Sittings · Document

DRAFT REPORT (COM(2021)0581 – C90367/2021 – 2021/0295(COD)) 2022-06-06

On the proposal for a directive of the European Parliament and of the Council Amending Directive 2009/138/EC as regards proportionality, quality of supervision, reporting, long-term guarantee measures, macro-prudential tools, sustainability risks, group and cross-border supervision

Committee on Economic and Monetary Affairs · Rapporteur: Markus Ferber

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6.6.2022

PR_COD_1amCom

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DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a directive of the European Parliament and of the Council Amending Directive 2009/138/EC as regards proportionality, quality of supervision, reporting, long-term guarantee measures, macro-prudential tools, sustainability risks, group and cross-border supervision

(COM(2021)0581 – C90367/2021 – 2021/0295(COD))

(Ordinary legislative procedure: first reading)

– having regard to the Commission proposal to Parliament and the Council (COM(2021)0581),

– having regard to Article 294(2) and Article 53(1), Article 62 and Article 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C90439/2021),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to the opinion of the European Economic and Social Committee of 23 February 2022,

– having regard to Rule 59 of its Rules of Procedure,

– having regard to the report of the Committee on Economic and Monetary Affairs (A90000/2022),

1. Adopts its position at first reading hereinafter set out;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment 1

Proposal for a directive

Recital 3

Text proposed by the Commission

Amendment

(3) As underlined in the Commission’s Communication of 24 September 2020 ‘A Capital Markets Union for people and businesses’18 , incentivising institutional investors, in particular insurers, to make more long-term investments will be instrumental in supporting re-equitisation in the corporate sector. To facilitate insurers’ contribution to the financing of the economic recovery of the Union, the prudential framework should be adjusted to better take into account the long-term nature of the insurance business. In particular, when calculating the Solvency Capital Requirement under the standard formula, the possibility to use a more favourable standard parameter for equity investments which are held with a long-term perspective should be facilitated, provided that insurance and reinsurance undertakings comply with sound and robust criteria, that preserve policyholder protection and financial stability. Such criteria should aim to ensure that insurance and reinsurance undertakings are able to avoid forced selling of equities intended to be held for the long term, including under stressed market conditions.

__________________

18 COM/2050/590 final

Or. en

Amendment 2

Proposal for a directive

Recital 4

Text proposed by the Commission

Amendment

(4) In its Communication of 11 December 2019 on the European Green Deal19 , the Commission made a commitment to integrate better into the Union’s prudential framework the management of climate and environmental risks. The European Green Deal is the Union’s new growth strategy, which aims to transform the Union into a modern, resource-efficient and competitive economy with no net emissions of greenhouse gases by 2050. It will contribute to the objective of building an economy that works for the people, strengthening the Union’s social market economy, helping to ensure that it is future-ready and that it delivers stability, jobs, growth and investment. In its proposal of 4 March 2020 for a European Climate Law, the Commission proposed to make the objective of climate neutrality and climate resilience by 2050 binding in the Union. That proposal was adopted by the European Parliament and by the Council and it entered into force on 29 July 202120 . The Commission’s ambition to ensure global leadership by the EU on the path towards 2050 was reiterated in the 2021 Strategic Foresight Report21 , which identifies the building of resilient and future-proof economic and financial systems as a strategic area of action.

deleted

__________________

19 COM(2019)640 final

20 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1).

21 COM(2021)750 final

Or. en

Amendment 3

Proposal for a directive

Recital 5

Text proposed by the Commission

Amendment

(5) The EU sustainable finance framework will play a key role in meeting the targets of the European Green Deal and environmental regulation should be complemented by a sustainable finance framework which channels finance to investments that reduce exposure to these climate and environmental risks. In its Communication of 6 July 2021 on a Strategy for Financing the Transition to a Sustainable Economy22 , the Commission committed to propose amendments to Directive 2009/138/EC to consistently integrate sustainability risks in risk management of insurers by requiring climate change scenario analysis by insurers.

deleted

__________________

22 COM(2021)390

Or. en

Amendment 4

Proposal for a directive

Recital 14

Text proposed by the Commission

Amendment

(14) Captive insurance undertakings and captive reinsurance undertakings which only cover risks associated with the industrial or commercial group to which they belong, present a particular risk profile that should be taken into account when defining some requirements, in particular on own-risk and solvency assessment, disclosures and the related empowerments for the Commission to further specify the rules on such empowerments. Moreover, captive insurance undertakings and captive reinsurance undertakings should also be able to benefit from the proportionality measures when they are classified as low-risk profile undertakings.

(14) Captive insurance undertakings and captive reinsurance undertakings which only cover risks associated with the industrial or commercial group to which they belong, present a particular risk profile that should be taken into account when defining some requirements, in particular on own-risk and solvency assessment, disclosures and the related empowerments for the Commission to further specify the rules on such empowerments. Therefore, captive insurance undertakings and captive reinsurance undertakings should benefit from the proportionality measures by being automatically classified as low-risk profile undertakings.

Or. en

Amendment 5

Proposal for a directive

Recital 19

Text proposed by the Commission

Amendment

(19) Reporting and disclosure deadlines should be clearly laid down in Directive 2009/138/EC. However, it should be recognised that extraordinary circumstances such as sanitary emergencies, natural catastrophes and other extreme events could make it impossible for insurance and reinsurance undertakings to submit such reports and disclosures, within the established deadlines. To this end, the Commission should be empowered to extend the deadlines under such circumstances.

(19) Reporting and disclosure deadlines should be clearly laid down in Directive 2009/138/EC. However, it should be recognised that exceptional circumstances such as sanitary emergencies, natural catastrophes and other extreme events could make it impossible for insurance and reinsurance undertakings to submit such reports and disclosures, within the established deadlines. To this end, the Commission should be empowered to extend the deadlines under such circumstances after having consulted EIOPA.

Or. en

Amendment 6

Proposal for a directive

Recital 21

Text proposed by the Commission

Amendment

(21) As insurance activities may trigger or amplify risks for financial stability, insurance and reinsurance undertakings should incorporate macroprudential considerations and analysis in their investment and risk management activities. This could include taking into account the potential behaviour of other market participants, macroeconomic risks, such as credit cycle downturns or reduced market liquidity, or excessive concentrations at market level in certain asset types, counterparties or sectors.

deleted

Or. en

Amendment 7

Proposal for a directive

Recital 22

Text proposed by the Commission

Amendment

(22) Insurance and reinsurance undertakings should factor any relevant macroprudential information provided by the supervisory authorities in their own-risk and solvency assessment. The supervisory authorities should analyse the own-risk and solvency assessment supervisory reports of undertakings within their jurisdictions, aggregate them and provide input to undertakings on the elements that should be considered in their future own-risk and solvency assessments, particularly as regards macroprudential risks. Member States should ensure that, where they entrust an authority with a macroprudential mandate, the outcome and the findings of macroprudential assessments by the supervisory authorities are shared with that macroprudential authority.

deleted

Or. en

Amendment 8

Proposal for a directive

Recital 24

Text proposed by the Commission

Amendment

(24) Authorities with a macroprudential mandate are in charge of the macroprudential policy for their national insurance and reinsurance market. The macroprudential policy can be pursued by the supervisory authority or by another authority or body entrusted with this purpose.

deleted

Or. en

Amendment 9

Proposal for a directive

Recital 25

Text proposed by the Commission

Amendment

(25) Good coordination between supervisory authorities and the relevant bodies and authorities with a macroprudential mandate is important for identifying, monitoring and analysing possible risks to the stability of the financial system that may affect insurance and reinsurance undertakings, and for taking measures to effectively and appropriately address those risks. Cooperation between authorities should also aim to avoid any form of duplicative or inconsistent actions.

(25) Good coordination between supervisory authorities is important for identifying, monitoring and analysing possible risks to the stability of the financial system that may affect insurance and reinsurance undertakings, and for taking measures to effectively and appropriately address those risks. Cooperation between authorities should also aim to avoid any form of duplicative or inconsistent actions.

Or. en

Amendment 10

Proposal for a directive

Recital 26

Text proposed by the Commission

Amendment

(26) Directive 2009/138/EC requires insurance and reinsurance undertakings to have, as an integrated part of their business strategy, a periodic own-risk and solvency assessment. Some risks, such as climate change risks, are difficult to quantify or they materialise over a period that is longer than the one used for the calibration of the Solvency Capital Requirement. Those risks can be better taken into account in the own-risk and solvency assessment. Where insurance and reinsurance undertakings have material exposure to climate risks, they should be required to carry out, within appropriate intervals and as part of the own-risk and solvency assessment, analyses of the impact of long-term climate change risk scenarios on their business. Such analyses should be proportionate to the nature, scale and complexity of the risks inherent in the business of the undertakings. In particular, while the assessment of the materiality of exposure to climate risks should be required from all insurance and reinsurance undertakings, long-term climate scenario analyses should not be required for low-risk profile undertakings.

deleted

Or. en

Amendment 11

Proposal for a directive

Recital 30

Text proposed by the Commission

Amendment

(30) In order to guarantee the highest degree of accuracy of the information disclosed to the public, a substantial part of the solvency and financial condition report should be subject to audit. Such audit requirement should cover the balance sheet assessed in accordance with the valuation criteria set out in Directive 2009/138/EC.

deleted

Or. en

Amendment 12

Proposal for a directive

Recital 31

Text proposed by the Commission

Amendment

(31) The burden of the auditing requirement does not seem to be justified for low-risk profile undertakings, which are not expected to be relevant for the financial stability of the Union and whose policyholders are not numerous. One of the criteria that low-risk profile undertakings are required to meet is that they be small in size. To alleviate this burden, an exclusion from this requirement should be granted.

deleted

Or. en

Amendment 13

Proposal for a directive

Recital 34

Text proposed by the Commission

Amendment

(34) The determination of the relevant risk-free interest rate term structure should balance the use of information derived from relevant financial instruments with the ability of insurance and reinsurance undertakings to hedge interest rates derived from financial instruments. In particular, it can happen that smaller insurance and reinsurance undertakings do not have the capacities to hedge interest rate risk with instruments other than bonds, loans or similar assets with fixed cash-flows. The relevant risk-free interest rate term structure should therefore be extrapolated for maturities where the markets for bonds are no longer deep, liquid and transparent. However, the method for the extrapolation should make use of information derived from relevant financial instruments other than bonds, where such information is available from deep, liquid and transparent markets for maturities where the bond markets are no longer deep, liquid and transparent. To ensure certainty and harmonised application while also allowing for timely reaction to changes in market conditions, the Commission should adopt delegated acts to specify how the new extrapolation method should apply.

(34) The determination of the relevant risk-free interest rate term structure should balance the use of information derived from relevant financial instruments with the ability of insurance and reinsurance undertakings to hedge interest rates derived from financial instruments. In particular, it can happen that smaller insurance and reinsurance undertakings do not have the capacities to hedge interest rate risk with instruments other than bonds, loans or similar assets with fixed cash-flows. The relevant risk-free interest rate term structure should therefore be extrapolated for maturities where the markets for bonds are no longer deep, liquid and transparent. However, the method for the extrapolation should make use of information derived from relevant financial instruments other than bonds, where such information is available from deep, liquid and transparent markets for maturities where the bond markets are no longer deep, liquid and transparent. To ensure certainty, harmonised application and sufficient convergence speed while also allowing for timely reaction to changes in market conditions, the Commission should adopt delegated acts to specify how the new extrapolation method should apply. For that purpose, the rules on the determination of the starting point of the extrapolation should be calibrated in such a way that the starting point for the euro is set at a maturity of 20 years.

Or. en

Amendment 14

Proposal for a directive

Recital 37

Text proposed by the Commission

Amendment

(37) Directive 2009/138/EC provides for a country component in the volatility adjustment that aims to ensure that exaggerations of bond spreads in a specific country are mitigated. However, the activation of the country component is based on an absolute threshold and a relative threshold with respect to the risk-adjusted spread of the country, which can lead to cliff-edge effects and therefore increase the volatility of own funds of insurance and reinsurance undertakings. In order to ensure that exaggerations of bond spreads in a specific Member State whose currency is the euro are mitigated effectively, the country component should be replaced by a macro component which is to be calculated based on the differences between the risk adjusted spread for the euro and the risk adjusted spread for the country. In order to avoid cliff-edge effects, the calculation should avoid discontinuities with respect to the input parameters.

deleted

Or. en

Amendment 15

Proposal for a directive

Recital 39 a (new)

Text proposed by the Commission

Amendment

(39a) Directive 2009/138/EC requires that the amount of eligible own funds necessary to support the insurance and reinsurance obligations be determined for the purpose of the risk margin calculation and that the Cost-of-Capital rate is equal to the additional rate, above the relevant risk-free interest rate, that an insurance or reinsurance undertaking would incur holding that amount of eligible own funds. Directive 2009/138/EC also requires that the Cost-of-Capital rate be reviewed periodically. For that purpose, the reviews should ensure that the Cost-of-Capital rate remains risk-based and is not set at an overly conservative level. In addition, the projection of future capital requirements for that purpose should take into account the time-dependence of risks in the aggregation of projected future capital requirements. In particular, projected future capital requirements for later years should have a lesser contribution to the risk margin than projected capital requirements of the same level pertaining to earlier years.

Or. en

Amendment 16

Proposal for a directive

Recital 43 a (new)

Text proposed by the Commission

Amendment

(43a) Directive 2009/138/EC requires that the Solvency Capital Requirement for interest-rate risk reflect the sensitivity of the values of assets, of liabilities and of financial instruments to changes in the term structures of interest rates, or in the volatility of interest rates. In light of recent experience with very low interest rates in many developed economies, the Solvency Capital Requirement for interest-rate risk should capture the risk that very low and negative interest rates can reduce even further. The modifications necessary to achieve that objective might have a significant impact on the solvency position of undertakings and should be introduced in a manner that avoids disruptions to the insurance and reinsurance market.

Or. en

Amendment 17

Proposal for a directive

Recital 44

Text proposed by the Commission

Amendment

(44) As part of the supervisory review process, it is important for supervisory authorities to be able to compare information across the companies they supervise. Partial and full internal models allow to capture the individual risk of a company better and Directive 2009/138/EC allows insurance and reinsurance undertakings to use them for determining capital requirements without limitations stemming from the standard formula. However, partial and full internal models make comparisons across companies more difficult and supervisory authorities would therefore benefit from access to the outcome of the calculation of standard formula capital requirements. All insurance and reinsurance undertakings should therefore regularly report such information to their supervisors.

Or. en

Amendment 18

Proposal for a directive

Recital 47

Text proposed by the Commission

Amendment

(47) National supervisory authorities should be able to collect relevant macroprudential information on the investment strategy of undertakings, analyse it together with other relevant information that might be available from other market sources, and incorporate a macroprudential perspective in their supervision of undertakings. This could include supervising risks related to specific credit cycles, economic downturns and collective or herding behaviour in investments.

(47) National supervisory authorities should be able to collect relevant information on the investment strategy of undertakings, analyse it together with other relevant information that might be available from other market sources. This could include supervising risks related to specific credit cycles, economic downturns and collective or herding behaviour in investments.

Or. en

Amendment 19

Proposal for a directive

Recital 54

Text proposed by the Commission

Amendment

(54) Supervisory authorities should have the necessary powers to preserve the solvency position of specific insurance or reinsurance undertakings during exceptional situations such as adverse economic or market events affecting a large part or the totality of the insurance and reinsurance market, in order to protect policyholders and preserve financial stability. Those powers should include the possibility to restrict or suspend distributions to shareholders and other subordinated lenders of a given insurance or reinsurance undertaking before an actual breach of the Solvency Capital Requirement occurs. Those powers should be applied on a case-by-case basis, respect common risk-based criteria and not undermine the functioning of the internal market.

(54) Supervisory authorities should have the necessary powers to preserve the solvency position of specific insurance or reinsurance undertakings during exceptional situations such as adverse economic or sector events affecting a large part or the totality of the insurance and reinsurance market, in order to protect policyholders and preserve financial stability. Those powers should be applied on a case-by-case basis, as a matter of last resort and only if there is imminent danger of policyholders' rights being endangered or to financial stability. Those measures should respect common risk-based criteria and not undermine the functioning of the internal market.

Or. en

Amendment 20

Proposal for a directive

Recital 62

Text proposed by the Commission

Amendment

(62) Insurance and reinsurance groups are free to decide on the specific internal arrangements, distribution of tasks and organisational structure within the group as they see fit to ensure compliance with Directive 2009/138/EC. However, in a few cases, such arrangements and organisational structures can jeopardise effective group supervision. Therefore, group supervisors should have the power - in exceptional circumstances and after consulting EIOPA and the other supervisory authorities concerned - to require changes to those arrangements or organisational structures. Group supervisors should duly justify their decision and explain why the existing arrangements or structures obstruct and jeopardise effective group supervision.

deleted

Or. en

Amendment 21

Proposal for a directive

Recital 77

Text proposed by the Commission

Amendment

(77) Commission Delegated Regulation (EU) 2019/98130 introduced a preferential treatment for long-term investments in equity. The duration-based equity risk submodule, which also aims at reflecting the lower risk of investing over a longer time horizon, but is of very limited use in the Union, is subject to criteria that are stricter than those applicable to long-term equity investments. Therefore, the new prudential category of long-term equity investments appears to obviate the need for the existing duration-based equity risk submodule. As there is no need to keep two distinct preferential treatments which have the same objective of rewarding long-term investments, the duration-based equity risk submodule should be deleted. However, in order to avoid a situation whereby those amendments lead to adverse effects, a grandfathering clause should be provided for with respect to insurers which are currently applying the duration-based equity risk submodule.

__________________

30 Commission Delegated Regulation (EU) 2019/981 of 8 March 2019 amending Delegated Regulation (EU) 2015/35 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) (OJ L 161, 18.6.2019, p. 1).

Or. en

Amendment 22

Proposal for a directive

Recital 78

Text proposed by the Commission

Amendment

(78) Achieving the environmental and climate ambitions of the Green Deal requires the channelling of large amounts of investments from the private sector, including from insurance and reinsurance companies, towards sustainable investments. The provisions of Directive 2009/138/EC on the capital requirements should not impede sustainable investments by insurance and reinsurance undertakings but should reflect the full risk of investments in environmentally harmful activities. While there is not sufficient evidence at this stage on risk differentials between environmentally or socially harmful and other investments, such evidence may become available over the next years. In order to ensure an appropriate assessment of the relevant evidence, EIOPA should monitor and report by 2023 on the evidence on the risk profile of environmentally or socially harmful investments. Where appropriate, EIOPA’s report should advise on changes to Directive 2009/138/EC and to the delegated and implementing acts adopted pursuant to that Directive. EIOPA may also inquire whether it would be appropriate that certain environmental risks, other than climate change-related, should be taken into account and how. For instance, if evidence so suggests, EIOPA could analyse the need for extending scenario analyses as introduced by this Directive in the context of climate change-related risks to other environmental risks.

deleted

Or. en

Amendment 23

Proposal for a directive

Recital 79

Text proposed by the Commission

Amendment

(79) Climate change is affecting and will affect at least over the next decades the frequency and severity of natural catastrophes which are likely to further aggravate due to environmental degradation and pollution. This may also change the exposure of insurance and reinsurance undertakings to natural catastrophe risk and render invalid the standard parameters for natural catastrophe risk set out in Delegated Regulation (EU) 2015/35. In order to ensure that there is no persistent discrepancy between the standard parameters for natural catastrophe risk and the actual exposure of insurance and reinsurance companies to such risks, EIOPA should review regularly the scope of the natural catastrophe risk module and the calibrations of its standard parameters. For that purpose, EIOPA should take into account the latest available evidence from climate science and, where discrepancies are found, it should submit an opinion to the Commission accordingly.

deleted

Or. en

Amendment 24

Proposal for a directive

Recital 83

Text proposed by the Commission

Amendment

(83) The United Kingdom became a third country on 1 February 2020 and Union law ceased to apply to and in the United Kingdom on 31 December 2020. Given that Directive 2009/138/EC has several provisions that address the specifics of particular Member States, where such provisions specifically concern the United Kingdom, they have become obsolete and should therefore be deleted. The calibrations used for the delegated acts and implementing acts adopted by the Commission are often based on data that is heavily influenced by the inclusion of data from the United Kingdom market. Therefore, all calibrations that are input for the calculations of the Solvency Capital Requirement and the Minimum Capital Requirement should be reviewed to determine whether they are dependent on UK data and, where applicable, UK data should be eliminated from the relevant data sets.

Or. en

Amendment 25

Proposal for a directive

Article 1 – paragraph 1 – point 2 – introductory part

Directive 2009/138/EC

Article 4 – paragraph 1

Text proposed by the Commission

Amendment

(2) in Article 4(1), points (a) and (b) are replaced by the following:

(2) in Article 4(1), points (a), (b) and (c) are replaced by the following:

Or. en

Amendment 26

Proposal for a directive

Article 1 – paragraph 1 – point 2

Directive 2009/138/EC

Article 4 – paragraph 1 – point a

Text proposed by the Commission

Amendment

(a) the undertaking’s annual gross written premium does not exceed EUR 15 000 000;

(a) the undertaking’s annual gross written premium does not exceed EUR 25 000 000;

Or. en

Amendment 27

Proposal for a directive

Article 1 – paragraph 1 – point 2

Directive 2009/138/EC

Article 4 – paragraph 1 – point b

Text proposed by the Commission

Amendment

(b) the total of the undertaking’s technical provisions, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred in Article 76, does not exceed EUR 50 000 000;;

Or. en

Amendment 28

Proposal for a directive

Article 1 – paragraph 1 – point 2

Directive 2009/138/EC

Article 4 – paragraph 1 – point c

Present text

Amendment

(c) where the undertaking belongs to a group, the total of the technical provisions of the group defined as gross of the amounts recoverable from reinsurance contracts and special purpose vehicles does not exceed EUR 25 million;

Or. en

Amendment 29

Proposal for a directive

Article 1 – paragraph 1 – point 5 – point b

Directive 2009/138/EC

Article 13 – paragraph 1 – point 10a

Text proposed by the Commission

Amendment

(10a) ‘low-risk profile undertaking’ means an insurance and reinsurance undertaking that meets the conditions set out in Article 29a and has been classified as such in accordance with Article 29b;

(10a) ‘low-risk profile undertaking’ means an insurance undertaking that meets the conditions set out in Article 29a and has been classified as such in accordance with Article 29b as well as a captive insurance undertaking and a captive reinsurance undertaking;

Or. en

Justification

Captive insurance and reinsurance companies do not pose a risk to financial stability and have a simple business model. Therefore, they should automatically be considered as having a low-risk profile.

Amendment 30

Proposal for a directive

Article 1 – paragraph 1 – point 5 – point b

Directive 2009/138/EC

Article 13 – paragraph 1 – point 10 a a (new)

Text proposed by the Commission

Amendment

(10aa) ‘significant cross-border activities’ means insurance and reinsurance activities carried out by an insurance or reinsurance undertaking under the right of establishment and those carried out under the freedom to provide services in a given host Member State, which exceed 25 % of the annual gross written premium of the undertaking, measured with reference to the last available financial statement of the undertaking.;

Or. en

Justification

Introduces a coherent horizontal definition of ‘significant cross-border activities’ to replace the definitions used in Article 33a and 159a

Amendment 31

Proposal for a directive

Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC

Article 13 – paragraph 1 – point 41

Text proposed by the Commission

Amendment

(i) the following point (41) is added:

deleted

(41) ‘regulated undertaking’ means ‘regulated entity’ within the meaning of Article 2(4) of Directive 2002/87/EC or an institution for occupational retirement provision within the meaning of Article 6(1) of Directive (EU) 2016/2341.;

Or. en

Justification

The change proposed by the Commission to include IORPs in the scope of Solvency II does not seem justified.

Amendment 32

Proposal for a directive

Article 1 – paragraph 1 – point 7

Directive 2009/138/EC

Article 23 – paragraph 1 – point f

Text proposed by the Commission

Amendment

(f) the market where the insurance or reinsurance undertaking concerned intends to operate;;

(f) the Member States in the markets of which the insurance or reinsurance undertaking concerned intends to operate;;

Or. en

Justification

Editorial correction.

Amendment 33

Proposal for a directive

Article 1 – paragraph 1 – point 12 – point a

Directive 2009/138/EC

Article 29 – paragraph 3

Text proposed by the Commission

Amendment

3. Member States shall ensure that the requirements laid down in this Directive are applied in a manner which is proportionate to the nature, scale and complexity of the risks inherent in the business of an insurance or reinsurance undertaking, in particular those classified as low-risk profile undertakings.

3. Member States shall ensure that the requirements laid down in this Directive are applied in a manner which is proportionate to the nature, scale and complexity of the risks inherent in the business of an insurance or reinsurance undertaking. Member States shall ensure such application in particular, but not exclusively, with respect to those undertakings classified as low-risk profile undertakings.

Or. en

Amendment 34

Proposal for a directive

Article 1 – paragraph 1 – point 12 – point b

Directive 2009/138/EC

Article 29 – paragraph 5

Text proposed by the Commission

Amendment

5. The Commission may adopt delegated acts specifying or adapting the criteria laid down in Article 29a(1), points (e), (f) and (h).

5. The Commission may adopt delegated acts specifying the criteria laid down in Article 29a(1), points (a), (b) and (c).

Or. en

Justification

Editorial correction to insert the correct references. Furthermore, the Commission should be allowed to specify, but not to adapt the criteria laid down in this Directive. Adapting the criteria should remain a prerogative of the legislator.

Amendment 35

Proposal for a directive

Article 1 – paragraph 1 – point 12 – point b

Directive 2009/138/EC

Article 29 – paragraph 6

Text proposed by the Commission

Amendment

6. In order to ensure consistent supervisory practices in the application of proportionality, EIOPA shall develop guidelines to facilitate common supervisory tools and further specifying the methodology to be used when classifying insurance and reinsurance undertakings as low-risk profile undertakings.;

deleted

Or. en

Justification

The criteria to identify low-risk profile undertakings should be defined with sufficient clarity by the legislator in this Directive.

Amendment 36

Proposal for a directive

Article 1 – paragraph 1 – point 13 – introductory part

Directive 2009/138/EC

Article 29e

Text proposed by the Commission

Amendment

(13) the following Articles 29a to 29e are inserted:

(13) the following Articles 29a to 29d are inserted:

Or. en

Amendment 37

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – title

Text proposed by the Commission

Amendment

Criteria for identifying low-risk profile undertakings

Low-risk profile undertakings

Or. en

Amendment 38

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

Member States shall ensure that insurance and reinsurance undertakings are classified as low-risk profile undertakings, according to the process set out in Article 29b, where, for two consecutive financial years prior to such classification, they meet the following criteria:

Member States shall ensure that insurance undertakings are classified as low-risk profile undertakings, according to the process set out in Article 29b, where, for two consecutive financial years prior to such classification, they meet the following criteria:

Or. en

Amendment 39

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point a – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

(a) For life insurance undertakings and for insurance undertakings pursuing both life and non-life insurance activities in accordance with Article 73 whose technical provisions related to the life insurance activities represent 20% or more of the total technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76, and whose annual gross written premium income related to the non-life insurance activities represents less than 40% of the total annual gross written premium, all of the following criteria shall be met:

(a) For life insurance undertakings, all of the following criteria shall be met:

Or. en

Justification

Simplification of the proportionality regime.

Amendment 40

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point a – subparagraph 1 – point ii

Text proposed by the Commission

Amendment

(ii) business underwritten in Member States other than the home Member State where the undertaking received its authorisation in accordance with Article 14 is not higher than 5 % of its total annual gross written premium;

(ii) business underwritten in Member States other than the home Member State where the undertaking received its authorisation in accordance with Article 14 is not higher than 25 % of its total annual gross written premium;

Or. en

Justification

Cross-border business is not inherently riskier than national business.

Amendment 41

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point a – subparagraph 1 – point iii

Text proposed by the Commission

Amendment

(iii) technical provisions, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76, are not higher than EUR 1 000 000 000;

(iii) the undertaking represents less than 10 % of the home Member State's life insurance market, where the market share is based on gross technical provisions;

Or. en

Amendment 42

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point a – subparagraph 1 – point iv

Text proposed by the Commission

Amendment

(iv) investments in non-traditional investments do not represent more than 20% of total investments;

(iv) investments in non-traditional investments do not represent more than 30% of total investments;

Or. en

Amendment 43

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point a – subparagraph 1 – point v

Text proposed by the Commission

Amendment

(v) the business of the undertaking does not include reinsurance operations exceeding 50 % of its annual total gross written premium income.

(v) the reinsurance business accepted by the undertaking does not exceed 50 % of its annual total gross written premium income.

Or. en

Justification

Editorial correction.

Amendment 44

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point a – subparagraph 1 – point v a (new)

Text proposed by the Commission

Amendment

(va) the Solvency Capital Requirement is complied with and a capital add-on in accordance with Article 37 has not been set.

Or. en

Justification

Undertakings should be in a sound financial position in order to be classified as a low-risk profile undertaking.

Amendment 45

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point a – subparagraph 2

Text proposed by the Commission

Amendment

The criteria laid down in points (ii) and (v) shall not apply to captive insurance undertakings or captive reinsurance undertakings.

deleted

Or. en

Amendment 46

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point b – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

(b) For non-life insurance undertakings, and for insurance undertakings pursuing both life and non-life insurance activities in accordance with Article 73 whose annual gross written premium income related to the non-life insurance activities represent 40% or more of its total annual gross written premium income and whose technical provisions related to the life insurance activities represent less than the 20% of its total technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76, all of the following criteria shall be met:

(b) For non-life insurance undertakings, all of the following criteria shall be met:

Or. en

Justification

Simplification of the regime.

Amendment 47

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point b – subparagraph 1 – point ii

Text proposed by the Commission

Amendment

Or. en

Justification

Cross-border business is not inherently riskier than national business.

Amendment 48

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point b – subparagraph 1 – point iii

Text proposed by the Commission

Amendment

(iii) the annual gross written premium is not higher than EUR 100 000 000;

(iii) the undertaking represents less than 10 % of the home Member State's non-life insurance market , where the market share is based on gross technical provisions;

Or. en

Amendment 49

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point b – subparagraph 1 – point iv

Text proposed by the Commission

Amendment

(iv) the sum of the annual gross written premiums in classes 3 to 7, 14 and 15 of Section A of Annex I is not higher than 30 % of total annual written premiums of non-life business;

(iv) the sum of the annual gross written premiums in classes 4 to 7, 14 and 15 of Section A of Annex I is not higher than 30 % of total annual gross written premiums of non-life business;

Or. en

Justification

Change excludes car insurance.

Amendment 50

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point b – subparagraph 1 – point v

Text proposed by the Commission

Amendment

(v) investments in non-traditional investments do not represent more than 20% of total investments;

(v) investments in non-traditional investments do not represent more than 30% of total investments;

Or. en

Amendment 51

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point b – subparagraph 1 – point vi

Text proposed by the Commission

Amendment

(vi) the business of the undertaking does not include reinsurance operations exceeding 50 % of its total gross written premium income.

(vi) the reinsurance business accepted by the undertaking does not exceed 50 % of its total gross written premium income.

Or. en

Amendment 52

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point b – subparagraph 1 – point vi a (new)

Text proposed by the Commission

Amendment

(vi a) the Solvency Capital Requirement is complied with and a capital add-on in accordance with Article 37 has not been set.

Or. en

Justification

Undertakings should be in a sound financial position in order to be classified as a low-risk profile undertaking.

Amendment 53

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point b – subparagraph 2

Text proposed by the Commission

Amendment

The criteria laid down in points (ii) and (vi) shall not apply to captive insurance undertakings or captive reinsurance undertakings.

deleted

Or. en

Justification

Addressed via the amended definition of low-risk profile undertaking.

Amendment 54

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point c – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

(c) For insurance undertakings pursuing both life and non-life insurance activities in accordance with Article 73 whose technical provisions related to the life insurance activities represent 20% or more of its total technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76, and whose annual gross written premium income related to the non-life insurance activities represents 40% or more of its total annual gross written premium income, all of the following criteria shall be met:

(c) For insurance undertakings pursuing both life and non-life insurance activities in accordance with Article 73, all of the following criteria shall be met:

Or. en

Justification

Simplification of the regime.

Amendment 55

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point c – subparagraph 1 – point iii

Text proposed by the Commission

Amendment

(iii) technical provisions, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76, are not higher than EUR 1 000 000 000;

(iii) the undertaking represents less than 10 % of the home Member State's life insurance market respectively, where the life insurance market share is based on gross technical provisions, or less than 10 % of the home Member State's non-life insurance market, where the non-life market share is based on gross written premiums;

Or. en

Amendment 56

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point c – subparagraph 1 – point iv

Text proposed by the Commission

Amendment

(iv) the annual gross written premium is not higher than EUR 100 000 000;

deleted

Or. en

Amendment 57

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point c – subparagraph 1 – point v

Text proposed by the Commission

Amendment

(v) business underwritten in Member States other than the home Member State where the undertaking received its authorisation in accordance with Article 14 is not higher than 5 % of its total annual gross written premium;

(v) business underwritten in Member States other than the home Member State where the undertaking received its authorisation in accordance with Article 14 is not higher than 25 % of its total annual gross written premium;

Or. en

Amendment 58

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point c – subparagraph 1 – point vi

Text proposed by the Commission

Amendment

(vi) the sum of the annual gross written premium in classes 3 to 7, 14 and 15 of Section A of Annex I is not higher than 30 % of total annual written premiums of non-life business;

(vi) the sum of the annual gross written premium in classes 4 to 7, 14 and 15 of Section A of Annex I is not higher than 30 % of total annual gross written premiums of non-life business;

Or. en

Justification

Excludes car insurance.

Amendment 59

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point c – subparagraph 1 – point vii

Text proposed by the Commission

Amendment

(vii) investments in non-traditional investments do not represent more than 20% of total investments;

(vii) investments in non-traditional investments do not represent more than 30% of total investments;

Or. en

Amendment 60

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point c – subparagraph 1 – point viii

Text proposed by the Commission

Amendment

(viii) the business of the undertaking does not include reinsurance operations exceeding 50 % of its annual total gross written premium income.

(viii) the reinsurance business accepted by the undertaking does not exceed 50 % of its annual total gross written premium income.

Or. en

Amendment 61

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point c – subparagraph 1 – point viii a (new)

Text proposed by the Commission

Amendment

(viii a) the Solvency Capital Requirement is complied with and a capital add-on in accordance with Article 37 has not been set.

Or. en

Amendment 62

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 1 – point c – subparagraph 2

Text proposed by the Commission

Amendment

The criteria laid down in points (v) and (viii) shall not apply to captive insurance undertakings or captive reinsurance undertakings.

deleted

Or. en

Justification

Addressed via the amended definition of low-risk profile undertakings.

Amendment 63

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

For the purpose of this Article, traditional investments shall consist of bonds, equities, cash and cash equivalents and deposits and total investments shall consist of all assets, including derivatives, and excluding investments covering unit-index linked contracts, excluding property for own use, excluding plant and equipment for own use, excluding property under construction for own used.

For the purpose of this Article, traditional investments shall consist of bonds, equities, real estate, loans including private loans, promissory notes and mortgages, cash and cash equivalents and deposits and related derivatives. Total investments shall consist of all assets, including derivatives, and excluding investments covering unit-linked contracts, excluding property and equipment for own use, excluding property under construction for own use.

Or. en

Amendment 64

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 1a (new)

Text proposed by the Commission

Amendment

1a. Notwithstanding paragraph 1, all captive insurance undertakings and captive reinsurance undertakings shall be classified as low-risk profile undertakings.

Or. en

Justification

Captive insurance undertakings and captive reinsurance undertakings should automatically be classified as low-risk profile undertakings.

Amendment 65

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 3 – introductory part

Text proposed by the Commission

Amendment

3. The following insurance and reinsurance undertakings shall never be classified as low-risk profile undertakings:

3. The following insurance undertakings shall never be classified as low-risk profile undertakings:

Or. en

Amendment 66

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29a – paragraph 3 – point a

Text proposed by the Commission

Amendment

(a) undertakings using an approved partial or full internal model to calculate the Solvency Capital Requirement, in accordance with the requirements for full and partial internal models set out in Chapter VI, Section 4, Subsection 3;

deleted

Or. en

Justification

The application of an internal model is not per se a sign of riskiness.

Amendment 67

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29b – paragraph 1

Text proposed by the Commission

Amendment

1. Member States shall ensure that insurance and reinsurance undertakings complying with the conditions set out in Article 29a(1) and (3) may notify the supervisory authority of such compliance with a view to be classified as low-risk profile undertakings.

1. Member States shall ensure that insurance undertakings complying with the conditions set out in Article 29a(1) and (3) may notify the supervisory authority of such compliance with a view to be classified as low-risk profile undertakings.

Or. en

Amendment 68

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29b – paragraph 2 – introductory part

Text proposed by the Commission

Amendment

2. The notification referred to in paragraph 1 of this Article shall be submitted by the insurance and reinsurance undertaking to the supervisory authority of the Member State that granted the prior authorisation referred to in Article 14. That notification shall include all of the following:

2. The notification referred to in paragraph 1 of this Article shall be submitted by the insurance undertaking to the supervisory authority of the Member State that granted the prior authorisation referred to in Article 14. That notification shall include all of the following:

Or. en

Amendment 69

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29b – paragraph 5 – subparagraph 1

Text proposed by the Commission

Amendment

The insurance and reinsurance undertakings shall be classified as low-risk profile undertaking for as long as such classification does not cease in accordance with this paragraph.

The insurance undertakings shall be classified as low-risk profile undertaking for as long as such classification does not cease in accordance with this paragraph.

Or. en

Amendment 70

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29c – paragraph 1

Text proposed by the Commission

Amendment

1. Member States shall ensure that, without prejudice to specific requirements set out in each proportionality measure, insurance and reinsurance undertakings classified as low-risk profile undertakings may use all the proportionality measures provided for in Article 35(5a), Article 41, Article 45(1b), Article 45(5), Article 45a(5), Article 51(6), Article 51a(1), Article 77(7) and Article144a(4), and any proportionality measure provided for in the delegated acts adopted pursuant to this Directive.

1. Member States shall ensure that, without prejudice to specific requirements set out in each proportionality measure, insurance and reinsurance undertakings classified as low-risk profile undertakings may use all the proportionality measures provided for in this Directive, in particular Article 35(5a), Article 41, Article 45(1b), Article 45(5), Article 51(6), Article 51a(1), Article 77(7) and Article144a(4), and any proportionality measure provided for in the delegated acts adopted pursuant to this Directive.

Or. en

Amendment 71

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29c – paragraph 2

Text proposed by the Commission

Amendment

2. Where the supervisory authority has serious concerns in relation to the risk profile of a low-risk profile undertaking, the supervisory authority may, in exceptional circumstances, request the undertaking concerned to refrain from using one or several proportionality measures listed in paragraph 1 provided this is justified in writing on consideration of the impact on the organisation of the undertaking and the specificities or change of its risk profile.

2. Where the supervisory authority has serious concerns in relation to the risk profile of a low-risk profile undertaking, the supervisory authority may, in exceptional circumstances, request the undertaking concerned to refrain from using one or several proportionality measures listed in paragraph 1 provided this is duly justified in writing on consideration of the impact on the organisation of the undertaking and the specificities or change of its risk profile.

Or. en

Amendment 72

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29d – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

Member States shall ensure that insurance and reinsurance undertakings that are not classified as low-risk profile undertakings may use any proportionality measure provided for in Article 35(5a), Article 41, Article 45(1b), Article 45(5), Article 77(7) and Article144a(4) and any proportionality measure provided for in the delegated acts adopted pursuant to this Directive, subject to prior approval from the supervisory authority.

Member States shall ensure that insurance and reinsurance undertakings that are not classified as low-risk profile undertakings may use any proportionality measure provided for in this Directive, in particular in Article 35(5a), Article 41, Article 45(1b), Article 45(5), Article 77(7) and Article144a(4) and any proportionality measure provided for in the delegated acts adopted pursuant to this Directive, subject to prior approval from the supervisory authority.

Or. en

Amendment 73

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29d – paragraph 1 – subparagraph 2 – point c

Text proposed by the Commission

Amendment

(c) a declaration that the undertaking does not plan any strategic change that would have an impact on the risk profile of the undertaking within the next three years.

deleted

Or. en

Justification

The commitment required here is not realistic and would essentially prevent many undertakings from benefitting from proportionality measures.

Amendment 74

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29d – paragraph 4

Text proposed by the Commission

Amendment

4. With respect to requests received by supervisory authorities within the first six months of [OP please insert date = date of application of this Directive], the period referred to in paragraph 2 shall be four months.

deleted

Or. en

Justification

The regular two month period shall apply at all times.

Amendment 75

Proposal for a directive

Article 1 – paragraph 1 – point 13

Directive 2009/138/EC

Article 29e

Text proposed by the Commission

Amendment

Article 29e

deleted

Monitoring of the use of proportionality measures

1. Member States shall require insurance and reinsurance undertakings using proportionality measures to report annually to their supervisory authorities information on the proportionality measures used as part of the information to be provided for supervisory purposes referred to in Article 35.

2. Insurance and reinsurance undertakings applying any proportionality measure referred to in Article 29c(1) or Article 29d(1) by [OP please insert date = entry into force of this Directive] may continue to apply such measures without applying requirements set out in Articles 29b, 29c and 29d , for a period not exceeding four financial years.;

Or. en

Justification

Given that Article 29b requires insurance companies to notify supervisory authorities of the use of proportionality measures, the additional reporting requirements in Article 29e are superfluous.

Amendment 76

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2009/138/EC

Article 33a – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

In the event of significant cross-border activities carried out by insurance and reinsurance undertakings under the right of establishment or the freedom to provide services, the supervisory authority of the home Member State shall cooperate with the supervisory authority of the host Member State to assess whether the insurance undertaking has a clear understanding of the risks that it faces, or may face, in the host Member State.

In the event of significant cross-border activities, the supervisory authority of the home Member State shall cooperate with the supervisory authority of the host Member State to assess whether the insurance undertaking has a clear understanding of the risks that it faces, or may face, in the host Member State.

The supervisory authority of the host Member State shall be obliged to cooperate with the supervisory authority of the home Member State.

Or. en

Justification

1st part: Editorial correction: this is already contained in paragraph 3 of Article 33a and has been transposed into a new definition (cf. Art. 13). / 2nd part: introduces an obligation for Member States authorities to work together.

Amendment 77

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2009/138/EC

Article 33a – paragraph 1 – subparagraph 2 – point b

Text proposed by the Commission

Amendment

(b) outsourcing arrangements and distribution partnerships;

(b) outsourcing and distribution partnerships;

Or. en

Justification

The definition of "outsourcing" already implies that an arrangement is in place.

Amendment 78

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2009/138/EC

Article 33a – paragraph 3

Text proposed by the Commission

Amendment

3. For the purpose of this Article, ‘significant cross-border activities’ are insurance and reinsurance activities carried out by an insurance or reinsurance undertaking under the right of establishment and those carried out under the freedom to provide services in a given host Member State, which exceed 5 % of the annual gross written premium of the undertaking, measured with reference to the last available financial statement of the undertaking.;

deleted

Or. en

Justification

Replaced by a new horizontal definition of "significant cross-border activities" in Article 13.

Amendment 79

Proposal for a directive

Article 1 – paragraph 1 – point 16 – point a

Directive 2009/138/EC

Article 35 – paragraph 1

Text proposed by the Commission

Amendment

Member States shall require insurance and reinsurance undertakings to submit to the supervisory authorities the information which is necessary for the purposes of supervision, taking into account the objectives of supervision laid down in Articles 27 and 28 and the general principles of supervision laid down in Article 29.

Or. en

Amendment 80

Proposal for a directive

Article 1 – paragraph 1 – point 16 – point b

Directive 2009/138/EC

Article 35 – paragraph 5a – subparagraph 2 – point a

Text proposed by the Commission

Amendment

(a) every three years, for low-risk profile undertakings;

(a) every five years, for low-risk profile undertakings;

Or. en

Amendment 81

Proposal for a directive

Article 1 – paragraph 1 – point 16 – point b

Directive 2009/138/EC

Article 35 – paragraph 5a – subparagraph 2 – point b

Text proposed by the Commission

Amendment

(b) at least every three years for insurance and reinsurance undertakings other than low-risk profile undertakings.;

(b) every three years for insurance and reinsurance undertakings other than low-risk profile undertakings. In exceptional circumstances and based on duly justified reasons, a supervisory authority may require supervised undertakings to report more frequently;

Or. en

Justification

A higher reporting frequency should only be done based on a duly justified opinion.

Amendment 82

Proposal for a directive

Article 1 – paragraph 1 – point 16 – point g

Directive 2009/138/EC

Article 35 – paragraph 12 – subparagraph 1 – point a

Text proposed by the Commission

Amendment

(a) reduce areas of duplications and inconsistencies between the reporting frameworks in the insurance sector and other sectors of the financial industry; and

(a) reduce areas of duplications and inconsistencies between the reporting frameworks in the insurance sector and other sectors of the financial industry;

Or. en

Amendment 83

Proposal for a directive

Article 1 – paragraph 1 – point 16 – point g

Directive 2009/138/EC

Article 35 – paragraph 12 – subparagraph 1 – point b a (new)

Text proposed by the Commission

Amendment

(ba) reduce compliance costs, in particular for low-risk profile undertakings;

Or. en

Justification

Any measures to create an integrated data collection tool should contribute to reducing compliance costs for insurance undertakings, particularly those with a low risk profile.

Amendment 84

Proposal for a directive

Article 1 – paragraph 1 – point 17

Directive 2009/138/EC

Article 35a – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

That limitation to regular supervisory reporting shall be granted only to undertakings that do not represent more than 20 % of a Member State’s life and non-life insurance and reinsurance market respectively, where the non-life market share is based on gross written premiums and the life market share is based on gross technical provisions.

That limitation to regular supervisory reporting shall be granted only to undertakings that collectively do not represent more than 30 % of a Member State’s life and non-life insurance and reinsurance market respectively, where the non-life market share is based on gross written premiums and the life market share is based on gross technical provisions.

Or. en

Amendment 85

Proposal for a directive

Article 1 – paragraph 1 – point 17

Directive 2009/138/EC

Article 35a – paragraph 1 – subparagraph 3

Text proposed by the Commission

Amendment

When determining the eligibility of undertakings for those limitations, supervisory authorities shall give priority to low-risk profile undertakings.

Low-risk profile undertakings shall be automatically granted the limitation to regular supervisory reporting.

Or. en

Justification

Amendment to further strengthen the proportionality regime.

Amendment 86

Proposal for a directive

Article 1 – paragraph 1 – point 17

Directive 2009/138/EC

Article 35a – paragraph 2 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

The supervisory authorities concerned may limit regular supervisory reporting, or exempt insurance and reinsurance undertakings from reporting on an item-by-item basis, where:

The supervisory authorities concerned shall limit regular supervisory reporting, or exempt insurance and reinsurance undertakings from reporting on an item-by-item basis, where:

Or. en

Amendment 87

Proposal for a directive

Article 1 – paragraph 1 – point 17

Directive 2009/138/EC

Article 35a – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

Supervisory authorities shall not exempt from reporting, on an item-by-item basis, insurance or reinsurance undertakings that are part of a group within the meaning of Article 212(1), point (c), unless the undertaking can demonstrate to the satisfaction of the supervisory authority 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.

deleted

Or. en

Justification

The burden of proof should not be put on the undertaking/the group.

Amendment 88

Proposal for a directive

Article 1 – paragraph 1 – point 17

Directive 2009/138/EC

Article 35a – paragraph 2 – subparagraph 3

Text proposed by the Commission

Amendment

The exemption from reporting on an item-by-item basis shall be granted only to undertakings that do not represent more than 20 % of a Member State’s life and non-life insurance or reinsurance market respectively, where the non-life market share is based on gross written premiums and the life market share is based on gross technical provisions. When determining the eligibility of undertakings for those limitations or exemptions, supervisory authorities shall give priority to low-risk profile undertakings.

The exemption from reporting on an item-by-item basis shall be granted only to undertakings that collectively do not represent more than 30 % of a Member State’s life and non-life insurance or reinsurance market respectively, where the non-life market share is based on gross written premiums and the life market share is based on gross technical provisions. When determining the eligibility of undertakings for those limitations or exemptions, supervisory authorities shall give priority to low-risk profile undertakings.

Or. en

Amendment 89

Proposal for a directive

Article 1 – paragraph 1 – point 17

Directive 2009/138/EC

Article 35a – paragraph 2 – subparagraph 3a (new)

Text proposed by the Commission

Amendment

Low-risk profile undertakings shall be automatically granted the limitation to regular supervisory reporting.

Or. en

Amendment 90

Proposal for a directive

Article 1 – paragraph 1 – point 17

Directive 2009/138/EC

Article 35a – paragraph 6 – point a

Text proposed by the Commission

Amendment

(a) the methods for determining the market shares referred to in paragraph 1, second subparagraph, and in paragraph 2, third subparagraph, of this Article;

deleted

Or. en

Justification

Paragraphs 1 and 2 are sufficiently clear.

Amendment 91

Proposal for a directive

Article 1 – paragraph 1 – point 18

Directive 2009/138/EC

Article 35b – paragraph 4

Text proposed by the Commission

Amendment

4. The Commission may adopt delegated acts in accordance with Article 301a to change the deadlines laid down in paragraphs 1, 2, and 3 of this Article, provided that the change is necessary due to sanitary emergencies, natural catastrophes or other extreme events.;

4. The Commission, after having consulted EIOPA, may adopt delegated acts in accordance with Article 301a to change the deadlines laid down in paragraphs 1, 2, and 3 of this Article for a limited time period, provided that the change is necessary due to sanitary emergencies, natural catastrophes or other extreme events, which prevent insurance and reinsurance undertakings from submitting the information within the specified deadlines.

Or. en

Amendment 92

Proposal for a directive

Article 1 – paragraph 1 – point 18

Directive 2009/138/EC

Article 35b – paragraph 4a (new)

Text proposed by the Commission

Amendment

4 a. At the request of at least one Member State, the Commission shall consult EIOPA with a view to determining whether the conditions for a temporary change of the submission deadlines have been fulfilled.

Or. en

Justification

Establishes a procedure to initiate a possible deadline extension.

Amendment 93

Proposal for a directive

Article 1 – paragraph 1 – point 21 – point c

Directive 2009/138/EC

Article 41 – paragraph 3 – subparagraph 2

Text proposed by the Commission

Amendment

Those written policies shall be reviewed at least annually. They shall be subject to prior approval by the administrative, management or supervisory body and be adapted in view of any significant change in the system or area concerned. Low-risk profile undertakings may perform a less frequent review, at least every three years, unless the supervisory authority concludes, based on the specific circumstances of that undertaking, that a more frequent review is needed.;

Those written policies shall be reviewed at least annually. They shall be subject to prior approval by the administrative, management or supervisory body and be adapted in view of any significant change in the system or area concerned. Low-risk profile undertakings may perform a less frequent review, at least every five years, unless the supervisory authority concludes, based on the specific circumstances of that undertaking, that a more frequent review is needed.;

Or. en

Amendment 94

Proposal for a directive

Article 1 – paragraph 1 – point 24 – point a

Directive 2009/138/EC

Article 45 – paragraph 1 – subparagraph 2 – point d

Text proposed by the Commission

Amendment

(d) consideration and analysis of the macroeconomic situation, and possible macroeconomic and financial markets’ developments, and, upon a reasoned request of the supervisory authority, macroprudential concerns, that may affect the specific risk profile, the approved risk tolerance limits, the business strategy, the underwriting activities or the investment decisions, and the overall solvency needs referred to in point (a) of the undertaking;

(d) upon a reasoned request by the supervisory authorities, consideration of the macroeconomic situation, and macroeconomic and financial markets’ developments, that may affect the specific risk profile, the approved risk tolerance limits, the business strategy, the underwriting activities or the investment decisions, and the overall solvency needs referred to in point (a) of the undertaking;

Or. en

Amendment 95

Proposal for a directive

Article 1 – paragraph 1 – point 24 – point a

Directive 2009/138/EC

Article 45 – paragraph 1 – subparagraph 2 – point e

Text proposed by the Commission

Amendment

(e) consideration and analysis of the activities of the undertaking that may affect the macroeconomic and financial markets’ developments, and have the potential to turn into sources of systemic risk;

deleted

Or. en

Justification

This provision is disproportionate given that the vast majority of insurance companies do not pose any systemic risk.

Amendment 96

Proposal for a directive

Article 1 – paragraph 1 – point 24 – point b

Directive 2009/138/EC

Article 45 – paragraph 1a – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

For the purpose of paragraph 1, points (d) and (e), macroeconomic and financial markets’ developments shall include, at least, changes in the following:

For the purpose of paragraph 1, points (d) and (e), macroeconomic and financial markets’ developments shall include, at least:

Or. en

Justification

Editorial change: the term "developments" already implies that his might refer to changes.

Amendment 97

Proposal for a directive

Article 1 – paragraph 1 – point 24 – point b

Directive 2009/138/EC

Article 45 – paragraph 1a – subparagraph 1 – point a

Text proposed by the Commission

Amendment

(a) the level of interest rates and spreads;

(a) interest rates and spreads;

Or. en

Amendment 98

Proposal for a directive

Article 1 – paragraph 1 – point 24 – point b

Directive 2009/138/EC

Article 45 – paragraph 1a – subparagraph 1 – point b

Text proposed by the Commission

Amendment

(b) the level of financial market indices;

(b) financial market indices;

Or. en

Amendment 99

Proposal for a directive

Article 1 – paragraph 1 – point 24 – point b

Directive 2009/138/EC

Article 45 – paragraph 1a – subparagraph 1 – point e

Text proposed by the Commission

Amendment

(e) climate change, pandemics, other mass-scale events and other catastrophes, which may affect insurance and reinsurance undertakings.

deleted

Or. en

Justification

Those are neither macroeconomic nor financial markets developments and thus do not fit under the headline.

Amendment 100

Proposal for a directive

Article 1 – paragraph 1 – point 24 – point b

Directive 2009/138/EC

Article 45 – paragraph 1a – subparagraph 2

Text proposed by the Commission

Amendment

For the purpose of the paragraph 1, point (d), macroprudential concerns shall include, at least, plausible unfavourable future scenarios and risks related to the credit cycle and economic downturn, herding behaviour in investments or excessive exposure concentrations at the sectoral level.

deleted

Or. en

Amendment 101

Proposal for a directive

Article 1 – paragraph 1 – point 24 – point b

Directive 2009/138/EC

Article 45 – paragraph 1b

Text proposed by the Commission

Amendment

1b. Member States shall ensure that the analysis required under paragraph 1, point (d), is commensurate to the nature of risks as well as the scale and complexity of the activities of undertakings. Member States shall ensure that insurance and reinsurance undertakings that are classified as low-risk profile undertakings, pursuant to Article 29c, and undertakings which have obtained prior supervisory approval, pursuant to Article 29d, are not obliged to conduct the analysis referred to in paragraph 1, point (e).;

1b. Member States shall ensure that the analysis required under paragraph 1, point (d), is commensurate to the nature of risks as well as the scale and complexity of the activities of undertakings. Member States shall ensure that insurance undertakings that are classified as low-risk profile undertakings, pursuant to Article 29c, and undertakings which have obtained prior supervisory approval, pursuant to Article 29d, are not obliged to conduct the analysis referred to in paragraph 1, point (e).;

Or. en

Amendment 102

Proposal for a directive

Article 1 – paragraph 1 – point 24 – point d

Directive 2009/138/EC

Article 45 – paragraph 5 – subparagraph 2 – introductory part

Text proposed by the Commission

Amendment

By way of derogation from the first subparagraph of this paragraph, insurance undertakings may perform the assessment referred to in paragraph 1 at least every two years and without any delay following any significant change in their risk profile, unless the supervisory authority concludes based on the specific circumstances of the undertaking that a more frequent assessment is needed, where either of the following conditions is met:

By way of derogation from the first subparagraph of this paragraph, insurance undertakings may perform the assessment referred to in paragraph 1 at least every three years and without any delay following any significant change in their risk profile, unless the supervisory authority concludes based on the specific circumstances of the undertaking that a more frequent assessment is needed, where either of the following conditions is met:

Or. en

Amendment 103

Proposal for a directive

Article 1 – paragraph 1 – point 24 – point d

Directive 2009/138/EC

Article 45 – paragraph 5 – subparagraph 2 – point b – point ii

Text proposed by the Commission

Amendment

(ii) the insurance obligations and the insurance contracts underlying the reinsurance obligations of the captive insurance undertaking or captive reinsurance undertaking do not consist of any compulsory third-party liability insurance.

Or. en

Amendment 104

Proposal for a directive

Article 1 – paragraph 1 – point 24 – point e

Directive 2009/138/EC

Article 45– paragraph 8

Text proposed by the Commission

Amendment

(e) the following paragraph 8 is added:

deleted

8. For the purpose of paragraph 1, points (d) and (e), of this Article, where authorities other than the supervisory authorities are entrusted with a macroprudential mandate, Member States shall ensure that the supervisory authorities share the findings of their macroprudential assessments of the own-risk and solvency assessment by insurance and reinsurance undertakings, as referred to in Article 45, with the relevant national authorities with a macroprudential mandate.

Member States shall ensure that supervisory authorities cooperate with any national authorities with a macroprudential mandate to analyse the results and, where applicable, to identify any macroprudential concerns on how undertakings may affect macroeconomic and financial markets’ developments.

Member States shall ensure that the supervisory authorities share any macroprudential concerns and relevant input parameters relevant for the assessment with the undertaking concerned.;

Or. en

Amendment 105

Proposal for a directive

Article 1 – paragraph 1 – point 25

Directive 2009/138/EC

Article 45a

Text proposed by the Commission

Amendment

(25) the following Article 45a is inserted:

deleted

Article 45a

Climate change scenario analysis

1. For the purposes of the identification and assessment of risks referred to in Article 45(2), the undertaking concerned shall also assess whether it has any material exposure to climate change risks. The undertaking shall demonstrate the materiality of its exposure to climate change risks in the assessment referred to in Article 45(1).

2. Where the undertaking concerned has material exposure to climate change risks, the undertaking shall specify at least two long-term climate change scenarios, including the following:

(a) a long-term climate change scenario where the global temperature increase remains below two degrees Celsius;

(b) a long-term climate change scenario where the global temperature increase is equal to or higher than two degrees Celsius.

3. At regular intervals, the assessment referred to in Article 45(1) shall contain an analysis of the impact on the business of the undertaking of the long-term climate change scenarios specified pursuant to paragraph 2 of this Article. Those intervals shall be proportionate to the nature, scale and complexity of the climate change risks inherent in the business of the undertaking, but be no longer than three years.

4. The long-term climate change scenarios referred to in the paragraph 2 shall be reviewed, at least every three years, and updated where necessary.

5. By way of derogation from paragraphs 2, 3 and 4, insurance and reinsurance undertakings that are classified as low-risk profile undertakings shall neither be required to specify climate change scenarios nor to assess their impact on the business of the undertaking.;

Or. en

Amendment 106

Proposal for a directive

Article 1 – paragraph 1 – point 26 – point a

Directive 2009/138/EC

Article 51 – paragraph 1

Text proposed by the Commission

Amendment

(a) paragraph 1 is replaced by the following:

deleted

1. Member States shall, taking into account the information required in paragraph 3 of this Article and the principles set out in Article 35(4), require insurance and reinsurance undertakings to disclose publicly, on an annual basis, a report on their solvency and financial condition.

The solvency and financial condition report shall contain two separate parts. The first part shall consist of information addressed to policyholders and beneficiaries, and the second part shall consist of information addressed to other market participants. The two parts shall be disclosed separately or jointly indicating clearly that the solvency and financial condition report consists of both parts.;

Or. en

Justification

There is little benefit of splitting the annual report into two parts.

Amendment 107

Proposal for a directive

Article 1 – paragraph 1 – point 26 – point b

Directive 2009/138/EC

Article 51 – paragraph 1a

Text proposed by the Commission

Amendment

(b) paragraph 1a is replaced by the following:

deleted

1a. The part of the solvency and financial condition report consisting of information addressed to policyholders and beneficiaries shall contain the following information:

(a) a description of the business and the performance of the undertaking; and

(b) a brief description of the capital management and the risk profile of the undertaking.;

Or. en

Justification

There is little benefit of splitting the annual report into two parts.

Amendment 108

Proposal for a directive

Article 1 – paragraph 1 – point 26 – point c

Directive 2009/138/EC

Article 51 – paragraph 1b

Text proposed by the Commission

Amendment

1b. The part of the solvency and financial condition report consisting of information addressed to other market participants shall contain the following information, either in full or by way of references to equivalent information, both in nature and scope, disclosed publicly under other legal or regulatory requirements:

deleted

(a) a description of the system of governance;

(b) a description, separately for assets, technical provisions, and other liabilities, of the bases and methods used for their valuation;

(i) the structure and amount of own funds, and their quality;

(ii) the amounts of the Solvency Capital Requirement and of the Minimum Capital Requirement;

(iii) for insurance and reinsurance undertakings relevant for the financial stability of the financial systems in the Union, information on risk sensitivity;

(iv) the option set out in Article 304 used for the calculation of the Solvency Capital Requirement;

(v) 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;

(vi) 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.

Or. en

Justification

There is little benefit of splitting the annual report into two parts.

Amendment 109

Proposal for a directive

Article 1 – paragraph 1 – point 26 – point c

Directive 2009/138/EC

Article 51 – paragraph 1c

Text proposed by the Commission

Amendment

1c. Where the matching adjustment referred to in Article 77b is applied, the description referred to in paragraph 1b, points (b), (c)(i) and (c)(ii), of this Article shall also describe the matching adjustment and 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.

deleted

The description referred to in paragraph 1b, points (b), (c)(i) and (c) (ii), of this Article shall also contain a statement on whether the volatility adjustment referred to in Article 77d is used by the undertaking and, where the volatility adjustment is used, it shall disclose the following information:

(a) a quantification of the impact of a change to zero of the volatility adjustment on the undertaking's financial position;

(b) for each relevant currency or, as applicable, country, the volatility adjustment calculated in accordance with Article 77d and the corresponding best estimates for insurance or reinsurance obligations.;

Or. en

Justification

There is little benefit of splitting the annual report into two parts.

Amendment 110

Proposal for a directive

Article 1 – paragraph 1 – point 26 – point d – introductory part

Directive 2009/138/EC

Article 51 – paragraph 2 – subparagraph 3

Text proposed by the Commission

Amendment

(d) paragraph 2 is replaced by the following:

(d) the third subparagraph of paragraph 2 is deleted.

Or. en

Justification

Deletes reference to transition period that has already expired.

Amendment 111

Proposal for a directive

Article 1 – paragraph 1 – point 26 – point d

Directive 2009/138/EC

Article 51 – paragraph 2

Text proposed by the Commission

Amendment

2. The description referred to in paragraph 1b, point (c)(i), shall include an analysis of any significant changes as compared to the previous reporting period 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.

deleted

The disclosure of the Solvency Capital Requirement referred to in paragraph 1b, point (c)(ii), of this Article shall show separately the amount calculated in accordance with Chapter VI, Section 4, Subsections 2 and 3 and any capital add-on imposed in accordance with Article 37 or the impact of the specific parameters the insurance or reinsurance undertaking is required to use in accordance with Article 110, together with concise information on its justification by the supervisory authority concerned.

The disclosure of the Solvency Capital Requirement shall be accompanied, where applicable, by an indication that its final amount is still subject to supervisory assessment.;

Or. en

Justification

There is little benefit of splitting the annual report into two parts.

Amendment 112

Proposal for a directive

Article 1 – paragraph 1 – point 26 – point e

Directive 2009/138/EC

Article 51 – paragraph 3

Text proposed by the Commission

Amendment

3. Captive insurance undertakings shall not be required to disclose the part addressed to policyholders and beneficiaries and they shall only be required to include in the part addressed to other market participants the quantitative data required by the implementing technical standard referred to in Article 56 provided that these undertakings meet the following conditions:

deleted

(a) all insured persons and beneficiaries are legal entities of the group of which the captive insurance undertaking is part or natural persons eligible to be covered under that group’s insurance policies and the business covering natural persons eligible to be covered under the group insurance policies remains below 5% of technical provisions;

(b) the insurance obligations of the captive insurance undertaking do not consist of any compulsory third-party liability insurance.

Or. en

Justification

There is little benefit of splitting the annual report into two parts.

Amendment 113

Proposal for a directive

Article 1 – paragraph 1 – point 26 – point e

Directive 2009/138/EC

Article 51 – paragraph 4

Text proposed by the Commission

Amendment

4. Captive reinsurance undertakings shall not be required to disclose the part addressed to policyholders and beneficiaries. Such undertakings shall only be required to include the quantitative data required by the implementing technical standards referred to in Article 56, and the part addressed to other stakeholders provided that these undertakings meet the following conditions:

deleted

(a) all insured persons and beneficiaries are legal entities of the group of which the captive reinsurance undertaking is part or natural persons eligible to be covered under that group’s insurance policies and the business covering natural persons eligible to be covered under the group insurance policies remains below 5% of technical provisions; ;

(b) the insurance contracts underlying the reinsurance obligations of the captive reinsurance undertaking do not relate to any compulsory third-party liability insurance;

(c) loans in place with the parent or any group company, including groups cashpools do not exceed 20 % of total assets held by the captive reinsurance undertaking;

(d) the maximum loss resulting from the gross technical provisions can be deterministically assessed without using stochastic methods.

Or. en

Justification

There is little benefit of splitting the annual report into two parts.

Amendment 114

Proposal for a directive

Article 1 – paragraph 1 – point 26 – point e

Directive 2009/138/EC

Article 51 – paragraph 5

Text proposed by the Commission

Amendment

5. By way of derogation from paragraph 1, reinsurance undertakings may not disclose the part of the solvency and financial condition report addressed to policyholders and beneficiaries.

deleted

Or. en

Justification

There is little benefit of splitting the annual report into two parts.

Amendment 115

Proposal for a directive

Article 1 – paragraph 1 – point 26 – point e

Directive 2009/138/EC

Article 51 – paragraph 6

Text proposed by the Commission

Amendment

6. By way of derogation from paragraph 1b of this Article, insurance undertakings that are classified as low-risk profile undertakings may disclose only the quantitative data required by the implementing technical standards referred to in Article 56 in the part of the solvency and financial condition report consisting of information addressed to other market participants, provided that they disclose a full report containing all the information required in this Article every three years.

6. By way of derogation from paragraph 1 of this Article, insurance undertakings that are classified as low-risk profile undertakings may disclose only the quantitative data required by the implementing technical standards referred to in Article 56 in the solvency and financial condition report, provided that they disclose a full report containing all the information required in this Article every three years.

Or. en

Amendment 116

Proposal for a directive

Article 1 – paragraph 1 – point 27

Directive 2009/138/EC

Article 51a

Text proposed by the Commission

Amendment

(27) the following Article 51a is inserted:

deleted

Article 51a

Audit requirements

1. For insurance and reinsurance undertakings other than low-risk profile undertakings and captive insurance undertakings and captive reinsurance undertakings, the balance sheet disclosed as part of the solvency and financial condition report or as part of the single solvency and financial condition report shall be subject to an audit.

2. Member States may extend the obligation laid down in paragraph 1 to captive insurance undertakings and captive reinsurance undertakings.

3. The audit shall be carried out by a statutory auditor or an audit firm, in accordance with the applicable international standards, unless this Directive, or delegated acts adopted pursuant to it establish other principles and requirements for the assessment of any item of the balance sheet. Statutory auditors and audit firms, when performing this task, shall comply with the duties of auditors set out in Article 72.

4. A separate report, including a description of the nature, and the results, of the audit, prepared by the statutory auditor or the audit firm shall be submitted together with the solvency and financial condition report to the supervisory authority by the insurance and reinsurance undertakings.;

Or. en

Justification

This obligation is extremely costly and will provide little added value if national supervisors have done their work.

Amendment 117

Proposal for a directive

Article 1 – paragraph 1 – point 36

Directive 2009/138/EC

Article 77 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

(36) in Article 77, the following paragraphs 6 and 7 are added:

(36) in Article 77, the following paragraphs 3a, 5a, 6 and 7 are added:

3a. The risk margin for the entire portfolio of insurance and reinsurance obligations shall be calculated using the following formula:

RM = CoC * Σt≥0 (0.9t*SCR(t)/((1+r(t+1))t+1)

where

(a) CoC denotes the Cost-of-Capital rates

(b) the sum covers all integers including zero

(d) r(t+1) denotes the basic risk-free interest rate for the maturity of t+1 years.

Or. en

Amendment 118

Proposal for a directive

Article 1 – paragraph 1 – point 36

Directive 2009/138/EC

Article 77 – paragraph 5 a (new)

Text proposed by the Commission

Amendment

5a. The Cost-of-Capital rate referred to in paragraph 5 shall be assumed to be equal to 4 %.

Or. en

Justification

The cost of capital should be set by the legislator.

Amendment 119

Proposal for a directive

Article 1 – paragraph 1 – point 36

Directive 2009/138/EC

Article 77 – paragraph 7

Text proposed by the Commission

Amendment

7. Notwithstanding paragraph 6, insurance and reinsurance undertakings that are classified as low-risk profile undertakings may use a prudent deterministic valuation of the best estimate for life obligations with options and guarantees that are not deemed material.;

7. Notwithstanding paragraph 6, insurance undertakings that are classified as low-risk profile undertakings or that have obtained prior supervisory approval may use a prudent deterministic valuation of the best estimate for life obligations with options and guarantees that are not deemed material.;

Or. en

Amendment 120

Proposal for a directive

Article 1 – paragraph 1 – point 37

Directive 2009/138/EC

Article 77a – paragraph 1 – subparagaph 1 – introductory part

Text proposed by the Commission

Amendment

The determination of the relevant risk-free interest rate term structure referred to in Article 77(2) shall make use of, and be consistent with, information derived from relevant financial instruments. That determination shall take into account relevant financial instruments of those maturities where the markets for those financial instruments are deep, liquid and transparent. The relevant risk-free interest rate term structure shall be extrapolated for maturities longer than the first smoothing point. The first smoothing point for a currency shall be the longest maturity for which all of the following conditions are met:

The determination of the relevant risk-free interest rate term structure referred to in Article 77(2) shall make use of, and be consistent with, information derived from relevant financial instruments. That determination shall take into account relevant financial instruments of those maturities where the markets for those financial instruments are deep, liquid and transparent. As of the first maturity (the ‘first smoothing point’) where markets for those financial instruments are not deep, liquid or transparent, the relevant risk-free interest rate shall be extrapolated in accordance with paragraph 2. The first smoothing point for a currency shall be the longest maturity for which all of the following conditions are met:

Or. en

Amendment 121

Proposal for a directive

Article 1 – paragraph 1 – point 37

Directive 2009/138/EC

Article 77a – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

The extrapolated part of the relevant risk-free interest rate term structure shall be based on forward rates converging smoothly from one or a set of forward rates in relation to the longest maturities for which the bonds can be observed in a deep, liquid and transparent market to an ultimate forward rate.

Or. en

Amendment 122

Proposal for a directive

Article 1 – paragraph 1 – point 37

Directive 2009/138/EC

Article 77a – paragraph 1 – subparagraph 3

Text proposed by the Commission

Amendment

The extrapolated part of the relevant risk-free interest rates shall take into account information from financial instruments other than bonds for maturities where the relevant risk-free interest rate term structure is extrapolated and where the markets for those financial instruments are deep liquid and transparent.

The extrapolated part of the relevant risk-free interest rates shall take into account information from financial instruments other than bonds where the markets for those financial instruments are deep liquid and transparent.

Or. en

Amendment 123

Proposal for a directive

Article 1 – paragraph 1 – point 37

Directive 2009/138/EC

Article 77a – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

For the purpose of paragraph 1, second subparagraph, any parameters determining the speed of the convergence of the forward rates towards the ultimate forward rate of the extrapolation may be chosen such that on [OP please insert date = application date] the risk-free interest rate term structure is sufficiently similar to the risk-free interest rate term structure on that date determined in line with the rules for the extrapolation applicable on [OP please insert date = one day before date of application]. Those parameters of the extrapolation shall be decreased linearly at the beginning of each calendar year, during a transitional period. The final parameters of the extrapolation shall be applied as of 1 January 2032.

The extrapolated risk-free rate shall be determined as follows:

rFSP+h = FSP+h√((1+rFSP)FSP * exp(h*fh)) - 1

Where:

fh = ln(1+UFR) + [(LLFR - ln(1+UFR)] * ((1-exp(-a*h)/(a*h))

(a) UFR is the Ultimate Forward Rate

(b) a is the convergence speed parameter

(d) FSP is the First Smoothing Point

The convergence speed parameter a shall be set at 20 %.

Or. en

Amendment 124

Proposal for a directive

Article 1 – paragraph 1 – point 37

Directive 2009/138/EC

Article 77a – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

The transitional mechanism set out in the first subparagraph shall not affect the determination of the depth, liquidity and transparency of financial markets and the first smoothing point referred to in paragraph 1.;

deleted

Or. en

Amendment 125

Proposal for a directive

Article 1 – paragraph 1 – point 37

Directive 2009/138/EC

Article 77a – paragraph 2a (new)

Text proposed by the Commission

Amendment

2 a. Notwithstanding paragraph 1, the starting point for the extrapolation of risk-free interest rates, in particular for the euro, should be at a maturity of 20 years. In addition, the extrapolated part of the risk-free interest rate term structure for the euro shall converge in such a way to the ultimate forward rate that for maturities 40 years past the starting point of the extrapolation, the extrapolated forward rates do not differ by more than three basis points from the ultimate forward rate. For currencies other than the euro, the characteristics of the local bond and swap markets shall be taken into account when determining the starting point for the extrapolation of risk-free interest rates and the appropriate convergence period to the ultimate forward rate.

Or. en

Justification

Based on recital 30 of current Omnibus II Directive.

Amendment 126

Proposal for a directive

Article 1 – paragraph 1 – point 37 a (new)

Directive 2009/138/EC

Article 77b – paragraph 1

Present text

Amendment

(37a) paragraph 1 of Article 77b is amended as follows:

(a) point (b) is deleted

(b) point (i) is replaced by the following:

(i) the insurance or reinsurance obligations of an insurance or reinsurance contract are not split into different parts when composing the portfolio of insurance or reinsurance obligations for the purpose of this paragraph.

(i) the insurance or reinsurance obligations of an insurance or reinsurance contract, and where a group contract is considered a single contract, are not split into different parts when composing the portfolio of insurance or reinsurance obligations for the purpose of this paragraph.

Or. en

Amendment 127

Proposal for a directive

Article 1 – paragraph 1 – point 38 – point c

Directive 2009/138/EC

Article 77d – paragraph 2 – subparagraphs 2 a (new) and 2 b (new)

Text proposed by the Commission

Amendment

For each currency and each country, the spread referred to in paragraph (2) shall be equal to the following:

S = wgov * max (Sgov, 0) + wcorp * max(Scorp, 0)

where:

(a) wgov denotes the ratio of the value of government bonds included in the reference portfolio of assets for that currency or country and the value of all the assets included int hat reference portfolio;

(b) Sgov denotes the average currency spread on government bonds included in the reference portfolio of assets for that currency or country;

(c) wcorp denotes the ratio of the value of bonds other than government bonds, loans and securitisations included in the reference portfolio of assets for that currency or country and the value of all the assets included in that reference portfolio;

(d) Scorp denotes the average currency spread on bonds other than government bonds, loans and securitisations included in the reference portfolio of assets for that currency or country.

For the purposes of this paragraph, ‘government bonds’ means exposures to central governments and central banks.

Or. en

Amendment 128

Proposal for a directive

Article 1 – paragraph 1 – point 38 – point c

Directive 2009/138/EC

Article 77d – paragraph 3 – subparagraph 3a (new)

Text proposed by the Commission

Amendment

The portion of the spread that is attributable to a realistic assessment of expected losses, unexpected credit risk or any other risk shall be calculated in the same manner as the fundamental spread referred to in Article 77c(2).

Or. en

Amendment 129

Proposal for a directive

Article 1 – paragraph 1 – point 43 a (new)

Directive 2009/138/EC

Article 105a

Text proposed by the Commission

Amendment

(43a) the following Article is inserted:

‘Article 105a

Long-term equity investments

1. A sub-set of equity investments may be treated as long-term equity investments if the insurance or reinsurance undertaking demonstrates, to the satisfaction of the supervisory authority, that all of the following conditions are met:

(a) the sub-set of equity investments as well as the holding period of each equity investment within the sub-set are clearly identified;

(b) the sub-set of equity investments is included within a portfolio of assets which is assigned to cover the best estimate of a portfolio of insurance or reinsurance obligations corresponding to one or several clearly identified businesses, and the undertaking maintains that assignment over the lifetime of the obligations;

(c) the portfolio of insurance or reinsurance obligations, and the assigned portfolio of assets referred to in point (b) are identified, managed and organised separately from the other activities of the undertaking, and the assigned portfolio of assets is not used to cover losses arising from other activities of the undertaking;

(d) the technical provisions within the portfolio of insurance or reinsurance obligations referred to in point (b) only represent a part of the total technical provisions of the insurance or reinsurance undertaking;

(e) the average holding period of equity investments in the sub-set exceeds five years, or where the average holding period of the sub-set is lower than five years, the insurance or reinsurance undertaking does not sell any equity investments within the sub-set until the average holding period exceeds five years;

(f) the sub-set of equity investments consists only of equities that are listed in countries that are member of the OECD or of unlisted equities of companies that have their head offices in countries that are member of the OECD;

(g) the solvency and liquidity position of the insurance or reinsurance undertaking, as well as its strategies, processes and reporting procedures with respect to asset-liability management, are such as to ensure, on an ongoing basis and under stressed conditions, that it is able to avoid forced sales of each equity investments within the sub-set for at least five years;

(h) the risk management, asset-liability management and investment policies of the insurance or reinsurance undertaking reflects the undertaking's intention to hold the sub-set of equity investments for a period that is compatible with the condition laid down in point (e) and its ability to meet the condition laid down in point (g).

2. Where equities are held within collective investment undertakings or within alternative investment funds the conditions laid down in paragraph 1 may be assessed at the level of the funds and not of the underlying assets held within those funds.

3. Insurance or reinsurance undertakings that treat a sub-set of equity investments as long-term equity investments in accordance with paragraph 1 of this Article shall not revert back to an approach that does not include long-term equity investments. Where an insurance or reinsurance undertaking that treats a sub-set of equity investments as long-term equity investments is no longer able to comply with the conditions laid down in paragraph 1 of this Article, it shall immediately inform the supervisory authority and shall cease to apply Article 169(1)(b), (2)(b), (3)(b) and (4)(b) to any of its equity investments for a period of 36 months.

4. The capital requirement for long-term equity investments shall be equal to the loss in the basic own funds that would result from an instantaneous decrease equal to 22 % in the value of investments that are treated as long-term equity.

Or. en

Amendment 130

Proposal for a directive

Article 1 – paragraph 1 – point 44

Directive 2009/138/EC

Article 106 – paragraph 3

Text proposed by the Commission

Amendment

3. The symmetric adjustment made to the standard equity capital charge covering the risk arising from changes in the level of equity prices shall not result in an equity capital charge being applied that is more than 17 percentage points lower or higher than the standard equity capital charge.;

3. The symmetric adjustment made to the standard equity capital charge covering the risk arising from changes in the level of equity prices in relation to equities not covering liabilities from unit-linked life insurance policies shall not result in an equity capital charge being applied that is more than 17 percentage points lower or 10 percentage points higher than the standard equity capital charge.;

Or. en

Amendment 131

Proposal for a directive

Article 1 – paragraph 1 – point 45

Directive 2009/138/EC

Article 109 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

Insurance and reinsurance undertakings may use a simplified calculation for a specific sub-module or risk module where the nature, scale and complexity of the risks they face justifies it and where it would be disproportionate to require all insurance and reinsurance undertakings to apply the standardised calculation.

Notwithstanding the first subparagraph, low-risk profile undertakings may use a simplified calculation for a specific sub-module or risk module.

Or. en

Amendment 132

Proposal for a directive

Article 1 – paragraph 1 – point 45

Directive 2009/138/EC

Article 109 – paragraph 2

Text proposed by the Commission

Amendment

2. Without prejudice to paragraph 1 of this Article and to Article 102(1), where an insurance or reinsurance undertaking calculates the Solvency Capital Requirement and a risk module or sub-module does not represent a share of more than 5 % of the Basic Solvency Capital Requirement referred to in Article 103, point (a), the undertaking may use a simplified calculation for that risk module or sub-module during a period of no more than three years following that calculation of the Solvency Capital Requirement.

2. Where an insurance or reinsurance undertaking calculates the Solvency Capital Requirement and a risk module or sub-module does not represent a share of more than 5 % of the Basic Solvency Capital Requirement referred to in Article 103, point (a), the undertaking may use a simplified calculation for that risk module or sub-module.

Or. en

Justification

There is no reason to put a time limit on the simplifications.

Amendment 133

Proposal for a directive

Article 1 – paragraph 1 – point 46 – point b – introductory part

Directive 2009/138/EC

Article 111 – paragraph 1

Text proposed by the Commission

Amendment

(b) the following subparagraph is added:

(b) the following subparagraphs are added:

Or. en

Amendment 134

Proposal for a directive

Article 1 – paragraph 1 – point 46 – point b

Directive 2009/138/EC

Article 111 – paragraph 1 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

For the purpose of the first subparagraph, point (c), the methods, assumptions and standard parameters for the interest rate risk sub-module referred to in Article 105(5)(a) shall reflect the risk that low or negative interest rates may fall below their current level. By way of derogation from the previous sentence, the calculation of the interest rate risk sub-module shall not be required to take into account the risk of interest rates falling to levels below a negative floor where a negative floor can be determined such that the likelihood of interest rates across relevant currencies and across maturities not being at all times above the negative floor is sufficiently small.

Or. en

Justification

Proposal for a new sub-paragraph to provide guidance on interest rate risk.

Amendment 135

Proposal for a directive

Article 1 – paragraph 1 – point 46 a (new)

Directive 2009/138/EC

Article 111 – paragraph 3

Present text

Amendment

(46a) Article 111(3) is amended as follows:

3. By 31 December 2020, the Commission shall make an assessment of the appropriateness of the methods, assumptions and standard parameters used when calculating the Solvency Capital Requirement standard formula. It shall in particular take into account the performance of any asset class and financial instruments, the behaviour of investors in those assets and financial instruments as well as developments in international standard setting in financial services. The review of certain asset classes may be prioritised. The Commission shall present a report to the European Parliament and to the Council, accompanied, where appropriate, by proposals for the amendment of this Directive, or of delegated or implementing acts adopted pursuant hereto.

‘3. By 31 December 2025, and every five years thereafter, EIOPA shall make an assessment of the appropriateness of the methods, assumptions, and standard parameters used when calculating the Solvency Capital Requirement standard formula. It shall in particular take into account the performance of any asset class and financial instruments, the behaviour of investors in those assets and financial instruments as well as developments in international standard setting in financial services. On the basis of EIOPA’s assessment, the Commission shall present, where appropriate, proposals for the amendment of this Directive, or of delegated or implementing acts adopted pursuant hereto.’

Or. en

Justification

All calibrations should be reviewed at regular intervals. This amendment updates the existing article.

Amendment 136

Proposal for a directive

Article 1 – paragraph 1 – point 47

Directive 2009/138/EC

Article 112 – paragraph 7

Text proposed by the Commission

Amendment

(47) in Article 112, paragraph 7 is replaced by the following:

deleted

7. After having received approval from supervisory authorities to use an internal model, and each time they report the result of a calculation of the Solvency Capital Requirement pursuant to Article 102(1), insurance and reinsurance undertakings shall provide the supervisory authorities with an estimate of the Solvency Capital Requirement determined in accordance with the standard formula, as set out in Subsection 2.;

Or. en

Justification

This provision would be extremely burdensome.

Amendment 137

Proposal for a directive

Article 1 – paragraph 1 – point 49 – point b

Directive 2009/138/EC

Article 132 – paragraph 5

Text proposed by the Commission

Amendment

5. Member States shall ensure that insurance and reinsurance undertakings take account of possible macroeconomic and financial markets’ developments and, at the request of the supervisory authority, macroprudential concerns when they decide on their investment strategy.

5. Insurance and reinsurance undertakings shall take account of possible macroeconomic and financial markets’ developments when they decide on their investment strategy.

Or. en

Amendment 138

Proposal for a directive

Article 1 – paragraph 1 – point 49 – point b

Directive 2009/138/EC

Article 132 – paragraph 6

Text proposed by the Commission

Amendment

6. Insurance and reinsurance undertakings shall assess the extent to which their investment strategy may affect macroeconomic and financial markets’ developments and have the potential to turn into sources of systemic risk, and incorporate such considerations as part of their investment decisions.

deleted

Or. en

Justification

Most insurance undertakings are too small to be a source of systemic risk.

Amendment 139

Proposal for a directive

Article 1 – paragraph 1 – point 49 – point b

Directive 2009/138/EC

Article 132 – paragraph 7

Text proposed by the Commission

Amendment

7. For the purpose of paragraphs 5 and 6 of this Article, macroeconomic developments and macroprudential concerns shall have the same meaning as in Article 45.;

7. For the purpose of paragraphs 5 and 6 of this Article, macroeconomic and financial market developments shall have the same meaning as in Article 45.;

Or. en

Amendment 140

Proposal for a directive

Article 1 – paragraph 1 – point 52

Directive 2009/138/EC

Article 139 – paragraph 3

Text proposed by the Commission

Amendment

3. If a winding-up proceeding is not opened within two months of receipt of the information referred to in paragraph 1, the supervisory authority of the home Member State shall consider restricting or prohibiting the free disposal of assets of the insurance or reinsurance undertaking. It shall inform the supervisory authorities of the host Member States accordingly. At the request of the supervisory authority of the home Member State, those authorities shall take the same measures. The supervisory authority of the home Member State shall designate the assets to be covered by such measures.

3. The supervisory authority of the home Member State may also restrict or prohibit the free disposal of assets of the insurance or reinsurance undertaking. It shall inform the supervisory authorities of the host Member States accordingly. At the request of the supervisory authority of the home Member State, those authorities shall take the same measures. The supervisory authority of the home Member State shall designate the assets to be covered by such measures.

Or. en

Justification

There should be no mix-up between Solvency II and IRRD.

Amendment 141

Proposal for a directive

Article 1 – paragraph 1 – point 52

Directive 2009/138/EC

Article 139 – paragraph 4

Text proposed by the Commission

Amendment

4. EIOPA may develop guidelines for the actions that supervisory authorities should take when they observe a failure to comply with the Minimum Capital Requirement or the risk of non-compliance referred to in paragraph 1.;

deleted

Or. en

Justification

EIOPA always may develop guidelines pursuant to the EIOPA Regulation.

Amendment 142

Proposal for a directive

Article 1 – paragraph 1 – point 53

Directive 2009/138/EC

Article 144 – paragraph 4

Text proposed by the Commission

Amendment

4. In the event of withdrawal of authorisation, Member States shall ensure that insurance and reinsurance undertakings continue to be subject to the general rules and objectives of the insurance supervision set out in Title I, Chapter III, until any winding-up proceedings are opened.;

4. In the event of the withdrawal of authorisation, Member States shall ensure that the insurance or reinsurance undertaking continues to be subject to the general rules and objectives of the supervision set out in Title I, Chapter III, until any winding-up proceedings are opened.;

Or. en

Justification

Editorial corrections.

Amendment 143

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

CHAPTER VIIA – title

Text proposed by the Commission

Amendment

CHAPTER VIIA

deleted

Macroprudential tools

Or. en

Justification

Most of the provisions in this chapter do not concern macroprudential tools.

Amendment 144

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144a – paragraph 1

Text proposed by the Commission

Amendment

1. Member States shall ensure that the liquidity risk management of insurance and reinsurance undertakings referred to in Article 44(2), point (d), ensure they maintain adequate liquidity to settle their financial obligation towards policyholders and other counterparties when they fall due, even under stressed conditions.

Or. en

Justification

"Stressed conditions" is a very vague concept.

Amendment 145

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144a – paragraph 2

Text proposed by the Commission

Amendment

2. For the purpose of paragraph 1, Member States shall ensure that insurance and reinsurance undertakings draw up and maintain a liquidity risk management plan projecting the incoming and outgoing cash flows in relation to their assets and liabilities. Member States shall ensure that insurance and reinsurance undertakings develop a set of liquidity risk indicators to identify, monitor and address potential liquidity stress.

2. For the purpose of paragraph 1, Member States shall ensure that insurance and reinsurance undertakings draw up and keep up to date a liquidity risk management plan projecting the incoming and outgoing cash flows in relation to their assets and liabilities.

Or. en

Amendment 146

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144a – paragraph 3

Text proposed by the Commission

Amendment

3. Member States shall ensure that insurance and reinsurance undertakings submit to the supervisory authorities the liquidity risk management plan as part of the information referred to in Article 35(1).

Or. en

Justification

This would be a better fit for the forward-looking own risk and solvency assessment (ORSA).

Amendment 147

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144a – paragraph 4

Text proposed by the Commission

Amendment

4. Member States shall ensure that insurance and reinsurance undertakings that are classified as low-risk profile undertakings pursuant to Article 29c and insurance or reinsurance undertakings which have obtained prior approval from the supervisory authority pursuant to Article 29d are not obliged to draw up a liquidity risk management plan as referred to in paragraph 2 of this Article.

4. Member States shall ensure that insurance undertakings that are classified as low-risk profile undertakings pursuant to Article 29c and insurance or reinsurance undertakings which have obtained prior approval from the supervisory authority pursuant to Article 29d are not obliged to draw up a liquidity risk management plan as referred to in paragraph 2 of this Article.

Or. en

Amendment 148

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144a – paragraph 5

Text proposed by the Commission

Amendment

5. Member States shall ensure that, where insurance and reinsurance undertakings apply the matching adjustment referred to in Article 77b or the volatility adjustment referred to in Article 77d, they may combine the liquidity risk management plan referred to in paragraph 3 of this Article with the plan required in accordance with Article 44(2), third subparagraph.

5. Member States shall ensure that, where insurance and reinsurance undertakings apply the matching adjustment referred to in Article 77b or the volatility adjustment referred to in Article 77d, they may combine the liquidity risk management plan referred to in paragraph 2 of this Article with the plan required in accordance with Article 44(2), third subparagraph.

Or. en

Justification

Editorial correction: reference is incorrect.

Amendment 149

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144a – paragraph 6

Text proposed by the Commission

Amendment

6. In order to ensure consistent application of this Article, EIOPA shall develop draft regulatory technical standards to further specify the content and the frequency of update of the liquidity risk management plan.

deleted

EIOPA shall submit those draft regulatory technical standards to the Commission by [OP please add date = 12 months after entry into force].

Power is conferred on the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

Or. en

Justification

This seems unnecessary and is likely to result in additional red tape.

Amendment 150

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144b – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

The measures taken by supervisory authorities on the basis of this paragraph shall be reviewed at least once a year by the supervisory authority and be removed when the undertaking has taken effective remedies.

The measures taken by supervisory authorities on the basis of this paragraph shall be reviewed at least every six months by the supervisory authority and be removed when the undertaking has taken effective remedies.

Or. en

Justification

Given the severity of the measures, a more frequent review is justified.

Amendment 151

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144b – paragraph 3 – subparagraph 1

Text proposed by the Commission

Amendment

Member States shall ensure that supervisory authorities have the power to temporarily suspend redemption rights of policyholders on life insurance policies of undertakings facing significant liquidity risks that may cause a threat to the protection of policyholders or to the stability of the financial system.

Member States shall ensure that, in relation to undertakings facing extreme liquidity risks that may cause a severe and imminent threat to the protection of policyholders or to the stability of the financial system, supervisory authorities have the power to temporarily:

(a) restrict or suspend dividend distributions to shareholders and other subordinated creditors;

(b) restrict or suspend other payments to shareholders and other subordinated creditors;

(d) restrict or suspend bonuses or other variable remuneration;

(e) suspend redemption rights of life insurance policy holders.

Or. en

Amendment 152

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144b – paragraph 3 – subparagraph 2

Text proposed by the Commission

Amendment

Such a power shall only be exercised in exceptional circumstances, as a last resort measure. Before exercising such a power, the supervisory authority shall take into account potential unintended effects on financial markets and on the rights of policyholders, including in a cross-border context.

Such a power shall only be exercised in exceptional circumstances, as a last resort measure and where this is in the collective interest of policyholders. Before exercising such a power, the supervisory authority shall take into account potential unintended effects on financial markets and on the rights of policyholders, including in a cross-border context. Supervisory authorities shall duly justify the application of those powers in writing.

Or. en

Amendment 153

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144b – paragraph 3 – subparagraph 3

Text proposed by the Commission

Amendment

The application of the measure referred to in the first subparagraph shall last three months. Member States shall ensure that the measure can be renewed if the underlying reasons that justify it are still present and it is no longer applied when those reasons are no longer present.

The application of the measure referred to in the first subparagraph may last three months. Member States shall ensure that the measure can be renewed if the underlying reasons that justify it are still present and it is no longer applied when those reasons are no longer present.

Or. en

Amendment 154

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144b – paragraph 3 – subparagraph 4

Text proposed by the Commission

Amendment

Without prejudice to Article 144c (6), Member States shall ensure that the insurance and reinsurance undertakings concerned do not make distributions to shareholders and other subordinated creditors, and do not pay bonuses or other variable remuneration until the suspension of redemption rights is lifted by the supervisory authorities.

Member States shall ensure that redemption rights of life insurance policy holders may only be suspended if the powers referred to in points (a) to (d) of the first subparagraph have been fully exhausted. Insurance and reinsurance undertakings concerned shall not make distributions to shareholders and other subordinated creditors, and shall not pay bonuses or other variable remuneration where such payment is fully under the discretion of the undertaking until the suspension of redemption rights is lifted by the supervisory authorities.

Or. en

Amendment 155

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144b – paragraph 3 – subparagraph 5

Text proposed by the Commission

Amendment

Member States shall ensure that authorities with a macroprudential mandate, where different from the supervisory authorities, are duly informed of the supervisory authority's intention to make use of the power referred to in this paragraph, and are appropriately involved in assessing the potential unintended effects referred to in the second subparagraph.

deleted

Or. en

Amendment 156

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144b – paragraph 3 – subparagraph 6

Text proposed by the Commission

Amendment

Member States shall ensure that supervisory authorities shall notify EIOPA and ESRB whenever the power referred to in paragraph 3 is exercised to address a risk for the stability of the financial system.

deleted

Or. en

Amendment 157

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144b – paragraph 4

Text proposed by the Commission

Amendment

4. The power referred to in paragraph 3 may be exercised in relation to all undertakings operating in that Member State where the exceptional circumstances referred to in paragraph 3 affect the whole or a significant part of the insurance market.

deleted

Member States shall appoint an authority to exercise the power referred to in this paragraph.

Where the appointed authority is different from the supervisory authority, the Member State shall ensure proper coordination and exchange of information between the different authorities. In particular, authorities shall be required to cooperate closely and to share all the information that may be necessary for the adequate performance of the duties entrusted to the authority appointed pursuant to this paragraph.

Or. en

Justification

This Article is about supervisors' intervention rights when it comes to liquidity management for an individual company.

Amendment 158

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144b – paragraph 5

Text proposed by the Commission

Amendment

5. Member States shall ensure that the authority referred to in paragraph 4, second subparagraph, shall notify EIOPA and, where the measure is taken to address a risk to the stability of the financial system, the ESRB of the use of the power referred to in paragraph 4.

deleted

The notification shall include a description of the measure applied, its duration, and a description of the reasons and risks that motivated the use of the power, including the reasons why it was considered effective and proportionate in relation to its negative effects on policyholders.

Or. en

Justification

This Article is about supervisors' intervention rights when it comes to liquidity management for an individual company.

Amendment 159

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144b – paragraph 6

Text proposed by the Commission

Amendment

6. In order to ensure consistent application of this Article, EIOPA shall, after consulting the ESRB, develop guidelines to:

deleted

(a) provide further guidance on measures to address deficiencies in liquidity risk management and on the form, activation and calibration of powers that supervisory authorities may exercise to reinforce the liquidity position of undertakings when liquidity risks are identified and are not adequately remedied by these undertakings;

(b) specify the existence of exceptional circumstances that may justify the temporary suspension of redemption rights;

(c) specify the conditions for ensuring the consistent application of the temporary suspension of redemption rights across the Union and the aspects to consider for equally and adequately protecting policyholders in all home and host jurisdictions.

Or. en

Amendment 160

Proposal for a directive

Article 1 – paragraph 1 – point 54

Directive 2009/138/EC

Article 144c

Text proposed by the Commission

Amendment

Article 144c

deleted

Supervisory measures to preserve the financial position of undertakings during exceptional market-wide shocks

1. Without prejudice to Article 141, Member States shall ensure that supervisory authorities have the power to take measures to preserve the financial position of individual insurance or reinsurance undertakings during periods of exceptional sector-wide shocks that have the potential to threaten the financial position of the undertaking concerned or the stability of the financial system.

2. During periods of exceptional sector-wide shocks, supervisory authorities shall have the power to require undertakings with a particularly vulnerable risk profile to take at least the following measures:

(a) restrict or suspend dividend distributions to shareholders and other subordinated creditors;

(b) restrict or suspend other payments to shareholders and other subordinated creditors;

(d) restrict or suspend bonuses or other variable remuneration.

Member States shall ensure that the relevant national bodies and authorities which have a macroprudential mandate are duly informed of the national supervisory authority's intention to make use of this Article, and are appropriately involved in the assessment of exceptional sector-wide shocks in accordance with this paragraph.

3. The application of the measures referred to in paragraph 2 of this Article shall duly take into account the proportionality criteria referred to in Article 29(3), and the existence of any preventively agreed risk tolerance limits and thresholds for internal capital planning.

4. The application of measures referred to in paragraph 2 of this Article shall take into account the evidence resulting from the supervisory process and a forward-looking assessment of the solvency and financial position of the undertakings concerned, in line with the assessment referred to in Article 45(1), second subparagraph, points (a) and (b).

5. The application of the measures referred to in paragraph 2 shall last for as long as the underlying reasons that justify the measure are present. Those measures shall be reviewed every three months and shall be removed as soon as the underlying conditions that motivated the measures are over.

6. For the purpose of this Article, significant intra-group transactions referred to in Article 245(2) including intra-group dividend distributions, shall only be suspended or restricted where they are a threat to the solvency or liquidity position of the group or of one of the undertakings within the group. The supervisory authority of a related undertaking shall consult the group supervisor before suspending or restricting transactions with the rest of the group.

7. In order to ensure consistent conditions of application of this Article, EIOPA shall, after consulting the ESRB, develop implementing technical standards to specify the existence of exceptional sector-wide shocks.

EIOPA shall submit those draft implementing technical standards to the Commission by [OP please add date = 12 months after entry into force].

Power is conferred on the Commission to adopt those implementing technical standards in accordance with Article 15 of Regulation (EU) No 1094/2010.;

Or. en

Amendment 161

Proposal for a directive

Article 1 – paragraph 1 – point 58 – introductory part

Directive 2009/138/EC

Article 152b

Text proposed by the Commission

Amendment

(58) in Article 152b, following paragraphs 5 and 6 are added:

(58) in Article 152b, paragraphs 1 and 2 are replaced by the following and paragraphs 5 and 6 are added:

Or. en

Amendment 162

Proposal for a directive

Article 1 – paragraph 1 – point 58

Directive 2009/138/EC

Article 152b – paragraphs 1 and 2

Present text

Amendment

1. EIOPA may, in the case of justified concerns about negative effects on policy holders, on its own initiative or at the request of one or more of the relevant supervisory authorities, shall set up and coordinate a collaboration platform to strengthen the exchange of information and to enhance collaboration between the relevant supervisory authorities of the home Member State and the host Member States where an insurance or reinsurance undertaking carries out, or intends to carry out, activities which are based on the freedom to provide services or the freedom of establishment and where.

1. EIOPA shall set up and coordinate a collaboration platform to strengthen the exchange of information and to enhance collaboration between the relevant supervisory authorities of the home Member State and the host Member States where an insurance or reinsurance undertaking carries out, or intends to carry out, activities which are based on the freedom to provide services or the freedom of establishment.

(a) such activities are of relevance with respect to the host Member State’s market;

(b) a notification by the supervisory authority of the home Member State has been made under Article 152a(2) of deteriorating financial conditions or other emerging risks; or

2. Paragraph 1 is without prejudice to the right of the relevant supervisory authorities to set up a collaboration platform where they all agree to do so.

2. The relevant supervisory authorities shall submit to the collaboration platform all information available in relation to the insurance or reinsurance undertaking concerned. That information, including all information received in accordance with Article 35 in relation to actions taken by the relevant supervisory authorities, shall be provided in a timely manner to allow for the proper functioning of the collaboration platform.

Or. en

Justification

Makes the collaboration platform in cross-border cases mandatory in order to improve cross-border cooperation.

Amendment 163

Proposal for a directive

Article 1 – paragraph 1 – point 58

Directive 2009/138/EC

Article 152b – paragraph 5

Text proposed by the Commission

Amendment

5. Where two or more relevant authorities of a collaboration platform disagree about the procedure or content of an action to be taken, or inaction, in relation to an insurance or reinsurance undertaking, EIOPA may, at the request of any relevant authority or on its own initiative, assist the authorities in reaching an agreement in accordance with Article 19(1) of Regulation (EU) No 1094/2010.

5. Where two or more relevant authorities of a collaboration platform disagree about the procedure or content of an action to be taken, or inaction, in relation to an insurance or reinsurance undertaking, EIOPA shall, at the request of any relevant authority or on its own initiative, assist the authorities in reaching an agreement in accordance with Article 19(1) of Regulation (EU) No 1094/2010.

Or. en

Amendment 164

Proposal for a directive

Article 1 – paragraph 1 – point 58

Directive 2009/138/EC

Article 152b – paragraph 6

Text proposed by the Commission

Amendment

6. In the event of disagreement within the platform and where there are serious concerns about negative effects on policyholders or about the content of an action or inaction to be taken in relation to an insurance or reinsurance undertaking, EIOPA may decide, on its own initiative, to initiate and coordinate on-site inspections. It shall invite the supervisory authority of the home Member State as well as other relevant supervisory authorities of the collaboration platform to participate in those on-site inspections.;

6. In the event of disagreement within the collaboration platform and where there are serious concerns about negative effects on policyholders or about the content of an action or inaction to be taken in relation to an insurance or reinsurance undertaking, EIOPA may decide, on its own initiative, to initiate and coordinate on-site inspections. It shall invite the supervisory authority of the home Member State as well as other relevant supervisory authorities of the collaboration platform to participate in those on-site inspections.;

Or. en

Amendment 165

Proposal for a directive

Article 1 – paragraph 1 – point 59

Directive 2009/138/EC

Article 153 – paragraph 1

Text proposed by the Commission

Amendment

The supervisory authority of the host Member State may require the information which it is entitled to request with regard to the business of an insurance undertaking operating in the territory of that Member State either from the supervisory authority of the home Member State of that undertaking or from the insurance undertaking. That information shall be supplied within a reasonable period of time in the official language or languages of the host Member State, or in another language accepted by the supervisory authority of the host Member State. Where the supervisory authority of the host Member State addresses the insurance undertaking directly, it shall inform the supervisory authority of the home Member State about the information request.;

Or. en

Justification

The issue should be effectively addressed via the collaboration platforms without blurring the line between home/host supervisors.

Amendment 166

Proposal for a directive

Article 1 – paragraph 1 – point 60

Directive 2009/138/EC

Article 159a

Text proposed by the Commission

Amendment

(60) [...]

deleted

Or. en

Justification

This sort of information should be exchanged as part of the work in the collaboration platform.

Amendment 167

Proposal for a directive

Article 1 – paragraph 1 – point 61 – point b

Directive 2009/138/EC

Article 212 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

For the purposes of this Title, the supervisory authorities shall also consider as a parent undertaking any undertaking which, in the opinion of the supervisory authorities, effectively exercises a dominant influence over another undertaking, including where this influence is exercised through centralised coordination, over the decisions of the other undertaking.;

Or. en

Amendment 168

Proposal for a directive

Article 1 – paragraph 1 – point 61 – point c

Directive 2009/138/EC

Article 212 – paragraphs 3 to 6

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 169

Proposal for a directive

Article 1 – paragraph 1 – point 62 – point c

Directive 2009/138/EC

Article 213 – paragraph 3a – introductory part

Text proposed by the Commission

Amendment

3a. In the cases referred to in paragraph 2, point (b), the insurance holding company or mixed financial holding company shall ensure that all of the following conditions are fulfilled:

3a. In the cases referred to in paragraph 2, point (b), insurance and reinsurance undertakings shall ensure that all of the following conditions are fulfilled:

Or. en

Justification

Contact point for the supervisor should be the insurance or reinsurance undertakings that actually hold a licence.

Amendment 170

Proposal for a directive

Article 1 – paragraph 1 – point 62 – point c

Directive 2009/138/EC

Article 213 – paragraph 3b

Text proposed by the Commission

Amendment

3b. Where the conditions set out in paragraph 3a, point (a), are not satisfied, the group supervisor shall have the power to require the insurance holding company or mixed financial holding companies to change internal arrangements and distributions of tasks within the group.

deleted

Where the conditions set out in paragraph 3a, point (b), are not satisfied, the insurance holding company or mixed financial holding company shall be subject to appropriate supervisory measures by the group supervisor to ensure or restore, as the case may be, continuity and integrity of group supervision and compliance with the requirements laid down in this Title. In particular, Member States shall ensure that supervisory authorities have the power to require the insurance holding company or mixed financial holding company to structure the group in a way which enables the relevant supervisory authority to effectively exercise group supervision. Such a power shall only be exercised in exceptional circumstances, after consulting EIOPA and, where applicable, other supervisory authorities concerned and shall be duly justified to the group.

Or. en

Justification

The text essentially empowers supervisors to reorganise the business structure. This is a disproportionate intrusion and should be deleted.

Amendment 171

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 1 – introductory part

Text proposed by the Commission

Amendment

1. Groups within the meaning of Article 212 that are subject to group supervision in accordance with Article 213(2), points (a) and (b), shall be classified as low risk profile groups by their group supervisor, following the procedure set out in paragraph 2 of this Article where they meet all the following criteria at the level of the group for the last two financial years:

Or. en

Amendment 172

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 1 – point a – point iii

Text proposed by the Commission

Amendment

(iii) the total of the technical provisions of the group defined as gross of the amounts recoverable from reinsurance contracts and special purpose vehicles is not higher than EUR 1 000 000 000;

deleted

Or. en

Amendment 173

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 1 – point b – point ii

Text proposed by the Commission

Amendment

(ii) the annual gross written premium of the group is not higher than EUR 100 000 000;

deleted

Or. en

Amendment 174

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 1 – point b – point iii

Text proposed by the Commission

Amendment

(iii) the sum of the annual gross written premiums in classes 3 to 7 and classes 14 and 15 of Section A of Annex I is not higher than 30% of total annual written premiums of non-life business of the group;

(iii) the sum of the annual gross written premiums in classes 4 to 7 and classes 14 and 15 of Section A of Annex I is not higher than 30% of total annual gross written premiums of non-life business of the group;

Or. en

Justification

Excludes motor insurance.

Amendment 175

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 1 – point c

Text proposed by the Commission

Amendment

(c) business underwritten by insurance and reinsurance undertakings in the scope of the group which have their head offices in Member States other than the Member State of the group supervisor is not higher than 5 % of the total annual gross written premium of the group;

(c) business underwritten by insurance and reinsurance undertakings in the scope of the group which have their head offices in Member States other than the Member State of the group supervisor is not higher than 25 % of the total annual gross written premium of the group;

Or. en

Justification

Cross-border business should not be classified as riskier per se.

Amendment 176

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 1 – point d

Text proposed by the Commission

Amendment

(d) business underwritten by the group in Member States other than the Member State of the group supervisor is not higher than 5 % of its total annual gross written premium;

(d) business underwritten by the group in Member States other than the Member State of the group supervisor is not higher than 25 % of its total annual gross written premium;

Or. en

Amendment 177

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 1 – point e

Text proposed by the Commission

Amendment

(e) investments in non-traditional investments do not represent more than 20% of total investments;

(e) investments in non-traditional investments do not represent more than 30% of total investments;

Or. en

Amendment 178

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 1 – point f

Text proposed by the Commission

Amendment

(f) the business of the group does not include reinsurance operations exceeding 50 % of its total gross written premium income of the group.

(f) the reinsurance business accepted of the group does not exceed 50 % of its total gross written premium income of the group.

Or. en

Amendment 179

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 1 – point f a (new)

Text proposed by the Commission

Amendment

(fa) the consolidated group Solvency Capital Requirement is complied with an a capital add-on in accordance with Article 232 has not been set.

Or. en

Amendment 180

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 4

Text proposed by the Commission

Amendment

4. Without prejudice to paragraph 1, groups which use an approved partial or full internal model to calculate their group Solvency Capital Requirement shall never be classified as low risk profile groups.

4. Without prejudice to paragraph 1, groups which use an approved partial or full internal model to calculate their group Solvency Capital Requirement may be classified as low risk profile groups after approval from the group supervisor.

Or. en

Justification

The use of an internal model should not prevent classification as low-risk profile undertakings per se.

Amendment 181

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 5

Text proposed by the Commission

Amendment

5. The ultimate parent insurance or reinsurance undertakings, the insurance holding companies, or the mixed financial holding companies shall consider, in its assessment of compliance with the criteria defined in paragraph 1, the business plans for the next three financial years.

deleted

Or. en

Justification

Purpose of this paragraph is unclear.

Amendment 182

Proposal for a directive

Article 1 – paragraph 1 – point 63

Directive 2009/138/EC

Article 213a – paragraph 6

Text proposed by the Commission

Amendment

6. Articles 29c, 29d and 29e shall apply mutatis mutandis.;

6. Articles 29c and 29d shall apply mutatis mutandis.;

Or. en

Justification

Reflects suggested deletion of 29e.

Amendment 183

Proposal for a directive

Article 1 – paragraph 1 – point 64 – point a

Directive 2009/138/EC

Article 214 – paragraph 1

Text proposed by the Commission

Amendment

(a) paragraph 1 is replaced by the following:

deleted

1. The exercise of group supervision in accordance with Article 213 shall not imply that the supervisory authorities are required to play a supervisory role in relation to the third-country insurance undertaking, the third-country reinsurance undertaking or the mixed-activity insurance holding company taken individually.;

Or. en

Justification

Text currently in the Directive is clearer and should be kept. Proposed wording introduces ambiguity as to whether supervisors may directly supervise non-insurance holding companies.

Amendment 184

Proposal for a directive

Article 1 – paragraph 1 – point 70

Directive 2009/138/EC

Article 228 – paragraph 1 – point e

Text proposed by the Commission

Amendment

(e) institutions for occupational retirement provision within the meaning of Article 6, point (1) of Directive (EU) 2016/2341.

deleted

Or. en

Justification

Reflects the rapporteur's suggestion not to adapt the definition of regulated entity.

Amendment 185

Proposal for a directive

Article 1 – paragraph 1 – point 70

Directive 2009/138/EC

Article 228 – paragraph 2 – subparagraph 1 – point e

Text proposed by the Commission

Amendment

(e) for each related undertaking referred to in paragraph 1, point (e), of this Article the available solvency margin calculated in accordance with Article 17a of Directive (EU) 2016/2341.

deleted

Or. en

Amendment 186

Proposal for a directive

Article 1 – paragraph 1 – point 70

Directive 2009/138/EC

Article 228 – paragraph 3 – point g

Text proposed by the Commission

Amendment

(g) for each related undertaking referred to in paragraph 1, point (e), of this Article, the required solvency margin calculated in accordance with Article 17b of Directive (EU) 2016/2341.

deleted

Or. en

Amendment 187

Proposal for a directive

Article 1 – paragraph 1 – point 80

Directive 2009/138/EC

Title III – Chapter IIA

Text proposed by the Commission

Amendment

(80) in Title III, the following Chapter IIA is inserted:

deleted

CHAPTER IIA

Macroprudential rules at group level

Article 246a

Liquidity Risk Management at group level

1. Member States shall require participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies to draw up and maintain a liquidity risk management plan at the level of the group. Article 144a shall apply mutatis mutandis.

2. By way of derogation from Article 144a, Member States shall ensure that insurance or reinsurance subsidiaries which are in the scope of group supervision in accordance with Article 213(2), points (a) and (b), are exempted from the drawing up and maintaining a liquidity risk management plan at individual level whenever the liquidity risk management plan pursuant to paragraph 1 of this Article covers the liquidity management and liquidity needs of the subsidiaries concerned.

Member States shall require each individual insurance or reinsurance undertaking benefitting from the exemption pursuant to first subparagraph to submit the parts of the liquidity risk management plan covering the situation of the whole group and their own situation to its supervisory authority.

3. Notwithstanding paragraph 2, supervisory authorities may require an insurance or reinsurance subsidiary to draw up and maintain a liquidity risk management plan at individual level whenever they detect a specific liquidity vulnerability or the liquidity management plan at group level does not include appropriate information which the supervisory authority having authorised the subsidiary requires comparable undertakings to provide for the purpose of monitoring their liquidity position.

4. In order to ensure consistent application of this Article, EIOPA shall develop regulatory technical standards to further specify the content and frequency of update of the liquidity risk management framework plan at group level.

EIOPA shall submit those draft regulatory technical standards to the Commission by [PO please add date = 12 months after entry into force].

Power is conferred on the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

Article 246b

Other macroprudential rules

Articles 144b and 144c shall apply mutatis mutandis at the level of the participating insurance or reinsurance undertaking, insurance holding company or mixed financial holding company.;

Or. en

Justification

If liquidity risk management is done properly on solo level, there is little added value of liquidity management on group level. Hence, the Article should be deleted.

Amendment 188

Proposal for a directive

Article 1 – paragraph 1 – point 83

Directive 2009/138/EC

Article 256

Text proposed by the Commission

Amendment

(83) Article 256 is amended as follows:

deleted

(a) paragraph 1 is replaced by the following:

1. Member States shall require participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies to disclose publicly, on an annual basis, a report on solvency and financial condition at the level of the group. This report shall contain information about the group addressed to other market participants, as referred to in Article 51(1b). Articles 51, 53, 54 and 55 shall apply mutatis mutandis.

Member States shall ensure that the participating insurance and reinsurance undertakings, the insurance holding company or the mixed financial holding company disclose the information referred to in this Article on an annual or less frequent basis within 24 weeks after the undertaking's financial year end.;

(b) in paragraph 2, point (b) is replaced by the following:

(b) the information for any of the subsidiaries within the group, which information must be individually identifiable, including both parts of the solvency and financial condition report, and must be disclosed in accordance with Articles 51, 53, 54 and 55.;

4. The Commission shall adopt delegated acts in accordance with Article 301a further specifying the information which must be disclosed in the single solvency and financial condition report referred to in paragraph 2 of this Article and the solvency and financial condition report at the level of the group referred to in paragraph 1 of this Article.;

(d) in paragraph 5, the first subparagraph is replaced by the following:

5. In order to ensure uniform conditions of application in relation to the single and group solvency and financial condition report, EIOPA shall develop draft implementing technical standards on the procedures and templates for, and the means of, disclosure of the single and group solvency and financial report as laid down in this Article.;

Or. en

Justification

Reflects the rapporteur’s suggestions in relation to Article 51.

Amendment 189

Proposal for a directive

Article 1 – paragraph 1 – point 84 – introductory part

Directive 2009/138/EC

Article 256c

Text proposed by the Commission

Amendment

(84) the following Articles 256b and 256c are inserted:

(84) the following Article 256b is inserted:

Or. en

Amendment 190

Proposal for a directive

Article 1 – paragraph 1 – point 84

Directive 2009/138/EC

Article 256b – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

Member States shall require participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies to submit to the supervisory authorities, on an annual basis, a regular supervisory report at the level of the group. Article 35(5a) shall apply mutatis mutandis.

Member States shall require participating insurance and reinsurance undertakings to submit to the supervisory authorities, on an annual basis, a regular supervisory report at the level of the group. Article 35(5a) shall apply mutatis mutandis.

Or. en

Justification

These undertakings are not subject to supervision under Solvency II.

Amendment 191

Proposal for a directive

Article 1 – paragraph 1 – point 84

Directive 2009/138/EC

Article 256b – paragraph 2 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

A participating insurance or reinsurance undertaking, an insurance holding company or a mixed financial holding company may, subject to the agreement of the supervisory authorities concerned, provide a single regular supervisory report which shall comprise the following:

A participating insurance or reinsurance undertaking may, subject to the agreement of the supervisory authorities concerned, provide a single regular supervisory report which shall comprise the following:

Or. en

Justification

These undertakings are not subject to supervision under Solvency II.

Amendment 192

Proposal for a directive

Article 1 – paragraph 1 – point 84

Directive 2009/138/EC

Article 256c

Text proposed by the Commission

Amendment

Article 256c

deleted

Audit requirements

1. Member States shall require a participating insurance or reinsurance undertaking, an insurance holding company or a mixed financial holding company of a group, to be subject to an audit the consolidated balance sheet disclosed as part of the group solvency and financial condition report or as part of the single solvency and financial condition report.

2. A separate report, including the identification of the type of assurance as well as the results of the audit, prepared by the audit firm shall be submitted to the group supervisory authority together with the solvency and financial condition report or the single solvency and financial condition report by the participating insurance or reinsurance undertakings, the insurance holding company or the mixed financial holding company.

3. Where there is a single solvency and financial condition report, the audit requirements imposed on a related insurance or reinsurance undertaking shall be complied with and the report referred to in Article 51a(4) shall be submitted to the supervisory authority of that undertaking by the participating insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company.

4. Article 51a shall apply mutatis mutandis.;

Or. en

Amendment 193

Proposal for a directive

Article 1 – paragraph 1 – point 86 – point a

Directive 2009/138/EC

Article 258 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

Supervisory authorities shall be given all supervisory powers to take measures in relation to insurance holding companies and mixed financial holding companies that are necessary to ensure that groups to which group supervision is applied in accordance with Article 213(2), points (a), (b) and (c), comply with all the requirements laid down in this Title. Those powers shall include the general supervisory powers referred to in Article 34.

deleted

Or. en

Amendment 194

Proposal for a directive

Article 1 – paragraph 1 – point 86 – point b

Directive 2009/138/EC

Article 258 – paragraphs 2a and 2b

Text proposed by the Commission

Amendment

(b) the following paragraphs 2a and 2b are inserted:

deleted

2a. Where the group supervisor has established that the conditions set out in Article 213(3a) are not met or have ceased to be met, the insurance holding company or mixed financial holding company shall be subject to appropriate supervisory measures to ensure or restore, as the case may be, continuity and integrity of group supervision and to ensure compliance with the requirements laid down in this Title. In the case of a mixed financial holding company, the supervisory measures shall, in particular, take into account the effects on the financial conglomerate as a whole as well as on its related regulated undertakings.

2b. For the purposes of paragraphs 1 and 2a of this Article, Member States shall ensure that the supervisory measures which may be applied to insurance holding companies and mixed financial holding companies include, at least, the following:

(a) suspending the exercise of voting rights attached to the shares of the subsidiary insurance or reinsurance undertaking held by the insurance holding company or mixed financial holding company;

(b) issuing injunctions, sanctions or penalties against the insurance holding company, the mixed financial holding company or the members of the administrative, management or supervisory body of those companies;

(c) giving instructions or directions to the insurance holding company or mixed financial holding company to transfer to its shareholders the participations in its subsidiary insurance and reinsurance undertakings;

(d) designating on a temporary basis another insurance holding company, mixed financial holding company or insurance or reinsurance undertaking within the group as responsible for ensuring compliance with the requirements set out in this Title;

(e) restricting or prohibiting distributions or interest payments to shareholders;

(f) requiring insurance holding companies or mixed financial holding companies to divest from or reduce holdings in insurance or reinsurance undertakings or other related undertakings referred to in Article 228(1);

(g) requiring insurance holding companies or mixed financial holding companies to submit a plan on return, without delay, to compliance.

The group supervisor shall consult other supervisory authorities concerned and EIOPA before taking any of the measures referred to in the first subparagraph, where those measures affect undertakings which have their head offices in more than one Member State.;

Or. en

Amendment 195

Proposal for a directive

Article 1 – paragraph 1 – point 88

Directive 2009/138/EC

Article 265 – paragraph 1a

Text proposed by the Commission

Amendment

1a. Member States shall also ensure that, where the parent undertaking of one or more insurance or reinsurance undertakings is a credit institution, an investment firm, a financial institution, a UCITS management company, an alternative investment fund manager, an institution for occupational retirement provision or a non-regulated undertaking which carries one or more of the activities referred to in Annex I to Directive 2013/36/EU where those activities constitute a significant part of its overall activity, the supervisory authorities responsible for the supervision of those insurance or reinsurance undertakings exercise general supervision over transactions between those insurance or reinsurance undertakings and the parent undertaking and its related undertakings.;

1a. Member States shall also ensure that, where the parent undertaking of one or more insurance or reinsurance undertakings is a credit institution, an investment firm, a financial institution, a UCITS management company, an alternative investment fund manager or a non-regulated undertaking which carries one or more of the activities referred to in Annex I to Directive 2013/36/EU where those activities constitute a significant part of its overall activity, the supervisory authorities responsible for the supervision of those insurance or reinsurance undertakings exercise general supervision over transactions between those insurance or reinsurance undertakings and the parent undertaking and its related undertakings.;

Or. en

Amendment 196

Proposal for a directive

Article 1 – paragraph 1 – point 89 – point b – introductory part

Directive 2009/138/EC

Article 301a – paragraph 3

Text proposed by the Commission

Amendment

(b) paragraph 3 is replaced by the following:

(b) the first subparagraph of paragraph 3 is replaced by the following:

Or. en

Justification

Reverses the deletion of a standard paragraph on the possibility to revoke delegation.

Amendment 197

Proposal for a directive

Article 1 – paragraph 1 – point 90 – introductory part

Directive 2009/138/EC

Article 304 – paragraph 1

Text proposed by the Commission

Amendment

(90) Article 304(2) is replaced by the following;

(90) Article 304(1) is replaced by the following;

‘1. Member States may authorise life insurance and reinsurance undertakings where:

(i) the average duration of the liabilities corresponding to the business held by the undertaking exceeds eight years; and

(ii) to apply an equity risk sub-module of the Solvency Capital Requirement, which is calibrated using a Value-at-Risk measure, over a time period, which is consistent with the typical holding period of equity investments for the undertaking concerned, with a confidence level providing the policy holders and beneficiaries with a level of protection equivalent to that set out in Article 101, where the approach provided for in this Article is used only in respect of those assets and liabilities referred in point (i) of this paragraph. In the calculation of the Solvency Capital Requirement those assets and liabilities shall be fully considered for the purpose of assessing the diversification effects, without prejudice to the need to safeguard the interests of policy holders and beneficiaries in other Member States.

Or. en

Justification

Facilitates long-term equity investments.

Amendment 198

Proposal for a directive

Article 1 – paragraph 1 – point 90

Directive 2009/138/EC

Article 304 – paragraph 2

Text proposed by the Commission

Amendment

2. As of [OP please insert date = date of application of this amending Directive] life insurance undertakings may continue to apply the approach referred to in paragraph 1 of this Article only in respect of assets and liabilities to which supervisory authorities approved the application of the duration-based equity sub-module before [OP please insert date = application date of this amending Directive].;

deleted

Or. en

Justification

The existing approach should be continued.

Amendment 199

Proposal for a directive

Article 1 – paragraph 1 – point 91

Directive 2009/138/EC

Article 304a

Text proposed by the Commission

Amendment

(91) [...]

deleted

Or. en

Amendment 200

Proposal for a directive

Article 1 – paragraph 1 – point 94 – point b

Directive 2009/138/EC

Article 308b – paragraph 12

Text proposed by the Commission

Amendment

12. Notwithstanding Article 100, Article 101(3) and Article 104, Member States shall ensure that the standard parameters to be used when calculating the market risk concentration and the spread risk sub-modules in accordance with the standard formula shall be the same in relation to exposures to Member States' central governments or central banks incurred before 1 January 2020 and denominated and funded in the domestic currency of any Member State as the ones that would be applied to such exposures denominated and funded in their domestic currency;;

12. Notwithstanding Article 100, Article 101(3) and Article 104, Member States shall ensure that the standard parameters to be used when calculating the market risk concentration and the spread risk sub-modules in accordance with the standard formula shall be the same in relation to exposures to Member States' central governments or central banks and denominated and funded in the domestic currency of any Member State as the ones that would be applied to such exposures denominated and funded in their domestic currency;;

Or. en

Justification

Limitation of exposures incurred before 2020 is arbitrary and should be deleted.

Amendment 201

Proposal for a directive

Article 1 – paragraph 1 – point 94 – point c

Directive 2009/138/EC

Article 308b – paragraph 17 – subparagraphs 1a and 1b

Text proposed by the Commission

Amendment

deleted

Where an insurance or reinsurance group, or any of its subsidiary insurance or reinsurance undertakings is applying the transitional measure on the risk-free interest rates referred to in Article 308c or the transitional measure on technical provisions referred to in Article 308d, the participating insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company shall publicly disclose, as part of its report on the group solvency and financial condition referred to in Article 256, and in addition to the disclosures referred to in Articles 308c(4), point (c), and Article 308d(5), point (c), the quantification of the impact on its financial position of assuming that the own funds stemming from the application of those transitional measures cannot effectively be made available to cover the Solvency Capital Requirement of the participating undertaking for which the group solvency is calculated.

Where an insurance or reinsurance group materially relies on the use of the transitional measures referred to in Articles 308c and 308d in such a manner that it misrepresents the actual solvency position of the group, even where the group Solvency Capital Requirement would be complied with without the use of those transitional measures, the group supervisor shall have the power to take appropriate measures, including the possibility to reduce the amount of own funds stemming from the use of those transitional measures that may be deemed eligible to cover the group Solvency Capital Requirement.;

Or. en

Amendment 202

Proposal for a directive

Article 1 – paragraph 1 – point 95 – point b

Directive 2009/138/EC

Article 308c – paragraph 4 – point c

Text proposed by the Commission

Amendment

(b) in paragraph 4, point (c) is replaced by the following:

deleted

(c) within the part of their report on their solvency and financial condition consisting of information addressed to other market participants referred to in Article 51(1b), publicly disclose all of the following:

(i) the fact that they apply the transitional risk-free interest rate term structure;

(ii) the quantification of the impact of not applying this transitional measure on their financial position;

(iii) where the undertaking would comply with the Solvency Capital Requirement without application of this transitional measure, the reasons for the application of this transitional measure;

(iv) an assessment of the dependency of the undertaking on this transitional measure and, where applicable, a description of the measures taken or planned by the undertaking to reduce or remove the dependency.;

Or. en

Justification

Deletion reflects the rapporteur's suggestion to delete the two-part SFCR report in Article 51.

Amendment 203

Proposal for a directive

Article 1 – paragraph 1 – point 96 – point b

Directive 2009/138/EC

Article 308d – paragraph 5 – point c

Text proposed by the Commission

Amendment

(b) in paragraph 5, point (c) is replaced by the following:

deleted

(i) the fact that they apply the transitional deduction to the technical provisions;

(ii) the quantification of the impact of not applying that transitional deduction on their financial position;

(iii) where the undertaking would comply with the Solvency Capital Requirement without application of this transitional measures, the reasons for the application of this transitional measure;

Or. en

Justification

Deletion reflects the rapporteur's suggestion to delete the two-part SFCR report in Article 51.

Amendment 204

Proposal for a directive

Article 2 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

Member States shall adopt and publish, by [OP please insert date = 18 months after entry into force], the laws, regulations and administrative provisions necessary to comply with this Directive. They shall immediately communicate the text of those measures to the Commission.

Member States shall adopt and publish, by 1 January 2025, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall immediately communicate the text of those measures to the Commission.

Or. en

Justification

Sufficient time for implementation is needed.

Amendment 205

Proposal for a directive

Article 2 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

They shall apply those measures from [OP please insert date = 18 months and one day after entry into force].

They shall apply those measures from 1 January 2026.

Or. en

Justification

Sufficient time for implementation is needed.

EXPLANATORY STATEMENT

In September 2021, the Commission adopted a proposal amending the Solvency II Directive (Solvency II Review) and a proposal for an Insurance Recovery and Resolution Directive (IRRD). Although both proposals could be dealt with separately and this draft report proposes amendments only to the Solvency II Review, it should be considered that some overlap of the objectives of the two proposals may exist. Your rapporteur therefore takes the view that there is some merit in ensuring dealing with these proposals in parallel.

General Considerations: The Purpose of Insurance Regulation

Your rapporteur considers that there are four broad objectives of good EU insurance regulation:

 further developing the internal market for insurance and reinsurance, by ensuring a level playing field within the EU, whilst allowing for fair competition with the rest of the world;

 ensuring that insurance companies are safe and stable and policyholders are protected, which also requires close cooperation between supervisors throughout the Union;

 ensuring that policyholders that use insurance policies for investment purposes (e.g. via life insurance policies) can earn a decent return;

 ensuring that insurance companies can fulfil their role as long-term investors thus supporting the recovery and potentially other EU policy objectives.

During the legislative deliberations, it will be up to the European legislator to determine the right balance between those objectives that sometimes can be in competition with one another.

Proportionality in Insurance Regulation

The insurance supervisory framework is risk-based. A risk-based approach should avoid blanket one-size fits all provisions and thus needs to go together with appropriate proportionality provisions. The Commission attempts to address the shortcomings of the Solvency II regime in relation to proportionality measures by introducing a new category of low-risk profile undertakings. Your rapporteur considers this to be a step into the right direction, but proposes the following amendments:

 Excluding a larger number of small insurance undertakings from the scope of the Directive by increasing the current thresholds at which insurance undertakings are subject to the Solvency II scope (Art 4);

 higher thresholds in the definition of low-risk profile undertakings;

 modifying the criteria for qualifying as low-risk profile undertaking, by replacing the absolute thresholds with relative thresholds in order to better account for different market sizes;

 extending these proportionality measures for low-risk undertakings to captive (re)insurance undertakings, but excluding reinsurance undertakings;

 some further simplifications, clarifications and automaticity in the application of these measures.

Supporting the Recovery and other EU Policy Objectives

Enhancing the capabilities of insurance undertakings to invest long-term, may also facilitate their support for general economic policy objectives of the European Union. In this context, your rapporteur proposes amendments to modify the very strict criteria of the duration based equity risk sub-module, to set the boundaries of the symmetric adjustment mechanism of the equity risk sub-module in accordance with actual data experience, and to clarify aspects of the matching adjustment.

Level 1 vs. Level 2

Some of the key aspects of the Solvency II framework, in particular in relation to the Long-Term Guarantees (LTG) framework, are currently determined via a delegated regulation. The Commission intends to keep it that way and has already provided a rough guidance on possible changes to the level 2 text via a Communication accompanying the legislative proposal.

Your rapporteur considers this status quo not to be satisfying. Delegated acts are not the appropriate instrument to deal with political issues. The fact that 10 years after the Omnibus II Directive, amongst others introducing LTG measures into Solvency II at the explicit wish of the Parliament, these LTG measures continue to being discussed, implies that Parliament was right in insisting on inclusion at Level 1 and that the Commission proposal to make important changes only via a delegated act, is not the appropriate way forward.

For these reasons, your rapporteur proposes in this draft report amendments to provide more detail and political guidance directly into the Directive in relation to:

 the risk-free interest rate curve, including the extrapolated part;

 the Risk Margin;

 the Volatility Adjustment;

 long-term equity investments.

Cooperation between Supervisors

Cooperation between supervisory authorities is absolute key to the working of cross-border supervision and the internal market, and conducive to the protection of policyholders and beneficiaries. This aspect deserves more attention from the co-legislators in view of the perceived obstruction by supervisors that has come to light over the years, perhaps caused by a lack of trust between them. For these reasons, your rapporteur proposes amendments to the collaboration platforms that have been introduced in 2019 as part of the ESA Review. This would make collaboration and information exchange between home and host supervisors mandatory, and would entail a structural move away from a voluntary process, which clearly has shown to have significant limitations in practice.

Reporting and Audit Requirements

It should be considered that every change to legislation has an accompanying operational compliance cost to the real economy. The proposal to fundamentally split and amend the Solvency and Financial Condition Report (SFCR) is both costly and based on an artificial split of unclear target groups. Undertakings have spent time and money over the last 10 years to produce these reports and they overall support having an SFCR. Although continuing the SCFR in its current format may have its downside, the possible upside from a change is not supported by evidence in the impact assessment. The Commission acknowledges in its impact assessment that an enhanced use of the proportionality principle seems to be able to provide a better policy answer, which is also the preferred direction of travel of your rapporteur.

A similar concern exists regarding the Commission’s proposal to extend audit requirements. Auditors have a role vis-a-vis the public in relation to annual accounts and reports. Auditing the insurance specific information in relation to purely supervisory reporting aspects, such as the SFCR, as proposed by the Commission, may not necessarily be within the competence of public auditors. For that reason, your rapporteur takes the view that reviewing this information should remain the task and responsibility of the supervisory authorities. In this context, it should be noted that supervisors have the power to conduct on-site inspections to perform this task.

Group Supervision

Several amendments have been proposed by the Commission to extend the scope of group supervision. Where these amendments concern undertakings in other sectors, your rapporteur takes the view that these amendments should have been made, if at all, in the Financial Conglomerates Directives, which purpose is exactly to deal with these cases. The Commission’s approach may lead to cross-sectoral regulatory arbitrage and this needs to be avoided.

Another extension of the scope to include holding companies and horizontal groups (which may include mutuals) is a significant deviation from current practices and policy principles. Your rapporteur takes the view that supervisors should not determine the economic structure of a group and that the contact point for supervision should remain the (re)insurance undertakings which holds an authorisation. The impact assessment on this point does not seem to provide the evidence required for such a major overhaul of established principles.

Macroprudential Supervision

The Commission’s proposal to require firmer liquidity planning by insurers is welcomed by your rapporteur. However, it is suggested to link this to general risk management requirements, not to macroprudential supervision. Liquidity problems in banks may indeed lead to systemic effects, but this can be hardly claimed for insurers. Extending powers to supervisors for macroprudential purposes should therefore be assessed very carefully. On balance, your rapporteur therefore suggests to streamline the macroprudential toolkit proposed by the Commission.

Sustainability Risks

Solvency II provides a risk-based prudential supervisory framework that takes into account all risks, including environmental risks. Your rapporteur considers that there is little evidence to suggest that insurance undertakings are systematically underestimating sustainability risks. Your rapporteur therefore takes the view that the current framework is sufficiently capable to deal with sustainable and social risks and is concerned that any amendment in this area may lead to viable and sustainable businesses becoming “un-insurable” or “un-investable” for no good reason. Furthermore, based on the EIOPA Regulation, EIOPA already has the power to present a report in relation to ESG risks.