisors stating the

full reasons.

(5) In the absence of a joint decision referred to in sub-

regulation (4), the task of the group supervisor shall be exercised

by the supervisory authority identified in accordance with Article

247(2) of the Solvency II Directive.

(1) Where the competent authority is the group supervisor

of a group, the authority shall, in order to facilitate the exercise of

the group supervision tasks, carry out the functions referred to in

article 32B(3) of the Act.

(2) In order to facilitate the exercise of the tasks referred to in

sub-regulation (1), the competent authority shall establish and chair

a college of supervisors comprising

(a) the competent authority;

(b) the supervisory authorities of the Member States or

EEA States in which the head office of every

subsidiary undertaking in the group is situated; and

(c) EIOPA.

(3)

The competent authority as group supervisor

(a) shall permit the European regulatory authorities of

significant branches and related undertakings to

participate in the college of supervisors, provided that

their participation is limited to achieving an efficient

exchange of information;

(b) shall ensure that the processes for cooperation,

exchange of information and consultation between the

competent authority and the other European regulatory

authorities that are members of the college of

supervisors, are effectively applied in accordance with

Articles 212 to 266 of the Solvency II Directive, with a

view to promoting the convergence of their respective

decisions and activities;

(c) may agree with the other European regulatory

authorities concerned that some activities of the

college of supervisors be carried out by a reduced

number of European regulatory authorities where the

effective functioning of the college of supervisors

requires it;

(d) shall, without prejudice to any measure adopted

pursuant to the Solvency II Directive, conclude

coordination arrangements with the other European

regulatory authorities for the establishment and

functioning of the college of supervisors.

(4) The coordination arrangements referred to in sub-regulation

(3)(d)

(a) shall specify the procedures for

(i)

the decision-making process among the

supervisory authorities concerned in accordance

with Articles 231, 232 and 247 of the Solvency

II Directive;

(ii) consultation under Articles 218(5) and 248(4) of

the Solvency II Directive; and

(b) may, in addition, set out procedures for

(i)

consultation among the supervisory authorities

concerned, in particular as referred to in Articles

213 to 217, 219 to 221, 227, 244 to 246, 250,

256, 260 and 262 of the Solvency II Directive;

(ii) cooperation with other supervisory authorities.

(5) Without prejudice to the rights and duties allocated by the

Solvency II Directive, the coordination arrangements may entrust

additional tasks to

(a) the competent authority

(i) where it is the group supervisor of a group; or

(ii) where it is one of the authorities responsible for

the supervision of an individual insurance or

reinsurance undertaking in a group and is not the

group supervisor; or

(b) EIOPA,

and, in each case, where this would result in the more efficient

supervision of the group and would not impair the supervisory

activities of the members of the college of supervisors in respect of

their individual responsibilities.

(6) Where diverging views concerning the coordination

arrangements arise

(a) any member of the college of supervisors may refer the

matter to EIOPA and request its assistance in

accordance with Article 19 of Regulation (EU) No

1094/2010; and

(b) where the competent authority is the group supervisor

of a group, the authority shall

(i) where it has received advice from EIOPA, after

consulting the European regulatory authorities

concerned, duly consider any advice produced

by EIOPA within two months of the receipt

thereof, before taking its final decision;

(ii) take its final decision in conformity with

EIOPA’s decision;

(iii) ensure that the decision states the full reasons

and contains an explanation of any significant

deviation from any advice given by EIOPA;

(iv) transmit that decision to the European regulatory

authorities concerned.

(7) The competent authority as group supervisor, shall send

EIOPA any information on the functioning of the college of

supervisors and any difficulties encountered that are relevant for

EIOPA’s reviews of the operational functioning of colleges of

supervisors.

(1) Where an authorised insurance undertaking, an

authorised reinsurance undertaking, a European insurance

undertaking or a European reinsurance undertaking and either a

credit institution as defined in Directive 2013/36/EU of the

European Parliament and of the Council of 26 June 2013 on access

to the activity of credit institutions and the prudential supervision

of credit institutions and investment firms, or an investment firm as

defined in Directive 2004/39/EC, or both, are directly or indirectly

related or have a common participating undertaking, the competent

authority or the European regulatory authorities concerned and the

authorities responsible for the supervision of those credit

institutions or investment firms shall cooperate closely.

(2) Without prejudice to their respective responsibilities, those

authorities referred to in sub-regulation (1) shall provide one

another with any information likely to simplify their task, in

particular as set out in Title III of the Solvency II Directive.

(1) The competent authority shall have access to any

information relevant for the purpose of that supervision regardless

of the nature of the undertaking concerned and Article 35(1) to (5)

of the Solvency II Directive shall apply mutatis mutandis.

(2) Where the competent authority has requested the

information from all the European regulatory authorities in the

group, and none of them has provided such information to the

competent authority, within a reasonable period of time, the

authority may address the undertakings in the group directly to

obtain the necessary information.

(3) Where the competent authority is the group supervisor of a

group, the authority may

(a) limit regular supervisory reporting with a frequency

shorter than one year at the level of the group where

all authorised insurance undertakings, authorised

reinsurance

undertakings,

European

insurance

undertakings and European reinsurance undertakings

within the group, benefit from the limitation in

accordance with Article 35(6) of the Solvency II

Directive taking into account the nature, scale and

complexity of the risks inherent in the business of the

group;

(b) exempt from reporting on an item-by-item basis at the

level of the group where all authorised insurance

undertakings, authorised reinsurance undertakings,

European insurance undertakings and European

reinsurance undertakings within the group, benefit

from the exemption in accordance with Article 35(7)

of the Solvency II Directive, taking into account the

nature, scale and complexity of the risks inherent in

the business of the group and the objective of financial

stability.

(1) A participating insurance and reinsurance undertaking,

insurance holding company and a mixed financial holding company

shall disclose publicly, on an annual basis, a report on the solvency

and financial condition at the level of the group, and Articles 51,

53, 54 and 55 of the Solvency II Directive shall apply mutatis

mutandis.

(2) A participating insurance or reinsurance undertaking, an

insurance holding company or a mixed financial holding company

referred to in sub-regulation (1) may, subject to the agreement of

the group supervisor, provide a single report on its solvency and

financial condition which shall comprise the following

(a) the information at the level of the group to be

disclosed in accordance with sub-regulation (1); and

(b) the information for any of the subsidiaries within the

group, which information must be individually

identifiable and must be disclosed in accordance with

Articles 51, 53, 54 and 55 of the Solvency II Directive.

(3) Before an agreement is granted by the group supervisor in

accordance with sub-regulation (2), the competent authority, when

consulted by the group supervisor, may submit its views or make

reservations.

(4) Where a subsidiary undertaking is an authorised insurance

undertaking or authorised reinsurance undertaking, and such

undertaking fails to include information which the competent

authority requires comparable undertakings to provide, and where

the omission is material, the competent authority shall have the

power to require the subsidiary undertaking concerned to disclose

the necessary additional information.

(5) Where the competent authority is the group supervisor of a

group and the authority has received a request from a participating

insurance and reinsurance undertaking, an insurance holding

c o m p a n y o r a m i x e d f i n a n c i a l h o l d i n g c o m p a n y, f o r s u c h

undertaking or company to be able to provide a single solvency and

financial condition report, the competent authority shall consult

and duly take into account any views and reservations of the other

members of the college of supervisors, before agreeing to the

request.

An insurance and reinsurance undertaking, an insurance

holding company and a mixed financial holding company shall

disclose publicly, at the level of the group, on an annual basis, the

legal structure and the governance and organisational structure,

including a description of all subsidiary undertakings, material

related undertakings and significant branches belonging to the

group.

The competent authority shall require that all persons who

effectively run the insurance holding company or the mixed

financial holding company whose head office is in Malta, are fit

and proper to perform their duties and Article 18I(2)(a) of the Act

shall apply mutatis mutandis.

(1) Where authorised insurance undertakings, authorised

reinsurance undertakings, European insurance undertakings and

European reinsurance undertakings in a group, do not comply with

the requirements provided for in Articles 218 to 246 of the

Solvency II Directive, or where the requirements are met but

solvency may nevertheless be jeopardised or where the intra-group

transactions or the risk concentrations are a threat to the financial

position of such undertakings, measures necessary to rectify the

situation as soon as possible shall be adopted

(a) where the competent authority is the group supervisor

of a group, by

(i)

the competent authority with respect to

(aa)

insurance holding companies and mixed

financial holding companies; and

(bb)

authorised insurance undertakings and

authorised reinsurance undertakings;

(ii) the European regulatory authorities with respect

to European insurance undertakings and

European reinsurance undertakings;

(b) where the competent authority is one of the authorities

responsible for the supervision of an individual

insurance or reinsurance undertaking in a group and is

not the group supervisor, by

(i)

the group supervisor with respect to insurance

holding companies and mixed financial holding

companies; and

(ii) the competent authority, with respect to

authorised

insurance

undertakings

and

authorised reinsurance undertakings.

(2) Where in the case referred to in sub-regulation (1)(a)(i), the

competent authority is not one of the supervisory authorities of the

Member State in which the insurance holding company or mixed

financial holding company has its head office, the competent

a ut h o r it y s ha l l i n fo r m t he E ur o p e a n r e g u la t or y a u t ho r i ti e s

concerned of its findings with a view to enabling them to take the

necessary measures.

(3) In the case referred to in sub-regulation (1)(a)(ii), the

competent authority shall inform the European regulatory

authorities concerned of its findings with a view to enabling them

to take the necessary measures.

(4) Without prejudice to regulation 49, the competent authority

shall determine the measures which may be taken with respect to

insurance holding companies and mixed financial holding

companies, whose head office is in Malta.

(5) Where the competent authority is the group supervisor of a

group, or where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group and is not the group supervisor,

the competent authority shall, where appropriate, coordinate any

measures it may take, with the European regulatory authorities

concerned or with the group supervisor, as applicable.

PART IV

Third countries

(1) In the case referred to in regulation 3(2)(c), the

competent authority shall verify whether an authorised insurance

undertaking and authorised reinsurance undertaking, the parent

undertaking of which has its head office in a third country is

subject to supervision, by an overseas regulatory authority which is

equivalent to that set out in Articles 212 to 266 of the Solvency II

Directive, on the supervision at the level of the group of insurance

and reinsurance undertakings referred to in Article 213(a) and (b)

of the Solvency II Directive.

(2) Where no delegated act has been adopted in accordance

with Articles 260(2), (3) and (5) of the Solvency II Directive, the

verification referred to in sub-regulation (1), shall be carried out by

the competent authority, which would be the group supervisor if the

criteria set out in Article 247(2) of the Solvency II Directive were

to apply (the "acting group supervisor"), at the request of the parent

undertaking or of any of the authorised insurance undertakings,

authorised reinsurance undertakings, European insurance

undertakings or European reinsurance undertakings, or on its own

initiative.

(3) Where the competent authority, is the acting group

supervisor, the authority

(a) shall, with the assistance of EIOPA, consult the

supervisory authorities concerned before taking a

decision on equivalence;

(b) shall, where applicable, take a decision on equivalence

in accordance with the criteria set out in any delegated

act adopted by the European Commission pursuant to

Article 260(2) of the Solvency II Directive;

(c) shall not take any decision in relation to a third

country that is in opposition to any previous decision

taken vis-à-vis that third country, except where it is

necessary to take into account significant changes to

the supervisory regime laid down in Title I of the

Solvency II Directive and to the supervisory regime in

the third country; and

(d) shall notify its decision to the supervisory authorities

concerned.

(4) Where the competent authority is not the acting group

supervisor and disagrees with the decision on equivalence taken by

the acting group supervisor in accordance with the third sub-

paragraph of Article 260 of the Solvency II Directive, it may refer

the matter to EIOPA and request its assistance in accordance with

Article 19 of Regulation (EU) No 1094/2010, within three months

after notification of that decision by the acting group supervisor.

(5) Where a delegated act determining that the prudential

regime of a third country is temporarily equivalent, is adopted in

accordance with Article 260(5) of the Solvency II Directive, the

competent authority shall apply regulation 45, unless there is an

authorised insurance undertaking, an authorised reinsurance

undertaking, a European insurance undertaking, or a European

reinsurance undertaking, in the group, which has a balance sheet

total that exceeds the balance sheet total of the parent undertaking

situated in a third country. In that case, the task of the group

supervisor shall be exercised by the acting group supervisor.

(1) In the event of equivalent supervision referred to in

Article 260 of the Solvency II Directive, the competent authority

shall rely on the equivalent group supervision exercised by the

overseas regulatory authorities, in accordance with sub-regulation

(2).

(2) Articles 247 to 258 of the Solvency II Directive shall apply

mutatis mutandis in relation to the cooperation with the overseas

regulatory authorities.

(1) Where regulation 3(2)(c) applies, in the absence of

equivalent supervision referred to in Article 260 of the Solvency II

Directive, or where the competent authority as the acting group

supervisor does not apply Article 261 of the Solvency II Directive

in the event of temporary equivalence in accordance with Article

260(7) of the Solvency II Directive, the competent authority shall

apply either of the following to authorised insurance undertakings

and authorised reinsurance undertakings

(a) Articles 218 to 235, and Articles 244 to 258 of the

Solvency II Directive, mutatis mutandis; or

(b) any other method which

(i)

ensures appropriate supervision of the insurance

and reinsurance undertakings in a group;

(ii) allows the objectives of the group supervision as

defined in Title III of the Solvency II Directive

to be achieved.

(2) The general principles and methods set out in Articles 218

to 258 of the Solvency II Directive shall apply at the level of the

insurance holding company, mixed financial holding company,

third-country insurance undertaking or third-country reinsurance

undertaking.

(3) For the sole purpose of the group solvency calculation, the

parent undertaking shall be treated as if it were an insurance or

reinsurance undertaking subject to the same conditions as laid

down in Articles 87 to 99 of the Solvency II Directive as regards

the own funds eligible for the Solvency Capital Requirement, and

to either of the following

(a) a Solvency Capital Requirement determined in

accordance with the principles of Article 226 of the

Solvency II Directive where the parent undertaking is

an insurance holding company or mixed financial

holding company; or

(b) a Solvency Capital Requirement determined in

accordance with the principles of Article 227 of the

Solvency II Directive, where the parent undertaking is

a third-country insurance undertaking or a third-

country reinsurance undertaking.

(4) The reference in sub-regulation (1)(b) to any other method,

may include

(a) requiring the establishment of an insurance holding

company which has its head office in a Member State

or EEA State, or a mixed financial holding company

which has its head office in a Member State or EEA

State; and

(b) applying Articles 212 to 266 of the Solvency II

Directive to the insurance and reinsurance

undertakings in the group headed by that insurance

holding company or mixed financial holding company.

(5) Before applying any other method under sub-regulation

(1)(b), the competent authority shall

(a) where it is the group supervisor, consult the other

supervisory authorities concerned in the supervision of

the group;

(b) where it is one of the authorities responsible for the

supervision of an individual insurance or reinsurance

undertaking in a group and is not the group supervisor,

agree the method with the group supervisor.

(6) Where the competent authority is the group supervisor, and

where the competent authority applies any other method under sub-

regulation (1)(b), it shall notify the European Commission and the

other supervisory authorities concerned.

(1) Subject to sub-regulation (2), where the parent

undertaking referred to in regulation 3(2)(c) is itself a subsidiary

undertaking of

(a) an insurance holding company which has its head

office in a third country;

(b) a mixed financial holding company which has its head

office in a third country;

(c) a third-country insurance undertaking; or

(d) a third-country reinsurance undertaking,

the verification provided for in regulation 44 shall apply only at the

level of the ultimate parent undertaking which is a third-country

insurance holding company, a third-country mixed financial

holding company, a third-country insurance undertaking or a third-

country reinsurance undertaking.

(2) The competent authority, as the acting group supervisor,

may, however, in the absence of equivalent supervision referred to

in Article 260 of the Solvency II Directive, carry out a new

verification at a lower level where a parent undertaking of an

authorised insurance undertaking or an authorised reinsurance

undertaking exists, whether at the level of a third-country insurance

holding company, a third country mixed financial holding company,

a third-country insurance undertaking or a third-country

reinsurance undertaking.

(3) In such a case referred to in sub-regulation (2), where the

competent authority is the acting group supervisor in accordance

with regulation 44(2), it shall explain its decision to the group.

(4) Article 262 of the Solvency II Directive shall apply mutatis

mutandis.

PART V

Mixed-activity insurance holding companies

(1) In the case referred to in regulation 3(2)(d), where the

parent undertaking of one or more insurance undertakings or

reinsurance undertakings is a mixed-activity insurance holding

company and the competent authority supervises one or more of the

insurance undertakings or reinsurance undertakings in the group,

the competent authority shall exercise general supervision over

transactions between

(a) the mixed-activity holding company and its related

undertakings; and

(b) the authorised insurance undertakings or authorised

reinsurance undertakings supervised by the competent

authority.

(2) Articles 245, 249 to 255 and 258 of the Solvency II

Directive shall apply mutatis mutandis.

PART VI

General provisions

(1) Any insurance holding company and mixed financial

holding company, or any person effectively managing those

companies, who contravenes any of the provisions of these

regulations, applicable to them, shall be liable to an administrative

penalty which may not be greater than a financial penalty of one

hundred and fifty thousand euro (€150,000) in respect of each

infringement or failure to comply, as the case may be, and, where

such infringement or failure to comply continues, a further penalty

not exceeding one hundred and sixteen euro (€116) for each day

during which the infringement or failure to comply continues

Provided further that a penalty imposed under this

regulation, whether in the form of a fixed amount, a daily penalty,

or both, may, in no case, exceed one hundred and fifty thousand

euro (€150,000).

(2) The competent authority shall cooperate closely with the

European regulatory authorities concerned, to ensure that the

sanctions or measures referred to in Article 258(3) of the Solvency

I I D i r e c t i v e a r e e ff e c t i v e , i n p a r t i c u l a r w h e r e t h e c e n t r a l

administration or main establishment of an insurance holding

company or mixed financial holding company is not located in

Malta.

(1) For the better carrying out of these regulations, the

competent authority may, from time to time, issue Insurance Rules.

(2) Such Insurance Rules may contain such incidental,

supplementary and consequential provisions as appear to the

competent authority to be expedient for the purposes of these

regulations.