The Solvency ii
Directive
(41)
As a matter of principle, the new risk-based approach does not
comprise the concept of quantitative investment limits and asset
eligibility criteria.
It
should however be possible to introduce
investment limits and asset eligibility criteria to address
risks which are not adequately covered by a sub-module of the
standard formula.
(41a) In accordance with the risk-oriented
approach to the Solvency Capital Requirement it should be possible, in specific
circumstances, to use partial or full internal models
for the calculation of that requirement instead of the standard formula.
In
order to provide policyholders and beneficiaries with an equivalent
level of protection, such internal models should be subject to prior supervisory approval on
the basis of harmonised processes and standards.
(42) When
the amount of eligible basic own funds falls
below the Minimum Capital Requirement, the authorisation of
insurance and reinsurance undertakings should be
withdrawn, if those undertakings are unable to re-establish the amount of eligible
basic own funds at the level of the Minimum Capital Requirement
within a short period of time.
(43) The Minimum Capital
Requirement should ensure a minimum level below which the amount of
financial resources should not fall.
It
is necessary that it is calculated in accordance with a simple formula, which is subject to a defined
floor and cap based on the risk-based Solvency Capital Requirement
in order to allow for an escalating ladder of supervisory
intervention, and that it is based on the data which can be
audited.
(44) Insurance and reinsurance undertakings should
have assets of sufficient quality to
cover their overall financial requirements.
All investments held by insurance and reinsurance
undertakings should be managed in accordance with the "prudent
person" principle.
(45) Member States should not
require insurance and reinsurance undertakings to invest their
assets in particular categories of assets, as such a requirement
could be incompatible with the liberalisation of
capital movements provided for in Article 56 of the
Treaty.
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[Note:
They mean the Treaty establishing the European Community (Amsterdam
consolidated version) - Part Three: Community policies - Title III:
Free movement of persons, services and capital - Chapter 4: Capital
and payments - Article 56 - Article 73b - EC Treaty (Maastricht
consolidated version)
Article 56
1. Within the
framework of the provisions set out in this Chapter, all restrictions on the movement of capital between
Member States and between Member States and third countries shall be
prohibited.
2. Within the framework of the
provisions set out in this Chapter, all
restrictions on payments between Member States and between Member
States and third countries shall be
prohibited.]
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(46) It is necessary to prohibit any
provisions enabling Member States to require pledging of assets
covering the technical provisions of an insurance or reinsurance
undertaking, whatever form this requirement might take, when the
insurer is reinsured by an insurance or reinsurance undertaking
authorised pursuant to this Directive, or by a
third-country undertaking where the supervisory regime of
that third country has been deemed equivalent.
(47) The legal
framework has so far provided neither detailed criteria for a
prudential assessment of a proposed acquisition nor a procedure for
their application.
A clarification of the criteria and the process
of prudential assessment is therefore needed to provide the
necessary legal certainty, clarity and predictability with regard to
the assessment process, as well as to the result thereof.
These
criteria and procedures have been introduced by Directive
2007/44/EC. As regards insurance and reinsurance these provisions
should therefore be codified and integrated into this
Directive.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------
[Note from George Lekatis:
They mean DIRECTIVE 2007/44/EC OF THE EUROPEAN PARLIAMENT AND
OF THE COUNCIL of 5 September 2007 amending Council Directive
92/49/EEC and Directives 2002/83/EC, 2004/39/EC, 2005/68/EC and
2006/48/EC as regards procedural
rules and evaluation criteria for the prudential assessment
of
acquisitions and increase of holdings in the financial
sector (Text
with EEA relevance)
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(48)
Maximum harmonisation throughout
the Community of these procedures and prudential assessments is
therefore critical.
However,
the provisions on qualifying holdings should not prevent the Member
States from requiring that the supervisory authorities are to
be informed of acquisitions of
holdings below the thresholds laid down in those
provisions, so long as a Member State imposes no more than one
additional threshold below 10 % for this purpose.
Nor
should it prevent the supervisory authorities from providing general
guidance as to when such holdings would be deemed to result in
significant influence.
(49) In view of the increasing mobility of European citizens, motor
liability insurance is increasingly being offered on a
cross-border basis.
To
ensure the continued proper functioning of the green card system and
the agreements between the national bureaux of motor insurers, it is
appropriate that Member States are able to require insurance
undertakings providing motor liability insurance in their territory
by way of provision of services to join and
participate in the financing of the national bureau as well as of
the guarantee fund set up in that Member State.
The
Member State of provision of services should require undertakings
which provide motor liability insurance to appoint a representative
in its territory to collect all necessary information in relation to
claims and to represent the undertaking concerned.
(50)
Within the framework of an internal market it is in the interest of
policyholders that they should have
access to the widest possible range of insurance products
available in the Community.
The
Member State of the commitment or the Member State in which the risk
is situated should therefore ensure that there is nothing to prevent the marketing within its
territory of all the insurance products offered for sale in the
Community as long as they do not conflict
with the legal provisions protecting the general good in
force in that Member State and in so far as the general good is not
safeguarded by the rules of the home Member State.
  
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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