The Solvency ii
Directive
CHAPTER
IX
BRANCHES ESTABLISHED WITHIN THE COMMUNITY AND BELONGING TO
INSURANCE OR REINSURANCE UNDERTAKINGS WHOSE HEAD OFFICES ARE OUTSIDE
THE COMMUNITY
SECTION 1 – TAKING UP OF
BUSINESS
Article 160
Principle of authorisation and
conditions
1. Member States shall make access to the business
referred to in the first subparagraph of Article 2(1) by any
undertaking whose head office is outside the Community subject to an
official authorisation.
2. A Member State may grant an
authorisation if the undertaking fulfils at least the following
conditions:
(a) it is entitled to carry on insurance business
under its national law;
(b) it establishes a branch in the
territory of such Member State;
(c) it undertakes to set up
at the place of management of the branch accounts specific to the
business which it carries on there, and to keep there all the
records relating to the business transacted;
(d) it
designates a general representative, to be approved by the
supervisory authorities;
(e) it possesses in the Member State
where it carries on its business assets of an amount equal to at
least one half of the absolute floor prescribed in point (d) of
Article 127(1) in respect of the Minimum Capital Requirement and
deposits one fourth of that absolute floor as security;
(f)
it undertakes to cover the Solvency Capital Requirement and the
Minimum Capital Requirement in accordance with the requirements
referred to in Articles 100 and 126;
(g) it communicates the
name and address of the claims representative appointed in each
Member State other than the Member State in which the authorisation
is sought if the risks to be covered are classified in class 10 of
point A in Annex I, other than carrier's liability;
(h) it
submits a scheme of operations in accordance with the provisions in
Article 161;
(i) it fulfils the governance requirements laid
down in Chapter IV, Section 2.
3. For the purposes of this
Chapter "branch" means any permanent presence in the territory of a
Member State of an undertaking referred to in paragraph 1, which
receives authorisation in that Member State and which carries out
insurance business.
Article 161
Scheme of
operations of the branch
1. The
scheme of operations of the
branch referred to in point (h) of Article 160(2)
shall contain the
following:
(a) the nature of the risks or commitments which
the undertaking proposes to cover;
(b) the guiding principles
as to reinsurance;
(c) estimates of the future Solvency
Capital Requirement, as laid down in Chapter VI, Section 4, on the
basis of a forecast balance sheet, as well as the method of
calculation used to derive those estimates;
(d) estimates of
the future Minimum Capital Requirement, as laid down in Chapter VI,
Section 5, on the basis of a forecast balance sheet, as well as the
method of calculation used to derive those estimates;
(e)
the state of the eligible own funds and eligible basic own funds of
the undertaking with respect to the Solvency Capital Requirement and
Minimum Capital Requirement as referred to in Chapter VI, Sections 4
and 5;
(f) estimates of the cost of setting up the
administrative services and the organisation for securing business,
the financial resources intended to meet those costs and, if the
risks to be covered are classified in class 18 in point A of Annex
I, the resources available for the provision of the assistance
;
(g) information on the structure of the governance system.
2. In addition to the requirements set out in paragraph 1,
the scheme of operations shall include the following, for the first
three financial years:
(a) a forecast balance
sheet;
(b) estimates of the financial resources intended to
cover technical provisions, the Minimum Capital Requirement and the
Solvency Capital Requirement,
(c) for non-life insurance also
the following:
(i) estimates of management expenses other
than installation costs, in particular current general expenses and
commissions;
(ii) estimates of premiums or contributions and
claims;
(d) for life insurance, also a plan setting out
detailed estimates of income and expenditure in respect of direct
business, reinsurance acceptances and reinsurance cessions.
3. As far as life insurance is concerned, Member States may
require insurance undertakings to submit systematic notification of
the technical bases used for calculating scales of premiums and
technical provisions, without that requirement constituting a prior
condition for a life insurance undertaking to carry on its business.
Article 162
Transfer of portfolio
1. Under
the conditions laid down by national law, Member States shall
authorise branches set up within their territory and covered by this
Chapter to transfer all or part of their portfolios of contracts to
an accepting undertaking established in the same Member State if the
supervisory authorities of that Member State or, where appropriate,
of the Member State referred to in Article 165, certify that after
taking the transfer into account the accepting undertaking possesses
the necessary eligible own funds to cover the Solvency Capital
Requirement referred to in the first subparagraph of Article
100.
2. Under the conditions laid down by national law,
Member States shall authorise branches set up within their territory
and covered by this Chapter to transfer all or part of their
portfolios of contracts to an insurance undertaking with a head
office in another Member State if the supervisory authorities of
that Member State certify that after taking the transfer into
account the accepting undertaking possesses the necessary eligible
own funds to cover the Solvency Capital Requirement referred to in
the first subparagraph of Article 100.
3. If under the
conditions laid down by national law a Member State authorises
branches set up within its territory and covered by this Chapter to
transfer all or part of their portfolios of contracts to an branch
covered by this Chapter and set up within the territory of another
Member State, it shall ensure that the supervisory authorities of
the Member State of the accepting undertaking or, if appropriate, of
the Member State referred to in Article 165 certify the following:
(a) that after taking the transfer into account the
accepting undertaking possesses the necessary eligible own funds to
cover the Solvency Capital Requirement ;
(b) that the law of
the Member State of the accepting undertaking permits such a
transfer;
(c) that that Member State has agreed to the
transfer.
4. In the circumstances referred to in paragraphs
1, 2 and 3, the Member State in which the transferring branch is
situated shall authorise the transfer after obtaining the agreement
of the supervisory authorities of the Member State in which the
risks are situated, or the Member State of the commitment, where
different from the Member State in which the transferring branch is
situated.
5. The supervisory authorities of the Member States
consulted shall give their opinion or consent to the supervisory
authorities of the home Member State of the transferring insurance
undertaking within three months of receiving a request. The absence
of any response from the authorities consulted within that period
shall be considered equivalent to a favourable opinion or tacit
consent.
6. A transfer authorised in accordance with
paragraphs 1 to 5 shall be published as laid down by national law in
the Member State in which the risk is situated or the Member State
of the commitment.
Such transfers shall automatically be
valid against policyholders, insured persons and any other persons
having rights or obligations arising out of the contracts
transferred.
Article 163
Technical
provisions
Member States shall require undertakings to
establish adequate technical provisions to cover the insurance and
reinsurance obligations assumed in their territories calculated in
accordance with Chapter VI, Section 2. Member States shall require
undertakings to value assets and liabilities in accordance with
Chapter VI, Section 1 and determine own funds in accordance with
Chapter VI, Section 3.
Article 164
Solvency
Capital Requirement and Minimum Capital Requirement
1. Each
Member State shall require for branches which are set up in its
territory an amount of eligible own funds consisting of the items
referred to in Article 98(4).
The Solvency Capital
Requirement and the Minimum Capital Requirement shall be calculated
in accordance with the provisions of Chapter VI, Sections 4 and
5.
However, for the purpose of calculating the Solvency
Capital Requirement and the Minimum Capital Requirement, account
shall be taken of the following:
(a) for non-life insurance,
only of the operations carried on by the branch concerned;
(b) for life insurance, only of the operations effected by
the branch concerned.
2. The eligible amount of basic own
funds required to cover the Minimum Capital Requirement and the
absolute floor of that Minimum Capital Requirement shall be
constituted in accordance with Article 98(5).
3. The eligible
amount of basic own funds may not be less than one-half of the
absolute floor required under point (d) of Article
127(1).
The deposit lodged in accordance with point (e) of
Article 160(2) shall be counted towards such eligible basic own
funds to cover the Minimum Capital Requirement.
4. The assets
representing the Solvency Capital Requirement must be kept within
the Member State where the activities are carried on up to the
amount of the Minimum Capital Requirement and the excess within the
Community.
Article 165
Advantages to undertakings
authorised in more than one Member State
1. Any undertaking
which has requested or obtained authorisation from more than one
Member State may apply for the following advantages which may be
granted only jointly:
(a) the Solvency Capital Requirement
referred to in Article 164 shall be calculated in relation to the
entire business which it carries on within the Community;
(b) the deposit required under point (e) of Article 160(2)
shall be lodged in only one of those Member States;
(c) the
assets representing the Minimum Capital Requirement shall be
localised, in accordance with Article 132, in any one of the Member
States in which it carries on its activities.
In the cases
referred to in point (a) of the first subparagraph, account shall be
taken only of the operations effected by all the branches
established within the Community for the purposes of this
calculation.
2. Application to benefit from the advantages
provided for in paragraph 1 shall be made to the supervisory
authorities of the Member States concerned. The application shall
state the authority of the Member State which in future is to
supervise the solvency of the entire business of the branches
established within the Community. Reasons must be given for the
choice of authority made by the undertaking.
The deposit
referred to in point (e) of Article 160(2) shall be lodged with that
Member State.
3. The advantages provided for in paragraph 1
may only be granted if the supervisory authorities of all Member
States in which an application has been made agree to
them.
They shall take effect from the time when the selected
supervisory authority informs the other supervisory authorities that
it will supervise the state of solvency of the entire business of
the branches within the Community.
The supervisory authority
selected shall obtain from the other Member States the information
necessary for the supervision of the overall solvency of the
branches established in their territory.
4. At the request of
one or more of the Member States concerned, the advantages granted
under paragraphs 1, 2 and 3 shall be withdrawn simultaneously by all
Member States concerned.
Article
166
Accounting, prudential and statistical information and
undertakings in difficulty
For the purposes of this Section Articles 34,
137(3), 138 and 139 shall apply.
As regards the application
of Articles 135, 136 and 137, where an undertaking qualifies for the
advantages provided for in Article 165(1), (2) and (3), the
supervisory authority responsible for verifying the solvency of
branches established within the Community with respect to their
entire business shall be treated in the same way as the supervisory
authority of the Member State in the territory of which the head
office of a Community undertaking is situated.
Article
167
Separation of non-life and life business
1.
Branches referred to in this Section may not simultaneously carry on
life and non-life insurance activities in the same Member
State.
2. By way of derogation from paragraph 1 Member States
may provide that branches referred to in this Section which, on the
relevant date referred to in the first subparagraph of Article
72(5), carried on both activities simultaneously in a Member State
may continue to do so there provided that each activity is
separately managed in accordance with Article 73.
3. Any
Member State which under the second subparagraph of Article 72(5)
requires undertakings established in its territory to cease the
simultaneous pursuit of the activities in which they were engaged on
the relevant date referred to in the first subparagraph of Article
72(5) must also impose this requirement on branches referred to in
this Section which are established in its territory and
simultaneously carry on both activities there.
Member States
may provide that branches referred to in this Section whose head
office simultaneously carries on both activities and which on the
dates referred to in the first subparagraph of Article 72(5) carried
on in the territory of a Member State solely life insurance activity
may continue their activity there. If the undertaking wishes to
carry on non-life insurance activity in that territory it may only
carry on life insurance activity through a
subsidiary.
Article 168
Withdrawal of
authorisation for undertakings authorised in more than one Member
State
In the case of a withdrawal of authorisation by
the authority referred to in Article 165(2) that authority shall
notify the supervisory authorities of the other Member States where
the undertaking operates and those authorities shall take the
appropriate measures.
If the reason for that withdrawal is
the inadequacy of the overall state of solvency as fixed by the
Member States which agreed to the request referred to in Article
165, the Member States which gave their approval shall also withdraw
their authorisations.
Article 169
Agreements with
third countries
The Community may, by means of agreements
concluded pursuant to the Treaty with one or more third countries,
agree to the application of provisions different to those provided
for in this Section, for the purpose of ensuring, under conditions
of reciprocity, adequate protection for policyholders and insured
persons in the Member States.
SECTION 2 –
REINSURANCE
Article 170
Equivalence
1. The
Commission shall adopt implementing measures specifying the
criteria to assess whether the solvency regime of a third-country
applied to re-insurance activities of undertakings with their head
office in that third-country is equivalent to that laid down in
Title I.
Those measures designed to amend non-essential
elements of this Directive by supplementing it shall be adopted in
accordance with the regulatory procedure with scrutiny referred to
in Article 304(3).
1a. The Commission may, in accordance with
the regulatory procedure referred to in Article 304(2) and taking
into account the criteria adopted in accordance with paragraph 1,
decide whether the solvency regime of a third-country applied to
reinsurance activities of undertakings with their head office in
that third-country is equivalent to that laid down in Title I.
Those decisions shall be regularly reviewed.
2.
Where in accordance with paragraph 1a the solvency regime of a third
country has been deemed to be equivalent to this Directive,
reinsurance contracts concluded with undertakings having their head
office in those third countries shall be treated in the same manner
as reinsurance contracts concluded with an undertaking which is
authorised in accordance with this Directive.
Article
171
Prohibition of pledging of assets
Member States
shall not retain or introduce for the establishment of technical
provisions a system with gross reserving which requires pledging of
assets to cover unearned premiums and outstanding claims provisions
if the reinsurer is an insurance or reinsurance undertaking having
its head office in a third country whose solvency regime is deemed
to be equivalent to that laid down in this Directive in accordance
with Article 170.
Article 172
Principle and
conditions for conducting reinsurance activity
A Member State
shall not apply to third country reinsurance undertakings taking up
or carrying on reinsurance activity in its territory provisions
which result in a more favourable treatment than that granted to
reinsurance undertakings which have their head office in that Member
State.
Article 173
Agreements with third
countries
1. The Commission may submit proposals to the
Council for the negotiation of agreements with one or more third
countries regarding the means of exercising supervision over the
following:
(a) third country reinsurance undertakings which
conduct reinsurance business in the Community;
(b) Community
reinsurance undertakings which conduct reinsurance business in the
territory of a third country.
2. The agreements referred to
in paragraph 1 shall in particular seek to ensure, under conditions
of equivalence of prudential regulation, effective market access for
reinsurance undertakings in the territory of each contracting party
and provide for mutual recognition of supervisory rules and
practices on reinsurance. They shall also seek to ensure the
following:
(a) that the supervisory authorities of the Member
States are able to obtain the information necessary for the
supervision of reinsurance undertakings which have their head
offices situated in the Community and conduct business in the
territory of third countries concerned;
(b) that the
supervisory authorities of third countries are able to obtain the
information necessary for the supervision of reinsurance
undertakings which have their head offices situated within their
territories and conduct business in the Community.
3. Without
prejudice to Article 300(1) and (2) of the Treaty, the Commission
shall with the assistance of the European Insurance and Occupational
Pensions Committee examine the outcome of the negotiations referred
to in paragraph 1 of this Article and the resulting
situation.
  
Return to Index
Solvency ii Introduction (1) to (10)
Solvency ii Introduction (11) to (20)
Solvency ii Introduction (21) to (30)
Solvency ii Introduction (31) to (40)
Solvency ii Introduction (41) to (50)
Solvency ii Introduction (51) to (60)
Solvency ii Introduction (61) to (70)
Solvency ii Introduction (71) to (80)
Solvency ii Introduction (81) to (95)
Solvency ii Articles 1 to 10
Solvency ii Articles 11 to 20
Solvency ii Articles 21 to 30
Solvency ii Articles 31 to 39
Solvency ii Articles 40 to 49
Solvency ii Articles 50 to 62
Solvency ii Articles 63 to 71
Solvency ii Articles 72 to 85
Solvency ii Articles 86 to 99
Solvency ii Articles 100 to 125
Solvency ii Articles 126 to 142
Solvency ii Articles 143 to 159
Solvency ii Articles 160 to 173
Solvency ii Articles 174 to 203
Solvency ii Articles 204 to 215
Solvency ii Articles 216 to 233
Solvency ii Articles 234 to
262
Solvency ii Articles 263 to 298
Solvency ii Articles 300 to 313
Solvency ii ANNEX 1 to 3
Solvency ii ANNEX 4 to 5
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