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

• (i) principles of the remuneration policy, with an explanation of at least the relative importance of the fixed and variable components of remuneration and deferral of variable component and how the remuneration policy is consistent with the integration of sustainability risks;

• (ii) information on the individual and collective performance criteria on which any entitlement to share options, shares or variable components of remuneration is based;

• (iii) a description of the main characteristics of supplementary pension or early retirement schemes for the members of the administrative, management or supervisory body and other key function holders;

• (c) information about material transactions during the reporting period with shareholders, with persons who exercise a significant influence on the undertaking, and with members of the administrative, management or supervisory body.

• (87) Article 295 is deleted;

• (88) Articles 296 and 297 are replaced by the following:

‘Article 296

Information targeted at market professionals: Valuation for solvency purposes

1. The solvency and financial condition report shall contain all of the following information regarding the valuation of the assets of the insurance or reinsurance undertaking for solvency purposes:

• (a) separately for each material class of assets, following the classification as set out in the solvency balance sheet, the value of the assets, and a description of the bases, methods and main assumptions used for valuation for solvency purposes, including, where relevant, the consideration of sustainability risks and factors in the valuation methods;

• (b) for material classes of assets, an explanation of any material differences between the bases, methods and main assumptions used by that undertaking for the valuation for solvency purposes and those used for its valuation in financial statements.

1. The solvency and financial condition report shall include all of the following information regarding the valuation of the technical provisions of the insurance or reinsurance undertaking for solvency purposes:

• (a) separately for each material line of business, the value of technical provisions, including the amount of the best estimate and the risk margin, and a description of the bases, methods and main assumptions used for its valuation for solvency purposes, including, where relevant, the consideration of sustainability risks and factors in the valuation methods;

• (b) a description of the level of uncertainty associated with the value of technical provisions;

• (c) for material lines of business, an explanation of any material differences between the bases, methods and main assumptions used by that undertaking for the valuation for solvency purposes and those used for their valuation in financial statements;

• (d) a statement on whether the phasing-in mechanism for extrapolation laid down in Article 77a(2) of Directive 2009/138/EC is used, and a quantification of the impact of not applying the phasing-in mechanism;

• (e) where the matching adjustment referred to in Article 77b of Directive 2009/138/EC is applied, a description of the matching adjustment and of the portfolio of obligations and assigned assets to which the matching adjustment is applied, and a quantification of the impact of a change to zero of the matching adjustment on the amount of technical provisions;

• (f) a statement on whether the volatility adjustment referred to in Article 77d of Directive 2009/138/EC is used by the undertaking, a description per currency of the volatility adjustment used and the amount of the best estimate it is applied to, and quantification of the impact of a change to zero of the volatility adjustment on the amount of technical provisions;

• (g) a statement on whether the transitional risk-free interest rate-term structure referred to Article 308c of Directive 2009/138/EC is applied, the reason for applying that transitional risk-free interest rate-term structure, a quantification of the impact of not applying that risk-free interest rate-term structure on the amount of technical provisions, and the prospect to reduce any dependence on the transitional risk-free interest rate-term structure by the end of the transitional period;

• (h) a statement on whether the transitional deduction referred to in Article 308d of Directive 2009/138/EC is applied, the reason for applying that transitional deduction, a quantification of the impact of not applying the transitional deduction on the amount of technical provisions and the prospect to reduce any dependence on the transitional deduction by the end of the transitional period;

• (i) a description of the following:

• (i) the recoverables from reinsurance contracts and separately, from special purpose vehicles;

• (ii) any material changes in the relevant assumptions made in the calculation of technical provisions compared to the previous reporting period.

1. The solvency and financial condition report shall contain all of the following information regarding the valuation of the other liabilities of the insurance or reinsurance undertaking for solvency purposes:

• (a) separately for each material class of other liabilities the value of other liabilities and a description of the bases, methods and main assumptions used for their valuation for solvency purposes;

• (b) for each material classes of other liabilities, an explanation of any material differences with the valuation bases, methods and main assumptions used by the undertaking for the valuation for solvency purposes and those used for their valuation in financial statements.

1. The solvency and financial condition report shall contain information on the areas set out in Article 263 in complying with the disclosure requirements of the insurance or reinsurance undertaking as laid down in paragraphs 1 and 3 of this Article.

1. The solvency and financial condition report shall contain in a separate section any other material information regarding the valuation of assets and liabilities for solvency purposes.

Article 297

Information targeted at market professionals: Capital management and risk profile

1. The solvency and financial condition report shall contain all of the following information regarding the own funds of the insurance or reinsurance undertaking:

• (a) information on the objectives of the insurance or reinsurance undertaking in managing its own funds, including information on the time horizon used for business planning and explanations for any material changes to those objectives over the reporting period;

• (b) the eligible amount of own funds to cover the Solvency Capital Requirement, classified by tiers, at the end of the reporting period and at the end of the previous reporting period, including an analysis of the material changes in each tier over the reporting period;

• (c) the eligible amount of basic own funds to cover the Minimum Capital Requirement, classified by tiers;

• (d) where the phasing-in mechanism for extrapolation referred to in Article 77a(2) of Directive 2009/138/EC is applied, a quantification of the impact of not applying the phasing-in mechanism on:

• (i) the basic own funds;

• (ii) the amounts of own funds eligible to cover the Minimum Capital Requirement and the Solvency Capital Requirement;

• (e) where the matching adjustment referred to in Article 77b of Directive 2009/138/EC is applied, a quantification of the impact of a change to zero of the matching adjustment on:

• (i) the basic own funds;

• (ii) the amounts of own funds eligible to cover the Minimum Capital Requirement and the Solvency Capital Requirement;

• (f) where the volatility adjustment referred to in Article 77d of Directive 2009/138/EC is used by the undertaking a quantification of the impact of a change to zero of the volatility adjustment on:

• (i) the basic own funds;

• (ii) the amounts of own funds eligible to cover the Minimum Capital Requirement and the Solvency Capital Requirement;

• (g) where the transitional risk-free interest rate-term structure referred to Article 308c of Directive 2009/138/EC is applied a quantification of the impact of not applying the transitional measure on:

• (i) the basic own funds;

• (ii) the amounts of own funds eligible to cover the Minimum Capital Requirement and the Solvency Capital Requirement;

• (h) where the transitional deduction referred to in Article 308d of Directive 2009/138/EC is applied a quantification of the impact of not applying the deduction measure on:

• (i) the basic own funds;

• (ii) the amounts of own funds eligible to cover the Minimum Capital Requirement and the Solvency Capital Requirement;

• (i) a quantification of the combined impact on the undertaking’s financial position of not applying the transitional measures laid down in Article 77a(2), Articles 308c and 308d and, where relevant, Article 111(1), second subparagraph, of Directive 2009/138/EC;

• (j) an analysis of significant changes in own funds during the reporting period, including:

• (i) the value of own fund items issued during the year;

• (ii) the extent to which an issuance as referred to in point (i) has been used to fund redemption;

• (iii) the value of instruments redeemed during the year;

• (iv) changes with regard to the key elements of the reconciliation reserve;

• (k) a quantitative and qualitative explanation of any material differences between equity as shown in the undertaking’s financial statements and the excess of assets over liabilities as calculated for solvency purposes;

• (l) for each material item of ancillary own funds:

• (i) a description of the item concerned;

• (ii) the amount of the ancillary own-fund item;

• (iii) where a method by which to determine the amount of the ancillary own-fund item has been approved:

• (1) that method;

• (2) the nature and the names of the counterparty or group of counterparties for the items referred to in Article 89(1), points (a), (b) and (c) of Directive 2009/138/EC;

• (m) a description of any item deducted from own funds and a brief description of any significant restriction affecting the availability and transferability of own funds within the undertaking;

For the purposes of the first subparagraph, point (l), the names of the counterparties shall not be disclosed where such disclosure is legally not possible or impracticable or where the counterparties concerned are not material.

1. The solvency and financial condition report shall contain all of the following information regarding the Solvency Capital Requirement and the Minimum Capital Requirement of the insurance or reinsurance undertaking:

• (a) the amounts of the undertaking’s Solvency Capital Requirement and the Minimum Capital Requirement and the eligible own funds and ratio of coverage for both the Solvency Capital Requirement and the Minimum Capital Requirement at the end of the reporting period, accompanied, where applicable, by a statement that the final amount of the Solvency Capital Requirement is still subject to supervisory assessment;

• (b) with regard to risk sensitivity, a description of the methods used, the assumptions made and the outcome of the sensitivity analysis for material risks and events;

• (c) where the phasing-in mechanism for extrapolation laid down in Article 77a(2) of Directive 2009/139/EC is applied, a quantification of the impact of non applying that phasing-in mechanism on the Solvency Capital Requirement and the Minimum Capital Requirement;

• (d) where the matching adjustment referred to in Article 77b of Directive 2009/138/EC is applied, a quantification of the impact of a change to zero of that matching adjustment on the Solvency Capital Requirement and on the Minimum Capital Requirement;

• (e) where the volatility adjustment referred to in Article 77d of Directive 2009/138/EC is used, a quantification of the impact of a change to zero of that volatility adjustment on the Solvency Capital Requirement and on the Minimum Capital Requirement;

• (f) where the transitional risk-free interest rate-term structure referred to Article 308c of Directive 2009/138/EC is applied a quantification of the impact of not applying that transitional risk-free interest rate-term structure on the Solvency Capital Requirement and on the Minimum Capital Requirement;

• (g) where the transitional deduction referred to in Article 308d of Directive 2009/138/EC is applied a quantification of the impact of not applying that transitional deduction on the Solvency Capital Requirement and on the Minimum Capital Requirement;

• (h) the amount of the undertaking’s Solvency Capital Requirement split by risk modules where that undertaking applies the standard formula, and by risk categories where the undertaking applies an internal model and a qualitative description of the material risks captured by the Solvency Capital Requirement calculation;

• (i) information on whether the undertaking is using simplified calculations, and for which risk modules and sub-modules of the standard formula;

• (j) information on whether and for which parameters of the standard formula that undertaking is using undertaking-specific parameters pursuant to Article 104(7) of Directive 2009/138/EC;

• (k) information on the inputs used by the undertaking to calculate the Minimum Capital Requirement;

• (l) any material change to the Solvency Capital Requirement and to the Minimum Capital Requirement over the reporting period, and the reasons for any such change.

1. The solvency and financial condition report shall contain all of the following information regarding the option set out in Article 304 of Directive 2009/138/EC:

• (a) a statement that the undertaking is using the duration-based equity risk sub-module set out in that Article for the calculation of its Solvency Capital Requirement, after approval from its supervisory authority;

• (b) the amount of the capital requirement for the duration-based equity risk sub-module resulting from such use.

The solvency and financial condition report shall contain all of the following information regarding the application of Article 105a of Directive 2009/138/EC:

• (a) a statement on whether the insurance and reinsurance undertaking applies the prudential treatment set out in Article 105a of that Directive for the calculation of its Solvency II capital requirement, and where applicable, the amount of equity investments that are classified as long-term equity investments, and the share of such investments within the equity portfolio;

• (b) information on any non-compliance with the conditions laid down in Article 105a(1), second subparagraph, of that Directive during the financial year covered by the report, including all of the following:

• (i) information on the conditions that are or were not met and the reasons for non-compliance;

• (ii) the duration of the non-compliance;

• (iii) whether the insurance or reinsurance undertaking has restored compliance.

An insurance or reinsurance undertaking that is required to cease to classify any equity investment as long-term equity investments in accordance with Article 105a(3), fourth subparagraph, of that Directive shall disclose that information and the remaining duration of the prohibition to apply the risk factor referred to in Article 105a(4) of Directive 2009/138/EC.

1. Where an internal model is used to calculate the Solvency Capital Requirement, the solvency and financial condition report shall also contain all of the following information:

• (a) a description of the various purposes for which that undertaking is using its internal model;

• (b) a description of the scope of the internal model in terms of business units and risk categories;

• (c) where a partial internal model is used, a description of the technique which has been used to integrate any partial internal model into the standard formula including, where relevant, a description of alternative techniques used;

• (d) a description of the methods used in the internal model for the calculation of the probability distribution forecast and the Solvency Capital Requirement;

• (e) an explanation, by risk module, of the main differences in the methodologies and underlying assumptions used in the standard formula and in the internal model;

• (f) the risk measure and time period used in the internal model, and where they are not the same as those set out in Article 101(3) of Directive 2009/138/EC, an explanation of why the Solvency Capital Requirement calculated using the internal model provides policy holders and beneficiaries with a level of protection equivalent to that set out in Article 101 of that Directive;

• (g) a statement on whether a dynamic volatility adjustment is used in the internal model.

1. For risk concentration and liquidity risk, the solvency and financial condition report shall contain all of the following:

• (a) a description of the material risk concentrations to which the insurance or reinsurance undertaking is exposed;

• (b) the total amount of the expected profit included in future premiums as calculated in accordance with Article 260(2);

• (c) the total amount of the expected profit included in future fees for servicing and management of funds as calculated in accordance with Article 260(2a).

1. For risk mitigation, the solvency and financial condition report shall describe the techniques used for mitigating risks.

1. The solvency and financial condition report shall contain both quantitative information regarding the reporting period, and information on the risk exposure arising from off-balance sheet positions and the transfer of risk to special purpose vehicles.

1. The solvency and financial condition report shall describe how the undertaking has determined its overall solvency needs given its risk profile and how its capital management activities and its risk management system interact with each other.

1. The solvency and financial condition report shall contain all of the following information regarding any non-compliance with the Minimum Capital Requirement or significant non-compliance with the Solvency Capital Requirement of the insurance or reinsurance undertaking:

• (a) regarding any non-compliance with that undertaking’s Minimum Capital Requirement:

• (i) the period and maximum amount of each non-compliance during the reporting period;

• (ii) explanation of the origin and consequences of the non-compliance;

• (iii) any remedial measures taken, as provided for under Article 51(1b), point (d)(vi), of Directive 2009/138/EC;

• (iv) an explanation of the effects of the remedial measures referred to in point (iii);

• (b) where non-compliance with the undertaking’s Minimum Capital Requirement has not been subsequently resolved, the amount of and the consequences of the non-compliance at the reporting date;

• (c) regarding any non-compliance with the undertaking’s Solvency Capital Requirement during the reporting period:

• (i) the period and maximum amount of each significant non-compliance;

• (ii) the explanation of its origin and consequences and any remedial measures taken, as provided for under Article 51(1b), point (d)(vi), of Directive 2009/138/EC;

• (iii) an explanation of the effects of such remedial measures referred to in point (ii);

• (d) where a non-compliance with the undertaking’s Solvency Capital Requirement has not been subsequently resolved, the amount of and the consequences of the non-compliance at the reporting date.

1. The solvency and financial condition report shall contain in a separate section any other material information regarding the risk profile and the capital management of the insurance or reinsurance undertaking.’

;

• (89) the following Article 297a is inserted:

‘Article 297a

Information targeted at market professionals: Sustainability-related information

1. The solvency and financial condition report shall contain the elements of the plans to be disclosed in accordance with Article 44 of Directive 2009/138/EC, including relevant quantifiable targets.

1. The solvency and financial condition report shall state whether the undertaking discloses the plans referred to in Article 19a or Article 29a of Directive 2013/34/EU, and where applicable, contain the internet link to those plans.

1. The solvency and financial condition report shall state whether the undertaking has any material exposure to climate change-related risks following the materiality assessment referred to in Article 45a(1) of Directive 2009/138/EC, and, where relevant, whether it has taken any actions to manage such exposure.

1. An insurance or reinsurance undertaking that intends to use the solvency and financial condition report to comply with the disclosure obligations laid down in Regulation (EU) 2019/2088 of the European Parliament and of the Council[^ntr*2-L_202600269EN.000101-E0014] and Regulation (EU) 2020/852, shall disclose the relevant information required by those Regulations together with the information required by paragraphs 1, 2 and 3 of this Article.

[^ntr*2-L_202600269EN.000101-E0014]: Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (OJ L 317, 9.12.2019, p. 1, ELI: http://data.europa.eu/eli/reg/2019/2088/oj).’;"

• (90) the following Article 298a is inserted:

‘Article 298a

Languages

1. Where the insurance contract was concluded with a policyholder from another Member State under the freedom of establishment or the freedom to provide services, the part of the solvency and financial condition report referred to in Article 51(1a) of Directive 2009/138/EC, shall upon request from the policyholder be provided to that policyholder in the official language or one of the official languages of that Member State as chosen by the policyholder. Where the translation is generated by a machine translation tool, insurance or reinsurance undertakings shall disclose to that policyholder that that part of the solvency and financial condition report has been machine translated. Insurance and reinsurance undertakings shall send the translated part of the solvency and financial condition report within 10 working days from that request.

1. Paragraph 1 shall not apply where the translation in the requested language is available online.’

;

• (91) in Article 299, the following title is inserted:

‘ Non-disclosure of information ’;

• (92) in Article 300, paragraph 1 is replaced by the following:

‘1.   Insurance and reinsurance undertakings shall disclose both parts of their solvency and financial condition report in accordance with Article 51(7) of Directive 2009/138/EC.’

;

• (93) Article 301 is replaced by the following:

‘Article 301

Means of disclosure

1. Insurance and reinsurance undertakings that own and maintain a website related to their business shall disclose both parts of the solvency and financial condition report on that website.

1. Where insurance and reinsurance undertakings that do not own and maintain a website but are a member of a trade association which does own and maintain a website shall, where permitted by that trade association, disclose both parts of the solvency and financial condition report on the website of that association.

1. Where insurance and reinsurance undertakings disclose both parts of their solvency and financial condition report on a website in accordance with paragraph 1 or 2, both parts shall be easily accessible and shall remain available on that website for at least five years after the disclosure date referred to in Article 300(1).

1. Insurance and reinsurance undertakings that do not disclose both parts of their solvency and financial condition report on a website in accordance with paragraphs 1 and 2 shall send an electronic copy of those parts to any person who, within five years of the disclosure date referred to in Article 300(1) requests those parts. Insurance and reinsurance undertakings shall send those parts within 10 working days from that request.

1. Insurance and reinsurance undertakings shall submit to the supervisory authorities both parts of their solvency and financial condition report, and any updated version of those parts thereto, in electronic form allowing for application of search function for relevant text and numbers.

1. Insurance and reinsurance undertakings shall submit to supervisory authorities, together with the information referred to in Article 304(1), point (d), the exact location on the website where both parts of the solvency and financial condition report are or will be available. Where that location changes during the subsequent three years, insurance and reinsurance undertakings shall notify the updated location to supervisory authorities.’

;

• (94) in Article 302, paragraph 2 is replaced by the following:

‘2.   Without prejudice to any disclosure which shall be immediately provided by insurance and reinsurance undertakings in accordance with Article 54(1) of Directive 2009/138/EC, any updated version of the solvency and financial condition report shall be identified as an updated version and disclosed with the date of update as soon as possible after the major development referred to in paragraph 1 of this Article, in accordance with Article 301 of this Regulation replacing the previous version disclosed.’

;

• (95) Article 303 is deleted;

• (96) Articles 304 and 305 are replaced by the following:

‘Article 304

Elements of the regular supervisory reporting

1. The information which supervisory authorities require insurance and reinsurance undertakings to submit at predefined periods in accordance with Article 35(2), point (a)(i) of Directive 2009/138/EC shall comprise the following:

• (a) both parts of the solvency and financial condition report disclosed by the insurance or reinsurance undertaking in accordance with Article 300 of this Regulation, together with any equivalent information disclosed publicly under other legal or regulatory requirements which the solvency and financial condition report refers to, and any updated version of that report disclosed in accordance with Article 302 of this Regulation;

• (b) the regular supervisory report comprising the information referred to in Articles 307 to 311 of this Regulation. It shall also present any information referred to in Articles 293 to 297 of this Regulation which supervisory authorities have permitted insurance and reinsurance undertakings not to disclose in their solvency and financial condition report, in accordance with Article 53(1) of Directive 2009/138/EC. The regular supervisory report shall follow the same structure as the one set out in Annex XX, Section B;

• (c) the own-risk and solvency assessment supervisory report (“ORSA supervisory report”), comprising the results of each regular own risk and solvency assessment performed by the insurance and reinsurance undertakings in accordance with Article 45(6) of Directive 2009/138/EC, whenever an own-risk and solvency assessment is performed in accordance with Article 45(5) of that Directive;

• (d) annual and quarterly quantitative templates specifying in greater detail and supplementing the information presented in the solvency and financial condition report and in the regular supervisory report, taking into account possible limitations and exemptions as referred to in Article 35a of Directive 2009/138/EC.

For the purposes of point (d), to the extent that undertakings are exempted from quarterly reporting obligations in accordance with Article 35a(1) of Directive 2009/138/EC they shall submit annual quantitative templates only. Annual reporting obligations shall not include reporting on an item-by-item basis where undertakings are exempted from such reporting pursuant to Article 35a(2) of Directive 2009/138/EC.

1. The scope of the quarterly quantitative templates shall be narrower than that of the annual quantitative templates.

1. Paragraph 1 shall be without prejudice to the power of supervisory authorities to require insurance and reinsurance undertakings to communicate on a regular basis any other information prepared under the responsibility of, or at the request of, the administrative, management or supervisory body of those undertakings.

Article 305

Materiality

For the purposes of this Chapter, the information or the changes to any information submitted to supervisors shall be considered material where its omission or misstatement could influence the decision-making or judgement of the supervisory authorities.’

;

• (97) Articles 307 and 308 are replaced by the following:

‘Article 307

Business and performance

1. The regular supervisory report shall contain all of the following information about the business of the insurance or reinsurance undertaking:

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

• (b) where available, the legal entity identifier of the insurance or reinsurance undertaking, as specified pursuant to Article 7(4), point (b), of Regulation (EU) 2023/2859;

• (c) the main trends and factors that contribute to the development, performance and position of the undertaking over its business planning time period including the undertaking’s competitive position and any significant legal or regulatory issues;

• (d) a description of the business objectives of the undertaking, including the relevant strategies and timeframes.

1. The regular supervisory report shall include all of the following qualitative and quantitative information regarding the underwriting performance of the insurance or reinsurance undertaking, as shown in the undertaking’s financial statements:

• (a) an analysis of the undertaking’s overall underwriting performance during the reporting period and reasons for any material changes compared to the previous reporting period;

• (b) projections of the undertaking’s underwriting performance with information on significant factors that might affect such underwriting performance, over its business planning time period.

1. The regular supervisory report shall contain all of the following qualitative and quantitative information regarding the performance of the investments of the insurance or reinsurance undertaking, as shown in the undertaking’s financial statements:

• (a) an analysis, by relevant asset class, of the undertaking’s overall investment performance during the reporting period, and, where applicable, the reasons for any material changes to that performance compared to the previous reporting period;

• (b) projections of the undertaking’s expected investment performance, with information on significant factors that might affect such investment performance, over its business planning time period;

• (c) the key assumptions which the undertaking makes in its investment decisions with respect to the movement of interest rates, exchange rates, and other relevant market parameters, over its business planning time period;

• (d) information about any investments in securitisation, and the undertaking’s risk management procedures in respect of such securities or instruments.

1. The regular supervisory report shall contain information about any material income and expenses, other than underwriting or investment income and expenses, over the undertaking’s business planning time period.

1. The regular supervisory report shall contain any other material information regarding their business and performance.

Article 308

System of governance

1. The regular supervisory report shall contain all of the following information regarding the insurance or reinsurance undertaking’s 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;

• (b) the remuneration entitlements of the members of the administrative, management or supervisory body and other key function, over the reporting period and the reasons for any material changes to those entitlements compared to the previous reporting period, including an explanation of the relative importance of the fixed and variable components of remuneration.

1. The regular supervisory report shall contain all of the following information regarding the compliance of the insurance or reinsurance undertaking with fit and proper requirements:

• (a) a list of the persons in the undertaking that are responsible for key functions;

• (b) a description of the undertaking’s specific requirements concerning skills, knowledge and expertise applicable to the persons who effectively run the undertaking or have other key functions.

1. The regular supervisory report shall contain all of the following information regarding the risk management system of the insurance or reinsurance undertaking:

• (a) a description of how the risk management system including the risk management function, are implemented and integrated into the organisational structure and decision-making processes of the undertaking;

• (b) information on the undertaking’s risk management strategies, objectives, processes and reporting procedures for each category of risk;

• (c) information on how the undertaking verifies the appropriateness of credit assessments from external credit assessments institutions, including information on how, and the extent to which, the undertaking uses credit assessments from external credit assessments institutions;

• (d) results of the assessments regarding the extrapolation of the risk-free rate, the matching adjustment and the volatility adjustment, as referred to in Article 44(2a) of Directive 2009/138/EC.

1. The regular supervisory report shall describe the process undertaken by the undertaking to fulfil its obligation to conduct an own risk and solvency assessment as part of its risk management system and how the own risk and solvency assessment is integrated into the organisational structure and decision-making processes of the undertaking.

1. The regular supervisory report shall contain all of the following information regarding the internal control system of the insurance or reinsurance undertaking:

• (a) a description of the undertaking’s internal control system elements and, where applicable, any material failures of that internal control system;

• (b) information on the advice given and assessments performed, as referred to in Article 46(2) of Directive 2009/138/EC during the reporting period, including any planned activities that were not implemented and the reason for their non-implementation;

• (c) information on the undertaking’s compliance policy, any major activities taken under the compliance plan and any material compliance problems identified during the reporting period.

1. The regular supervisory report shall contain all of the following information regarding the internal audit function of the insurance or reinsurance undertaking:

• (a) a description of internal audits performed during the reporting period, with:

• (i) a summary of the material findings and recommendations reported to the undertaking’s administrative, management or supervisory body;

• (ii) a summary of and any action taken with respect to those material findings and recommendations;

• (iii) any information on outstanding material issues;

• (b) a description of the undertaking’s internal audit policy, and the frequency of its revision;

• (c) a description of the undertaking’s audit plan, including future internal audits and the rationale for those future audits.

1. The regular supervisory report shall contain all of the following information regarding the actuarial function of the insurance or reinsurance undertaking:

• (a) a description of how the actuarial function of the insurance or reinsurance undertaking is implemented;

• (b) an overview of the activities undertaken by the actuarial function in each of its areas of responsibility during the reporting period, describing how the actuarial function contributes to the effective implementation of the undertaking’s risk management system and describing the main findings of the actuarial function.

1. The regular supervisory report shall contain all of the following information regarding outsourcing:

• (a) a description of the outsourcing policy of the insurance or reinsurance undertaking;

• (b) a list of the persons responsible for the outsourced key functions in the service provider.

1. The regular supervisory report shall contain any other material information regarding the system of governance of the insurance or reinsurance undertaking.’

;

• (98) Article 309 is deleted;

• (99) in Article 310, paragraphs 2 and 3 are replaced by the following:

‘2.   The regular supervisory report shall describe in detail the most relevant assumptions used in the calculation of the best estimate, the sensitivity of the best estimate to changes and results of any back testing.

1. The regular supervisory report shall contain the following information regarding the obligations laid down in Article 263 of this Regulation:

• (a) a justification of why alternative valuation methods are used by class of assets and liabilities;

• (b) the assumptions of each alternative valuation method used for assets and liabilities;

• (c) the valuation uncertainty by class of assets and liabilities;

• (d) information about the adequacy of the valuation of the assets and liabilities for which the alternative valuation is used, assed by comparison against experience.’

;

• (100) Article 311 is replaced by the following:

‘Article 311

Capital management and risk profile

1. The regular supervisory report shall contain all of the following information regarding the own funds of the insurance or reinsurance undertaking:

• (a) information on the policies and processes employed by the undertaking for managing its own funds;

• (b) information on the material terms and conditions of the main items of own funds held by the undertaking;

• (c) the expected developments of the undertaking’s own funds over its business planning time period given the undertaking’s business strategy, taking into account appropriately stressed capital plans;

• (d) whether there is any intention to repay or redeem any own-fund item or whether there are plans to raise additional own funds;

• (e) information regarding deferred taxes, including:

• (i) a description of the calculated amount of deferred tax assets without an assessment of their probable utilisation, and the extent to which those deferred tax assets have been recognised;

• (ii) for deferred tax assets which have been recognised, a description of the amounts being recognised as likely to be utilised by reference to probable future taxable profit and by reference to the reversion of deferred tax liabilities relating to income taxes levied by the same tax authority;

• (iii) a detailed description of the underlying assumptions used for the projection of probable future taxable profit for the purposes of Article 15;

• (iv) an analysis of the sensitivity of the net deferred tax assets to changes in the underlying assumptions referred to in point (iii), where net deferred tax assets shall be calculated as the difference between:

• (1) the amount of deferred tax assets calculated in accordance with Article 15;

• (2) the amount of deferred tax liabilities against which the deferred tax assets may be set off by taking into account detailed scheduling.

1. The regular supervisory report shall contain all of the following information regarding the Solvency Capital Requirement and the Minimum Capital Requirement of the insurance or reinsurance undertaking:

• (a) the expected developments of the undertaking’s anticipated Solvency Capital Requirement and Minimum Capital Requirement over its business planning time period given the undertaking’s business strategy, where the same information is not included in the ORSA Supervisory Report;

• (b) an estimate of the undertaking’s Solvency Capital Requirement, determined in accordance with the standard formula, where the supervisory authority has required the undertaking to provide such estimate pursuant to Article 112(7) of Directive 2009/138/EC, or where no such estimate was required in the year of adoption of the regular supervisory report, the most recent available calculation, accompanied by an indication of the reference year of that calculation;

• (c) a description on the approach taken for the calculation of the capital requirements for immaterial risks of the SCR standard formula, including a brief description of the modules or sub-modules which are subject to such approach and of the volume measures that have been used to calculate the immaterial risks;

• (d) for the future profit projected for the purposes of the loss-absorbing capacity of deferred taxes in accordance with Article 207 of this Regulation:

• (i) a description, and the relevant amount of each of the components used to demonstrate a positive value of the increase in deferred tax assets;

• (ii) a detailed description of the underlying assumptions used for the projection of probable future taxable profit for the purposes of Article 207;

• (iii) an analysis of the sensitivity of the value of the adjustment to changes in the underlying assumptions referred to in point (ii);

• (e) the volume and nature of the loan portfolio of the insurance or reinsurance undertaking.

1. Where an internal model is used to calculate the Solvency Capital Requirement, the regular supervisory report shall also contain:

• (a) the results of the review of the sources of profits and the causes of losses, as required by Article 123 of Directive 2009/138/EC, for each major business unit;

• (b) a description of how the categorisation of risk chosen in the internal model explains those sources of profits and causes of losses.

1. Where undertaking-specific parameters are used to calculate the Solvency Capital Requirement, or a matching adjustment is applied to the relevant risk-free interest term structure, the regular supervisory report shall also state whether there have been changes to the information in the application for approval concerning undertaking-specific parameters or matching adjustment.

1. The regular supervisory report shall contain all of the following information regarding the holding of long-term equity investments as referred to in Article 105a of the Directive 2009/138/EC:

• (a) a statement of whether the insurance or reinsurance undertaking applies the prudential treatment set out in Article 105a of that Directive, and where that is the case, the amount and characteristics of equity investments that are classified as long-term equity investments, including:

• (i) the geographical location of those equity investments;

• (ii) the share of such equity investments within the equity portfolio;

• (b) a description of how the insurance or reinsurance undertaking complies with the conditions laid down in Article 105a(1), second subparagraph of Directive 2009/138/EC;

• (c) a description of the methods used to demonstrate the ability to avoid forced sales in accordance with Article 171a of this Regulation.

The regular supervisory report shall also contain the information laid down in the third subparagraph, where one of the following conditions is met:

• (a) long-term equity investments represent more than 4 % of total assets held by insurance or reinsurance undertakings;

• (b) the insurance or reinsurance undertaking would not comply with the Solvency Capital Requirement without applying Article 105a of Directive 2009/138/EC.

The information referred to in the second subparagraph shall be the following:

• (a) a quantification of the impact on the value of the market risk module of non-application of Article 105a of Directive 2009/138/EC to any equity investment;

• (b) information on the actions that the insurance or reinsurance undertaking would take in case of breach of, or persisting non-compliance with, the conditions laid down in Article 105a(1), second subparagraph, of Directive 2009/138/EC.

1. With respect to the liquidity risk, the regular supervisory report shall contain:

• (a) information about the expected profit included in future premiums and the expected profit included in future fees for servicing and management of funds as calculated in accordance with Article 260 (2) and (2a) respectively of this Regulation for each line of business;

• (b) the result of the qualitative assessment referred to in Article 260(1), point (d)(ii);

• (c) a description of the methods and main assumptions used to calculate the expected profit included in future premiums.

The regular supervisory report shall also contain information on any material liquidity risk exposure to financing transactions or agreements, including factoring, in which the insurance or reinsurance undertaking has entered directly or indirectly.

1. With respect to risk concentration the regular supervisory report shall contain:

• (a) information on the material risk concentrations to which the undertaking is exposed to;

• (b) an overview of any future risk concentrations anticipated over the business planning time period in line with that undertaking’s business strategy;

• (c) an explanation on how the risk concentrations referred to in point (a) and (b) will be managed.

1. The regular supervisory report shall contain all of the following information regarding the risk exposure of the insurance or reinsurance undertaking, including the exposure arising from off-balance sheet positions and the transfer of risk to special purpose vehicles:

• (a) where the undertaking sells or re-pledges collateral, within the meaning of Article 214 of this Regulation, the amount of that collateral, valued in accordance with Article 75 of Directive 2009/138/EC;

• (b) where the undertaking has provided collateral, within the meaning of Article 214:

• (i) the nature of the collateral;

• (ii) the nature and value of assets provided as collateral;

• (iii) the corresponding actual and contingent liabilities created by the collateral arrangement;

• (c) information on the material terms and conditions associated with the collateral arrangement;

• (d) where the undertaking sells variable annuities, information on guarantee riders and hedging of the guarantees;

• (e) a description of the financing transactions, including factoring, in which the insurance or reinsurance undertaking has entered directly or indirectly, and the corresponding amounts of the off-balance sheet liabilities.

1. The regular supervisory report shall contain all of the following information regarding the risk-mitigation techniques of the insurance or reinsurance undertaking:

• (a) a description of the techniques used to mitigate risks;

• (b) a description of any material risk-mitigation techniques that the undertaking is considering purchasing or entering into over the business planning time period given the undertaking’s business strategy, and the rationale for and effect of such risk mitigation techniques;

• (c) where the insurance or reinsurance undertaking holds collateral, within the meaning of Article 214 of this Regulation, information on the material terms and conditions associated with the collateral arrangement.

1. The regular supervisory report shall contain qualitative and quantitative information about the material risks not captured by the Solvency Capital Requirement calculation and not captured in the previous paragraphs, where the same information is not covered by the ORSA supervisory report.

1. The regular supervisory report shall contain all of the following information about the risk sensitivity of the insurance or reinsurance undertaking, where the same information is not covered by the ORSA supervisory report:

• (a) a description of the stress tests and scenario analysis referred to in Article 259(3), carried out by the undertaking including its outcome;

• (b) a description of the methods used and the main assumptions underlying the stress tests and scenario analysis referred to in Article 259(3).

1. The regular supervisory report shall contain information about any reasonably foreseeable risk of non-compliance with the undertaking’s Minimum Capital Requirement or Solvency Capital Requirement, and the undertaking’s plans for ensuring that compliance with each is maintained, where the same information is not included in the ORSA supervisory report.

1. The regular supervisory report shall contain any other material information about the capital management and risk profile of the insurance or reinsurance undertaking.

1. For the purposes of paragraphs 6 and 8, “factoring” shall mean a contractual agreement between a business (the “assignor”) and a financial entity (the “factor”) in which the assignor assigns or sells its receivables to the factor in exchange for the factor providing the assignor with one or more of the following services with regard to the receivables assigned:

• (a) an advance of a percentage of the amount of the assigned receivables, generally short-term, uncommitted and without automatic roll-over;

• (b) receivables management, collection and credit protection, whereby, in general, the factor administers the assignor’s sales ledger and collects the receivables in the factor’s own name.’

;

• (101) in Title 1, Chapter XIII, Section 2, the title is replaced by the following:

‘ SECTION 2

Information on material changes and means of communications ’;

• (102) Articles 312 and 313 are replaced by the following:

‘Article 312

Information on material changes

Where there is no requirement for a regular supervisory report to be submitted in relation to a given financial year, insurance and reinsurance undertakings shall nevertheless submit to their supervisory authority information on any material changes that occurred during the financial year compared to the latest information submitted to that supervisory authority in accordance with this Chapter. They shall also provide a concise explanation about the causes and effects of such changes. The submission of information on material changes shall not be considered a change in frequency of the regular supervisory report set out in Article 35a of Directive 2009/138/EC.

Article 313

Means of communication

Insurance and reinsurance undertakings shall submit the information referred to in Article 304(1) in a machine-readable electronic form which allows for application of search function for relevant text and numbers.’

;

• (103) Article 314 is deleted;

• (104) in Title I, the following Chapter XVI is added:

‘CHAPTER XVI

PROPORTIONALITY MEASURES

Article 327a

Investments in intangibles asset capital requirement for identifying small and non-complex undertakings

For the purposes of Article 29a(1), points (a)(iv)(3), (b)(v)(3) and (c)(vii)(3) of Directive 2009/138/EC, the capital requirement that is applicable to investments in intangible assets that are not covered by the market risk and the counterparty default risk modules shall be the capital requirement for intangible asset risk referred to in Article 203 of this Regulation.

Article 327b

Reduction of the frequency of the regular supervisory report

1. The supervisory authority shall approve the use of the proportionality measure provided for in Article 35(5a) of Directive 2009/138/EC by an insurance and reinsurance undertaking that is not classified as a small and non-complex undertaking, where all of the following conditions are met:

• (a) the supervisory authority concludes, on the basis of the supervisory review process, that the undertaking:

• (i) is able to withstand any current or future risks;

• (ii) does not require a more frequent supervisory assessment than the one requested by the insurance or reinsurance undertaking;

• (iii) is not subject to on-going supervisory measures to remedy material non-compliance with Directive 2009/138/EC;

• (b) the supervisory authority concludes that the undertaking does not have a complex business model, taking into account the undertaking’s business strategy and business plan, the complexity of the insurance products offered and its investment portfolio;

• (c) the undertaking meets all of the following conditions, subject to paragraphs 2, 3 and 4:

• (i) the technical provisions from life activities, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76 of Directive 2009/138/EC, are not higher than EUR 12 000 000 000;

• (ii) the annual gross written premium income from non-life activities is not higher than EUR 2 000 000 000;

• (iii) the undertaking does not represent more than 5 % of the life market or non-life market of the home Member State of the undertaking, where the life market share is based on gross technical provisions and the non-life market share is based on gross written premiums;

• (d) the supervisory authority has not identified unresolved material concerns arising from the system of governance of the undertaking;

• (e) the undertaking’s Solvency Capital Requirement is exceeded by an appropriate margin taking also into account the internal target solvency position of the undertaking as specified in its medium-term capital management plan;

• (f) the supervisory authority has not identified unresolved material concerns with the last Regular Supervisory Report and is satisfied with the information in the Solvency and Financial Condition Report, and the annual and where applicable quarterly Quantitative Reporting Templates.

The supervisory authority shall withdraw the approval granted to an insurance or reinsurance undertaking that is not classified as small and non-complex undertaking to use the proportionality measure provided for in Article 35(5a) of Directive 2009/138/EC, where any of the conditions set out in the first subparagraph are no longer fulfilled.

1. Paragraph 1, first subparagraph, point (c)(i), shall only apply to life undertakings and to undertakings pursuing both life and non-life activities whose technical provisions related to the life activities represent 20 % or more of the total technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76 of Directive 2009/138/EC.

1. Paragraph 1, first subparagraph, point (c)(ii), shall only apply to non-life undertakings and to undertakings pursuing both life and non-life activities whose annual gross written premium income related to the non-life activities represent 40 % or more of its total annual gross written premium income.

1. Notwithstanding paragraph 1, first subparagraph, supervisory authorities may still approve the use of the proportionality measure provided for in Article 35(5a) of Directive 2009/138/EC to an insurance and reinsurance undertaking which does not meet the condition set out in point (c) of that paragraph, where they conclude, on the basis of the elements of the supervisory review process that are relevant for this proportionality measure, that the risk profile of the undertaking is sufficiently low.

Article 327c

Combination of key functions

1. The supervisory authority shall approve the use of the proportionality measure provided for in Article 41(2a), second subparagraph of Directive 2009/138/EC by an insurance and reinsurance undertaking that is not classified as small and non-complex undertaking, where all of the following conditions are met:

• (a) the supervisory authority concludes, on the basis of the supervisory review process, that the undertaking:

• (i) is able to withstand any current or future risks;

• (ii) is not subject to on-going supervisory measures to remedy material non-compliance with Directive 2009/138/EC;

• (b) the supervisory authority concludes that the undertaking does not have a complex business model, taking into account its business strategy its business plan, the complexity of the insurance products offered and its investment portfolio;

• (c) the undertaking meets all of the following conditions, subject to paragraphs 2, 3 and 4:

• (i) the technical provisions from life activities, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76 of Directive 2009/138/EC, are not higher than EUR 12 000 000 000;

• (ii) the annual gross written premium income from non-life activities is not higher than EUR 2 000 000 000;

• (iii) the undertaking does not represent more than 5 % of the life market or non-life market of the home Member State of the undertaking, where the life market share is based on gross technical provisions and the non-life market share is based on gross written premiums;

• (d) the supervisory authority has not identified unresolved material concerns arising from the system of governance of the undertaking;

• (e) the persons responsible for the key functions of risk management, actuarial and compliance possess at all times sufficient knowledge, skills and experience to perform their duties, and the combination of functions or the combination of a function with a membership of the administrative, management or supervisory body does not compromise the person’s ability and availability to carry out her or his responsibilities;

• (f) the supervisory authority is satisfied that the cost of maintaining separate functions would be disproportionate for the undertaking.

The supervisory authority shall withdraw the approval granted to an insurance or reinsurance undertaking that is not classified as small and non-complex undertaking to use the proportionality measure provided for in Article 41(2a) of Directive 2009/138/EC, where any of the conditions set out in the first subparagraph are no longer fulfilled.

1. Paragraph 1, first subparagraph, point (c)(i), shall only apply to life undertakings and to undertakings pursuing both life and non-life activities whose technical provisions related to the life activities represent 20 % or more of the total technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76 of Directive 2009/138/EC.

1. Paragraph 1, first subparagraph, point (c)(ii), shall only apply to non-life undertakings and to undertakings pursuing both life and non-life activities whose annual gross written premium income related to the non-life activities represent 40 % or more of its total annual gross written premium income.

1. Notwithstanding paragraph 1, first subparagraph, supervisory authorities may still approve the use of the proportionality measure provided for in Article 41(2a) of Directive 2009/138/EC to an insurance and reinsurance undertaking which does not meet the condition set out in paragraph 1, first subparagraph, point (c), of this Article, where they conclude, on the basis of the elements of the supervisory review process that are relevant for this proportionality measure, that the risk profile of the undertaking is sufficiently low.

Article 327d

Reduction of the frequency of the review of written policies

1. The supervisory authority shall approve the use of the proportionality measure provided for in Article 41(3), second subparagraph of Directive 2009/138/EC by an insurance and reinsurance undertaking that is not classified as small and non-complex undertaking, where all of the following conditions are met:

• (a) the supervisory authority concludes, on the basis of the supervisory review process, that the undertaking:

• (i) is able to withstand any current or future risks;

• (ii) does not require a more frequent supervisory assessment than the one requested by the insurance or reinsurance undertaking;

• (iii) is not subject to on-going supervisory measures to remedy material non-compliance with Directive 2009/138/EC;

• (b) the supervisory authority concludes that the undertaking does not have a complex business model, taking into account its business strategy, its business plan, the complexity of the insurance products offered and its investment portfolio;

• (c) the undertaking meets all of the following conditions, subject to paragraphs 2, 3 and 4:

• (i) the technical provisions from life activities, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76 of Directive 2009/138/EC, are not higher than EUR 12 000 000 000;

• (ii) the annual gross written premium income from non-life activities is not higher than EUR 2 000 000 000;

• (iii) the undertaking does not represent more than 5 % of the life market or non-life market of the home Member State of the undertaking, where the life market share is based on gross technical provisions and the non-life market share is based on gross written premiums;

• (d) the supervisory authority has not identified unresolved material concerns arising from the system of governance of the undertaking.

The supervisory authority shall withdraw the approval granted to an insurance or reinsurance undertaking that is not classified as small and non-complex undertaking to use the proportionality measure provided for in Article 41(3) of Directive 2009/138/EC, where any of the conditions set out in the first subparagraph are no longer fulfilled.

1. Paragraph 1, first subparagraph, point (c)(i), shall only apply to life undertakings and to undertakings pursuing both life and non-life activities whose technical provisions related to the life activities represent 20 % or more of the total technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76 of Directive 2009/138/EC.

1. Paragraph 1, first subparagraph, point (c)(ii), shall only apply to non-life undertakings and to undertakings pursuing both life and non-life activities whose annual gross written premium income related to the non-life activities represent 40 % or more of its total annual gross written premium income.

1. Notwithstanding paragraph 1, first subparagraph, supervisory authorities may still approve the use of the proportionality measure provided for in Article 41(3), second subparagraph of Directive 2009/138/EC to an insurance and reinsurance undertaking which does not meet the condition set out in paragraph 1, first subparagraph, point (c), of this Article, where they conclude, on the basis of the elements of the supervisory review process that are relevant for this proportionality measure, that the risk profile of the undertaking is sufficiently low.

Article 327e

Reduction of the frequency of the own risk and solvency assessment

1. The supervisory authority shall approve the use of the proportionality measure provided for in Article 45(5), second subparagraph, of Directive 2009/138/EC by an insurance and reinsurance undertaking that is not classified as small and non-complex undertaking, where all of the following conditions are met:

• (a) the supervisory authority concludes, on the basis of the supervisory review process, that the undertaking:

• (i) is able to withstand any current or future risks;

• (ii) does not require a more frequent supervisory assessment than the one requested by the insurance or reinsurance undertaking;

• (iii) is not subject to on-going supervisory measures to remedy material non-compliance with Directive 2009/138/EC;

• (b) the supervisory authority concludes that the undertaking does not have a complex business model, taking into account its business strategy, its business plan, the complexity of the insurance products offered and its investments portfolio;

• (c) the undertaking meets all of the following conditions, subject to paragraphs 2, 3 and 4:

• (i) the technical provisions from life activities, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76 of Directive 2009/138/EC, are not higher than EUR 12 000 000 000;

• (ii) the annual gross written premium income from non-life activities is not higher than EUR 2 000 000 000;

• (iii) the undertaking does not represent more than 5 % of the life market or non-life market of the home Member State of the undertaking, where the life market share is based on gross technical provisions and the non-life market share is based on gross written premiums;

• (d) the supervisory authority has not identified unresolved material concerns arising from the system of governance of the undertaking;

• (e) the undertaking’s Solvency Capital Requirement is exceeded by an appropriate margin taking into account the internal target solvency position of the undertaking as specified in its medium-term capital management plan;

• (f) the supervisory authority is satisfied with the information provided in the undertaking’s last own risk and solvency assessment pursuant to Article 45(2) of Directive 2009/138/EC and Article 306 of this Regulation, taking into account its risk profile;

• (g) the undertaking is able to demonstrate to the satisfaction of the supervisory authority that the reduced frequency of the own risk and solvency assessment report would not negatively affect the risk management system of the undertaking referred to Article 44 of Directive 2009/138/EC;

• (h) the undertaking maintains an effective process to monitor circumstances that require an ad hoc own risk and solvency assessment report and has sufficient resources to draw up such ad hoc report, when required.

The supervisory authority shall withdraw the approval granted to an insurance or reinsurance undertaking that is not classified as small and non-complex undertaking to use the proportionality measure provided for in Article 45(5), second subparagraph, of Directive 2009/138/EC, where any of the conditions set out in the first subparagraph are no longer fulfilled.

1. Paragraph 1, first subparagraph, point (c)(i), shall only apply to life undertakings and to undertakings pursuing both life and non-life activities whose technical provisions related to the life activities represent 20 % or more of the total technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76 of Directive 2009/138/EC.

1. Paragraph 1, first subparagraph, point (c)(ii), shall only apply to non-life undertakings and to undertakings pursuing both life and non-life activities whose annual gross written premium income related to the non-life activities represent 40 % or more of its total annual gross written premium income.

1. Notwithstanding paragraph 1, first subparagraph, supervisory authorities may still approve the use of the proportionality measure provided for in Article 45(5), second subparagraph, of Directive 2009/138/EC to an insurance and reinsurance undertaking which does not meet the condition set out in paragraph 1, first subparagraph, point (c), of this Article, where they conclude, on the basis of the elements of the supervisory review process that are relevant for this proportionality measure, that the risk profile of the undertaking is sufficiently low.

Article 327f

Use of the prudent deterministic valuation of the best estimate for life obligations with options and guarantees that are deemed immaterial

1. The supervisory authority shall approve the use of the proportionality measure provided for in Article 77(8) of Directive 2009/138/EC by an insurance and reinsurance undertaking that is not classified as small and non-complex undertaking, where all of the following conditions are met:

• (a) the supervisory authority concludes, on the basis of the supervisory review process, that the undertaking:

• (i) is able to withstand any current or future risks;

• (ii) is not subject to on-going supervisory measures to remedy material non-compliance with Directive 2009/138/EC;

• (b) the supervisory authority concludes that the undertaking does not have a complex business model, taking into account its business strategy, its business plan, the complexity of the insurance products offered and its investment portfolio;

• (c) the undertaking meets all of the following conditions, subject to paragraphs 2 and 3:

• (i) the technical provisions from life activities, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76 of Directive 2009/138/EC, are not higher than EUR 12 000 000 000;