← Ireland

S.I. No. 485/2015 - European Union (Insurance and Reinsurance) Regulations 2015.

S.I. No. 485/2015 - European Union (Insurance and Reinsurance) Regulations 2015. Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Ga

Article 4

(5)and
(21)of Directive 2006/48/EC respectively; (b) an insurance undertaking or a reinsurance undertaking, or an insurance holding company within the meaning of Regulation 215
(1); (
  1. c)an investment firm; (
  2. d)a mixed financial holding company within the meaning of Article 2
(15)of Directive 2002/87/EC; “financial year”, in relation to an undertaking, means the period in respect of which the accounts of the undertaking are made up, whether the period is a year or not; “function”, within a system of governance, means an internal capacity to undertake practical tasks and includes the risk management function, the compliance function, the internal audit function and the actuarial function; “group” has the meaning given by Regulation 215
(1); “home Member State” means— (
  1. a)for non-life insurance, the Member State in which the head office of the insurance undertaking covering the risk is situated; (
  2. b)for life insurance, the Member State in which the head office of the insurance undertaking covering the commitment is situated; (
  3. c)for reinsurance, the Member State in which the head office of the reinsurance undertaking is situated; “host Member State” means the Member State, other than the home Member State, in which an insurance undertaking or reinsurance undertaking has a branch or provides services; and for this purpose, in relation to life and non-life insurance, the Member State in which an insurance undertaking “provides services” means, respectively, the Member State of the commitment or the Member State in which the risk is situated, where that commitment or risk is covered by the insurance undertaking, or a branch, situated in another Member State; “industrial assurance business” has the meaning assigned to it by section 3 of the Insurance Act 1936 (No. 45 of 1936); “the Insurance Acts” means the Insurance Acts 1909 to 2009, regulations made under those Acts and regulations relating to insurance made under the European Communities Act 1972 (No. 27 of 1972); “insurance undertaking” means a person who has received authorisation to carry on non-life insurance or life insurance and references to “non-life insurance undertaking” and “life insurance undertaking” shall be construed accordingly; “intra-group transaction” means any transaction by which an insurance undertaking or 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 that group by close links, for the fulfilment of an obligation, whether or not contractual, and whether or not for payment; “investment firm” has the meaning given by Article 4
(1)
(1)of Directive 2004/39/EC; “large risks” means— (
  1. a)risks classified under classes 4, 5, 6, 7, 11 and 12 in Part 1 of Schedule 1; (
  2. b)risks classified under classes 14 and 15 in Part 1 of Schedule 1, where the policy holder is engaged professionally in an industrial or commercial activity or in one of the liberal professions, and the risks relate to such activity; (
  3. c)risks classified under classes 3, 8, 9, 10, 13 and 16 in Part 1 of Schedule 1 and risks insured for professional associations, joint ventures or temporary groupings in so far as the policy holder exceeds the limits of at least 2 of the following criteria: (
  4. i)a balance-sheet total of €6.2 million in assets; (
  5. ii)a net turnover, within the meaning of Fourth Council Directive 78/660/EEC of 25 July 1978 based on Article 54
(3)(
  1. g)of the Treaty on the annual accounts of certain types of companies25 , of €12.8 million; (iii) an average number of 250 employees during the financial year; and if the policy holder belongs to a group of undertakings for which consolidated accounts within the meaning of Directive 83/349/EEC are drawn up, the criteria set out in paragraph (
  2. c)shall be applied on the basis of the consolidated accounts; “legal expenses insurance undertaking” shall be construed in accordance with Regulation 204; “life insurance” means activities of the classes in Schedule 2; “liquidity risk” means the risk that an insurance undertaking or reinsurance undertaking is unable to realise investments and other assets in order to settle its financial obligations when they fall due; “market risk” means the risk of loss or of adverse change in the financial situation, resulting, directly or indirectly, from fluctuations in the level and in the volatility of market prices of assets, liabilities and financial instruments; “Member State” means a Member State of the European Union and, where relevant, includes a contracting party to the Agreement on the European Economic Area signed at Oporto on 2 May 1992 (as adjusted by the Protocol signed at Brussels on 17 March 1993), as amended; “Member State in which the risk is situated” means any of the following: (
  3. a)the Member State in which the property is situated, where the insurance relates either to buildings or to buildings and their contents, in so far as the contents are covered by the same insurance policy; (
  4. b)the Member State of registration, where the insurance relates to vehicles of any type; (
  5. c)the Member State where the policy holder took out the policy in the case of policies of a duration of 4 months or less covering travel or holiday risks, whatever the class concerned; (
  6. d)in all cases not explicitly covered by paragraph (a), (
  7. b)or (c), the Member State in which either of the following is situated: (
  8. i)the habitual residence of the policy holder; (
  9. ii)if the policy holder is a legal person, that policy holder’s establishment to which the contract relates; “Member State of the commitment” means the Member State in which either of the following is situated: (
  10. a)the habitual residence of the policy holder; (
  11. b)if the policy holder is a legal person, that policy holder’s establishment, to which the contract relates; “Minister” means Minister for Finance; “national bureau” means a national insurers’ bureau as defined in Article 1
(3)of Council Directive 72/166/EEC of 24 April 1972 on the approximation of the laws of Member States relating to insurance against civil liability in respect of the use of motor vehicles, and to the enforcement of the obligation to insure against such liability26 ; “national guarantee fund” means the body referred to in Article 1
(4)of Second Council Directive 84/5/EEC of 30 December 1983 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles27 ; “non-life insurance” means activities of the classes in Part 1 of Schedule 1; “operational risk” means the risk of loss arising from inadequate or failed internal processes, or from personnel and systems, or from external events; “outsourcing” means an arrangement of any form between an insurance undertaking or reinsurance undertaking and a service provider, whether a supervised entity or not, by which that service provider performs a process, a service or an activity, whether directly or by sub outsourcing, which would otherwise be performed by the insurance undertaking or reinsurance undertaking itself; “own risk and solvency assessment report” means the report submitted in accordance with Regulation 47
(9); “parent undertaking” means a parent

Article 1

of Directive 83/349/EEC; “participation”, in relation to an undertaking, means the ownership, direct or by way of control, of 20% or more of the voting rights or capital of the undertaking; “probability distribution forecast” means a mathematical function that assigns to an exhaustive set of mutually exclusive future events a probability of realisation; “qualifying holding”, in relation to an undertaking, means a direct or indirect holding in the undertaking which represents 10% or more of the capital or of the voting rights or which makes it possible to exercise a significant influence over the management of the undertaking; “quarterly quantitative templates” mean the quarterly templates referred to in Article 304

(1)(d) of Commission Delegated Regulation (EU) 2015/35; “regular supervisory report” means the report referred to in Article 304
(1)(
  1. b)of Commission Delegated Regulation (EU) 2015/35; “regulated market” means either of the following: (
  2. a)in the case of a market situated in a Member State, a regulated market /as defined in Article 4
(1)
(14)of Directive 2004/39/EC; or (
  1. b)in the case of a market situated in a third country, a financial market which fulfils the following conditions: (
  2. i)it is recognised by the home Member State of the insurance undertaking and meets requirements comparable to those under Directive 2004/39/EC; (
  3. ii)the financial instruments dealt in on that market are of a quality comparable to that of the instruments dealt in on the regulated market or markets of the home Member State; “Regulation (EC) No 593/2008” means Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I)28 ; “Regulation (EU) No 1094/2010” means Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC29 ; “reinsurance” means— (
  4. a)the activity consisting in accepting risks ceded by an insurance undertaking or third-country insurance undertaking, or by another reinsurance undertaking or third-country reinsurance undertaking, or (
  5. b)in the case of the association of underwriters known as Lloyd’s, the activity consisting in accepting risks, ceded by any member of Lloyd’s, by an insurance undertaking or reinsurance undertaking other than the association of underwriters known as Lloyd’s; “reinsurance undertaking” means a person who has received authorisation to carry on reinsurance only; “risk measure” means a mathematical function which assigns a monetary amount to a given probability distribution forecast and increases monotonically with the level of risk exposure underlying that probability distribution forecast; “risk-mitigation techniques” means all techniques which enable insurance undertakings and reinsurance undertakings to transfer part or all of their risks to another party; “special purpose vehicle” means any undertaking, whether incorporated or not, other than an existing insurance undertaking or reinsurance undertaking, which assumes risks from insurance undertakings or reinsurance undertakings and which fully funds its exposure to such risks through the proceeds of a debt issuance or any other financing mechanism where the repayment rights of the providers of such debt or financing mechanism are subordinated to the reinsurance obligations of such an undertaking; “subsidiary undertaking” means any subsidiary

Article 1

of Directive 83/349/EEC, including subsidiaries of such an undertaking; “supervisory authority” means a national authority empowered by law to supervise insurance undertakings or reinsurance undertakings; “supervisory review process” shall be construed in accordance with Regulation 38

(7); “third country” means a country that is not a Member State; “third-country insurance undertaking” means an undertaking which has its head office in a third country but would require authorisation as an insurance undertaking in accordance with Article 14 of the Directive if it had its head office in a Member State; “third-country reinsurance undertaking” means an undertaking which has its head office in a third country but would require authorisation as a reinsurance undertaking in accordance with Article 14 of the Directive if it had its head office in a Member State; “underwriting risk” means the risk of loss or of adverse change in the value of insurance liabilities, due to inadequate pricing and provisioning assumptions. Exclusion of small undertakings 4.
(1)Without prejudice to Regulations 5 to 9 and subject to paragraphs
(2),
(3)and
(5), these Regulations do not apply to an undertaking (other than an undertaking carrying on reinsurance only) which meets all of the following conditions: (
  1. a)the annual gross written premium income of the undertaking does not exceed €5 million; (
  2. b)the total of the undertaking’s technical provisions, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Regulation 83 does not exceed €25 million; (
  3. c)where the undertaking belongs to a group, the total of the technical provisions of the group, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, does not exceed €25 million; (
  4. d)the business of the undertaking does not include insurance or reinsurance activities covering liability, credit and suretyship insurance risks, other than any that constitute ancillary risks within the meaning of Regulation 16; (
  5. e)the business of the undertaking does not include reinsurance operations exceeding €0.5 million of its gross written premium income or €2.5 million of its technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, or more than 10% of its gross written premium income or more than 10% of its technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles.
(2)In the case of an undertaking to which, by virtue of paragraph
(1), these Regulations do not apply— (a) if any of the amounts set out in paragraph
(1)is exceeded for 3 consecutive years these Regulations apply to the undertaking from the beginning of the next year, and (b) if the condition set out in paragraph
(1)(d) ceases to be met and for as long as it is not met, these Regulations apply.
(3)By way of derogation from paragraph
(1), these Regulations apply to an undertaking seeking authorisation to pursue insurance or reinsurance activities in respect of which the annual gross written premium income or technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles are expected to exceed the amounts in paragraph
(1)within the next 5 years.
(4)These Regulations cease to apply to an undertaking if the Bank verifies that— (a) the conditions set out in paragraph
(1)have been met for the previous 3 consecutive years, and (b) those conditions are expected to be met for the next 5 years.
(5)Paragraph
(1)does not apply to an undertaking which conducts business outside the State through a branch or pursuant to the freedom to provide services under Regulations 154 to 163.
(6)Paragraphs
(1)to
(5)do not prevent any undertaking from applying for authorisation or continuing to be authorised under these Regulations.
(7)The Bank may require an undertaking which expects to meet the conditions in this Regulation to notify the Bank accordingly in such manner, and at such time, as may be determined by the Bank and published on its website. Exclusion of mutual undertakings 5.
(1)These Regulations do not apply to a mutual undertaking (in this Regulation referred to as the “ceding undertaking”) which pursues non-life insurance activities and which has concluded with another mutual undertaking (in this Regulation referred to as the “accepting undertaking”) an agreement which provides for the full reinsurance of the insurance policies issued by the ceding undertaking or under which the accepting undertaking is to meet the liabilities arising under such policies in the place of the ceding undertaking.
(2)These Regulations do apply to the accepting undertaking. Exclusions: insurance forming part of social security system 6. These Regulations do not apply to insurance forming part of a statutory system of social security. Exclusions: non-life operations 7. As far as non-life insurance is concerned, these Regulations do not apply to the following operations: (
  1. a)capital redemption operations; (
  2. b)operations of provident and mutual benefit institutions whose benefits vary according to the resources available and in which the contributions of the members are determined on a flat rate basis; (
  3. c)operations carried out by organisations not having a legal personality with the purpose of providing mutual cover for their members without there being any payment of premiums or constitution of technical reserves; (
  4. d)export credit insurance operations for the account of or guaranteed by the State, or where the State is the insurer. Exclusions: assistance activity 8. These Regulations do not apply to an assistance activity which meets the conditions set out in Article 6 of the Directive. Exclusions: life operations and organisations 9. As far as life insurance is concerned, these Regulations do not apply to the following operations and organisations: (
  5. a)operations of provident and mutual-benefit institutions whose benefits vary according to the resources available and which require each of their members to contribute at the appropriate flat rate; (
  6. b)operations carried out by organisations, other than insurance undertakings or reinsurance undertakings, whose object is to provide benefits for employed or self-employed persons belonging to an undertaking or group of undertakings, or a trade or group of trades, in the event of death or survival or of discontinuance or curtailment of activity, whether or not the commitments arising from such operations are fully covered at all times by mathematical provisions; (
  7. c)organisations which undertake to provide benefits solely in the event of death, where the amount of such benefits does not exceed the average funeral costs for a single death or where the benefits are provided in kind. Exclusions: reinsurance 10.
(1)As far as reinsurance is concerned, these Regulations do not apply to the activity of reinsurance conducted or fully guaranteed by the government of a Member State when that government is acting, for reasons of substantial public interest, in the capacity of reinsurer of last resort, including in circumstances where such a role is required by a situation in the market in which it is not feasible to obtain adequate commercial cover.
(2)These Regulations do not apply to reinsurance undertakings which by 10 December 2007 ceased to conduct new reinsurance contracts and exclusively administer their existing portfolio in order to terminate their activity. Insurance and reinsurance undertakings closing their activity 11.
(1)Without prejudice to Regulation 10
(2), an insurance undertaking or reinsurance undertaking to which this paragraph applies and which before 1 January 2016 ceases to conduct new insurance or reinsurance contracts and exclusively administers its existing portfolio in order to terminate its activity shall not be subject to Regulations 12 and 14 to 268 until the date arrived at under paragraph
(2)or
(3)where either— (
  1. a)the undertaking has satisfied the Bank that it will terminate its activity before 1 January 2019, or (
  2. b)the undertaking is subject to reorganisation measures set out in Regulations 271 to 274 and an administrator has been appointed before 1 January 2016.
(2)An insurance undertaking or reinsurance undertaking which falls within paragraph
(1)(a) shall be subject to Regulations 12 and 14 to 268 from 1 January 2019 or from an earlier date notified by the Bank if the Bank is not satisfied with the progress that has been made towards terminating the undertaking’s activity.
(3)An insurance undertaking or reinsurance undertaking which falls within paragraph
(1)(b) shall be subject to Regulations 12 and 14 to 268 from 1 January 2021 or from an earlier date notified by the Bank if the Bank is not satisfied with the progress that has been made towards terminating the undertaking’s activity.
(4)Paragraph
(1)applies to an insurance undertaking or reinsurance undertaking if— (
  1. a)it is not part of a group, or if it is, all undertakings that are part of the group cease to conduct new insurance or reinsurance contracts before 1 January 2016, (
  2. b)the undertaking provides the Bank with an annual report setting out what progress has been made in terminating its activity, and (
  3. c)the undertaking has notified the Bank that paragraph
(1)applies to it.
(5)The Bank shall draw up a list of the insurance undertakings and reinsurance undertakings to which paragraph
(1)applies and communicate that list to all the other Member States.
(6)This Regulation does not preclude any insurance undertaking or reinsurance undertaking from operating in accordance with Regulations 12 and 14 to 268. Part 2 AUTHORISATION Prohibition against carrying on insurance etc. without authorisation 12.
(1)A person shall not— (
  1. a)carry on the business of insurance of any class, or any reinsurance activity, in the State unless the person holds an authorisation covering the class of insurance or the reinsurance activity, or (
  2. b)claim to be, or represent itself as, an insurance undertaking or reinsurance undertaking in the State unless the person holds an authorisation covering insurance or reinsurance.
(2)Paragraph
(1)does not apply to persons, activities or operations excluded from the application of these Regulations.
(3)A person who contravenes paragraph
(1)commits an offence. Deemed authorisation for existing undertakings 13.
(1)A person who, immediately before 1 January 2016, is authorised to carry on life insurance, non-life insurance or reinsurance shall be deemed on and after that date to hold an authorisation under these Regulations to carry on the same kind of insurance or reinsurance business that it had a right to carry on immediately before that date (but subject to the provisions of these Regulations).
(2)Paragraph
(1)does not include a person excluded from the application of these Regulations. Authorisation 14.
(1)An application for authorisation may be made to the Bank by— (
  1. a)any undertaking which has established or is establishing its head office in the State, or (
  2. b)any insurance undertaking which is the holder of an authorisation relating to the whole or any part of a particular class or classes of insurance and which proposes to extend its business to the whole of the class or to other classes of insurance.
(2)An application for authorisation shall be in such form, and contain such particulars, as the Bank may from time to time determine. Scope of authorisation 15.
(1)An authorisation of an insurance undertaking or reinsurance undertaking under these Regulations shall be valid in all Member States and shall permit the undertaking to carry on business in all Member States, by way of establishment and by way of the provision of services.
(2)An authorisation of an insurance undertaking shall be granted for a particular class of insurance in Part 1 of Schedule 1 or in Schedule 2 and shall cover the entire class, unless the applicant wishes to cover only some of the risks pertaining to that class.
(3)The risks included in a class shall not be included in any other class except in the cases referred to in Regulation 16.
(4)Where appropriate the Bank may grant authorisation for 2 or more of the classes of insurance.
(5)An authorisation may be restricted to industrial assurance business and an insurance undertaking may not carry on industrial assurance business by virtue of an authorisation unless the authorisation expressly extends to such business.
(6)As far as non-life insurance is concerned, the Bank may grant authorisation for the groups of classes in Part 2 of Schedule 1; and the Bank may limit authorisation requested for one of the classes to the operations set out in the scheme of operations referred to in Regulation 21.
(7)Without prejudice to Regulation 16
(1), an insurance undertaking may engage in the assistance activity referred to in Regulation 8 only if it has been granted authorisation for class 18 in Part 1 of Schedule 1 and, if it does so these Regulations shall apply to that activity.
(8)As far as reinsurance is concerned, authorisation may be granted for non-life reinsurance activity, life reinsurance activity or both and an application for authorisation as a reinsurance undertaking shall be considered in the light of the scheme of operations to be submitted pursuant to Regulation 17
(4)(c). Ancillary risks 16.
(1)An insurance undertaking which has obtained an authorisation for a principal risk belonging to one class or a group of classes in Schedule 1 may also insure ancillary risks included in another class without the need to obtain authorisation in respect of such risks provided that the ancillary risks meet all of the following conditions: (a) they are connected with the principal risk; (b) they concern the object which is covered against the principal risk; (c) they are covered by the contract insuring the principal risk.
(2)The risks included in classes 14, 15 and 17 in Part 1 of Schedule 1 shall not be regarded as risks ancillary to other classes but legal expenses insurance as set out in class 17 may be regarded as a risk ancillary to class 18 in that Part of that Schedule, where all of the conditions in paragraph
(1)and either of the following conditions is met: (
  1. a)the main risk relates solely to the assistance provided for persons who fall into difficulties while travelling, while away from their home or habitual residence; (
  2. b)the insurance concerns disputes or risks arising out of, or in connection with, the use of sea going vessels. Conditions for authorisation 17.
(1)An undertaking applying for authorisation shall comply with the following provisions: (
  1. a)it shall be a designated activity company, a public limited company, a company limited by guarantee, an unlimited company or a European Company (SE); (
  2. b)its head office and registered office shall be in the State.
(2)Despite paragraph
(1)(a), an undertaking applying for authorisation in relation to life insurance may be a society registered under the Industrial and Provident Societies Acts 1893 to 2014 or the Friendly Societies Acts 1896 to 2014.
(3)An undertaking set up in any public law form may apply for an authorisation provided that it has as its object insurance or reinsurance operations, under conditions equivalent to those under which undertakings governed by private law operate.
(4)An undertaking applying for authorisation shall also comply with the following provisions: (
  1. a)where the application is for authorisation as an insurance undertaking, its objects shall be limited to the business of insurance and operations arising directly from insurance to the exclusion of all other commercial business; (
  2. b)where the application is for authorisation as a reinsurance undertaking, its objects shall be limited to the business of reinsurance and related operations (which may include a holding company function or activities with respect to financial sector activities within the meaning of Article 2
(8)of Directive 2002/87/EC); (
  1. c)it shall submit to the Bank a scheme of operations in accordance with Regulation 21; (
  2. d)it shall hold the eligible basic own funds to cover the absolute floor of the Minimum Capital Requirement provided for in Regulation 140
(2); (
  1. e)it shall submit to the Bank evidence that it will be, and will continue to be, in a position to hold eligible own funds to cover the Solvency Capital Requirement, as provided for in Regulation 113; (
  2. f)it shall submit to the Bank evidence that it will be, and will continue to be, in a position to hold eligible basic own funds to cover the Minimum Capital Requirement, as provided for in Regulation 139; (
  3. g)it shall submit to the Bank evidence that it will be in a position to comply with the system of governance referred to in Regulations 44 to 51; (
  4. h)it shall submit to the Bank a copy of the undertaking’s memorandum and articles of association; (
  5. i)where the application is for authorisation as a non-life insurance undertaking and the risks to be covered are those included in class 10 in Part 1 of Schedule 1, other than carrier’s liability, it shall communicate to the Bank the name and address of the claims representative appointed or to be appointed pursuant to Article 4 of Directive 2000/26/EC in each Member State other than the State.
(5)An insurance undertaking seeking authorisation to extend its business to other classes or to extend an authorisation covering only some of the risks pertaining to one class shall submit to the Bank— (
  1. a)a scheme of operations in accordance with Regulation 21; and (
  2. b)evidence that it possesses the eligible own funds to cover the Solvency Capital Requirement and Minimum Capital Requirement provided for in Regulations 113 and 139.
(6)An insurance undertaking shall not be authorised to pursue life and non-life insurance activities simultaneously except in the circumstances specified in Regulation 79.
(7)A life insurance undertaking seeking authorisation to extend its business to the risks included in class 1 or 2 in Part 1 of Schedule 1 as referred to in Regulation 79 shall demonstrate to the Bank that it— (a) possesses the eligible own funds to cover the absolute floor of the Minimum Capital Requirement for life insurance undertakings and the absolute floor of the Minimum Capital Requirement for non-life insurance undertakings provided for in Regulation 140
(2), and (b) undertakes to cover, and continue to cover, the minimum financial obligations referred to in Regulation 80
(3). Close links 18.
(1)Where close links exist between an insurance undertaking or reinsurance undertaking and other natural or legal persons, the Bank shall grant authorisation only if those links do not prevent the effective exercise of its supervisory functions.
(2)The Bank shall refuse authorisation if the laws, regulations or administrative provisions of a third country governing one or more natural or legal persons with which the insurance undertaking or reinsurance undertaking has close links, or difficulties involved in their enforcement, would prevent the effective exercise of its supervisory functions.
(3)The Bank shall, in the exercise of its powers under financial services legislation, require an insurance undertaking or reinsurance undertaking to provide it with the information the Bank requires to monitor compliance with the condition referred to in paragraph
(1)on a continuous basis. Policy conditions and scales of premiums 19.
(1)The Bank shall not require the prior approval or systematic notification of general and special policy conditions, of scales of premiums, of the technical bases used in particular for calculating scales of premiums and technical provisions, or of forms and other documents which an undertaking intends to use in its dealings with policyholders or ceding or retro ceding undertakings.
(2)Despite paragraph
(1), in relation to life insurance the Bank may, for the sole purpose of verifying compliance with rules concerning actuarial principles, require systematic notification of the technical bases used for calculating scales of premiums and technical provisions but such a requirement does not constitute a prior condition for authorisation.
(3)The Bank shall not retain or introduce prior notification or approval of proposed increases in premium rates except as part of general price control systems.
(4)The Bank, in the exercise of its powers under financial services legislation, may subject undertakings seeking or having obtained authorisation for class 18 in Part 1 of Schedule 1 to checks on their direct or indirect resources in staff and equipment, including the qualification of their medical teams and the quality of the equipment available to such undertakings to meet their commitments arising out of that class. Economic requirements of the market 20. The Bank shall not consider any application for authorisation in terms of the economic requirements of the market. Scheme of operations 21.
(1)The scheme of operations referred to in Regulation 17
(4)(
  1. c)shall include particulars or evidence of the following: (
  2. a)the nature of the risks or commitments which the insurance undertaking or reinsurance undertaking proposes to cover; (
  3. b)the kind of reinsurance arrangements which the reinsurance undertaking proposes to make with ceding undertakings; (
  4. c)the guiding principles as to reinsurance and to retrocession; (
  5. d)the basic own fund items constituting the absolute floor of the Minimum Capital Requirement; (
  6. e)estimates of the costs of setting up the administrative services and the organisation for securing business; the financial resources intended to meet those costs and, if the risks to be covered are classified in class 18 in Part 1 of Schedule 1, the resources at the disposal of the insurance undertaking for the provision of the assistance promised.
(2)In addition to the requirements set out in paragraph
(1), for the first 3 financial years the scheme shall include the following: (
  1. a)a forecast balance sheet; (
  2. b)estimates of the future Solvency Capital Requirement, as provided for in Regulations 113 to 115, on the basis of the forecast balance sheet, as well as the calculation method used to derive those estimates; (
  3. c)estimates of the future Minimum Capital Requirement, as provided for in Regulations 139 and 140, on the basis of the forecast balance sheet, as well as the calculation method used to derive those estimates; (
  4. d)estimates of the financial resources intended to cover technical provisions, the Minimum Capital Requirement and the Solvency Capital Requirement; (
  5. e)in regard to non-life insurance and reinsurance— (
  6. i)estimates of management expenses other than installation costs, in particular current general expenses and commissions; (
  7. ii)estimates of premiums or contributions and claims; (
  8. f)in regard to life insurance, a plan setting out detailed estimates of income and expenditure in respect of direct business, reinsurance acceptances and reinsurance cessions. Shareholders and members with qualifying holdings 22.
(1)The Bank shall not grant an authorisation to an undertaking to take up the business of insurance or reinsurance before it has been informed of the identities of the shareholders or members, direct or indirect, whether natural or legal persons, who have qualifying holdings in that undertaking and of the amounts of those holdings.
(2)The Bank shall not grant an authorisation to an undertaking if, taking into account the need to ensure the sound and prudent management of the undertaking, it is not satisfied as to the qualifications of the shareholders or members.
(3)For the purposes of paragraph
(1)the voting rights referred to in Articles 9 and 10 of Directive 2004/109/EC, as well as the conditions regarding aggregation laid down in Article 12
(4)and
(5)of that Directive, shall be taken into account.
(4)The Bank shall not take into account voting rights or shares which investment firms or credit institutions may hold as a result of providing the underwriting of financial instruments or placing of financial instruments on a firm commitment basis included under point 6 of Section A of Annex I to Directive 2004/39/EC, provided that those rights are not exercised or otherwise used to intervene in the management of the issuer and are disposed of within one year of the acquisition. Prior consultation with authorities of other Member States 23.
(1)The Bank shall consult the supervisory authority of another Member State before the granting of an authorisation to— (
  1. a)a subsidiary undertaking of an insurance undertaking or reinsurance undertaking authorised in the other Member State, (
  2. b)a subsidiary undertaking of the parent undertaking of an insurance undertaking or reinsurance undertaking authorised in the other Member State, or (
  3. c)an undertaking controlled by the same person, whether natural or legal, who controls an insurance undertaking or reinsurance undertaking authorised in the other Member State.
(2)The Bank shall consult the authority of the other Member State involved which is responsible for the supervision of credit institutions or investment firms prior to the granting of an authorisation to an insurance undertaking or reinsurance undertaking which is— (
  1. a)a subsidiary undertaking of a credit institution or investment firm authorised in the European Union, (
  2. b)a subsidiary undertaking of the parent undertaking of a credit institution or investment firm authorised in the European Union, or (
  3. c)an undertaking controlled by the same person, whether natural or legal, who controls a credit institution or investment firm authorised in the European Union.
(3)The Bank shall consult with the authorities referred to in paragraphs
(1)and
(2)in particular when assessing the suitability of the shareholders and the fit and proper requirements of all persons who effectively run the undertaking or have other key functions involved in the management of another entity which is a member of the same group.
(4)Information regarding the suitability of shareholders and the fit and proper requirements of all persons who effectively run the undertaking or have other key functions shall be exchanged between the Bank and the authorities referred to in paragraphs
(1)and
(2)where it is of relevance to the other authority for the granting of an authorisation as well as for the ongoing assessment of compliance with operating conditions. Decision on application for authorisation 24.
(1)Where the Bank is satisfied as to all the matters which it needs to consider for the purposes of the preceding Regulations it shall grant an authorisation.
(2)Where the Bank decides to refuse an application for authorisation it shall notify its decision to the applicant and shall in the notification specify the grounds for its decision.
(3)A decision of the Bank refusing an application for an authorisation is an appealable decision for the purposes of Part VIIA of the Act of 1942.
(4)A failure by the Bank to deal with a complete application for an authorisation within the period of 6 months beginning with the date on which it received the application is an appealable decision for the purposes of Part VIIA of the Act of 1942, and for this purpose an application is “complete” if it fully complies with Regulation 14
(2). Notification of authorisation to EIOPA 25. The Bank shall notify EIOPA of every authorisation granted. Power to impose conditions 26.
(1)When granting an authorisation to an insurance undertaking or reinsurance undertaking, or at any time while an authorisation has effect in relation to an insurance undertaking or reinsurance undertaking, the Bank may, by notice in writing, impose such conditions as it considers appropriate with respect to the conduct of insurance business or reinsurance business by the undertaking with a view to ensuring that the undertaking carries out in a proper manner the responsibilities imposed by or under these Regulations.
(2)The Bank may, from time to time, by notice in writing given to an insurance undertaking or reinsurance undertaking, vary or revoke a condition imposed on the undertaking under paragraph
(1)(including one previously varied under this paragraph).
(3)In imposing or varying a condition under this Regulation, the Bank shall ensure that the condition, or the condition as varied, is consistent with the objects of these Regulations.
(4)A decision of the Bank imposing or varying a condition under this Regulation is an appealable decision for the purposes of Part VIIA of the Act of
  1. Part 3 SUPERVISION Main objective of supervision
  2. The main objective of supervision is the protection of policy holders and beneficiaries. Financial stability and pro-cyclicality 28.
(1)Without prejudice to the main objective of supervision, the Bank shall, in the exercise of its general duties, duly consider the potential impact of its decisions on the stability of the financial systems concerned in the European Union, in particular in emergency situations, taking into account the information available at the relevant time.
(2)In times of exceptional movements in the financial markets, the Bank shall take into account the potential pro-cyclical effects of its actions. General principles of supervision 29.
(1)The Bank shall take a prospective and risk-based approach to its supervisory duties.
(2)The Bank shall verify on a continuous basis the proper operation of insurance business or reinsurance business and compliance with supervisory provisions by insurance undertakings and reinsurance undertakings.
(3)The supervision of insurance undertakings and reinsurance undertakings by the Bank shall comprise an appropriate combination of off site activities and on site inspections.
(4)The Bank shall apply the requirements laid down in these Regulations in a manner which is proportionate to the nature, scale and complexity of the risks inherent in the business of any insurance undertaking or reinsurance undertaking. Scope of supervision 30.
(1)The Bank shall have the sole responsibility for the financial supervision of insurance undertakings and reinsurance undertakings, including that of the business they pursue either through branches or under the freedom to provide services.
(2)For the purposes of paragraph
(1)financial supervision shall include verification, with respect to the entire business of an insurance undertaking or reinsurance undertaking, of its state of solvency, of the establishment of technical provisions, of its assets and of the eligible own funds, in accordance with these Regulations and other laws applicable in the State.
(3)Where an insurance undertaking is authorised to cover the risks classified in class 18 in Part 1 of Schedule 1, the Bank’s supervision shall extend to monitoring of the technical resources which the insurance undertaking has at its disposal for the purpose of carrying out the assistance operations it has undertaken to perform.
(4)If— (
  1. a)an insurance undertaking or reinsurance undertaking authorised in a Member State other than the State is carrying on business in the State, and (
  2. b)the Bank believes on reasonable grounds that the activities of the undertaking might affect the undertaking’s financial soundness, the Bank shall, without delay, notify its belief to the supervisory authority of the home Member State.
(5)If an insurance undertaking or reinsurance undertaking is carrying on business in a Member State other than the State and— (
  1. a)in the case of an insurance undertaking, the supervisory authority of the Member State in which the risk is situated, or the Member State of the commitment, or (
  2. b)in the case of a reinsurance undertaking, the supervisory authority of the host Member State, notifies the Bank of its belief that the activities of the undertaking may affect its financial soundness, the Bank shall determine whether the undertaking is complying with the prudential principles in these Regulations. Transparency and accountability 31.
(1)The Bank shall publish the following information: (
  1. a)the text of laws, administrative rules and general guidance in the field of insurance regulation; (
  2. b)the general criteria and methods, including the tools to be used in the supervisory review process; (
  3. c)aggregate statistical data on key aspects of the application of the prudential framework; (
  4. d)the manner of exercise of the options provided for in these Regulations; (
  5. e)the objectives of the supervision provided for by these Regulations and its main functions and activities.
(2)The Bank shall comply with paragraph
(1)in such a way as to enable a comparison with the supervisory approaches adopted by the supervisory authorities of the other Member States.
(3)The Bank shall publish and regularly update the information specified in paragraph
(1)in a common format that is accessible at a single electronic location. Prohibition of refusal of reinsurance and retrocession contracts 32.
(1)The Bank shall not refuse a reinsurance contract concluded by an insurance undertaking with a reinsurance undertaking or another insurance undertaking on grounds directly related to the financial soundness of that reinsurance undertaking or insurance undertaking.
(2)The Bank shall not refuse a retrocession contract concluded by a reinsurance undertaking with a reinsurance undertaking or another insurance undertaking on grounds directly related to the financial soundness of that reinsurance undertaking or insurance undertaking. Supervision of branches established in another Member State 33.
(1)If an insurance undertaking or reinsurance undertaking authorised in a Member State other than the State carries on business in the State through a branch, the supervisory authority of the home Member State may, after having informed the Bank, carry out itself, or by persons appointed for the purpose, on site verifications of the information necessary to ensure the financial supervision of the undertaking and the Bank may participate in those verifications.
(2)If an insurance undertaking or reinsurance undertaking carries on business through a branch in a Member State other than the State, in accordance with Article 33 of the Directive, the Bank may, after having informed the supervisory authority of the host Member State, carry out itself, or by persons appointed for the purpose, on site verifications of the information necessary to ensure the financial supervision of the undertaking and the supervisory authority of the host Member State may participate in those verifications. Information to be provided for supervisory purposes 34.
(1)An insurance undertaking or reinsurance undertaking shall provide to the Bank information which is necessary for the purposes of supervision in accordance with these Regulations, taking into account the objectives of supervision laid down in Regulations 27 and 28.
(2)The information referred to in paragraph
(1), when being submitted in accordance with the supervisory review process, shall include at least the information necessary to enable the Bank— (
  1. a)to assess the system of governance applied by the undertaking, the business it is pursuing, the valuation principles applied for solvency purposes, the risks faced and the risk management systems, and its capital structure, needs and managements, and (
  2. b)to make any appropriate decisions resulting from the exercise of its supervisory functions.
(3)Without prejudice to the powers of the Bank under financial services legislation, the Bank shall exercise those powers— (a) to determine the nature, the scope and the format of the information referred to in paragraphs
(1)and
(2)which it requires insurance undertakings and reinsurance undertakings to submit at the following points in time: (
  1. i)at predefined periods; (
  2. ii)on the occurrence of predefined events; (iii) during enquiries regarding the situation of an insurance undertaking or reinsurance undertaking, (
  3. b)to obtain any information regarding contracts which are held by intermediaries or regarding contracts which are entered into with third parties, and (
  4. c)to require information from external experts, including auditors and actuaries.
(4)The information referred to in paragraphs
(1)to
(3)shall— (
  1. a)consist of— (
  2. i)qualitative or quantitative elements (or both), (
  3. ii)historic, current or prospective elements (or more than one of those), and (iii) data from internal or external sources (or both), and (
  4. b)comply with the following: (
  5. i)it reflects the nature, scale and complexity of the undertaking, and in particular the risks inherent in the business; (
  6. ii)it is accessible, complete in all material respects, comparable and consistent over time; (iii) it is relevant, reliable and comprehensible.
(5)Insurance undertakings and reinsurance undertakings shall have appropriate systems and structures in place to fulfil any information requirement, howsoever described, made by the Bank where necessary for the purpose of supervision under these Regulations as well as a written policy, approved by its board of directors, ensuring the on-going appropriateness of the information provided.
(6)Without prejudice to Regulation 140
(6)to
(8), where the predefined periods referred to in paragraph
(3)(a)(
  1. i)are shorter than one year, the Bank may limit regular supervisory reporting where— (
  2. a)the provision of that information would be overly burdensome in relation to the nature, scale and complexity of the risks inherent in the business of the undertaking, and (
  3. b)the information is reported at least annually.
(7)The Bank shall not limit regular supervisory reporting with a frequency shorter than one year in the case of an insurance undertaking or reinsurance undertaking that is part of a group, unless the undertaking can demonstrate to the satisfaction of the Bank that regular supervisory reporting with a frequency shorter than one year is inappropriate, given the nature, scale and complexity of the risks inherent in the group.
(8)The limitation to regular supervisory reporting shall be granted only to undertakings that do not represent more than 20% of the State’s life and non-life insurance and reinsurance market respectively, where the non-life insurance market share is based on gross written premiums and the life insurance market share is based on gross technical provisions.
(9)The Bank shall give priority to the smallest undertakings when determining the eligibility of the undertakings for those limitations.
(10)The Bank may limit regular supervisory reporting or exempt an insurance undertaking or reinsurance undertaking from reporting on an item-by-item basis where— (
  1. a)the provision of that information would be overly burdensome in relation to the nature, scale and complexity of the risks inherent in the business of the undertaking, (
  2. b)the submission of that information is not necessary for the effective supervision of the undertaking, (
  3. c)the exemption does not undermine the stability of the financial systems concerned in the European Union, and (
  4. d)the undertaking is able to provide the information on an ad-hoc basis.
(11)The Bank shall not exempt from reporting on an item-by-item basis an insurance undertaking or reinsurance undertaking that is part of a group, unless the undertaking can demonstrate to the satisfaction of the Bank that reporting on an item-by-item basis is inappropriate, given the nature, scale and complexity of the risks inherent in the business of the group and taking into account the objective of financial stability.
(12)The exemption from reporting on an item-by-item basis shall be granted only to undertakings that do not represent more than 20% of the State’s life and non-life insurance or reinsurance market respectively, where the non-life insurance market share is based on gross written premiums and the life insurance market share is based on gross technical provisions.
(13)The Bank shall give priority to the smallest undertakings when determining the eligibility of the undertakings for those exemptions.
(14)For the purposes of paragraphs
(6)and
(10), as part of the supervisory review process, the Bank shall assess whether the submission of information would be overly burdensome in relation to the nature, scale and complexity of the risks of the undertaking, taking into account, at least— (
  1. a)the volume of premiums, technical provisions and assets of the undertaking, (
  2. b)the volatility of the claims and benefits covered by the undertaking, (
  3. c)the market risks that the investments of the undertaking give rise to, (
  4. d)the level of risk concentrations, (
  5. e)the total number of classes of life and non-life insurance for which authorisation is granted, (
  6. f)possible effects of the management of the assets of the undertaking on financial stability, (
  7. g)the systems and structures of the undertaking to provide information for supervisory purposes and the written policy referred to in paragraph
(5), (
  1. h)the appropriateness of the system of governance of the undertaking, (
  2. i)the level of own funds covering the Solvency Capital Requirement and the Minimum Capital Requirement, and (
  3. j)whether the undertaking is a captive insurance undertaking or captive reinsurance undertaking only covering risks associated with the industrial or commercial group to which it belongs. Annual and quarterly information etc.: transitional deadlines 35.
(1)An insurance undertaking or reinsurance undertaking shall submit its regular supervisory report or annual summary of the regular supervisory report and annual quantitative templates no later than— (a)20 weeks after the end of the undertaking’s financial year ending on or after 30 June 2016 but before 1 January 2017, (b)18 weeks after the end of the undertaking’s financial year ending on or after 1 January 2017 but before 1 January 2018, (c)16 weeks after the end of the undertaking’s financial year ending on or after 1 January 2018 but before 1 January 2019, and (d)14 weeks after the end of the undertaking’s financial year ending on or after 1 January 2019 but before 1 January 2020.
(2)An insurance undertaking or reinsurance undertaking shall submit its quarterly quantitative templates no later than— (a)8 weeks after the end of any quarter ending on or after 1 January 2016 but before 1 January 2017, (b)7 weeks after the end of any quarter ending on or after 1 January 2017 but before 1 January 2018, (c)6 weeks after the end of any quarter ending on or after 1 January 2018 but before 1 January 2019, and (d)5 weeks after the end of any quarter ending on or after 1 January 2019 but before 1 January 2020. Directors’ accuracy certificates 36.
(1)Insurance undertakings and reinsurance undertakings shall annex to the annual quantitative templates a directors’ accuracy certificate attesting the accuracy of the information submitted in the templates which shall be submitted to the Bank in a form specified by the Bank from time to time.
(2)Insurance undertakings and reinsurance undertakings shall annex to each own risk and solvency assessment report and each regular supervisory report or annual summary of the regular supervisory report a directors’ accuracy certificate attesting the accuracy of the information submitted in the reports which shall be submitted in a form specified by the Bank from time to time.
(3)At least 2 directors and the chief executive of the undertaking shall sign a directors’ accuracy certificate. Auditor’s report 37.
(1)Such elements of the quantitative information to be submitted by insurance undertakings and reinsurance undertakings under financial services legislation and other laws applicable in the State adopted pursuant to the Directive as may from time to time be specified by notice in writing by the Bank shall be audited by a person duly qualified under the Act of 2014 who shall make a report to the Bank in a form specified by the Bank from time to time.
(2)The report referred to in paragraph
(1)shall include a reasonable assurance opinion on the elements of the report on the solvency and financial condition of the undertaking as referred to in Regulation 52 relevant to the balance sheet, own funds and capital requirements.
(3)Such elements of the quantitative information to be submitted by a participating insurance undertaking or participating reinsurance undertaking, an insurance holding company or a mixed financial holding company (as referred to in Regulation 216
(3)(a) and (b)) under financial services legislation and other laws applicable in the State adopted pursuant to the Directive as may from time to time be specified by notice in writing by the Bank shall be audited by a person duly qualified under the Act of 2014 who shall make a report to the Bank in a form specified by the Bank from time to time.
(4)The report referred to in paragraph
(3)shall include a reasonable assurance opinion on the elements of the report on the solvency and financial condition of the participating insurance undertaking or reinsurance undertaking, insurance holding company or mixed financial holding company as referred to in Regulation 258 relevant to the balance sheet, own funds and capital requirements. Supervisory review process 38.
(1)The Bank shall review and evaluate the strategies, processes and reporting procedures which are put in place by an insurance undertaking or reinsurance undertaking to comply with these Regulations and other laws applicable in the State adopted pursuant to the Directive.
(2)The review and evaluation shall comprise the assessment of the qualitative requirements relating to the system of governance, the assessment of the risks which the undertaking faces or may face and the assessment of the ability of the undertaking to assess its risks taking into account the environment in which it is operating.
(3)The Bank shall in particular review and evaluate compliance with the following: (
  1. a)the system of governance, including the own risk and solvency assessment, as set out in Regulations 44 to 51; (
  2. b)the technical provisions as set out in Regulations 83 to 101; (
  3. c)the quality and quantity of own funds as set out in Regulations 102 to 112; (
  4. d)the capital requirements as set out in Regulations 113 to 140; (
  5. e)where the undertaking uses a full or partial internal model, ongoing compliance with the requirements for full and partial internal models set out in Regulations 125 to 138; (
  6. f)the investment rules as set out in Regulations 141 to 143.
(4)The Bank shall have in place appropriate monitoring tools that enable it to identify deteriorating financial conditions in the undertaking and to monitor how that deterioration is remedied.
(5)The Bank shall assess the adequacy of the methods and practices of the undertaking designed to identify possible events or future changes in economic conditions that could have adverse effects on its overall financial standing.
(6)The Bank shall assess the ability of the undertaking to withstand those possible events or future changes in economic conditions.
(7)The Bank shall conduct the reviews, evaluations and assessments referred to in paragraphs
(1),
(3),
(5)and
(6)(referred to in these Regulations as “the supervisory review process”) regularly and establish the minimum frequency and the scope of those reviews, evaluations and assessments having regard to the nature, scale and complexity of the activities of the undertaking. Capital add-on 39.
(1)Following the supervisory review process the Bank may, in exceptional circumstances, set a capital add-on for an insurance undertaking or reinsurance undertaking and direct that undertaking to comply with it.
(2)For the purposes of paragraph
(1)exceptional circumstances exist where— (
  1. a)the Bank concludes that the risk profile of the undertaking deviates significantly from the assumptions underlying the Solvency Capital Requirement, as calculated using the standard formula in accordance with Regulations 116 to 124 and either— (
  2. i)the requirement to use an internal model under Regulation 131 is inappropriate or has been ineffective, or (
  3. ii)a partial or full internal model is being developed in accordance with Regulation 131, (
  4. b)the Bank concludes that the risk profile of the undertaking deviates significantly from the assumptions underlying the Solvency Capital Requirement, as calculated using an internal model or partial internal model in accordance with Regulations 125 to 138, because certain quantifiable risks are captured insufficiently and the adaptation of the model to better reflect the given risk profile has failed within an appropriate timeframe, (
  5. c)the Bank concludes that the system of governance of the undertaking deviates significantly from the standards laid down in Regulations 44 to 51, that those deviations prevent it from being able to properly identify, measure, monitor, manage and report the risks that it is or could be exposed to and that the application of other measures is in itself unlikely to improve the deficiencies sufficiently within an appropriate timeframe, or (
  6. d)the undertaking applies the matching adjustment referred to in Regulation 86, the volatility adjustment referred to in Regulation 88 or the transitional measures referred to in Regulations 99 and 100 and the Bank concludes that the risk profile of the undertaking deviates significantly from the assumptions underlying those adjustments and transitional measures.
(3)A direction imposed pursuant to paragraph
(1)shall be in writing and shall specify the grounds for the direction.
(4)In the circumstances set out in subparagraphs (a) and (b) of paragraph
(2)the capital add-on shall be calculated in such a way as to ensure that the undertaking complies with Regulation 114
(3)to
(5).
(5)In the circumstances set out in subparagraph (c) of paragraph
(2)the capital add-on shall be proportionate to the material risks arising from the deficiencies which gave rise to the decision of the Bank to set the add on.
(6)In the circumstances set out in subparagraph (d) of paragraph
(2)the capital add-on shall be proportionate to the material risks arising from the deviation referred to in that sub-paragraph.
(7)In the cases set out in subparagraphs (b) and (c) of paragraph
(2)the Bank shall ensure that the undertaking makes every effort to remedy the deficiencies that led to the imposition of the capital add-on.
(8)The capital add-on shall be reviewed at least once a year by the Bank and shall be revoked when the exceptional circumstances specified in paragraph
(2)are no longer applicable.
(9)The Solvency Capital Requirement including the capital add-on imposed shall replace the inadequate Solvency Capital Requirement.
(10)Despite paragraph
(9)the Solvency Capital Requirement shall not include the capital add-on imposed in accordance with paragraph
(2)(c) for the purposes of the calculation of the risk margin referred to in Regulation 84
(9)to
(11). Supervision of outsourced functions and activities 40.
(1)Without prejudice to Regulation 51, an insurance undertaking or reinsurance undertaking which outsources a function or an insurance or reinsurance activity to a person (in this Regulation referred to as a “service provider”) shall ensure that— (
  1. a)the service provider co-operates with the Bank in connection with the outsourced function or activity, (
  2. b)the undertaking, its auditors and the Bank have effective access to data related to the outsourced function or activity, and (
  3. c)the Bank has effective access to the business premises of the service provider and is able to exercise that right of access.
(2)Where the service provider is located in a Member State other than the State, in accordance with Article 38
(2)of the Directive, the Bank shall have the right to carry out itself, or through the intermediary of persons it appoints for the purpose, on-site inspections at the premises of the service provider and shall inform the appropriate authority of that Member State before conducting an on site inspection.
(3)In circumstances where the service provider is a non-supervised entity the Bank shall inform the supervisory authority in the Member State in question.
(4)The Bank may delegate the carrying out of an on-site inspection under paragraph
(2)to the appropriate authority of the Member State where the service provider is located.
(5)Where an insurance undertaking or reinsurance undertaking authorised in a Member State other than the State outsources a function or an insurance or reinsurance activity to a service provider located in the State, the supervisory authorities of the undertaking shall be permitted to carry out themselves, or though the intermediary of persons they appoint for the purpose, on-site inspections at the premises of the service provider and shall inform the appropriate authority of the service provider in the State before carrying out the on-site inspection.
(6)In circumstances where the service provider is a non-supervised entity the appropriate authority shall be the Bank.
(7)The supervisory authority may delegate the carrying out of an on site inspection under paragraph
(5)to the Bank. Transfer of insurance portfolio 41.
(1)For the purposes of section 13 of the Assurance Companies Act 1909 (1909 c. 49) and subject to section 36 of the Insurance Act 1989 (No. 3 of 1989) and these Regulations, an insurance undertaking whose head office is in the State may, after consultation with the Bank, transfer all or part of its portfolios of contracts, including those concluded either under the right of establishment or the freedom to provide services, to an accepting undertaking whose head office is in the State or another Member State.
(2)Where a branch, established in another Member State, whose head office is situated in the State, proposes to transfer all or part of its portfolio of contracts, the Bank shall consult the supervisory authority of the Member State of the branch.
(3)A transfer shall not be effected unless— (
  1. a)the supervisory authority of the home Member State of the accepting undertaking certifies that, after taking the transfer into account, the accepting undertaking possesses the necessary eligible own funds to cover the Solvency Capital Requirement referred to in Regulation 113, and (
  2. b)the supervisory authorities of every Member State where the contracts were concluded, either under the right of establishment or the freedom to provide services, and (in a case within paragraph
(2)) the supervisory authority of the Member State in which the branch is situated, have consented.
(4)The Bank shall consult the supervisory authorities referred to in paragraph
(3)(b) before the transfer to obtain their opinion or consent, and the absence of any response by a supervisory authority within 3 months of being consulted shall be deemed to be consent by that supervisory authority.
(5)Without prejudice to the requirements of section 13
(3)(
  1. a)of the Assurance Companies Act 1909 , a transfer in accordance with this Regulation shall be published— (
  2. a)prior to the transfer being authorised, by advertisement once in each of 2 daily newspapers published in the State, and (
  3. b)in each Member State in which the risks are situated or which is the Member State of the commitment in accordance with the law of that Member State.
(6)Where the Bank is consulted by the supervisory authority of a Member State pursuant to Article 39 of the Directive, the Bank shall provide an opinion or consent within 3 months of being consulted and the absence of any response within that period from the Bank shall be deemed to be consent.
(7)Where— (
  1. a)a transfer is to be effected under the law of a Member State other than the State in accordance with Article 39 of the Directive, and (
  2. b)the State is a Member State in which the risk is situated or is a Member State of the commitment, the transfer shall, prior to being authorised, be published by advertisement once in Iris Oifigiúil and once in each of 2 daily newspapers published in the State.
(8)A transfer in accordance with this Regulation shall automatically be valid against policy holders, insured persons and any other persons having rights or obligations arising out of the contracts transferred. Transfer of reinsurance portfolio 42.
(1)Subject to paragraph
(2), a reinsurance undertaking whose head office is in the State may transfer its portfolio of reinsurance contracts to another person without restriction.
(2)A reinsurance undertaking whose head office is in the State shall not acquire a portfolio of reinsurance contracts held by another reinsurance undertaking (whether having its head office in the State or another Member State) unless it has obtained from the Bank a certificate to the effect that, after taking the acquisition into account, the accepting undertaking possesses the necessary eligible own funds to cover the Solvency Capital Requirement referred to in Regulation 113.
(3)In this Regulation— “portfolio of reinsurance contracts” includes contracts entered into under the right of establishment or the freedom to provide services in a Member State, and includes a part of a portfolio; “reinsurance contracts” means reinsurance contracts transacted by a reinsurance undertaking in the course of carrying on a reinsurance business. Part 4 CONDITIONS GOVERNING BUSINESS Chapter 1 Responsibilities of board of directors Responsibility of board of directors 43. The board of directors of an insurance undertaking or reinsurance undertaking has the ultimate responsibility for compliance with these Regulations and other laws applicable in the State adopted pursuant to the Directive. Chapter 2 System of governance General governance requirements 44.
(1)An insurance undertaking or reinsurance undertaking shall establish and maintain an effective system of governance which provides for sound and prudent management of the business carried on by it.
(2)The system of governance shall include at least— (
  1. a)an adequate transparent organisational structure with a clear allocation and appropriate segregation of responsibilities, (
  2. b)an effective system for ensuring the transmission of information, and (
  3. c)compliance with the requirements laid down in Regulations 45 to 51.
(3)The system of governance shall be subject to regular internal review.
(4)The system of governance shall be proportionate to the nature, scale and complexity of the operations of the undertaking.
(5)The undertaking shall have written policies in place to cover at least risk management, internal control, internal audit and, where relevant, outsourcing and shall ensure that those policies are implemented.
(6)The undertaking shall review the policies at least annually.
(7)The policies and amendments of the policies (other than minor ones) shall be subject to prior approval by the board of directors.
(8)The policies shall be adapted in view of any significant changes.
(9)The undertaking shall take reasonable steps to ensure continuity and regularity in the performance of its activities, including the development of contingency plans and for that purpose it shall employ appropriate and proportionate systems, resources and procedures.
(10)The Bank shall, where it considers it appropriate to do so, exercise its powers under financial services legislation to verify the system of governance of the undertaking and to evaluate emerging risks identified by the undertaking itself which may affect its financial soundness.
(11)The Bank shall, where it considers it appropriate to do so, exercise its powers under financial services legislation to require the undertaking to improve and strengthen its system of governance to ensure compliance with the requirements set out in Regulations 45 to 51. Fit and proper requirements 45. An insurance undertaking or reinsurance undertaking shall notify the Bank immediately if— (
  1. a)a person ceases to perform a pre-approval controlled function, as defined in section 22 of the Act of 2010, which the person had been previously appointed by the undertaking to perform, or (
  2. b)a person who performs a pre-approval controlled function has been replaced because the person no longer complies with any standard of fitness and probity in a code issued by the Bank under section 50 of that Act. Risk management 46.
(1)An insurance undertaking or reinsurance undertaking shall establish and maintain an effective risk management system comprising strategies, processes and reporting procedures necessary to identify, measure, monitor, manage and report, on a continuous basis, the risks, on an individual and aggregated level, to which the undertaking is or could be exposed, and any interdependencies.
(2)The risk management system shall be effective and well integrated into the organisational structure and decision-making processes of the undertaking with proper consideration of the persons who effectively run the undertaking or have other key functions.
(3)The risk management system shall cover the risks that are included in the calculation of the Solvency Capital Requirement as set out in Regulation 114
(6)and
(7)as well as the risks which are not, or are not fully, included in the calculation of it.
(4)The risk management system shall cover at least the following areas: (
  1. a)underwriting and reserving; (
  2. b)asset–liability management; (
  3. c)investment, in particular derivatives and similar commitments; (
  4. d)liquidity and concentration risk management; (
  5. e)operational risk management; (
  6. f)reinsurance and other risk-mitigation techniques.
(5)The written policy on risk management referred to in Regulation 44
(5)shall comprise policies relating to the matters specified in paragraph
(4)(a) to (f).
(6)An insurance undertaking or reinsurance undertaking which applies the matching adjustment referred to in Regulation 86 or the volatility adjustment referred to in Regulation 88, shall set up a liquidity plan projecting the incoming and outgoing cash flows in relation to the assets and liabilities subject to those adjustments.
(7)As regards asset-liability management, the undertaking shall regularly assess— (
  1. a)the sensitivity of its technical provisions and eligible own funds to the assumptions underlying the extrapolation of the relevant risk-free interest rate term structure referred to in Regulation 85, (
  2. b)where the matching adjustment referred to in Regulation 86 is applied— (
  3. i)the sensitivity of its technical provisions and eligible own funds to the assumptions underlying the calculation of the matching adjustment, including the calculation of the fundamental spread referred to in Regulation 87
(1)(b), and the possible effect of a forced sale of assets on its eligible own funds, (
  1. ii)the sensitivity of its technical provisions and eligible own funds to changes in the composition of the assigned portfolio of assets, and (iii) the impact of a reduction of the matching adjustment to zero, and (
  2. c)where the volatility adjustment referred to in Regulation 88 is applied— (
  3. i)the sensitivity of its technical provisions and eligible own funds to the assumptions underlying the calculation of the volatility adjustment and the possible effect of a forced sale of assets on its eligible own funds, and (
  4. ii)the impact of a reduction of the volatility adjustment to zero.
(8)The undertaking shall submit the assessments referred to in paragraph
(7)to the Bank annually as part of the information required to be submitted to the Bank under financial services legislation.
(9)Where the reduction of the matching adjustment or the volatility adjustment to zero would result in non-compliance with the Solvency Capital Requirement, the undertaking shall also submit an analysis of the measures it could apply in such a situation to re-establish the level of eligible own funds covering the Solvency Capital Requirement or to reduce its risk profile to restore compliance with the Solvency Capital Requirement.
(10)Where the volatility adjustment referred to in Regulation 88 is applied, the written policy on risk management referred to in Regulation 44
(5)shall comprise a policy on the criteria for the application of the volatility adjustment.
(11)As regards investment risk, the undertaking shall demonstrate that it complies with Regulations 141 and 142.
(12)The undertaking shall provide for a risk management function which shall be structured in such a way as to facilitate the implementation of the risk management system.
(13)In order to avoid overreliance on external credit assessment institutions when the undertaking uses an external credit rating assessment in the calculation of technical provisions or the Solvency Capital Requirement, the undertaking shall assess the appropriateness of those external credit assessments as part of its risk management by using additional assessments wherever practicably possible in order to avoid any automatic dependence on external assessments.
(14)Where the undertaking uses a partial or full internal model approved in accordance with Regulations 125 and 126 the risk management function shall cover the following additional tasks: (
  1. a)to design and implement the internal model; (
  2. b)to test and validate the internal model; (
  3. c)to document the internal model and any subsequent changes made to it; (
  4. d)to analyse the performance of the internal model and to produce summary reports of it; (
  5. e)to inform the board of directors about the performance of the internal model, suggesting areas needing improvement, and providing updates on the status of efforts to improve previously identified weaknesses. Own risk and solvency assessment 47.
(1)As part of its risk management system an insurance undertaking or reinsurance undertaking shall conduct its own risk and solvency assessment.
(2)The assessment shall include at least the following: (
  1. a)the overall solvency needs taking into account the specific risk profile, approved risk tolerance limits and the business strategy of the undertaking; (
  2. b)the compliance, on a continuous basis, with the capital requirements, as laid down in Regulations 113 to 140, and with the requirements regarding technical provisions, as laid down in Regulations 83 to 101; (
  3. c)the significance with which the risk profile of the undertaking deviates from the assumptions underlying the Solvency Capital Requirement as laid down in Regulation 114
(3)to
(5), calculated with the standard formula in accordance with Regulations 116 to 124 or with its partial or full internal model in accordance with Regulations 125 to 138.
(3)For the purposes of paragraph
(2)(a), the undertaking shall have in place processes which are proportionate to the nature, scale and complexity of the risks inherent in its business and which enable it to properly identify and assess the risks it faces in the short and long term and to which it is or could be exposed.
(4)The undertaking shall be able to demonstrate to the Bank the methods used in the assessment under paragraph
(3).
(5)Where the undertaking applies the matching adjustment referred to in Regulation 86, the volatility adjustment referred to in Regulation 88 or the transitional measures referred to in Regulations 99 and 100, it shall perform the assessment of compliance with the capital requirements referred to in paragraph
(2)(b) with and without taking into account those adjustment and transitional measures.
(6)For the purposes of paragraph
(2)(c), when an internal model is used, the assessment shall be performed together with the recalibration that transforms the internal risk numbers into the Solvency Capital Requirement risk measure and calibration.
(7)The assessment shall be an integral part of the business strategy of the undertaking and shall be taken into account on an ongoing basis in the strategic decisions of the undertaking.
(8)The undertaking shall perform the assessment regularly and without any delay following any significant change in its risk profile.
(9)The undertaking shall provide the Bank with the results of each assessment in such form and manner as may be specified by the Bank as part of the information required to be provided to the Bank under financial services legislation.
(10)The assessment shall not serve to calculate a capital requirement for the undertaking and the Solvency Capital Requirement of the undertaking shall be adjusted only in accordance Regulations 39, 234 to 237 and 241. Internal control 48.
(1)An insurance undertaking or reinsurance undertaking shall establish and maintain an effective internal control system.
(2)The system shall include administrative and accounting procedures, an internal control framework, appropriate reporting arrangements at all levels of the undertaking and a compliance function.
(3)The compliance function shall include— (
  1. a)advising the board of directors on compliance with these Regulations and other laws applicable in the State adopted pursuant to the Directive, and (
  2. b)an assessment of the possible impact of any changes to laws applicable in the State on the operations of the undertaking and the identification and assessment of compliance risk. Internal audit 49.
(1)An insurance undertaking or reinsurance undertaking shall establish and maintain an effective internal audit function.
(2)The undertaking’s internal audit function shall include an evaluation of the adequacy and effectiveness of the internal control system and other elements of the system of governance.
(3)The undertaking’s internal audit function shall be objective and independent from its operational functions.
(4)Any findings and recommendations of the internal audit shall be reported to the board of directors which shall determine what actions are to be taken with respect to each of the internal audit findings and recommendations and shall ensure that those actions are carried out. Actuarial function 50.
(1)An insurance undertaking or reinsurance undertaking shall establish and maintain an effective actuarial function— (
  1. a)to coordinate the calculation of technical provisions, (
  2. b)to ensure the appropriateness of the methodologies and underlying models used as well as the assumptions made in the calculation of technical provisions, (
  3. c)to assess the sufficiency and quality of the data used in the calculation of technical provisions, (
  4. d)to compare best estimates against experience, (
  5. e)to inform the board of directors of the reliability and adequacy of the calculation of technical provisions, (
  6. f)to oversee the calculation of technical provisions in the cases set out in Regulation 95, (
  7. g)to express an opinion on the overall underwriting policy, (
  8. h)to express an opinion on the adequacy of reinsurance arrangements, and (
  9. i)to contribute to the effective implementation of the risk management system referred to in Regulation 46 in particular with respect to the risk modelling underlying the calculation of the capital requirements set out in Regulations 113 to 140 and with respect to the assessment referred to in Regulation 47.
(2)The actuarial function shall be carried out by persons who have knowledge of actuarial and financial mathematics, commensurate with the nature, scale and complexity of the risks inherent in the business of the undertaking, and who are able to demonstrate their relevant experience with applicable professional and other standards. Outsourcing 51.
(1)An insurance undertaking or reinsurance undertaking shall be fully responsible for discharging all of its obligations under these Regulations when they outsource functions or any insurance or reinsurance activities.
(2)Where an undertaking outsources critical or important operational functions or activities, it shall not be done in such a way as to lead to any of the following: (
  1. a)materially impairing the quality of the system of governance of the undertaking; (
  2. b)unduly increasing the operational risk; (
  3. c)impairing the ability of the Bank to monitor the compliance of the undertaking with its obligations; (
  4. d)undermining continuous and satisfactory service to policy holders.
(3)An undertaking shall, in a timely manner, notify the Bank— (
  1. a)before outsourcing critical or important functions or activities, and (
  2. b)regarding the occurrence of subsequent material developments with respect to those functions or activities. Chapter 3 Public disclosure Report on solvency and financial condition: contents 52.
(1)An insurance undertaking or reinsurance undertaking shall make publicly available an annual report on its solvency and financial condition which must— (a) include the information required in Regulation 34
(4)(a) and comply with the principles set out in Regulation 34
(4)(b), and (b) contain the information specified in paragraph
(2), either in full or, subject to Regulation 55
(3), by way of reference to equivalent information, both in nature and scope, published under other legal or regulatory requirements.
(2)The information referred to in paragraph
(1)(
  1. b)is— (
  2. a)a description of the business and performance of the undertaking, (
  3. b)a description of the system of governance of the undertaking and an assessment of its adequacy for the risk profile of the undertaking, (
  4. c)a description, separately for each category of risk, of the risk exposure, concentration, mitigation and sensitivity, (
  5. d)a description, separately for assets, technical provisions and other liabilities, of the bases and methods used for their valuation, together with an explanation of any major differences in the bases and methods used for their valuation in financial statements, and (
  6. e)a description of the capital management, including the following: (
  7. i)the structure and amount of own funds, and their quality; (
  8. ii)the amounts of the Solvency Capital Requirement and of the Minimum Capital Requirement; (iii) information allowing a proper understanding of the main differences between the underlying assumptions of the standard formula and those of any internal model used by the undertaking for the calculation of its Solvency Capital Requirement; (
  9. iv)the amount of any non-compliance with the Minimum Capital Requirement or any significant non-compliance with the Solvency Capital Requirement during the reporting period, even if subsequently resolved, with an explanation of its origin and consequences as well as any remedial measures taken.
(3)Where the matching adjustment referred to in Regulation 86 is applied, the matters specified in paragraph
(2)(d) include a description of the matching adjustment and of the portfolio of obligations and assigned assets to which the matching adjustment is applied as well as a quantification of the impact of a change to zero of the matching adjustment on the undertaking’s financial position.
(4)The matters specified in paragraph
(2)(d) include a statement on whether the volatility adjustment referred to in Regulation 88 is used by the undertaking and a quantification of the impact of a change to zero of the volatility adjustment on the undertaking’s financial position.
(5)The matters specified in paragraph
(2)(e)(i) include an analysis of any significant changes as compared to the previous report and an explanation of any major differences in relation to the value of such elements in financial statements, and a brief description of the capital transferability.
(6)The disclosure of the Solvency Capital Requirement referred to in paragraph
(2)(e)(ii) shall show separately the amount calculated in accordance with Regulations 116 to 138 and any capital add-on imposed in accordance with Regulation 39 or the impact of the specific parameters which the undertaking is required to use in accordance with Regulation 124, together with concise information on its justification by the Bank.
(7)Without prejudice to any disclosure that is required by law, for a transitional period until 31 December 2020, the undertaking, in disclosing the total Solvency Capital Requirement referred to in paragraph
(2)(e)(ii), is not required to disclose the capital add-on or the impact of the specific parameters it is required to use in accordance with Regulation 124.
(8)The disclosure of the Solvency Capital Requirement by the undertaking shall be accompanied, where applicable, by an indication that its final amount is still subject to supervisory assessment. Report on solvency and financial condition: transitional deadlines
  1. An insurance undertaking or reinsurance undertaking shall make publicly available the solvency and financial condition report referred to in Regulation 52 no later than— (a)20 weeks after the end of the undertaking’s financial year ending on or after 30 June 2016 but before 1 January 2017, (b)18 weeks after the end of the undertaking’s financial year ending on or after 1 January 2017 but before 1 January 2018, (c)16 weeks after the end of the undertaking’s financial year ending on or after 1 January 2018 but before 1 January 2019, and (d)14 weeks after the end of the undertaking’s financial year ending on or after 1 January 2019 but before 1 January
  2. Information for EIOPA
  3. Without prejudice to Article 35 of Regulation (EU) No 1094/2010, the Bank shall provide the following information to EIOPA annually: (a) the average capital add on per undertaking, and the distribution of capital add ons imposed by it during the previous year, measured as a percentage of the Solvency Capital Requirement, shown separately for— (i) all insurance undertakings and reinsurance undertakings together, (ii) life insur

🔗 To official source

AI explanation based on the official legal text. Indicative, not a substitute for legal advice.