S.I. 729 of 2004

European Communities (Life Assurance) Framework (Amendment No. 2) Regulations 2004

I, Brian Cowen, Minister for Finance, in exercise of the powers conferred on me by the European Communities Act 1972 (No. 27 of 1972), as amended by the European Communities (Amendment) Act 1993 (No. 25 of 1993), and for the purpose of giving effect to Directive 2002/87/EC, dated 16 December 2002, of the European Parliament and of the Council, hereby make the following Regulations:

Citation and commencement

1.       (1)    These Regulations may be cited as the European Communities (Life Assurance) Framework (Amendment No. 2) Regulations 2004.

(2)    These Regulations come into operation on 1 January 2005.

Interpretation

2.       In these Regulations, “Principal Regulations” means the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360/1994).

Insertion into the Principal Regulations of new Article 36A

3.       The Principal Regulations are amended by inserting the following Article after Article 36:

“Insurance undertaking to provide plan for restoring its finances if required to do so by the Bank

36A.  (1)    If the Bank believes that the rights of holders of policies issued by an insurance undertaking are being jeopardised, it can, by notice in writing, require the undertaking to provide it with a financial recovery plan to restore the undertaking to a sound financial position.

(2)    As soon as practicable after receiving a notice under sub-article (1) of this Article, the undertaking shall provide the Bank with a financial recovery plan, covering the 3 financial years of the undertaking following the date of the notice. The plan must include particulars or proof of the following:

(a)    estimates of the undertaking's management expenses, and in particular its current general expenses and commissions;

(b)    detailed estimates of the undertaking's income and expenditure in respect of direct business, reinsurance acceptances and reinsurance cessions;

(c)    a forecast balance sheet for the undertaking;

(d)   estimates of financial resources intended to cover the undertaking's underwriting liabilities and its required solvency margin, and

(e)    the undertaking's overall reinsurance policy.

(3)    If the Bank believes that the rights of holders of policies issued by the undertaking are being jeopardised because its financial position is deteriorating, it may, by notice in writing, require the undertaking to maintain a higher required solvency margin so as to ensure that the undertaking is able to comply with the relevant solvency requirements. The higher required solvency margin must be based on the financial recovery plan.

(4)    As soon as practicable after being notified of a requirement under sub-article (3) of this Article, the undertaking shall comply with the requirement.

(5)    The Bank may revalue downwards all elements eligible for the undertaking's available solvency margin, in particular, if the market value of these elements has changed significantly since the end of the undertaking's last financial year.

(6)    The Bank may reduce the reduction, based on reinsurance, to the required solvency margin as determined in respect of the undertaking in accordance with these Regulations if--

(a)    the nature or quality of the undertaking's reinsurance contracts has changed significantly since its last financial year, and

(b)    no risk, or only an insignificant risk transfer, arises under the undertaking's reinsurance contracts.

(7)    If the Bank has required an insurance undertaking to provide a financial recovery plan in accordance with these Regulations, it may not issue a certificate verifying compliance with the required solvency margin so long as it continues to believe that the rights of policy holders of the undertaking are being jeopardised.”.

Substitution of Article 40 of the Principal Regulations

4.       The Principal Regulations are amended by substituting the following Articles for Article 40:

“Interpretation: Part 4

40.     (1)    In this Part--

‘Companies Acts’ means the Companies Act 1963 , as amended from time to time, and includes any Act that is required to be read as one with that Act or any Act amending that Act;

‘control’ means the relationship between a parent undertaking and a subsidiary, as defined in Article 1 of Council Directive 83/349/EEC, or a similar relationship between any natural or legal person and an undertaking;

‘qualifying holding’ has the meaning given by Article 9 (4) of these Regulations;

‘parent undertaking’ means a parent undertaking as defined in Articles 1 and 2 of Council Directive 83/349/EEC;

‘prescribed percentage level’ means 20 per cent, 33 per cent or 50 per cent;

‘prescribed entity’ means any of the following:

(a)    an insurance undertaking, a credit institution or an investment firm authorised by a competent authority of a Member State;

(b)    the parent undertaking of such an undertaking, institution or firm;

(c)    a person (whether natural or legal) who controls such an undertaking, institution or firm;

‘subsidiary’ means a subsidiary undertaking as defined in Articles 1 and 2 of Council Directive 83/349/EEC, and includes a subsidiary of a subsidiary undertaking that is a subsidiary of the undertaking that is the undertaking's ultimate parent undertaking.

(2)    This Part has effect despite anything in the Companies Acts to the contrary.

Restrictions on acquiring and disposing of qualifying holdings in insurance undertakings

40A.  (1) A person shall not, directly or indirectly, acquire a qualifying holding in an insurance undertaking without having previously notified the Bank of the size of the holding.

(2)    A person who has a qualifying holding in an insurance undertaking shall not, directly or indirectly, increase the holding without having previously notified the Bank of the increase, if, as a result of the increase--

(a)    the percentage level of the voting rights or capital that the person holds would reach or exceed any of the prescribed percentage levels, or

(b)    the undertaking would become the person's subsidiary.

(3)    A person shall not, directly or indirectly, dispose of a qualifying holding in an insurance undertaking without having previously notified the Bank of the size of the holding to be disposed of.

(4)    A person shall not, directly or indirectly, decrease a qualifying holding without having previously notified the Bank if, as a result of the decrease--

(a)    any of the percentage levels of the voting rights or capital that the person holds would fall below any of the prescribed percentage levels, or

(b)    the undertaking would cease to be the person's subsidiary.

Bank to consult other competent authorities in certain cases

40B. If an insurance undertaking would, as result of an acquisition of a qualifying holding, or of an increase in an existing qualifying holding, in the undertaking by a prescribed entity, become a subsidiary, or become subject to the control, of a prescribed entity, the Bank shall consult the competent authorities responsible for supervising credit institutions, investment firms and insurance undertakings in the Member State concerned.

Obligations of insurance undertaking to provide information under this Part

40C.  (1)  As soon as practicable after an insurance undertaking becomes aware of an acquisition of a holding in its capital so that the holding exceeds any of the prescribed percentage levels, the undertaking shall inform the Bank of the acquisition.

(2)  As soon as practicable after an insurance undertaking becomes aware of a disposal of a holding in its capital so that the holding falls below any of the prescribed percentage levels, the undertaking shall inform the Bank of the disposal.

(3)    An insurance undertaking shall, at such times as may be specified by the Bank and at least once a year, notify the Bank of the names of shareholders or members who have qualifying holdings and the size of the holdings by reference, for example, to information received at annual general meetings of shareholders or members or as a result of compliance with the Companies Acts.

(4)    An insurance undertaking shall, if required to do so by the Bank, provide information concerning all shareholders of the undertaking, irrespective of the size of their shareholding.

Bank may oppose certain acquisitions

40D.  (1)    Within 3 months after the date on which notice is given in accordance with Article 40A of these Regulations, the Bank shall decide whether or not to oppose an acquisition of, or an increase in, a qualifying holding in an insurance undertaking.

(2)    The Bank may oppose the acquisition or increase if, having regard to the need to ensure the prudent and sound management of the insurance undertaking concerned, the Bank is not satisfied as to the suitability of the person who, or the entity that, is proposing to acquire a qualifying holding in that undertaking or to increase such a holding.

Power of Court to make certain orders

40E.   (1)    If the Bank reasonably believes that--

(a)    the control exercised by a person referred to in Article 40A of these Regulations would be inconsistent with the prudent and sound management of an insurance undertaking, or

(b)    a person has failed to comply with sub-article (1) or (2) of that Article,

it may apply to the Court for an order under sub-article (2) of this Article.

(2)    On making an application under paragraph (1), the Bank shall serve a copy of the application on the person to whom the application relates. On being served with the notice, that person becomes the respondent to the application.

(3)    On the hearing of an application made under sub-article (1), the Court may, on being satisfied that the Bank's belief is substantiated, make--

(a)    an order directing the respondent not to acquire a qualifying holding or an increase in a qualifying holding in the relevant insurance undertaking, or

(b)    if the respondent has already acquired such a holding, an order directing the respondent to dispose of the holding or a part of it, and also an order suspending the exercise of the voting rights attached to the relevant shares or invalidating votes already exercised by holders of those shares.

(4)    Nothing in this Article limits the application of Article 5 of these Regulations.”.

Substitution of Annex II to the Principal Regulations

5.       The Principal Regulations are amended by substituting the following Annex for Annex II:

“ANNEX II

SOLVENCY MARGINS AND GUARANTEE FUNDS

PART A

DETERMINATION OF REQUIRED SOLVENCY MARGIN

Solvency margin required for insurance undertakings

1.       (1)    An insurance undertaking whose head office is located in the State shall maintain an adequate available solvency margin in respect of the whole of its business, which is at all times at least equal to that required by these Regulations.

(2)    The undertaking's available solvency margin must correspond to its assets, free of all foreseeable liabilities, less any intangible items.

(3)    In determining the amount of the available solvency margin for the undertaking, the following must be included:

(a)    the paid up share capital or, in the case of a mutual insurance undertaking, the effective initial fund, together with any members’ accounts that satisfy the requirements set out in subparagraph (4) of this paragraph;

(b)    reserves (including both statutory reserves and free reserves) not corresponding to underwriting liabilities;

(c)    profit or loss brought forward after deducting dividends to be paid;

(d)    any profit reserves appearing in the balance sheet that are not available for distribution to policy holders but could be used to cover losses that the undertaking might incur.

(4)    The requirements referred to in subparagraph (3)(a) of this paragraph are that--

(a)    the memorandum and articles of association of the mutual insurance undertaking must stipulate that payments may be made from these accounts to members only--

(i)     if the payments do not cause the available solvency margin to fall below the prescribed level, or

(ii)    in the event of dissolution of the undertaking, if all the undertaking's other debts have been settled, and

(b)    the memorandum and articles of association must stipulate that, for any such payments made for reasons other than the individual termination of membership, the Bank must be notified at least 1 month in advance and that the Bank can prohibit the payment within that period, and

(c)    the relevant provisions of the memorandum and articles of association may be amended only after the Bank has declared that it has no objection to the amendment.

(5)    Nothing in sub-subparagraph (c) of subparagraph (4) of this paragraph affects any other requirement of that subparagraph.

(6)    With the consent of the Bank and subject to subparagraphs (7) to (9) of this paragraph, cumulative preferential share capital and subordinated loan capital may be included in determining the amount of the available solvency margin for the undertaking, but only up to 50 per cent of whichever is the lesser of the available solvency margin and the required solvency margin.

(7)    No more than 25 per cent of the lesser of--

(a)    the available solvency margin, and

(b)    the required solvency margin referred to in subparagraph (6) of this paragraph,

can consist of fixed term cumulative preferential share capital or subordinated loans with a fixed maturity.

(8)    However, cumulative preferential share capital or subordinated loan capital may be taken into account under subparagraph (6) of this paragraph only if, should the undertaking become bankrupt or be placed in liquidation, binding agreements exist under which the cumulative preferential share capital or subordinated loan capital will rank after the claims of all other creditors and will not be repaid until all other debts outstanding at the relevant time have been settled.

(9)    Subordinated loan capital may be taken into account under subparagraph (6) of this paragraph only if--

(a)    it consists only of fully paid-up funds, and

(b)    subject to paragraph 2 of this Part--

(i)     in the case of loans having a fixed maturity, the original maturity is for not less than 5 years, and

(ii)    loans the maturity of which is not fixed are repayable only subject to 5 years’ notice, unless the loans are no longer considered as a component of the available solvency margin or unless the Bank's prior consent is specifically required for early repayment, and

(c)    the loan agreement does not include any clause providing that in specified circumstances (other than the winding-up of the undertaking) the debt will become repayable before the agreed repayment dates, and

(d)    the loan agreement provides that it can be amended only if the Bank is notified of the amendment and has indicated that it does not object to the amendment.

Requirements to be complied with in respect of repayment of certain loans

2.       (1)    Not later than 12 months before the repayment date for a loan of a kind referred to in paragraph 1(9)(b)(i) of this Part, the original maturity is for not less than 5 years, the undertaking must submit to the Bank for its approval a plan showing how the undertaking's available solvency margin will be kept at, or brought to, the required level at maturity, unless the extent to which the loan may rank as a component of the undertaking's available solvency margin is gradually reduced during at least the last 5 years before the repayment date. The Bank may authorise the early repayment of the loan provided that--

(a)    an application is made to it by the issuing undertaking, and

(b)    the undertaking's available solvency margin will not fall below the requisite level.

(2)    In the case of a loan of a kind referred to in paragraph 1(9)(b)(ii) of this Part, the undertaking concerned shall, by notice in writing given to the Bank at least 6 months before the date of the proposed repayment, provide an estimate of--

(a)    the available solvency margin and the required solvency margin before the proposed repayment, and

(b)    assuming the repayment is made, the available solvency

margin and the required solvency margin after that repayment. The Bank may authorise the repayment only if it is satisfied that the undertaking's available solvency margin will not fall below the required level.

Other amounts that may be included in an undertaking's solvency margin

3.       (1)    With the consent of the Bank, securities with no specified maturity date and other instruments (including cumulative preferential shares other than those referred to in subparagraph (5) of paragraph 1 of this Part) may also be included in determining the amount of the available solvency margin for the undertaking, but only up to 50 per cent of the lesser of --

(a)    the available solvency margin, and

(b)    the required solvency margin,

for the total of those securities and the subordinated loan capital referred to in that subparagraph.

(2)    However, the securities or instruments referred to in subparagraph (1) of this paragraph may be included for the purpose of determining the undertaking's available solvency margin only if--

(a)    the securities or instruments may not be repaid on the initiative of the bearer or without the prior consent of the Bank, and

(b)    the contract of issue enables the undertaking to defer the payment of interest on the loan, and

(c)    the lender's claims on the undertaking rank entirely after those of all non-subordinated creditors, and

(d)   the documents governing the issue of the securities or instruments provide for the loss-absorption capacity of the debt and unpaid interest, while enabling the undertaking to continue its business, and

(e)   only fully paid-up amounts are taken into account.

(3)    An amount equal to 50 per cent of the insurance undertaking's future profits, but not exceeding 25 per cent of the lesser of the available solvency margin and the required solvency margin, may, until 31 December 2009, be included in the amount of the available solvency margin for the undertaking, but only with the consent of the Bank.

(4)    The amount of the future profits referred to in subparagraph (3) of this paragraph is to be calculated by multiplying the estimated annual profit by a factor that represents the average period left to run on policies. The factor used may not exceed 6 and the estimated annual profit may not exceed the arithmetical average of the profits made by the undertaking, over the last 5 financial years, in the activities specified in Article 2(1) of Directive 2002/83/EC. The Bank may consent to the inclusion of such an amount as part of the available solvency margin for the undertaking only if--

(a)    an actuarial report is submitted to it that substantiates the likelihood of those profits being realised in the future, and

(b)    the part of future profits realised from hidden net reserves referred to in subparagraph (6)(a) of this paragraph has not already been taken into account.

(5)    If zillmerizing is not practised, or if, where it is practised, it is less than the loading for acquisition costs included in the premium, an amount equal to the difference between a non-zillmerized or partially zillmerized mathematical reserve at a rate equal to the loading for acquisition costs included in the premium may be included in the amount of the available solvency margin for the undertaking, but only with the consent of the Bank. However, the amount of the difference may not exceed 3.5 per cent of the sum of the differences between the relevant capital sums of life insurance activities and the mathematical reserves for all policies for which zillmerizing is possible. In that case, the difference must be reduced by the amount of any undepreciated acquisition costs entered as an asset.

(6)    The following may also be included in the amount of the available solvency margin for the undertaking, but only with the consent of the Bank:

(a)    any hidden net reserves resulting from the under-estimation of assets and over-estimation of liabilities other than mathematical reserves insofar as those reserves are not of an exceptional nature;

(b)    one half of the unpaid share capital or initial fund, once the paid-up part amounts to 25 per cent of that share capital or fund, up to 50 per cent of the lesser of the available and required solvency margin.

Reductions in available solvency margin

4.       (1)    The available solvency margin for an insurance undertaking must be reduced by the amount of its own shares directly held by the undertaking.

(2)    The available solvency margin must also be reduced by the following items:

(a)    participations that the insurance undertaking holds in--

(i)     insurance undertakings within the meaning of Article 4 of Directive 2002/83/EC, Article 6 of Council Directive 73/239/EEC or Article 1(b) of Directive 98/78/EC, or

(ii)    reinsurance undertakings within the meaning of Article 1(c) of Directive 98/78/EC, or

(iii)   insurance holding companies within the meaning of Article 1(i) of Directive 98/78/EC, or

(iv)   credit institutions and financial institutions within the meaning of Article 1(1) and (5) of Directive 2000/12/EC, or

(v)    investment firms and financial institutions within the meaning of Article 1(2) of Directive 93/22/EEC and of Article 2(4) and (7) of Directive 93/6/EEC,

(b)    each of the following items that the undertaking holds in respect of the entities referred to in paragraph (a) in which it holds a participation:

(i)     instruments of the kind referred to in paragraph 3 of Article 27 of the Directive 2002/83/EC;

(ii)    instruments of the kind referred to in Article 16(3) of Directive 73/239/EEC;

(iii)   subordinated claims and instruments of the kind referred to in Articles 35 and 36(3) of Directive 2000/12/EC.

(3)    If an insurance undertaking temporarily holds shares in a credit institution, investment firm, financial institution, insurance or reinsurance undertaking or insurance holding company for the purpose of providing financial assistance to enable the entity to be reorganised and saved, the Bank may waive the requirements of subparagraph (2) of this paragraph.

(4)    As an alternative to making the reductions referred to in subparagraph (2) of this paragraph that an insurance undertaking holds in credit institutions, investment firms and financial institutions, the Bank may allow the undertaking to apply method 1, 2 or 3 of Schedule 1 to the European Communities (Financial Conglomerates) Regulations 2004 ( S.I. No. 727 of 2004 ). However, method 1 (accounting consolidation method) may be applied only if the Bank is satisfied as to the level of integrated management and internal control regarding the entities that would be included within the scope of consolidation. The undertaking must apply the chosen method in a consistent manner over time.

(5)    The Bank may allow an undertaking to which this subparagraph applies, when calculating the solvency margin as provided for by these Regulations, not to have make the reductions referred in subparagraph (2) of this paragraph that are held in credit institutions, investment firms, financial institutions, insurance or reinsurance undertakings or insurance holding companies that are subject to supplementary supervision. This subparagraph applies to undertakings that are subject to supplementary supervision under--

(a)    the European Communities (Supplementary Supervision of Insurance Undertakings in an Insurance Group) Regulations 1999 ( S.I. No. 399 of 1999 ), or

(b)    the European Communities (Financial Conglomerates) Regulations 2004 ( S.I. No. 727 of 2004 ).

(6)    In this paragraph, “participation” has the same meaning as in Article 1(f) of Directive 98/78/EC.

Solvency margin for insurance undertaking that issues insurance of a kind referred to in Article 2 (1) (a) and (b) of Directive 2002/83/EC

5.       For insurance of a kind referred to in Article 2 (1) (a) and (b) of Directive 2002/83/EC (other than insurance linked to an investment fund) and for an operation of a kind referred to in Article 2 (3) of Directive 2002/83/EC, the required solvency margin must be equal to an amount calculated as follows:

Step 1  (first result): Multiply 4 per cent of the mathematical reserves relating to direct business and reinsurance acceptances gross of reinsurance cessions by the ratio, for the last financial year of the undertaking, of the total mathematical reserves after deducting reinsurance cessions to the gross total mathematical reserves. The ratio may in no case be less than 85 per cent.

Step 2  (second result):

(a)    For an insurance policy on which the capital at risk is not a negative figure, multiply 0.3 per cent of the capital at risk underwritten by the undertaking by the ratio, for the undertaking's last financial year, of the total of capital at risk retained as the undertaking's liability after reinsurance cessions and retrocessions to the total capital at risk, gross of reinsurance (which ratio must not be less than 50 per cent);

(b)    For an insurance policy with a maximum term of 3 years providing temporary insurance on death, multiply 0.1 per cent of the capital at risk underwritten by the undertaking by the ratio, for the undertaking's last financial year, of the total capital at risk retained as the undertaking's liability after reinsurance cessions and retrocessions to the total capital at risk, gross of reinsurance (which ratio must not be less than 50 per cent);

(c)    For an insurance policy with a term of more than 3 years, but not more than 5 years, that provides temporary insurance on death, multiply 0.15 per cent of the capital at risk underwritten by the undertaking by the ratio, for the undertaking's last financial year, of the total capital at risk retained as the undertaking's liability after reinsurance cessions and retrocessions to the total capital at risk, gross of reinsurance (which ratio must not be less than 50 per cent);

Step 3: Add together the first result and the second result.

Solvency margin for insurance undertaking that provides certain kinds of supplementary insurance

6.       For an insurance undertaking that provides supplementary insurance of the kind referred to in Article 2 (1) (c) of Directive 2002/83/EC, the required solvency margin must be an amount equal to the required solvency margin for insurance undertakings as prescribed by Article 16a of Directive 73/239/EEC, excluding the provisions of Article 17 of that Directive.

Solvency margin for insurance undertaking that provides health insurance

7.       (1)    For permanent health insurance that is not subject to cancellation as referred to in Article 2 (1)(d) of Directive 2002/83/EC, the required solvency margin for the undertaking concerned must be an amount equal to--

(a)    4 per cent of the mathematical reserves, calculated in accordance with step 1 in paragraph 1 of this Part, and

(b)    the required solvency margin for insurance undertakings as prescribed by Article 16a of Directive 73/239/EEC.

(2)    In calculating the required solvency margin referred to in paragraph (1)(b)--

(a)    Article 17 of Directive 73/239/EEC is to be disregarded, and

(b)    the condition specified in Article 16a(6)(b) of that Directive (to the effect that provision be set up for increasing age) can be replaced by a requirement that the health insurance business must be conducted on a group basis.

Solvency margin for insurance undertaking involved in a capital redemption operation

8.       For a capital redemption operation referred to in Article 2 (2) (b) of Directive 2002/83/EC, the required solvency margin for the undertaking concerned must be an amount equal to 4 per cent of the mathematical reserves, calculated in accordance with step 1 in paragraph 1 of this Part.

Solvency margin for certain tontines

9.       For a tontine of the kind referred to in Article 2 (2) (a) of Directive 2002/83/EC, the required solvency margin must be an amount equal to 1 per cent of its assets.

Solvency margin for certain kinds of insurance covered by Directive 2002/83/EC

10.     For insurance business covered by Article 2 (1) (a) and (b) of Directive 2002/83/EC and linked to investment funds, and for an operation of the kind referred to in Article 2 (2) (c) and (d) of Directive 2002/83/EC, the required solvency margin for the undertaking concerned must be an amount equal to--

(a)    insofar as the undertaking bears an investment risk, a 4 per cent fraction of the technical provisions, calculated in compliance with step 1 of paragraph 1 of this Part, and

(b)    insofar as the undertaking bears no investment risk but the allocation to cover management expenses is fixed for a period exceeding 5 years, a 1 per cent fraction of the technical provisions, calculated in accordance with step 1 of that paragraph, and

(c)    insofar as the undertaking bears no investment risk and the allocation to cover management expenses is not fixed for a period exceeding 5 years, an amount equivalent to 25 per cent of the last financial year's net administrative expenses relating to that business, and

(d)    insofar as the undertaking covers death risk, 0.3 per cent of the capital at risk, calculated in accordance with step 2 of that paragraph.

Applications for consent

11.     (1)    A person seeking a consent under subparagraphs (3) to (6) of paragraph 3 of this Part must make an application for the consent in accordance with Annex VI to these Regulations.

(2)    Such an application must be accompanied by such documents and information as the Bank requires.

PART B

GUARANTEE FUNDS

What an insurance undertaking's guarantee fund must contain

1.       (1)    Subject to subparagraph (2) of this paragraph, an insurance undertaking's guarantee fund must--

(a)    contain funds equivalent to at least one-third of the undertaking's required solvency margin, as calculated in accordance with this Part, and

(b)    comprise--

(i)     the items specified in paragraphs 1(2) to (9), 2 and 3(1) and (2) of Part A of this Annex, and

(ii)    with the approval of the Bank, any hidden net reserves resulting from the under-estimation of assets and over-estimation of liabilities (other than mathematical reserves) insofar as those reserves are not of an exceptional nature.

(2)    The amount of the undertaking's guarantee fund must be--

(a)    not less than €3,000,000, or

(b)    if the European Commission under the review procedure set out in Article 30 (i) of 2002/83/EC has prescribed a higher amount, that higher amount.

However, if the undertaking is a mutual association, mutual type association or a tontine, the undertaking may, with the permission of the Bank, reduce that amount by not more than 25 per cent.

PART C

APPLICATION OF THIS ANNEX

Annex to take effect on day after end of undertaking's financial year ending during 2005

1.       In relation to an insurance undertaking that, on 20 March 2002, provided life assurance in one or more of the classes specified in Annex I to Directive 2002/83/EC, this Annex (as substituted by the European Communities (Life Assurance) Framework (Amendment No. 2) Regulations 2004) takes effect from the day after the last day of the undertaking's financial year that ends during 2005.”.

Explanatory Note

These Regulations give effect to a number of provisions in Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament which specifically apply to life assurance undertakings.

They also incorporate the rules regarding the solvency margin requirements for life assurance undertakings set out in Directive 2002/13/EC of the European Parliament and of the Council of 5 March 2002.