Commission Delegated Regulation (EU) 2026/269 of 29 October 2025 amending Delegated Regulation (EU) 2015/35 as regards technical provisions, long-term guarantee measures, own funds, equity risk, spread risk on securitisation positions, other standard formula capital requirements, reporting and disclosure, proportionality and group solvency

• (c) based on projections over a five-year time horizon, the undertaking is able to generate cash inflows that are higher than cash outflows, both on an ongoing basis and under stressed conditions during each of the next five financial calendar years (forced selling test) over the time horizon of the test.

1. For the forced selling test referred to in paragraph 1, point (c), all of the following shall apply:

• (a) when assessing cash inflows and outflows on an ongoing basis, insurance and reinsurance undertakings shall assume that the situation in financial markets over the time horizon of the test remains the same as the one at the reference date of the test;

• (b) when assessing cash inflows and outflows under stressed conditions, insurance and reinsurance undertakings shall apply the stress assumptions set out in paragraph 5 and shall not be required to take into account additional secondary or market-wide effects;

• (c) when assessing cash inflows and outflows both on an ongoing basis and under stressed conditions, the projected decisions of investment or divestments by the insurance or reinsurance undertaking shall be consistent with the business strategy of the undertaking, its written policies on investment, liquidity and asset-liability management, and the future management actions referred to in Article 23.

1. For the forced selling test referred to in paragraph 1, point (c), the cash inflows shall only include the value of cash and cash equivalents on the reference date and inflows from the following sources over the time horizon of the projections:

• (a) revenues stemming from the sale of the following assets, held either directly or through a collective investment undertaking or other investment packaged as funds in which the undertaking holds units or shares:

• (i) assets representing claims on one of the counterparties referred to in Article 180(2);

• (ii) assets that are fully, unconditionally and irrevocably guaranteed by one of the counterparties referred to in Article 180(2), where the guarantee meets the requirements set out in Article 215;

• (iii) bonds and loans which have been assigned to credit quality step 0, 1, 2 or 3, excluding bonds and loans issued by insurance and reinsurance undertakings or financial sector entities within the meaning of Article 4, point (27), of Regulation (EU) No 575/2013;

• (iv) covered bonds referred to in Article 180(1) which have been assigned to credit quality step 0 or 1, excluding those which are issued by a financial sector entity which is part of the same group;

• (v) STS securitisation which either has been assigned a credit assessment of credit quality step 0 or 1 by a nominated ECAI, or which is a senior tranche, and which is not originated by entities belonging to the same group as the insurance or reinsurance undertaking;

• (vi) equities, other than long-term equity investments or strategic equities, and other than investments in financial sector entities, which are either listed in regulated markets in the countries which are members of the EEA or the OECD, or traded on multilateral trading facilities, as referred to in Article 4(1), point (22), of Directive 2014/65/EU, whose registered office or head office is in EU Member States;

• (b) revenues at maturity date stemming from dated assets referred to in point (a), and regular revenues stemming from assets referred to in that point and from property investments and long-term equity investments, including prudently estimated future non-contractual revenues such as dividend payments, provided that the projected non-contractual revenues for a given year are not higher than their three-year historical average;

• (c) premiums and other cash inflows included in the contract boundary of the best estimate of life technical provisions, prudently estimated life premiums and other cash inflows to be earned by the undertaking over the time horizon of the test not included in the contract boundary, provided that such prudently estimated premiums and other cash inflows during a given year are never assumed to be higher than their three-year historical average, or, where there is less than three years of available data, they are not assumed to be higher than those of the most recent year, as well as cash inflows from accepted reinsurance of life obligations;

• (d) premiums and other cash inflows included in the contract boundary of the best estimate of non-life technical provisions, prudently estimated non-life premiums and other cash inflows to be earned by the undertaking over the time horizon of the test not included in the contract boundary, provided that such prudently estimated premiums and other cash inflows during a given year are not assumed to be higher than their three-year historical average or, where there is less than three years of available data, they are not assumed to be higher than those of the most recent year, as well as cash inflows from accepted reinsurance of non-life obligations;

• (e) revenues stemming from the reinvestment of the cash inflows listed in points (a) to (d) in excess of the cash outflows referred to in paragraph 4, where the return on investment is derived from the risk-free interest rate term structure, taking into account the volatility adjustment.

The assets referred to in the first subparagraph, point (a), held through an investment vehicle over which the insurance or reinsurance undertaking exercises control, or, to the extent of the rights of the undertaking, through an investment vehicle over which another entity within the same group exercises control and in which the undertaking holds units or shares, may be fully taken into account. The assets referred to in the first subparagraph, point (a), held through collective investment undertakings or through other investments packaged as funds, other than those referred to in the preceding sentence, may be taken into account up to an absolute amount of EUR 500 million.

Insurance and reinsurance undertakings may decide not to take into account cash inflows referred to in the first subparagraph, point (b) or (e).

For estimating the cash inflows referred to in the first subparagraph, points (c) and (d), which are not included in the contract boundary, the insurance or reinsurance undertaking shall be able to demonstrate to the satisfaction of the supervisory authority that plausible negative outlooks with regard to historical data are appropriately taken into account.

For the purposes of the first subparagraph, point (a), insurance and reinsurance undertakings shall not take into account assets covering the best estimate of insurance obligations to which the matching adjustment is applied.

When assuming revenues stemming from the sale of bonds, loans and securitisations covering the best estimate of insurance obligations to which the volatility adjustment is applied over the time horizon of the test, the undertaking shall be able to demonstrate to the satisfaction of the supervisory authority that its risk profile does not deviate significantly from the following assumptions underlying the volatility adjustment, even as a result of such sales, including under stressed conditions:

• (a) the undertaking holds assets that are spread-sensitive, and is exposed to changes in credit spreads;

• (b) the application of the volatility adjustment does not result in situations where the impact of an exaggeration of credit spreads on the assets held by the undertaking is overcompensated by the impact of the volatility adjustment on the best estimate of technical provisions;

• (c) the cash flows arising from insurance liabilities of the undertaking to which the volatility adjustment is applied are sufficiently stable and predictable to ensure that the undertaking is not exposed to the risk of forced sale of its assets that are spread-sensitive, and can instead hold on to such assets, including during market turmoil.

1. For the forced selling test referred to in paragraph 1, point (c), the cash outflows shall include all of the following:

• (a) cash outflows related to claims, surrenders, other technical outflows including operating expenses, and taxes, within the contract boundary of the best estimate of life technical provisions, cash outflows corresponding to obligations related to the life premiums which are not included in the contract boundary referred to in paragraph 3, first subparagraph, point (c), as well as cash outflows from accepted reinsurance of life obligations;

• (b) cash outflows related to claims, surrenders, other technical outflows including operating expenses, taxes, within the contract boundary of the best estimate of non-life technical provisions, cash outflows corresponding to obligations related to the non-life premiums which are not included in the contract boundary referred to in paragraph 3, first subparagraph, point (d), as well as cash outflows from accepted reinsurance of non-life obligations;

• (c) cash outflows arising from repurchase agreements, reverse repurchase agreements and similar arrangements, margin requirements, and other financial outflows;

• (d) cash outflows arising from pension scheme contributions related to the employees of the insurance or reinsurance undertaking;

• (e) cash outflows arising from other expenses that are not included in the calculation of the best estimate of technical provisions, and other cash outflows, including all of the following:

• (i) dividend distributions and other payments to shareholders and other subordinated creditors;

• (ii) share buy-backs and repayment or redemption of own fund items;

• (iii) other cash outflows, including intragroup ones, not captured by previous points, including contingent liabilities, bonuses and other variable remuneration and off-balance sheet commitments.

1. For the forced selling test under stressed conditions referred to in paragraph 1, point (c), the insurance or reinsurance undertaking shall assume to be subject to the following stresses:

• (a) during the first financial year of the projections, there is an additional cash outflow equal to the aggregation of capital requirements stemming from the risk modules referred to in Chapter V of Title I, net of the adjustment for the loss-absorbing capacity of technical provisions and deferred taxes referred to in Article 205, where the aggregation is based on the correlation parameters set out in Annex IV to Directive 2009/138/EC;

• (b) during each of the following four financial years of the projections, there is an additional cash outflow equal to the aggregation of capital requirements stemming from the risk modules referred to in Chapter V of Title I, net of the adjustment for the loss-absorbing capacity of technical provisions and deferred taxes referred to in Article 205, without taking into account the submodules referred to in the second subparagraph of this paragraph, where the aggregation is based on the correlation parameters set out in Annex IV to Directive 2009/138/EC.

The submodules referred to in the first subparagraph, point (b), shall be the following:

• (a) the sum of capital requirements for non-life, life and health catastrophe risks, calculated in accordance with Articles 119, 143 and 160 respectively;

• (b) the sum of capital requirements for non-life, life, NSLT health and SLT health lapse risks, calculated in accordance with Articles 118, 142, 150 and 159 respectively.

For the purposes of the first subparagraph, point (b), the following assumptions shall apply:

• (a) capital requirements for market risk and counterparty default risk modules decrease each year of the test, the percentage of reduction for a given year is equal to the decrease in the total projected value of the assets held by the insurance or reinsurance undertaking at the end of the previous year.

• (b) in relation to the non-life premium and reserve risk sub-module referred to in Article 115, cash outflows referred to in paragraph 4, point (b), shall be estimated by increasing the relevant cash outflows in each segment s set out in Annex II as follows:

• (i) the cash outflows occurring during the first year following the date when the insurance or reinsurance cover begins or is renewed shall be increased by a percentage that is equal to the standard deviations for non-life premium risk of the segments s as set out in Annex II multiplied by three;

• (ii) the cash outflows occurring after the first year following the date when the insurance or reinsurance cover begins or is renewed shall be increased by a percentage that is equal to the standard deviation for non-life reserve risk of the segments s as set out in Annex II multiplied by three;

• (c) in relation to the NSLT health premium and reserve risk sub-module referred to in Article 146, cash outflows referred to in paragraph 4, point (b), shall be estimated by increasing the relevant cash outflows in each segment s set out in Annex XIV as follows:

• (i) the cash outflows occurring during the first year following the date when the insurance or reinsurance cover begins or is renewed shall be increased by a percentage that is equal to the standard deviation for NSLT health premium risk of the segment s as set out in Annex XIV multiplied by three;

• (ii) the cash outflows occurring after the first year following the date when the insurance or reinsurance cover begins or is renewed shall be increased by a percentage that is equal to the standard deviation for NSLT health reserve risk of the segment s as set out in Annex XIV multiplied by three.

1. For the forced selling test under stressed conditions referred to in paragraph 1, point (c), the insurance or reinsurance undertaking shall make the following additional assumptions regarding certain cash flows:

• (a) over the time horizon of the test, the stressed values of cash flows referred to in paragraph 3, first subparagraph, point (c), and paragraph 4, point (a), shall be consistent with the scenario of the life lapse risk sub-module referred to in Article 142 and, as applicable, the SLT health lapse risk sub-module referred to in Article 159;

• (b) over the time horizon of the test, the stressed values of cash flows referred to in paragraph 3, first subparagraph, point (d), and paragraph 4, point (b), shall be consistent with the scenario of the non-life lapse risk sub-module referred to in Article 118 and, as applicable, the NSLT health lapse risk sub-module referred to in Article 150;

• (c) the stressed values of cash outflows referred to in paragraph 4, points (c), (d) and (e) shall be consistent with paragraph 2, point (c), and with past distribution practices by insurance and reinsurances undertakings, in particular in stressed market environments; in addition, the insurance and reinsurance undertaking shall assume that the contingent liabilities and off-balance sheet commitments referred in paragraph 4, point (e)(iii), are triggered;

• (d) for determining reinvestment revenues referred to in paragraph 3, first subparagraph, point (e), the term structure of interest rate shall be assumed to change in accordance with the scenario underlying the calculation of the interest rate risk submodule included in the calculation of the cash outflow referred to in paragraph 5.

Article 171d

Long-term equity investments: collective investment undertakings with a lower risk profile

1. The funds referred to in Article 105a(2) of Directive 2009/138/EC shall belong to one of the types of collective investment undertakings or alternative investment funds referred to in paragraph 2 of this Article.

1. The types of collective investment undertakings and alternative investment funds referred to in paragraph 1 shall be the following:

• (a) European long-term investment funds pursuant to Regulation (EU) 2015/760;

• (b) qualifying social entrepreneurship funds as referred to in Article 3, point (b), of Regulation (EU) No 346/2013;

• (c) qualifying venture capital funds as referred to in Article 3, point (b), of Regulation (EU) No 345/2013;

• (d) closed-ended alternative investment funds managed by authorised EU AIFMs, which have no leverage calculated in accordance with the commitment method set out in Article 8 of Delegated Regulation (EU) No 231/2013.

1. Where the conditions set out in Article 105a(1) of Directive 2009/138/EC are complied with at the level of a collective investment undertaking referred to in paragraph 2 of this Article, Article 105a(4) of that Directive shall apply to:

• (a) equities held within the collective investment undertaking, where the look-through approach set out in Article 84 of this Regulation can be applied to all exposures;

• (b) units or shares of the collective investment undertaking, where the look-through approach set out in Article 84 of this Regulation cannot be applied to all exposures.’

;

• (51) in Article 172, paragraph 4 is replaced by the following:

‘4.   The symmetric adjustment shall not be lower than – 13 % or higher than 13 %.’

;

• (52) Article 173 is replaced by the following:

‘Article 173

Investments in equity under legislative programmes

1. Where an insurance or reinsurance undertaking invests in equity, either directly or through a collective investment undertaking, under a legislative programme which fulfils the conditions laid down in Article 133(5) of Regulation (EU) No 575/2013, the standard equity risk sub-module applicable to the part of such equity investments that in aggregate does not exceed 10 % of the undertaking’s eligible own funds shall be calculated in accordance with paragraphs 2 and 3 of this Article, subject to the approval of the supervisory authority.

1. The percentages laid down in Article 169 of this Regulation shall be reduced in proportion to the quantified reduction in credit risk achieved under the legislative programme.

1. Where the Commission maintains a public register of legislative programmes deemed to comply with the conditions of Article 133(5) of Regulation (EU) No 575/2013, any programme included in that register shall be deemed to achieve a reduction in overall credit risk of at least 5 %.’

;

• (53) in Article 176, paragraph 1 is replaced by the following:

‘1.   The capital requirement for spread risk on bonds and loans SCRbonds shall be equal to the loss in the basic own funds that would result from an instantaneous relative decrease of stressi in the value of each bond or loan i other than defaulted and forborne loans, and other than mortgage loans that meet the requirements in Article 191, including bank deposits other than cash at bank referred to in Article 189(2), point (b).’

;

• (54) in Article 176a(3), point (g), point (v) is replaced by the following:

• ‘(v) at least one of the following conditions is fulfilled with respect to each of the last three financial years ending prior to the date on which the Solvency Capital Requirement is being calculated:

• — the annual turnover of the company exceeds EUR 12 800 000;

• — the balance sheet total of the company exceeds EUR 12 800 000;

• — the number of staff employed by the company exceeds 50;’;

• (55) in Article 176c(3), point (e) is replaced by the following:

• ‘(e) at least one of the following conditions is met for each of the last three financial years ending prior to the date on which the Solvency Capital Requirement is being calculated:

• (i) the annual turnover of the issuer exceeds EUR 12 800 000;

• (ii) the balance sheet total of the issuer exceeds EUR 12 800 000;

• (iii) the number of staff employed by the issuer exceeds 50.’;

• (56) Article 178 is amended as follows:

• (a) in paragraph 3, the table is replaced by the following:

‘Credit quality step	‘Credit quality step	0	0	1	1	2	2	3	3	4	4	5 and 6	5 and 6
Duration	stress i	ai	bi	ai	bi	ai	bi	ai	bi	ai	bi	ai	bi
(duri)	stress i	ai	bi	ai	bi	ai	bi	ai	bi	ai	bi	ai	bi
up to 5	min [bi Image omitted; see official source duri; 1]	—	0,7 %	—	0,9 %	—	1,4 %	—	2,5 %	—	4,5 %	—	7,5 %
More than 5 and up to 10	min [ai + bi Image omitted; see official source (duri – 5); 1]	3,5 %	0,5 %	4,5 %	0,6 %	7,0 %	0,7 %	12,5 %	1,5 %	22,5 %	2,5 %	37,5 %	4,2 %
More than 10 and up to 15	min [ai + bi Image omitted; see official source (duri – 10); 1]	6,0 %	0,5 %	7,5 %	0,5 %	10,5 %	0,5 %	20,0 %	1,0 %	35,0 %	1,8 %	58,5 %	0,5 %
More than 15 and up to 20	min [ai + bi Image omitted; see official source (duri – 15); 1]	8,5 %	0,5 %	10,0 %	0,5 %	13,0 %	0,5 %	25,0 %	1,0 %	44,0 %	0,5 %	61,0 %	0,5 %
More than 20	min [ai + bi Image omitted; see official source (duri – 20); 1]	11,0 %	0,5 %	12,5 %	0,5 %	15,5 %	0,5 %	30,0 %	0,5 %	46,5 %	0,5 %	63,5 %	0,5 %’

• (b) in paragraph 4, the table is replaced by the following:

‘Credit quality step	‘Credit quality step	0	0	1	1	2	2	3	3	4	4	5 and 6	5 and 6
Duration	stress i	ai	bi	ai	bi	ai	bi	ai	bi	ai	bi	ai	bi
(duri)	stress i	ai	bi	ai	bi	ai	bi	ai	bi	ai	bi	ai	bi
up to 5	min [bi Image omitted; see official source duri; 1]	—	2,0 %	—	2,6 %	—	4,0 %	—	7,1 %	—	12,7 %	—	21,3 %
More than 5 and up to 10	min [ai + bi Image omitted; see official source (duri – 5); 1]	9,8 %	1,1 %	12,8 %	1,4 %	20,2 %	2,0 %	35,3 %	4,2 %	63,5 %	7,3 %	100,0 %	0,0 %
More than 10 and up to 15	min [ai + bi Image omitted; see official source (duri – 10); 1]	15,3 %	1,1 %	19,8 %	1,1 %	30,2 %	1,4 %	56,3 %	2,9 %	100,0 %	0,0 %	100,0 %	0,0 %
More than 15 and up to 20	min [ai + bi Image omitted; see official source (duri – 15); 1]	20,8 %	1,1 %	25,3 %	1,1 %	37,2 %	1,4 %	70,8 %	2,9 %	100,0 %	0,0 %	100,0 %	0,0 %
More than 20	min [ai + bi Image omitted; see official source (duri – 20); 1]	26,3 %	1,1 %	30,8 %	1,1 %	44,2 %	1,4 %	85,3 %	1,5 %	100,0 %	0,0 %	100,0 %	0,0 %’

• (c) paragraph 8 is replaced by the following:

‘8.   Senior securitisation positions not covered by paragraphs 3 to 7, for which a credit assessment by a nominated ECAI is available shall be assigned a risk factor stressi equal to the following formula:

stressi = min(bi · duri;1)

where bi shall be assigned depending on the credit quality step of securitisation position i, as set out in the following table:

Credit quality step	0	1	2	3	4	5	6
bi	2,7  %	3,3  %	4,4  %	7,5  %	14,3  %	23,5  %	100,0  %’

• (d) the following paragraph 8a is inserted:

‘8a.   Non-senior securitisation positions not covered by paragraphs 3 to 8, for which a credit assessment by a nominated ECAI is available shall be assigned a risk factor stressi equal to the following formula:

stressi = min(bi · duri;1)

where bi shall be assigned depending on the credit quality step of securitisation position i, as set out in the following table:

Credit quality step	0	1	2	3	4	5	6
bi	7,4  %	9,0  %	12,0  %	18,8  %	38,9  %	63,8  %	100,0  %’

• (e) paragraph 9 is replaced by the following:

‘9.   Securitisation positions not covered by paragraphs 3 to 8a, shall be assigned a risk factor stressi of 100 %.’

;

• (57) Article 180 is amended as follows:

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

‘1.   Exposures in the form of bonds within the meaning of Article 3, point (1), of Directive (EU) 2019/2162 (covered bonds) which have been assigned to credit quality step 0 or 1 shall be assigned a risk factor stressi according to the following table.’

;

• (b) in paragraph 2, the following subparagraphs are inserted after the second subparagraph:

‘Where an exposure takes the form of an individual bond or loan that is partly, unconditionally and irrevocably guaranteed by one of the counterparties mentioned in points (a) to (d), where the guarantee meets the requirements set out in Article 215 and provides a first-loss guarantee of at least 5 % of the nominal value of the exposure, the part of the value of the exposure that is covered by the guarantee shall also be assigned a risk factor stressi of 0 %.

Where an exposure takes the form of a pool of bonds and loans that is partly, unconditionally and irrevocably guaranteed by one of the counterparties mentioned in points (a) to (d) and where the guarantee meets the requirements set out in Article 215 and provides a first-loss guarantee of at least 5 % of the nominal total exposure, for the calculating spread risk, the insurance and reinsurance undertaking may assign a risk factor stressi of 0 % to an amount of bonds and loans within the pool the cumulative value of which is equal to the total value of the guarantee.

For the purposes of the third and fourth subparagraphs, the requirements set out in Article 215 point (f) shall be considered to be satisfied where the partial guarantee proportionally covers all types of regular payments the obligor is expected to make in respect of the claim.’;

• (c) paragraph 10 is replaced by the following:

‘10.   Securitisation positions which fulfil the criteria set out in Article 243 of Regulation (EU) No 575/2013 and which are fully, unconditionally and irrevocably guaranteed by the European Investment Fund or the European Investment Bank, where the guarantee meets the requirements set out in Article 215, shall be assigned a risk factor stressi of 0 %.’

;

• (58) Article 182 is amended as follows:

• (a) paragraph 5 is replaced by the following

‘5.   For the purposes of paragraph 4, exposures for which a credit assessment by a nominated ECAI is available shall be assigned a credit quality step in accordance with Chapter 1 Section 2 of this Title. The credit quality step for exposures to central governments and central banks shall be reduced by one where all of the following applies:

• (a) those exposures are other than those referred to in Article 187(3), point (b);

• (b) those exposures are denominated and funded in the domestic currency of that central government and central bank;

• (c) the credit quality step for such exposures is two or larger.’

;

• (b) the following paragraphs 5a and 5b are inserted:

‘5a.   Exposures to Member States’ regional governments and local authorities not listed in Article 1 of Implementing Regulation (EU) 2015/2011 shall be assigned credit quality step 1.

5b.   Exposures that are fully, unconditionally, and irrevocably guaranteed by a Member State’s regional government or local authority that is not listed in Article 1 of Implementing Regulation (EU) 2015/2011, where the guarantee meets the requirements set out in Article 215 of this Regulation, shall be assigned to credit quality step 1.’

;

• (59) in Article 184(2), the following point (g) is added:

• ‘(g) the value of an equity investment, where such value is negative.’;

• (60) Article 187 is amended as follows:

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

‘1.   Exposures in the form of bonds within the meaning of Article 3, point (1), of Directive (EU) 2019/2162 (covered bonds) shall be assigned a relative excess exposure threshold CTi of 15 %, provided that the corresponding exposures in the form of covered bonds have been assigned to credit quality step 0 or 1. Exposures in the form of covered bonds shall be considered as single name exposures, regardless of other exposures to the same counterparty as the issuer of the covered bonds, which constitute a distinct single name exposure.’

;

• (b) paragraphs 4a and 4b are deleted;

• (61) Article 189 is amended as follows:

• (a) in paragraph 2, the following points (g) and (h) are added:

• ‘(g) repurchase transactions, reverse repurchase transactions, and securities lending or borrowing transactions;

• (h) pre-funded contributions and unfunded contributions to the default fund of a CCP, within the meaning of Article 4(1), point (90) and Article 300, point (10) of Regulation (EU) No 575/2013 respectively, where the CCP is a qualifying central counterparty.’;

• (b) in paragraph 3, the following point (ca) is inserted:

• ‘(ca) defaulted loans and forborne loans;’;

• (62) Article 191 is amended as follows:

• (a) in paragraph 4, ‘EUR 1 million’ is replaced by ‘EUR 1,35 million’;

• (b) paragraph 7 is replaced by the following:

‘7.   Either of the following conditions shall be met:

• (a) the risk of the borrower does not materially depend upon the performance of the underlying property, but on the underlying capacity of the borrower to repay the debt from other sources, and as a consequence, the repayment of the facility does not materially depend on any cash flow generated by the underlying property serving as collateral. For those other sources, the insurance or reinsurance undertaking shall determine maximum loan-to-income ratio as part of its lending policy and obtain suitable evidence of the relevant income when granting the loan; or

• (b) the exposure complies with Article 124(2), point(a)(ii), and Article 124(3), points (a), (b) and (d) of Regulation (EU) No 575/2013.’

;

• (63) Article 192 is amended as follows:

• (a) paragraph 2, second subparagraph, is replaced by the following:

‘Where the reinsurance arrangement is with an insurance or reinsurance undertaking or a third country insurance or reinsurance undertaking and 60% or more of that counterparty’s assets are subject to collateral arrangements, the loss-given-default shall be equal to the following:

LGD = max[90 % Image omitted; see official source (Recoverables + 50 % * RMre) – F’’’ . Collateral; 0]

where F’’’ denotes a factor to take into account the economic effect of the collateral arrangement in relation to the reinsurance arrangement or securitisation in the case of a credit event related to the counterparty.’;

• (b) in paragraph 3, the introductory wording is replaced by the following:

‘The loss-given-default on a derivative falling within Article 192a(1) or Article 192b shall be equal to the following:’;

• (c) the following paragraphs 3e and 3f are inserted:

‘3e.   The loss-given-default on repurchase transactions, reverse repurchase transactions, or securities lending or borrowing transactions, shall be equal to the following:

LGD = max(Exposure – Collateral; 0)

where:

• (a) Exposure denotes the value of securities or cash lent to the counterparty under the transaction, determined in accordance with Article 75 of Directive 2009/138/EC;

• (b) Collateral denotes the risk-adjusted value of securities or cash received from the counterparty.

3f.   Where insurance and reinsurance undertakings have concluded contractual netting agreements covering several repurchase transactions, or reverse repurchase agreements or securities lending or borrowing transactions that represent credit exposure to the same counterparty, they may calculate the loss-given-default on those repurchase transactions or reverse repurchase transactions or securities lending or borrowing transactions, as set out in paragraph 3e, on the basis of the combined economic effect of all of those repurchase transactions or reverse repurchase transactions or securities lending or borrowing transactions that are covered by the same contractual netting agreement, provided that Articles 209 and 210 are complied with in relation to the netting.

Where the loss-given default on repurchase transactions, or reverse repurchase transactions, or securities lending or borrowing transactions is to be calculated on the bases referred to in the first subparagraph, the following rules shall apply for the purposes of paragraph 3e:

• (a) the value of the securities or cash lent to the counterparty shall be the total value for solvency purposes of securities or cash lent to the counterparty for the transactions that covered by the contractual netting arrangement;

• (b) the risk-adjusted value of securities or cash received from the counterparty shall be determined at the level of the combination of repurchase transactions, or reverse repurchase transactions, or securities lending or borrowing transactions, covered by the contractual netting arrangement.’

;

• (d) paragraph 4 is replaced by the following:

‘4.   The loss-given-default on a mortgage loan shall be equal to the following:

LGD = max[Loan – (80 % × Mortgage + Guarantee); 5 % × max[0; (Loan – Guarantee)]]

where:

• (a) Loan denotes the value of the mortgage loan determined in accordance with Article 75 of Directive 2009/138/EC;

• (b) Mortgage denotes the risk-adjusted value of the mortgage;

• (c) Guarantee denotes the amount that the guarantor would be required to pay to the insurance or reinsurance undertaking if the obligor of the mortgage loan were to default at a time when the value of the property held as mortgage were equal to 80 % of the risk-adjusted value of the mortgage.

For the purposes of point (c), a guarantee shall only be recognised where both of the following conditions are met:

• (a) it is provided by a counterparty as referred to in Article 180(2), first subparagraph, points (a) to (d), or by a counterparty which is itself fully guaranteed by one of the counterparties referred to in the first subparagraph, points (a) to (d), of that Article;

• (b) it complies with the requirements set out in Articles 209 and 210, and Article 215, points (a) to (e).

Where the guarantee is provided by a counterparty which is fully guaranteed by one or more of the counterparties referred to in Article 180(2), first subparagraph, points (a) to (d), the requirements set out in Article 215, point (c)(iii) and point (d) shall be considered to be satisfied where the insurance or reinsurance undertaking has the right to obtain in a timely manner a provisional payment by the first guarantor that meets both of the following conditions:

• (a) it represents a robust estimate of the amount of the loss, including losses resulting from the non-payment of interest and other types of payment which the borrower is obliged to make, that the lending insurance or reinsurance undertaking is likely to incur;

• (b) it is proportional to the coverage of the guarantee.’

;

• (e) the following paragraph 4a is inserted:

‘4a.   The loss-given-default on a defaulted loan or a forborne loan shall be equal to the following:

LGD = max (Loan – Recoverables; 36 % × Loan)

where:

• (a) Loan denotes the value of the mortgage loan determined in accordance with Article 75 of Directive 2009/138/EC;

• (b) Recoverables denotes the present value of the debt recoveries calculated in accordance with the guidelines adopted pursuant to Article 181(4) of Regulation (EU) No 575/2013.’

;

• (f) the following paragraphs 7 and 8 are added:

‘7.   The loss-given-default on a pre-funded contribution to the default fund of a qualifying central counterparty shall be equal to 18 % of the contribution.

1. The loss-given-default on an unfunded contribution to the default fund of a qualifying central counterparty shall be equal to 0 % of the contribution.’

;

• (64) in Article 192a, paragraph 1 is replaced by the following:

‘1.   For the purposes of Article 192(3), a derivative shall fall within this paragraph where the following requirements are met:

• (a) the derivative is a CCP-related transaction in which the insurance or reinsurance undertaking is the client;

• (b) the positions and assets of the insurance or reinsurance undertaking related to that transaction are distinguished and segregated, at the level of both the clearing member and the CCP, from the positions and assets of both the clearing member and the other clients of that clearing member and as a result of that distinction and segregation those positions and assets are bankruptcy remote in the event of the default or insolvency of the clearing member or one or more of its other clients;

• (c) the laws, regulations, rules and contractual arrangements applicable to or binding the insurance or reinsurance undertaking or the CCP facilitate the transfer of the client's positions relating to that contract and transaction and of the corresponding collateral to another clearing member within the applicable margin period of risk in the event of default or insolvency of the original clearing member, in which case, the client’s positions and the collateral shall be transferred at market value, unless the client requests to close out the position at market value;

• (d) the insurance and reinsurance undertaking has conducted a sufficiently thorough legal review, which it has kept up to date, that substantiates that the arrangements that ensure that the condition set out in point (c) is met are legal, valid, binding and enforceable under the relevant laws of the relevant jurisdiction or jurisdictions;

• (e) the CCP is a qualifying central counterparty.

When assessing their compliance with the condition set out in the first subparagraph, point (c), insurance or reinsurance undertakings may take into account any clear precedents of transfers of client positions and of corresponding collateral at a CCP, and any industry intent to continue with that practice.’

;

• (65) the following Article 192b is inserted:

‘Article 192b

Direct exposure to a qualifying central counterparty

Notwithstanding Article 192a, for the purposes of Article 192(3), a derivative financing transaction shall fall under the scope of this Article where the insurance or reinsurance undertaking acts as a clearing member of a CCP for its own purposes on the derivative financing transaction, and the CCP is a qualifying central counterparty.’

;

• (66) in Article 197(7), the first sentence is replaced by the following:

‘Where, in case of insolvency of the counterparty, the determination of the insurance or reinsurance undertaking’s proportional share of the counterparty's insolvency estate does not take into account that the undertaking receives the collateral, the factors F, F', F'' and F''' referred to in Article 192(2) to (3c) and Articles 194 to 196 shall all be 100 %.’;

• (67) in Article 199, paragraph 12 is replaced by the following:

‘12.   Notwithstanding paragraphs 2 to 11, exposures as referred to in Article 192(3), (7) and (8) shall be assigned a probability of default equal to 0,002 %.’

;

• (68) in Article 201(2), point (a) is replaced by the following:

• ‘(a) the sum covers all possible combinations (j,k) of probabilities of default on single name exposures as referred to in Article 199, except the case where PDj = PDk = 0;’;

• (69) Article 202 is replaced by the following:

‘Article 202

Type 2 exposures

The capital requirement for counterparty default risk on type 2 exposures shall be equal to the loss in the basic own funds that would result from an instantaneous decrease in value of type 2 exposures by the following amount:

90 % Image omitted; see official source LGDreceivables>3months + 100 % Image omitted; see official source LGDdefaulted/forborne + Image omitted; see official source

where:

• (a) LGDreceivables>3months denotes the total losses-given-default on all receivables from intermediaries which have been due for more than three months;

• (b) LGDdefaulted/forborne denotes the total loss given default on all defaulted and forborne loans;

• (c) the sum is taken on all type 2 exposures other than receivables from intermediaries which have been due for more than three months, and other than defaulted and forborne loans;

• (d) LGDi denotes the loss-given-default on the type 2 exposure i.’

;

• (70) Article 210 is amended as follows:

• (a) the following paragraph 3a is inserted:

‘3a.   A risk-mitigation technique shall only be considered not to result in material basis risk where the insurance or reinsurance undertaking can demonstrate that both of the following conditions are met:

• (a) the exposure covered by the risk-mitigation technique is sufficiently similar in nature to the risk exposure of the undertaking; and

• (b) the changes in value of the exposure covered by the risk-mitigation technique closely mirror the changes in value of the risk exposure of the undertaking under a comprehensive set of relevant risk scenarios, including scenarios that are consistent with the confidence level set out in Article 101(3) of Directive 2009/138/EC.’

;

• (b) the following paragraph 6 is added:

‘6.   The undertaking can demonstrate that the transfer of risk is effective and that any reduction in the Solvency Capital Requirement or increase in available basic own funds resulting from the risk transfer arrangements is commensurate with the actual change in risks that the undertaking is exposed to.

The Solvency Capital Requirement and available basic own funds shall reflect the economic substance of the contractual arrangements governing the risk-mitigation techniques. When calculating the Basic Solvency Capital Requirement, insurance or reinsurance undertakings shall only take into account risk-mitigation techniques as referred to in Article 101(5) of Directive 2009/138/EC where the insurance or reinsurance undertaking can demonstrate that all of the following conditions are met:

• (a) the contractual arrangements governing the risk-mitigation technique result in an effective transfer of risk;

• (b) the reduction in the Solvency Capital Requirement is commensurate with the extent of transfer of risks stemming from the contractual arrangements; and

• (c) the Solvency Capital Requirement appropriately reflects any risk arising from the risk-transfer process.’

;

• (71) Article 211 is amended as follows:

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

‘1.   Where insurance or reinsurance undertakings transfer underwriting risks using reinsurance contracts or special purpose vehicles, in order for them to take into account the risk-mitigation technique in the Basic Solvency Capital Requirement, the qualitative criteria set out in Articles 209 and 210 and those set out in paragraphs 2 to 7 shall be met.’

;

• (b) the following paragraph 2a is inserted:

‘2a.   Where insurance or reinsurance undertakings transfer underwriting risks to a scheme based on reinsurance conducted or fully guaranteed by the government of a Member State acting, for reasons of substantial public interest, in the capacity of reinsurer of last resort, the scheme shall be considered as a reinsurance counterparty within the meaning of paragraph 2 of this Article.’

;

• (c) the following paragraph 7 is added:

‘7.   For the purposes of Article 86 and Article 210(3), undertakings shall consider basis risk arising from a currency mismatch to be material where the exposure covered by the reinsurance contracts or special purpose vehicles is denominated in a different currency than the risk exposure of the undertaking, unless the currencies involved are pegged within a sufficiently narrow corridor or the fixed exchange rate is provided in the reinsurance contract.’

;

• (72) in Article 212, paragraph 1 is replaced by the following:

‘1.   Where insurance or reinsurance undertakings transfer risk, in order for the risk-mitigation technique to be taken into account in the Basic Solvency Capital Requirement, in other cases than in the cases referred to in Article 211(1), including transfers through the purchase or issuance of financial instruments, the qualitative criteria provided in paragraphs 2 to 5 shall be met, in addition to the qualitative criteria set out in Articles 209 and 210.’

;

• (73) the following Article 212a is inserted:

‘Article 212a

Contingent capital instruments and convertible bond instruments

The following contractual arrangements shall never be considered as meeting the requirements of effective transfer of risk set out in Article 210:

• (a) contractual arrangements concluded between an insurance or reinsurance undertaking and another counterparty, according to which upon the occurrence of pre-defined specific events, that counterparty is required to purchase new equity shares or subordinated debts issued by the insurance or reinsurance undertaking in accordance with a pre-defined price setting mechanism;

• (b) contractual arrangements concluded between an insurance or reinsurance undertaking and another counterparty according to which upon the occurrence of pre-defined specific events that counterparty is required to acquire debt instruments issued by the insurance or reinsurance undertaking which can be later converted into new equity shares of this undertaking, in accordance with a pre-defined price setting mechanism.’

;

• (74) Article 215 is amended as follows:

• (a) the introductory wording is replaced by the following:

‘Subject to Article 215a(1), in the calculation of the Basic Solvency Capital Requirement, guarantees shall only be recognised where explicitly referred to in this Chapter, and where in addition to the qualitative criteria laid down in Articles 209 and 210, all of the following criteria are met:’;

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

• ‘(b) the extent of the credit protection is clearly set out and incontrovertible;’;

• (c) in point (c), point (i) is replaced by the following:

• ‘(i) would allow the protection provider to cancel or change the protection unilaterally;’;

• (d) the following subparagraphs are added:

‘In the case of a guarantee covering residential mortgage loans, the requirements in the first subparagraph, points (c)(iii) and (d), shall only be required to be satisfied within 24 months.

For the purposes of the first subparagraph, point (c), a clause in the guarantee contract providing that flawed due diligence or fraud by the lending institution cancels or diminishes the extent of the credit protection offered by the guarantor, shall not disqualify that guarantee from meeting the requirements of the first subparagraph, point (c).

For the purposes of the first subparagraph, point (c), the guarantor may make one lump sum payment of all monies due under the claim, or may assume the future payment obligations of the obligor covered by the credit protection contract.

For the purposes of the first subparagraph, an insurance or reinsurance undertaking shall be able to demonstrate to the satisfaction of the supervisory authority that it has in place systems to manage potential concentration of risk arising from its use of guarantees. An insurance or reinsurance undertaking shall be able to demonstrate to the satisfaction of the supervisory authority how its strategy in respect of its use of guarantees interacts with its management of its overall risk profile.’;

• (75) the following Article 215a is inserted:

‘Article 215a

Sovereign and other public sector counter-guarantees

1. Insurance and reinsurance undertakings may treat the exposures referred to in paragraph 2 as protected by a guarantee provided by the entities listed in that paragraph, provided all the following conditions are satisfied:

• (a) the counter-guarantee covers all credit risk elements of the claim;

• (b) both the original guarantee and the counter-guarantee meet the requirements for guarantees set out in Article 215, except that the counter-guarantee need not be direct;

• (c) the cover is robust and nothing in the historical evidence suggests that the coverage of the counter-guarantee is less than effectively equivalent to that of a direct guarantee by the entity in question.

1. The treatment set out in paragraph 1 shall apply to exposures protected by a guarantee which is counter-guaranteed by any of the counterparties referred to in Article 180(2), first subparagraph.’

;

• (76) Articles 216 and 217 are replaced by the following:

‘Article 216

Calculation of the Solvency Capital Requirement in the case of ring-fenced funds

1. In the case of ring-fenced funds determined in accordance with Article 81(1), insurance and reinsurance undertakings shall adjust the calculation of the Solvency Capital Requirement following the method set out in Article 217.

1. However, an insurance or reinsurance undertaking that has received supervisory approval to apply Article 304 of Directive 2009/138/EC before 29 January 2027 to a ring-fenced fund shall not adjust the calculation in accordance with Article 217 of this Regulation, but base the calculation on the assumption of full diversification between the assets and liabilities of the ring-fenced funds and the rest of the undertaking.

Article 217

Solvency Capital Requirement calculation method for ring-fenced funds

1. Insurance and reinsurance undertakings shall calculate a notional Solvency Capital Requirement for each ring-fenced fund and for the remaining part of the undertaking in the same manner as if those ring-fenced funds and the remaining part of the undertaking were separate undertakings.

1. Insurance and reinsurance undertakings shall calculate their Solvency Capital Requirement as the sum of the notional Solvency Capital Requirements for each of the ring-fenced funds and for the remaining part of the undertaking.

1. Where the calculation of the capital requirement for a risk module or sub-module of the Basic Solvency Capital Requirement is based on the impact of a scenario on the basic own funds of the insurance or reinsurance undertaking, the impact of the scenario on the basic own funds at the level of the ring-fenced fund and the remaining part of the undertaking shall be calculated.

1. The basic own funds at the level of the ring-fenced fund shall be those restricted own-fund items that meet the definition of basic own funds set out in Article 88 of Directive 2009/138/EC.

1. Where profit participation arrangements exist in the ring-fenced fund, insurance and reinsurance undertakings shall apply the following approach when adjusting the Solvency Capital Requirement:

• (a) where the calculation referred to in paragraph 3 would result in an increase in the basic own funds at the level of the ring-fenced fund, the estimated change in those basic own funds shall be adjusted to reflect the existence of profit participation arrangements in the ring-fenced fund in which case the adjustment to the change in the basic own funds of the ring-fenced fund shall be the amount by which technical provisions would increase due to the expected future distribution to policy holders or beneficiaries of that ring-fenced fund;

• (b) where the calculation referred to in paragraph 3 would result in a decrease in the basic own funds at the level of the ring-fenced fund, the estimated change in those basic own funds for the calculation of the net Basic Solvency Capital Requirement, as referred to in Article 206(2), shall be adjusted to reflect the reduction in future discretionary benefits payable to policy holders or beneficiaries of that ring-fenced fund, but such adjustment shall not exceed the amount of future discretionary benefits within the ring-fenced fund.

1. Notwithstanding paragraph 1, the notional Solvency Capital Requirement for each ring-fenced fund shall be calculated using the scenario-based calculations under which basic own funds for the undertaking as a whole are most negatively affected.

1. When determining the scenario under which basic own funds are most negatively affected for the undertaking as a whole, the undertaking shall first calculate the sum of the results of the impacts of the scenarios on the basic own funds at the level of each ring-fenced fund, in accordance with paragraphs 3 and 5. The sums at the level of each ring-fenced fund shall be added to one another and to the results of the impact of the scenarios on the basic own funds in the remaining part of the insurance or reinsurance undertaking.

1. The notional Solvency Capital Requirement for each ring-fenced fund shall be determined by aggregating the capital requirements for each sub-module and risk module of the Basic Solvency Capital Requirement.

1. Insurance and reinsurance undertakings shall assume that there is no diversification of risks between each of the ring-fenced funds and the remaining part of the insurance or reinsurance undertaking.’

;

• (77) in Article 231, the following paragraph 4 is added:

‘4.   Insurance and reinsurance undertakings shall put in place internal procedures to avoid overreliance on data from past events with respect to climate change-related trends, including, where appropriate, by using climate scenarios.’

;

• (78) in Article 234, point (b), point (ii) is replaced by the following:

• ‘(ii) any restrictions of diversification which arise from the existence of a ring-fenced fund;’;

• (79) Article 235 is amended as follows:

• (a) the title is replaced by the following:

‘ Risk-mitigation techniques and other techniques to reduce the Solvency Capital Requirement ’;

• (b) the following paragraph 4 is added:

‘4.   The use of the arrangements referred to in Article 212a shall never be recognised as risk-mitigation techniques. It shall never result in a reduction of the Solvency Capital Requirements.’

;

• (80) in Article 258(6), the following subparagraph is added:

‘The evaluation referred to in the first subparagraph shall include an assessment of the adequacy of the composition, including in terms of gender-balance and diversity, the effectiveness and the internal governance of the administrative, management or supervisory body. The evaluation shall also be commensurate to the nature, scale and complexity of the risks inherent in the business of the undertakings.’;

• (81) Article 260 is amended as follows:

• (a) the following paragraph 2a is inserted:

‘2a.   The expected profit in future fees for servicing and management of funds for index-linked and unit-linked insurance shall be calculated as the difference between technical provisions without a risk margin calculated in accordance with Article 77 of Directive 2009/138/EC and technical provisions without a risk margin under the assumption that the future fees for servicing and management of funds that are expected to be received in the future are not received for any reason other than the insured event having occurred, regardless of the contractual rights of the policyholder to discontinue the policy.’

;

• (b) paragraph 4 is replaced by the following:

‘4.   Loss-making policies shall be offset against profit-making policies within a homogeneous risk group. Loss-making homogeneous risk groups shall also be offset against profit-making homogeneous risk groups.’

;

• (82) in Article 271, paragraph 2 is deleted;

• (83) Article 275 is amended as follows:

• (a) paragraph 2 is amended as follows:

• (i) the following point (ea) is inserted:

• ‘(ea) the variable remuneration, including the deferred portion, is paid or vests only if it is sustainable according to the financial situation of the undertaking as a whole, and justified on the basis of the performance of the undertaking, the business unit and the individual concerned;’;

• (ii) the following subparagraphs are added:

‘For the purposes of point (c), remuneration payable under deferral arrangements shall vest no faster than on a pro rata basis.

For the purposes of the first subparagraph, point (ea), without prejudice to the general principles of national contract and labour law, the total variable remuneration shall generally be considerably contracted where subdued or negative financial performance of the undertaking occurs, taking into account both current remuneration and reductions in payouts of amounts previously earned, including through malus or clawback arrangements.

Up to 100 % of the total variable remuneration shall be subject to malus or clawback arrangements. Undertakings shall set specific criteria for the application of malus and clawback. Such criteria shall cover situations where the staff member:

• (i) participated in or was responsible for conduct which resulted in significant losses to the undertaking;

• (ii) is no longer considered as meeting appropriate standards of fitness and propriety.’;

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

‘2a.   The deferral of a substantial portion of the variable remuneration component set out in paragraph 2, point (c), shall not apply where the annual variable remuneration of a member of the administrative, management or supervisory body, a person who effectively runs the undertaking or has other key functions, or person belonging to other categories of staff whose professional activities have a material impact on the undertaking’s risk profile, does not exceed EUR 50 000 and does not represent more than 1/3 of that staff member’s total annual remuneration.

2b.   By way of derogation from paragraph 2a, a supervisory authority may decide that staff members entitled to annual variable remuneration below the threshold referred to in that paragraph shall not be subject to the exemption set out therein because of national market specificities in terms of remuneration practices, because of the nature of the responsibilities and job profile of those staff members or because of the specific risk profile of the undertaking.’

;

• (84) the following Article 275b is inserted:

‘Article 275b

Transparency on investment and capital management

Taking into account the information from the regular supervisory reporting referred to in Article 304, EIOPA shall regularly report to the European Commission, the European Parliament and the Council, quantitative and qualitative information on:

• (a) the aggregated allocation of investments, broken down by sector and geographical area;

• (b) distributions to shareholders, including share buy-backs, and variable remuneration to members of the administrative, management or supervisory body, key function holders or senior management.’

;

• (85) in Article 278, paragraph 2 is replaced by the following:

‘2.   With respect to the matching adjustment and transitional measures and with respect to the volatility adjustment, where supervisory authorities have allowed an insurance or reinsurance undertaking to use one of these adjustments or transitional measures, they may impose a capital add-on pursuant to Article 37(1), point (d), of Directive 2009/138/EC only in circumstances where the deviation from the assumptions underlying the adjustments or transitional measures is of a temporary nature and does not justify revoking the supervisory approval for the use of the adjustment or the transitional measure.’

;

• (86) Articles 290 to 294 are replaced by the following:

‘Article 290

Structure

1. The solvency and financial condition report shall follow the structure set out in Annex XX, Section A, and disclose the information referred to in Articles 292 to 298 of this Regulation.

1. The solvency and financial condition report shall contain narrative information in quantitative and qualitative form supplemented, for the part targeted at market professionals, where appropriate, with quantitative templates.

1. Where information of at least equal scope and level of detail is provided for the reporting period in other public reports, the undertaking may provide the required information in the part targeted at market professionals by including the internet link to the relevant part of the public reports. When using internet links, insurance and reinsurance undertakings shall in particular specify the relevant sections and pages. They shall ensure that such links remain valid during at least five years after publication date.

Article 291

Materiality

For the purposes of this Chapter, the information or the changes to any information to be disclosed in the solvency and financial condition report shall be considered material where its omission or misstatement could influence the decision-making or the judgement of the users of that document, including the supervisory authorities.

Article 292

Information targeted at policy holders and beneficiaries

1. The part of the solvency and financial condition report targeted at policy holders and beneficiaries shall start with an indication that policy holders and beneficiaries have the right to request a version of that part in the official language of the Member State where they reside, provided that the insurance or reinsurance undertaking operates in that Member State through the right of establishment or the freedom to provide services. Where versions in other languages are available online, the insurance or reinsurance undertaking shall also provide the internet links to each version at the beginning of that part of the solvency and financial condition report.

1. The part of the solvency and financial condition report consisting of information targeted at policy holders and beneficiaries shall contain a section about the business and performance of the undertaking, which shall cover all of the following information:

• (a) the name and legal form of the undertaking;

• (b) the name and contact details of the supervisory authority responsible for financial supervision of the undertaking;

• (c) a list of the shareholders of qualifying holdings in the undertaking;

• (d) where the insurance undertaking belongs to a group, the name of the group, its legal form, the jurisdiction of the group and where applicable, the supervisory authority responsible for financial supervision of the group;

• (e) any significant business development or other significant event that has occurred over the reporting period that has a material impact on the undertaking’s risk profile;

• (f) clear and simple information on the insurance undertaking’s underwriting and investment performance at an aggregate level over the reporting period.

1. The part of the solvency and financial condition report consisting of information targeted at policy holders and beneficiaries shall contain a section about the capital management and risk profile of the undertaking, which shall cover all of the following information:

• (a) a brief definition of the Solvency Capital Requirement and Minimum Capital Requirement;

• (b) the Solvency Capital Requirement and Minimum Capital Requirement, the eligible own funds, and the ratio of coverage both at the end of the reporting period and the previous reporting period;

• (c) regarding any non-compliance with the Minimum Capital Requirement or the Solvency Capital Requirement during the reporting period or at the time of disclosure, the period of each non-compliance, an explanation of its origin and consequences, any remedial measures taken, and an explanation of the effects of such remedial measures;

• (d) a description of the material risks the undertaking is exposed to, including in relation to sustainability risks, any material changes to those material risks over the reporting period, and a description of the applied risk mitigation techniques.

The description referred to in the first subparagraph, point (a), shall contain the following text:

“Two capital requirements aim at measuring the financial soundness of the undertaking: the Solvency Capital Requirement (SCR) and the Minimum Capital Requirement (MCR). The SCR should deliver a level of capital that enables an undertaking to absorb significant unforeseen losses over a one-year time horizon and should give reasonable assurance to policy holders that payments will be made as they fall due. The MCR is intended to provide a minimum level of security to be held at all times by the undertaking and below which the amount of financial resources (own funds) should not fall.

The capital requirements will need to be covered by capital (own funds) of sufficient quality to ensure that losses can be covered on a going-concern basis as well as in the event of winding-up”.

Compliance with the first subparagraph shall not result in an omission or the abridgement of the relevant information referred to in paragraphs 1 to 4.

Article 293

Information targeted at market professionals: Business and performance

• (a) the name and legal form of the undertaking, and, where available, the specific legal entity identifier referred to in Article 7(3), point (b), of Regulation (EU) 2023/2859 of the European Parliament and of the Council¹;

• (b) the name and contact details of the supervisory authority responsible for the financial supervision of the undertaking and, where applicable, the name and contact details of the group supervisor of the group to which the undertaking belongs;

• (c) the name and contact details of the external auditor of the undertaking and the scope of the audit referred to in Article 51a of Directive 2009/138/EC;

• (d) a description of the holders of qualifying holdings in the undertaking, including their names;

• (e) where the undertaking belongs to a group, details of the undertaking’s position within the legal structure of the group, including a full organisational chart and, where appropriate, a simplified group organisational chart;

• (f) the undertaking’s material lines of business and material geographical areas where it carries out business;

• (g) any significant business or other events that have occurred over the reporting period that have had a material impact on the undertaking.

• (a) information on income and expenses arising from investments and, where necessary for a proper understanding of the income and expenses, the components of such income and expenses;

• (b) information about the nature and amount of any gains and losses recognised directly in equity;

• (c) information about the nature and amount of any investments in securitisation.

Article 294

Information targeted at market professionals: System of governance

• (a) a description of the structure of the undertaking’s administrative, management or supervisory body, of its main roles and responsibilities and of the segregation of responsibilities within those bodies, and in particular whether relevant committees exist within them, and a description of the main roles and responsibilities of key functions or, where a solvency and financial condition report has already been submitted, any material changes in the system of governance that have taken place compared to the previous reporting period;

• (b) information on the remuneration policy and practices regarding administrative, management or supervisory body and, unless otherwise stated, employees, including: