on the proposal for a directive of the European Parliament and of the Council amending Directives 2003/71/EC and 2009/138/EC in respect of the powers of the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority

(COM(2011)0008 – C7‑0027/2011 – 2011/0006(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to Parliament and the Council (COM(2011)0008),

–   having regard to Article 294(2) and Articles 50, 53, 62 and 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7‑0027/2011),

–   having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–   having regard to the opinion of the European Central Bank of 4 May 2011

   OJ C 159, 18.5.2011, p. 10.

–   having regard to the opinion of the European Economic and Social Committee of 5 May 2011

   OJ C 218, 23.7.2011, p. 82.

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the report of the Committee on Economic and Monetary Affairs and the opinion of the Committee on Legal Affairs (A7-0077/2012),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

AMENDMENTS BY THE EUROPEAN PARLIAMENT

*          Amendments: new or amended text is highlighted in bold italics; deletions are indicated by the symbol ▌.

to the Commission proposal

---------------------------------------------------------

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Directives 2002/92/EC, 2003/71/EC and 2009/138/EC and Regulation (EC) No 1060/2009 in respect of the powers of the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 50, 53, 62, and 114 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Central Bank

          OJ C 159, 18.5.2011, p. 10.

Having regard to the opinion of the European Economic and Social Committee

          OJ C 218, 23.7.2011, p. 82.

Acting in accordance with the ordinary legislative procedure

         Position of the European Parliament of ....

Whereas:

(-1)     The financial crisis in 2007 and 2008 exposed important shortcomings in financial supervision, both in particular cases and in relation to the financial system as a whole. Nationally based supervisory models have lagged behind financial globalisation and the integrated and interconnected reality of European financial markets, in which many financial institutions operate across borders. The crisis exposed shortcomings in the areas of cooperation, coordination, consistent application of Union law and trust between national competent authorities.

(-1a)   In a number of resolutions adopted before and during the financial crisis, the European Parliament called for a move towards more integrated European supervision, in order to ensure a truly level playing field for all actors at Union level, and for such supervision to reflect the increasing integration of financial markets in the Union (in particular, in its resolutions of 13 April 2000 on the Commission communication on implementing the framework for financial markets: Action Plan, of 21 November 2002 on prudential supervision rules in the European Union, of 11 July 2007 on financial services policy (2005-2010) – White Paper, of 23 September 2008 with recommendations to the Commission on hedge funds and private equity, and of 9 October 2008 with recommendations to the Commission on Lamfalussy follow-up: Future Structure of Supervision, and in its positions of 22 April 2009 on the amended proposal for a directive of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) and of 23 April 2009 on the proposal for a regulation of the European Parliament and of the Council on Credit Rating Agencies).

(-1b)   In November 2008 the Commission instructed a High-Level Group chaired by Jacques de Larosière to make recommendations on how to strengthen European supervisory arrangements with a view to better protecting Union citizens and rebuilding trust in the financial system. In its final report presented on 25 February 2009 (the ‘de Larosière Report’), the High-Level Group recommended that the supervisory framework be strengthened to reduce the risk and severity of future financial crises. It recommended far-reaching reforms to the supervisory structure of the financial sector within the Union. The de Larosière Report also recommended that a European System of Financial Supervision (ESFS) be created, comprising three European supervisory authorities – one for each of the banking, the securities and the insurance and occupational pensions sectors – and a European Systemic Risk Council.

(-1c)   Financial stability is a prerequisite if the real economy is to provide jobs, credit and growth. The financial crisis has revealed serious shortcomings in financial supervision, which has failed to anticipate adverse macro-prudential developments or to prevent the accumulation of excessive risks within the financial system.

(1)      On 24 November 2010, the European Parliament and the Council adopted three Regulations establishing the European Supervisory Authority (European Insurance and Occupational Pensions Authority) (EIOPA), the European Supervisory Authority (European Banking Authority) (EBA) and the European Supervisory Authority (European Securities and Markets Authority) (ESMA) (collectively referred to as the European Supervisory Authorities (ESAs), which are part of the European System of Financial Supervision.

(1a)    In its conclusions following its meeting of 18 and 19 June 2009, the European Council recommended that a European System of Financial Supervisors, comprising three new ESAs, be established. It also recommended that the system should be aimed at upgrading the quality and consistency of national supervision, strengthening the oversight of cross-border groups, establishing a single European rulebook applicable to all financial institutions in the internal market. It emphasised that the ESAs should also enjoy supervisory powers in respect of credit rating agencies, and invited the Commission to prepare concrete proposals as to how the ESFS could play a strong role in crisis situations.

(2)      In order for the ESFS to work effectively, changes to Union legislation in the field of operation of the three ESAs are necessary. Such changes concern the definition of the scope of certain powers of the ESAs, the integration of certain powers in existing processes established in relevant Union legislation and amendments to ensure a smooth and effective functioning of the ESAs in the context of the ESFS.

(3)      The establishment of three ESAs should therefore be accompanied by the development of a single rule book to ensure consistent harmonisation and uniform application and thus contribute to the even more effective functioning of the internal market and the more effective implementation of micro-level supervision. The regulations establishing the ESFS provide that the ESAs may develop draft technical standards in the areas specifically set out in the relevant legislation, to be submitted to the Commission for adoption in accordance with Articles 290 and 291 of the Treaty on the Functioning of the European Union (TFEU) by means of delegated or implementing acts. Whereas Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010 in respect of the powers of the European Supervisory Authority (European Banking Authority), the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority)

         OJ L 331, 15.12.2010, p. 120.

(4)      The relevant legislation should define those areas where the ESAs are empowered to develop draft technical standards and how such standards should be adopted. The relevant legislation should lay down the elements, conditions and specifications as detailed in Article 290 TFEU in the case of delegated acts.

(5)      The identification of areas for technical standards should strike an appropriate balance between building a single set of harmonised rules and avoiding unduly complicated regulation and enforcement. The only areas selected should be those in which consistent technical rules will contribute significantly and effectively to the achievement of the objectives of the relevant legislation, while ensuring that policy decisions are taken by the European Parliament, the Council and the Commission in accordance with their usual procedures.

(6)      Matters subject to technical standards should be genuinely technical, where their development requires the expertise of supervisory experts. Regulatory technical standards adopted as delegated acts should further develop, specify and determine the conditions for consistent harmonisation of the rules included in basic instruments adopted by the European Parliament and the Council, supplementing or amending certain non-essential elements of the legislative act. On the other hand, implementing technical standards adopted as implementing acts should set conditions for the uniform application of legally binding Union acts. Technical standards should not involve policy choices.

(7)      In the case of regulatory technical standards it is appropriate to apply the procedure provided for in Articles 10 to 14 of Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010, and of Regulation (EU) No 1095/2010, respectively. Implementing technical standards should be adopted in accordance with the procedure provided for in Article 15 of Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010, and of Regulation (EU) No 1095/2010, respectively. It should be recognised that regulatory technical standards are adopted as delegated acts under Article 290 TFEU and implementing technical standards are adopted as implementing acts under Article 291 TFEU.

(8)      Regulatory and implementing technical standards should contribute to a single rulebook for financial services legislation as endorsed by the European Council in its conclusions of June 2009. To the extent that certain requirements in Union legislative acts are not fully harmonised, and in accordance with the precautionary principle on supervision, regulatory and implementing technical standards developing, specifying or determining the conditions of application for those requirements should not prevent Member States from requiring additional information or imposing more stringent requirements. Regulatory and implementing technical standards should therefore allow Member States to do so in specific areas, where those legislative acts provide for such discretion.

(9)      As set out in the regulations establishing the ESAs, before submitting regulatory or implementing technical standards to the Commission, the ESAs should, where appropriate, conduct open public consultations relating to them and analyse the potential related costs and benefits.

(10)    It should be possible for regulatory and implementing technical standards to provide for transitional measures subject to adequate deadlines, if the costs of immediate implementation would be excessive compared to the benefits involved.

(10a)  At the moment of adoption of this Directive, the work relating to the preparation of and the consultation to the first set of measures to implement the framework rules under Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking up and pursuit of the business of insurance and reinsurance (Solvency II)

         OJ 335, 17.12.2009, p. 1.

(10b)  Due to the extensive nature of the delegated acts and the regulatory technical standards provided for in this Directive, the European Parliament and the Council should have three months from the date of notification to object to a delegated act or a regulatory technical standard. At the initiative of the European Parliament or the Council, it should be possible to prolong that period by a further three months.

(11)    The Regulations establishing the ESAs provide for a mechanism to settle disagreements between national supervisory authorities. Where a supervisory authority disagrees with the procedure or content of an action or inaction by another supervisory authority in areas specified in legal acts of the Union in accordance with Regulation (EU) No 1093/2010 ▌, Regulation (EU) No 1094/2010 ▌and Regulation (EU) No 1095/2010 ▌, where the relevant legislation requires cooperation, coordination or joint decision-making by ▌national supervisory authorities from more than one Member State, the competent ESA, at the request of one of the supervisory authorities concerned, should be able to assist the authorities in reaching an agreement within the time limit set by the ESA which should take into account any relevant time limits in the relevant legislation, and the urgency and complexity of the disagreement. In the event that such disagreement persists, the competent ESA should be able to settle the matter.

(12)    The regulations establishing the ESAs require that the cases where the mechanism to settle disagreements between ▌national supervisory authorities may be applied are to be specified in the sectoral legislation. This Directive should identify a second set of such cases and should be ▌. This Directive should not prevent the ESAs from acting in accordance with other powers or fulfilling tasks specified in their establishing regulations, including non-binding mediation and contributing to the consistent, efficient and effective application of legal acts of the Union. Moreover, in those areas where some form of non-binding mediation is already established in the relevant legal act, or where there are time limits for joint decisions to be taken by one or more ▌national supervisory authorities, amendments are needed to ensure clarity and minimum disruption of the process for reaching a joint decision, but also that where necessary, the ESAs should be able to resolve disagreements. The binding procedure for the settlement of disagreements is designed to solve situations where national supervisory authorities cannot resolve, among themselves, procedural or substantive issues relating to compliance with legal acts of the Union.

(13)    This Directive should therefore identify situations where a procedural or a substantive issue of compliance with Union law may need to be resolved and the national supervisory authorities may not be able to resolve the matter on their own. In such a situation, one of the national supervisory authorities concerned should be able to raise the issue with the competent ESA. That ESA should act in accordance with ▌its establishing regulation and with this Directive. It should be able to require the supervisory authorities concerned to take specific action or to refrain from action in order to settle the matter and to ensure compliance with Union law, with binding effects on the supervisory authorities concerned. In cases where the relevant legal act of the Union confers discretion on Member States, decisions taken by an ESA should not replace the exercise of discretion by the supervisory authorities in compliance with Union law.

(14)    Directive 2009/138/EC ▌provides for joint decisions as regards the approval of applications to use an internal model at group and subsidiary levels, the approval of applications to make a subsidiary subject to Articles 238 and 239 of that Directive and the identification of the group supervisor on a different basis from the criteria set out in Article 247 of that Directive. In all of these areas, an amendment should clearly state that in the event of disagreement, ▌EIOPA may resolve the disagreement using the process outlined in Regulation (EU) No 1094/2010. This approach makes it clear that while EIOPA should not replace the exercise of discretion by the supervisory authorities in compliance with Union law, it should be possible for disagreements to be resolved and cooperation to be strengthened before a final decision is taken by the national supervisory authority or issued to an institution. EIOPA should resolve disagreements by mediating between the conflicting views of the supervisory authorities ▌.

(15)    The new supervisory architecture established by the ESFS will require national supervisory authorities to cooperate closely with the ESAs. Amendments to the relevant legislation should ensure that there are no legal obstacles to the information-sharing obligations included in the regulations ▌establishing the ESAs and that the provision of data does not give rise to unnecessary red tape.

(15a)  Supervisory knowledge of the assets held by insurance and reinsurance undertakings is an important tool with respect to macroeconomic surveillance. A full list of an undertaking's assets can be essential for supervisory authorities to assess financial risks properly, and in particular for insurance and reinsurance undertakings that are significant in terms of their size, internal organisation, and the nature, scale and complexity of risks inherent to their business. Supervisory authorities should therefore be able to require insurance and reinsurance undertakings to submit a full list of assets on an item-by-item basis when such information is necessary for them to effectively undertake their supervisory role. A full list of assets is not essential for supervisory authorities concerned to assess risks with respect to financial stability where insurance and reinsurance undertakings concerned do not play a major role in financial markets. This is particularly relevant for undertakings which do not hold a significant part of the total market share of a Member State's life or non-life insurance market.

(16)    In areas where the Commission is currently empowered by Directive 2009/138/EC to adopt implementing measures where these measures are non-legislative acts of general application to supplement or amend certain non-essential elements of that Directive in the sense of Article 290 TFEU, the Commission should be empowered to adopt delegated acts in accordance with that Article or regulatory technical standards in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

(17)    In order to allow for the consistent calculation of technical provisions by insurance and reinsurance undertakings under Directive 2009/138/EC, it is necessary for a central body to derive, publish, and update certain technical information relating to the risk-free interest rate term structure on a regular basis, taking account of observations in the financial market. The manner in which the risk-free interest rate term structure is derived should be transparent in such a manner that insurance and reinsurance undertakings are able to use this term-structure in their risk management policies. Given the technical and insurance related nature of these tasks, they should be carried out by EIOPA.

(17a)  The risk-free interest rate term structure should be determined on the basis of a holistic and consistent approach to the setting of all assumptions and parameters on which the curve is based ensuring consistency over time and avoiding artificial volatility of technical provisions and eligible own funds in excess of the capital requirements. The choice of the starting points of the extrapolation of risk-free interest rates should allow undertakings to match with bonds the cash-flows which are discounted with non-extrapolated rates in the calculation of the best estimate. Under market conditions similar to those at the date of adoption of this Directive, the starting point for the extrapolation of risk-free interest rates in euro should be 20 years.

(18)    In order to ensure that certain technical inputs to the Solvency Capital Requirement (SCR) using the standard formula are provided on a harmonised basis, for instance to allow for harmonised approaches towards the use of ratings, specific tasks should be assigned to EIOPA. Recognition of rating agencies should be aligned and made consistent with Directive 2006/48/EC, including the upcoming revision of that Directive, and Regulation (EC) No 1060/2009. Overlap with Regulation (EC) No 1060/2009 should be avoided and therefore a role for the Joint Committee of supervisory authorities is justified. EIOPA should make optimal use of ESMA's competences and experience. The detailed manner for the exercise of such tasks should be further specified in measures to be adopted by delegated or implementing act.

(19)    In order to ensure a harmonised approach under Directive 2009/138/EC in determining where an extension to the recovery period in cases of breaches of the SCR is permitted, the conditions which constitute ‘an exceptional fall in the financial markets’ should be specified. EIOPA ▌should be responsible for determining whether those conditions have been fulfilled and the Commission should be empowered to adopt measures by means of delegated and implementing acts specifying the relevant procedures to be followed.

(20)    In order to ensure cross-sectoral consistency and to remove the misalignment between the interests of firms that "repackage" loans into tradable securities and other financial instruments (originators) and the interests of insurance or reinsurance undertakings that invest in such securities or instruments, the Commission should be empowered to adopt measures by means of delegated act in the context of investments in repackaged loans under Directive 2009/138/EC, specifying not only the requirements but also the consequences of breaching those requirements.

(21)    In order to allow for greater convergence on procedures for supervisory approvals provided for in Directive 2009/138/EC of undertaking specific parameters, model change policies, special purpose vehicles and the setting and removal of capital add-ons, the Commission should be empowered to adopt measures by means of delegated act specifying procedure in these areas.

(22)    The development of international convergence toward risk-based solvency regimes should be encouraged. In order to acknowledge that some third countries may need more time to adapt and implement a solvency regime that would fully satisfy the criteria for being recognised as equivalent, it is necessary to specify conditions in relation to the treatment of such third country regimes in order for these third countries to be recognised temporarily equivalent. It should also be stressed that, in the case of third countries, risk-based supervision is not enough: third countries must also have group supervision systems similar to that of the Union.

(23)    In order to enable the European Cooperative Society, established in Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE)

          OJ L 207, 18.8.2003, p. 1.

(24)    The amounts in euro of the Minimum Capital Requirement floor for insurance and reinsurance undertakings should be adapted. Such an adaptation arises out of the periodic adjustment of the existing capital requirement floors for such undertakings to take account of inflation.▌

(24a)  The calculation of the SCR for health insurance should reflect national equalisation systems and should also account for changes in the national health legislation, as they are a fundamental part of the insurance system within those national health markets.

(25)    In order to better reflect the date which marks the end of the financial year for the majority of insurance undertakings (31 December) and to enable a smoother transition between the old and new regimes, the relevant transposition, repeal and application dates in Directive 2009/138/EC should be extended by two months.

(26)    Certain implementing powers designed under Article 202 of the Treaty establishing the European Community (EC Treaty) should be replaced with the appropriate provisions in accordance with Article 290 TFEU.

(27)    The alignment of comitology procedures to the TFEU and, in particular, to Article 290 thereof, should be effected on a case-by-case basis. In order to take account of the technical developments in the financial markets and to specify the requirements laid down in the directives amended by this Directive, the Commission should be empowered to adopt delegated acts in accordance with Article 290 TFEU. In particular, the delegated acts should be adopted in respect of details concerning governance requirements, valuation, supervisory reporting and public disclosure, the determination and classification of own funds, the standard formula for the calculation of the SCR (including any consequential changes in the area of capital add-ons) and the choice of methods and assumptions for the calculation of technical provisions.

(28)    The European Parliament and the Council should have three months from the date of notification to object to a delegated act. At the initiative of the European Parliament or the Council, it should be possible to prolong that period by three months with regard to significant areas of concern. It should also be possible for the European Parliament and the Council to inform the other institutions of their intention not to raise objections. Such early approval of delegated acts is particularly appropriate when deadlines need to be met, for example where there are timetables in the basic act for the Commission to adopt delegated acts.

(28a)  In the light of the financial crisis and the pro-cyclical mechanisms that contributed to its origin and aggravated its effect, the Financial Stability Board, BCBS, and the G20 made recommendations to mitigate the pro-cyclical effects of financial regulation. Those recommendations have direct relevance to insurance and reinsurance undertakings as important components of the financial system.

(28b)  In order to achieve coherent application and to assure macro-prudential oversight across the Union, it is appropriate that the European Systemic Risk Board develops principles tailored for the Union economy and is responsible to monitor the application of the counter-cyclical buffer.

(28c)    The financial crisis highlighted that financial institutions massively underestimated the level of counterparty credit risk associated with over-the-counter (OTC) derivatives. This prompted the G20, in September 2009, to call for more OTC derivatives to be cleared through a central counterparty. Furthermore, they asked to subject those OTC derivatives that could not be cleared centrally to higher capital requirements in order to reflect properly the higher risks associated with them.

(28d)  The sovereign debt crisis and the statement of 26 October 2011 of the Heads of State or Government of Member States whose currency is the euro have demonstrated that a zero-risk treatment for government bonds no longer corresponds with economic reality. The Commission should submit a report to the European Parliament and the Council proposing options to adapt the calculation of own funds requirements for such exposures accordingly as soon as possible, while taking into account potentially destabilising effects of tabling such proposals during periods of market stress.

(29)    In order to allow for a smooth transition under Directive 2009/138/EC to a new regime, it is necessary to provide for phasing in and specific transitional periods.

(30)    The transitional periods should aim at avoiding market disruption ▌. The transitional periods should encourage undertakings to move towards compliance with the particular requirements of the new regime as soon as possible.

(31)    Since the objectives of this Directive, namely improving the functioning of the internal market by means of ensuring a high, effective and consistent level of prudential regulation and supervision, protecting policy holders and beneficiaries and thereby businesses and consumers, protecting the integrity, efficiency and orderly functioning of financial markets, maintaining the stability of the financial system, and strengthening international supervisory coordination, cannot be sufficiently achieved by the Member States and can, therefore, by reason of scale of the action, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Directive should not go beyond what is necessary in order to achieve those objectives and should not, in particular, lay down any solvency requirements for occupational pension bodies.

(32)    The Commission should, by 1 January 2014, report to the European Parliament and to the Council on the submission by the ESAs of the draft technical standards provided for in this Directive and present any appropriate proposals.

(33)    Directives 2002/92/EC, 2003/41/EC, 2003/71/EC and 2009/138/EC and Regulation (EC) No 1060/2009 should therefore be amended accordingly,

HAVE ADOPTED THIS DIRECTIVE:

Article -1

Amendments to Directive 2002/92/EC

Directive 2002/92/EC is amended as follows:

(1)       In Article 3(2), the following subparagraph is added:

"Member States shall communicate the information gathered by their single information point on a regular basis and at least quarterly to the European Supervisory Authority (European Insurance and Occupational Pensions Authority) (EIOPA), established by Regulation (EU) No 1094/2010 of the European Parliament and of the Council*, which shall publish it on its website.

___________

* OJ L L 331, 15.12.2010, p. 48.";

(2)      In Article 6, paragraph 2 is replaced by the following:

"2. Member States shall notify the Commission of their wish to be informed in accordance with paragraph 1. The Commission shall in turn notify all the Member States and EIOPA of this.";

(3)      In Article 7, paragraph 1 is replaced by the following:

"1. Member States shall designate the competent authorities empowered to ensure implementation of this Directive. They shall inform the Commission and EIOPA thereof, indicating any division of those duties.";

(4)      In Article 9, the title is replaced by the following:

"Exchange of information between Member States and EIOPA";

(5)      In Article 9, the following paragraph is inserted:

"1a. The competent authorities shall cooperate with EIOPA for the purposes of this Directive, in accordance with Regulation (EU) No 1094/2010. The competent authorities shall, without delay, provide EIOPA with all information necessary to carry out its duties under this Directive and under Regulation (EU) No 1094/2010, in accordance with Article 35 of that Regulation.";

(6)      In Article 12, paragraph 5 is replaced by the following:

"5.      Member States may maintain or adopt stricter provisions regarding the information requirements referred to in paragraph 1, provided that such provisions comply with Union law.

Member States shall communicate to the Commission and EIOPA the national provisions set out in the first subparagraph.

Member States shall update that information on a regular basis and at least every two years and EIOPA shall make that information available on its website.

In order to establish a high level of transparency by all appropriate means, the Commission shall ensure that the information it receives relating to national provisions is also communicated to consumers and insurance intermediaries

6.        In order to ensure uniform conditions of application of paragraph 5, EIOPA shall develop draft implementing technical standards on the procedures to be followed and formats and templates to be used by the competent authorities when transmitting and updating the relevant information to EIOPA.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.".

Article 1

Amendments to Directive 2003/71/EC

Directive 2003/71/EC is amended as follows:

(1)       In Article 5(4), the third subparagraph is replaced by the following:

"Where the final terms of the offer are neither included in the base prospectus, nor in a supplement, the final terms shall be made available to investors and filed with the competent authority of the home Member State, as well as communicated by that competent authority to the competent authority of the host Member State(s) and to ▌ESMA when each public offer is made as soon as practicable and, where possible, in advance of the beginning of the public offer or admission to trading. The final terms shall contain only information that relates to the securities note and shall not be used to supplement the base prospectus. Article 8(1)(a) shall apply in such cases.";

(2)       Article 11(3) is replaced by the following:

"3.      In order to ensure consistent harmonisation in relation to this Article, ESMA shall develop draft regulatory technical standards to specify the information to be incorporated by reference.

ESMA shall submit those draft regulatory technical standards to the Commission by 1 January 2014.

Power is delegated to the Commission to adopt regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.";

▌

(3) Article 13(7) is replaced by the following:

"7.      In order to ensure consistent harmonisation in relation to the approval of prospectuses, ESMA shall develop draft regulatory technical standards to specify the procedures for the approval of the prospectus and the conditions in accordance with which time limits may be adjusted.

ESMA shall submit those draft regulatory technical standards to the Commission by 1 January 2014.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.";

(4)       Article 14(8) is replaced by the following:

"8.      In order to ensure consistent harmonisation in relation to this Article, ESMA shall develop draft regulatory technical standards to specify the provisions relating to the publication of the prospectus in paragraphs 1 to 4.

ESMA shall submit those draft regulatory technical standards to the Commission by 1 January 2014.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.";

▌

(5)       Article 15(7) is replaced by the following:

"7.      In order to ensure consistent harmonisation in relation to this Article, ESMA shall develop draft regulatory technical standards to specify the provisions concerning the dissemination of advertisements announcing the intention to offer securities to the public or the admission to trading on a regulated market, in particular before the prospectus has been made available to the public or before the opening of the subscription, and specify the provisions laid down in paragraph 4.

ESMA shall submit those draft regulatory technical standards to the Commission by 1 January 2014.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.";

▌

(5a)     the following Article is inserted:

"Article 31a

Staff and resources of ESMA

ESMA shall asses the staffing and resources needs arising from the assumption of its powers and duties in accordance with this Directive and submit a report to the European Parliament, the Council and the Commission.".

Article 2

Amendments to Directive 2009/138/EC

Directive 2009/138/EC is amended as follows:

(-1)     in Article 13, the following point is inserted:

"(32a) ‘authorised central counterparty’ means a central counterparty within the meaning of Article 2(1)(1) of Regulation (EU) No .../2012 of the European Parliament and of the Council of ... [EMIR] which is authorised under Article 10 of that Directive;";

(1)       Article 17(3) is replaced by the following:

"3.       The Commission may adopt delegated acts, in accordance with Article 301a ▌relating to the ▌list of forms set out in points 1 to 27 of Part A, of Part B and of Part C of Annex III.";

(1a)     the following Article is inserted:

"Article 25a

Notification and publication of authorisations, withdrawals of authorisation and refusals of authorisation

Every authorisation, withdrawal of authorisation and refusal of authorisation shall be notified to the European Supervisory Authority (European Insurance and Occupational Pensions Authority) (EIOPA) established by Regulation (EU) No 1094/2010 of the European Parliament and of the Council*. The name of each insurance undertaking or reinsurance undertaking to which authorisation has been granted shall be entered in a list. EIOPA shall publish and keep up to date that list on its website.

____________

* OJ L L 331, 15.12.2010, p. 48.";

(1b)     in Article 29, paragraph 4 is replaced by the following:

"4.      The Commission shall ensure that delegated acts, regulatory and implementing technical standards take into account the principle of proportionality, thus ensuring the proportionate application of this Directive, in particular to small insurance undertakings.

EIOPA shall ensure that draft regulatory technical standards, submitted in accordance with Article 10 to 14 of Regulation (EU) No 1094/2010, draft implementing technical standards submitted in accordance with Article 15 thereof and guidelines and recommendations adopted in accordance with Article 16 thereof, take into account the principle of proportionality, thus ensuring the proportionate application of this Directive, in particular to small insurance undertakings.":

(2)       Article 31 is amended as follows:

(a)       paragraph 4 is replaced by the following:

"4.       In order to ensure uniform conditions of application of paragraph 2 of this Article, and without prejudice to Article 35, Article 51, Article 254(2) and Article 256, EIOPA shall develop draft implementing technical standards to specify the key aspects on which aggregate statistical data are to be disclosed, and to determine the format, structure, contents list and publication date of the disclosures provided for in this Article.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.";

▌

(3)       In Article 33, the following paragraphs are added:

"Where a supervisory authority has informed the supervisory authorities of a host Member state that it intends to carry out on-site verifications in accordance with paragraph 1 and where that supervisory authority is practically prohibited to exercise its right to carry out those on-site verifications or where those supervisory authorities are practically prohibited to exercise their right to participate in accordance with paragraph 2, the supervisory authorities may refer the matter to EIOPA and request its assistance in accordance with Article 19, paragraphs 1 to 3 and 6, of Regulation (EU) No 1094/2010 EIOPA. In that case, EIOPA may act in accordance with the powers conferred on it by that Article.

In accordance with Article 21 of Regulation (EU) No 1094/2010, EIOPA may participate in on-site verifications where they are carried out jointly by two or more supervisory authorities.";

(4)       Article 35 is amended as follows:

(-a)      in paragraph 2, point (a)(i) is replaced by the following:

"(i)     at predefined periods; whereby, supervisory authorities concerned may limit regular supervisory reporting to information that changes significantly in the course of the year provided that:

–         derogations from regular supervisory reporting may only be granted to insurance and reinsurance undertakings whose combined contribution to the total market share does not exceed 20 % of a Member State's life or non-life insurance market respectively; and

–         a full reporting is done at least annually.";

(-aa)    in paragraph 2, the following subparagraphs are added:

"Member States shall require insurance and reinsurance undertakings to submit to the supervisory authorities concerned, as part of their regular reporting or on an ad hoc basis, a full list of assets on an item-by-item basis, only when such information is necessary for the supervisory authorities concerned to undertake their supervisory role effectively, in particular with respect to financial stability.

The supervisory authorities concerned may exempt from reporting obligations on an item-by-item basis insurance and reinsurance undertakings whose combined contribution to the total market share does not exceed 20 % of a Member State's life or non-life insurance market respectively.";

(a)       paragraph 6 is replaced by the following:

"6.      In order to ensure consistent harmonisation in relation to this Article, EIOPA shall develop draft regulatory technical standards to specify the information and points in time referred to in paragraphs 1 to 4.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

6a.      In order to enhance a coherent and consistent application of paragraph 2, EIOPA shall elaborate guidelines in accordance with Article 16 of Regulation (EU) No 1094/2010 to determine criteria for the calculation of market shares, taking into account the principle of proportionality as well as financial stability aspects.

Those guidelines shall also be used for the purposes of the derogations from regular supervisory reporting at group level, where such derogations are applied mutatis mutandis in accordance with the first paragraph of Article 254(2).

Those criteria shall be reviewed at least every five years.

▌

7.        In order to ensure uniform conditions of application of this Article, EIOPA may develop draft implementing technical standards to establish standard forms, templates and procedures for the submission of information to the supervisory authorities. The procedures may include, where appropriate, requirements for approval by the administrative, management or supervisory body of the insurance or reinsurance undertakings of the information submitted.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.";

(5)       Article 37 is amended as follows:

(a)       paragraph 6 is replaced with the following:

"6.       The Commission shall adopt delegated acts, in accordance with Article 301a, laying down further specifications for the circumstances under which a capital add-on may be imposed.

6a.      In order to ensure consistent harmonisation in relation to capital add-ons, EIOPA shall develop draft regulatory technical standards to specify the methodologies for the calculation of capital add-ons.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

▌

6b.      In order to ensure uniform conditions of application of this Article, EIOPA shall develop draft implementing technical standards on the procedures to be followed for decisions to set, calculate and remove capital add-ons.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.";

(6)       In Article 38(2), the following subparagraphs are added:

"Where a supervisory authority has informed the supervisory authorities of a host Member state that it intends to carry out an on-site inspection in accordance with the first subparagraph and where that supervisory authority is practically prohibited to exercise its right to carry out that on-site inspection, the supervisory authority may refer the matter to EIOPA and request its assistance in accordance with Article 19, paragraphs 1 to 3 and 6, of Regulation (EU) No 1094/2010. In that case, EIOPA may act in accordance with the powers conferred on it by that Article.

In accordance with Article 21 of Regulation (EU) No 1094/2010, EIOPA shall be entitled to participate in on-site inspections where they are carried out jointly by two or more supervisory authorities.";

(7)       Article 50 is replaced by the following:

"Article 50

Regulatory technical standards

1.        In order to ensure consistent harmonisation in relation to this Section, EIOPA shall develop draft regulatory technical standards to further specify the following:

(a)    the elements of the systems referred to in Articles 41, 44, 46 and 47, and in particular the areas to be covered by the asset–liability management and investment policy, as referred to in Article 44(2), of insurance and reinsurance undertakings;

(b)    the functions referred to in Articles 44, 46, 47 and 48;

(c)    the requirements set out in Article 42 and the functions subject thereto;

(d)    the conditions under which outsourcing, in particular to service providers located in third countries, may be performed.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

2.        In order to ensure consistent harmonisation in relation to the assessment referred to in point (a) of Article 45(1), EIOPA shall develop draft regulatory technical standards to further specify the elements of that assessment.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.";

(8)       In ▌ Article 51(2), the third subparagraph is replaced by the following:

           "However, and without prejudice to any disclosure that is mandatory under any other legal or regulatory requirements, Member States may provide that, although the total Solvency Capital Requirement referred to in point (e)(ii) of paragraph 1 is disclosed, the capital add-on or the impact of the specific parameters the insurance or reinsurance undertaking is required to use in accordance with Article 110 need not be separately disclosed during a transitional period ending no later than 31 December 2017.";

(9)       Article 52 is replaced by the following:

"Article 52

Information for and reports by the European Insurance and Occupational Pensions Authority

1.        Member States shall require the supervisory authorities to provide the following information to EIOPA on an annual basis:

(a)       the average capital add-on per undertaking and the distribution of capital add-ons imposed by the supervisory authority during the previous year, measured as a percentage of the Solvency Capital Requirement, shown separately as follows:

(i)     for all insurance and reinsurance undertakings;

(ii)     for life insurance undertakings;

(iii)    for non-life insurance undertakings;

(iv)    for insurance undertakings pursuing both life and non-life activities;

(v)    for reinsurance undertakings;

(b)    for each of the disclosures set out in point (a) of this paragraph, the proportion of capital add-ons imposed under points (a), (b) and (c) of Article 37(1) respectively.

2.        EIOPA shall publicly disclose, on an annual basis, the following information:

(a)    for all Member States together, the total distribution of capital add-ons, measured as a percentage of the Solvency Capital Requirement, for each of the following:

(i)     all insurance and reinsurance undertakings;

(ii)     life insurance undertakings;

(iii)    non-life insurance undertakings;

(iv)    insurance undertakings pursuing both life and non-life activities;

(v)    reinsurance undertakings;

(b)    for each Member State separately, the distribution of capital add-ons, measured as a percentage of the Solvency Capital Requirement, covering all insurance and reinsurance undertakings in that Member State;

(c)    for each of the disclosures referred to in points (a) and (b) of this paragraph, the proportion of capital add-ons imposed under points (a), (b) and (c) of Article 37(1) respectively.

3.        EIOPA shall provide the information referred to in paragraph 2 to the European Parliament, the Council and the Commission, together with a report outlining the degree of supervisory convergence in the use of capital add-ons between supervisory authorities in the different Member States.";

(10)     Article 56 is replaced by the following:

"Article 56

Solvency and financial condition report: delegated acts and implementing acts

The Commission shall adopt delegated acts, in accordance with Article 301a ▌, further specifying the information which must be disclosed in accordance with section 3.

In order to ensure uniform conditions of application of this section, EIOPA shall develop draft implementing technical standards on the procedures to be followed and formats and templates to be used.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the second subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.";

(11)     Article 58(8) is replaced by the following:

"8.       In order to ensure consistent harmonisation in relation to this section, EIOPA may develop draft regulatory technical standards to establish an exhaustive list of information, referred to in Article 59(4), to be included by proposed acquirers in their notification, without prejudice to Article 58(2).

In order to ensure consistent harmonisation in relation to this section and to take account of future developments, EIOPA shall develop draft regulatory technical standards to specify the adjustments of the criteria set out in Article 59(1).

EIOPA shall submit the draft regulatory technical standards referred to in the second subparagraph to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first and second subparagraphs in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

8a.      In order to ensure uniform conditions of application of this Directive, EIOPA may develop draft implementing technical standards to establish common procedures, forms and templates for the consultation process between the relevant supervisory authorities as referred to in Article 60.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.";

(11a)  The following article is inserted:

"Article 65a

Cooperation with EIOPA

Member States shall ensure that the supervisory authorities cooperate with EIOPA for the purposes of this Directive in accordance with Regulation (EU) No 1094/2010.

Member States shall ensure that the supervisory authorities provide EIOPA, without delay, with all the information necessary to carry out its duties in accordance with Regulation (EU) No 1094/2010.";

(12)     In Article 69, the second paragraph is replaced by the following:

"Such disclosure shall be made only where necessary for reasons of prudential control. Member States shall, however, provide that information received under Articles 65 and Article 68(1), and information obtained by means of on-site verification referred to in Article 33, may only be disclosed with the express consent of the supervisory authority from which the information originated or the supervisory authority of the Member State in which the on-site verification was carried out.";

(12a)   Article 70 is replaced by the following:

"Article 70

Transmission of information to central banks, and monetary authorities, payment systems overseers and the European Systemic Risk Board

1.        Without prejudice to this Section, a supervisory authority may transmit information intended for the performance of their tasks to the following:

(a)    central banks of the European System of Central Banks (including the ECB) and other bodies with a similar function in their capacity as monetary authorities where this information is relevant to their respective statutory tasks, including the conduct of monetary policy and related liquidity provision, oversight of payments, clearing and securities settlement systems and safeguarding the stability of the financial system;

(b)    where appropriate, other national public authorities responsible for overseeing payment systems.; and

(c)    the European Systemic Risk Board (ESRB), where that information is relevant to carrying out its tasks.

2.        Such authorities or bodies may also communicate to the supervisory authorities such information as they may need for the purposes of Article 67. Information received in this context shall be subject to the provisions on professional secrecy laid down in this Section.

3.        In an emergency situation, including a situation as defined in Article 18 of Regulation (EU) No 1094/2010, Member States shall allow the competent authorities to communicate, without delay, information to the central banks of the European System of Central Banks (including the ECB) where that information is relevant to their statutory tasks including the conduct of monetary policy and related liquidity provision, oversight of payments, clearing and securities settlement systems and safeguarding the stability of the financial system, and to the ESRB, where such information is relevant to its tasks.";

(13)     Article 71 is amended as follows:

(a)       paragraph 2 is replaced by the following:

"2.       Member States shall ensure that in the exercise of their duties supervisory authorities have regard to the convergence in respect of supervisory tools and supervisory practices in the application of the laws, regulations and administrative requirements adopted pursuant to this Directive. For that purpose, Member States shall ensure that:

(a)    the supervisory authorities participate in the activities of the EIOPA;

(b)    the supervisory authorities follow the guidelines and recommendations of EIOPA and state the reasons if they do not do so;

(c)    national mandates conferred on the supervisory authorities do not inhibit the performance of their duties as members of EIOPA or under this Directive.";

(b)       paragraph 3 is deleted.

(14)     Article 75 is amended as follows:

(-a)      in paragraph 1, point b of the first subparagraph is replaced by the following:

"(b)      liabilities shall be valued at the amount for which they could be transferred, or settled, between knowledgeable willing parties in an arm’s length transaction. The discounting of liabilities shall not take into account information concerning assets held by insurance or reinsurance undertakings.";

(a)       paragraph 2 is replaced by the following:

"2. In order to ensure consistent harmonisation in relation to valuation of assets and liabilities, EIOPA shall develop draft regulatory technical standards to specify:

(a)       methods and assumptions to be used in the valuation of assets and liabilities as laid down in paragraph 1;

(b)       international accounting standards as endorsed by the Commission in accordance with Regulation (EC) No 1606/2002 that are consistent with the valuation approach of assets and liabilities as laid down in paragraph 1;

(c)       valuation approaches where quoted market prices are either not available or not consistent with the valuation approach of assets and liabilities as laid down in paragraph 1;

(d)       alternative valuation methods to be used where international accounting standards, as endorsed by the Commission in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council

            OJ L 243, 11.9.2002, p. 1.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.";

(14a)   Article 76(2) is replaced by the following:

"2.      The value of technical provisions shall correspond to the current amount insurance and reinsurance undertakings would have to pay if they were to transfer their insurance and reinsurance obligations immediately to another insurance or reinsurance undertaking. The discounting of technical provisions shall not be affected by assets held by insurance or reinsurance undertakings.";

(14b)   In Article 77(2) the first subparagraph is replaced by the following:

"2.      The best estimate shall correspond to the probability-weighted average of future cash-flows, taking account of the time value of money (expected present value of future cash-flows), using the relevant risk-free interest rate term structure. The relevant risk-free interest rate term structure used to discount the insurance liabilities shall not take into account information concerning assets held by insurance or reinsurance undertakings.";

(15)     the following articles are inserted:

"Article 77a

"Technical information produced by the European Insurance and Occupational Pensions Authority

1.        The relevant risk-free interest rate term structure to be used to calculate the best estimate referred to in Article 77(2) shall be laid down and published by EIOPA for each relevant currency on at least a monthly basis. Chapter VII of this Title shall apply based on this best estimate.

▌

2.        Where EIOPA, in close co-operation with ESRB, observes a stressed situation of financial markets for a given currency and where EIOPA demonstrates that this temporary and exceptional situation is more likely than not to result in undertakings selling a large and substantial part of their fixed income securities portfolio, an adapted relevant risk-free interest rate term structure shall be published for each relevant currency in the same frequency as the relevant risk-free interest rate term structure referred to in paragraph 1.

The adaptation shall be calculated with reference to a portion of the spread between the interest rate that could be earned from assets included in a representative portfolio of assets that insurance and reinsurance undertakings are invested in and the rates of the basic risk-free interest rate term structure. The portion shall not be attributable to a realistic assessment of expected losses or unexpected credit risk on the assets or any other risk.

Insurance and reinsurance undertakings may use that adapted relevant risk-free interest rate term structure in calculating the best estimate only for certain substantially illiquid liabilities, identified in accordance with Article 86.

In that event, insurance and reinsurance undertakings shall publicly disclose the use of this adapted relevant risk-free interest rate term structure and the monetary effect on their financial position.

3.        EIOPA shall carry out the tasks referred to in paragraphs 1 and 2 in a transparent, objective and reliable manner.

Article 77b

Extrapolation

EIOPA's determination of the rates of the risk-free interest rate term structure shall make use of and be consistent with information derived from relevant financial instruments. This shall take into account relevant financial instruments of those maturities where the markets for those financial instruments as well as for bonds can be considered as deep, liquid and transparent. For maturities where the markets for the relevant financial instruments as well as for bonds cannot be considered as deep, liquid and transparent anymore, the risk-free interest rate term structure shall be extrapolated.

For each currency, the extrapolated part of the basic risk-free interest rate term structure shall be based on forward rates converging smoothly from one or a set of interest rates in relation to the longest maturities for which the relevant financial instruments and the bonds in that currency can be observed in a deep and liquid market to an ultimate forward rate.

The extrapolated part of the basic risk-free interest rate term structure shall converge in such a way to the ultimate forward rate that for maturities 10 years past the longest maturities referred to in the second paragraph the extrapolated forward rates do not differ more than three basis points from the ultimate forward rate.";

(16)     Article 86 is replaced by the following:

"Article 86

Regulatory technical standards

In order to ensure consistent harmonisation in relation to the methods and calculations for technical provisions, EIOPA shall develop draft regulatory technical standards to specify:

(a)    actuarial and statistical methodologies to calculate the best estimate referred to in Article 77(2);

(b)    the methodologies, principles and techniques for the determination of the relevant risk-free interest rate term structure to be used to calculate the best estimate referred to in Article 77(2);

(c)    the circumstances in which technical provisions shall be calculated as a whole, or as a sum of a best estimate and a risk margin, and the methods to be used in the case where technical provisions are calculated as a whole, as referred to in Article 77(4);

(d)    the methods and assumptions to be used in the calculation of the risk margin including the determination of the amount of eligible own funds necessary to support the insurance and reinsurance obligations and the calibration of the cost-of-capital rate, as referred to in Article 77(5);

(da)  the detailed criteria for the methodology to calculate the illiquidity premium and the methodology to identify substantial illiquid liabilities, as referred to in Article 77a;

(e)    the lines of business on the basis of which insurance and reinsurance obligations are to be segmented in order to calculate technical provisions referred to in Article 80;

(f)     the standards to be met with respect to ensuring the appropriateness, completeness and accuracy of the data used in the calculation of technical provisions, and the specific circumstances in which it would be appropriate to use approximations, including case-by-case approaches, to calculate the best estimate, as referred to in Article 82;

(g)    the methodologies to be used when calculating the counterparty default adjustment referred to in Article 81 designed to capture expected losses due to default of the counterparty;

(h)    where necessary, simplified methods and techniques to calculate technical provisions, in order to ensure the actuarial and statistical methods referred to in points (a) and (d) are proportionate to the nature, scale and complexity of the risks supported by insurance and reinsurance undertakings including captive insurance and reinsurance undertakings;

▌

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

▌";

(17)     Article 92 is amended as follows:

(a)    the title is replaced by the following:

"Article 92

Regulatory and implementing technical standards";

(b)    paragraph 1 is replaced by the following:

"1.          In order to ensure consistent harmonisation in relation to determination of own funds, EIOPA shall develop draft regulatory technical standards to specify:

(a)    the criteria ▌for granting supervisory approval of ancillary own funds in accordance with Article 90;

(b)    the treatment of participations, within the meaning of the third subparagraph of Article 212(2), in financial and credit institutions with respect to the determination of own funds.

▌

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.";

(ba)     the following paragraph is added:

"2a.       In order to ensure uniform conditions of application of Article 90, EIOPA shall develop draft implementing technical standards concerning the procedures to be followed and the formats and templates to be used for granting supervisory approval for the use of ancillary own funds.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.

▌";

(18)     Article 97 is replaced by the following:

"Article 97

Regulatory technical standards

1.        In order to ensure consistent harmonisation in relation to classification of own funds, EIOPA shall develop draft regulatory technical standards to specify:

(a)    a list of own-fund items, including those referred to in Article 96, deemed to fulfil the criteria, set out in Article 94, which contains for each own-fund item a precise description of the features which determined its classification;

(b)    the methods to be used by supervisory authorities, when approving the assessment and classification of own-fund items which are not covered by the list referred to in point (a);

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

The Commission shall regularly review and, where appropriate update, the list referred to in point (a) of paragraph 1 in light of market developments.

▌";

(19)     Article 99 is replaced by the following:

"Article 99

Regulatory technical standards on the eligibility of own funds

1.        In order to ensure consistent harmonisation in relation to eligibility of own funds, EIOPA shall develop draft regulatory technical standards to specify:

(a)    the quantitative limits referred to in Article 98(1) and (2);

(b)    the adjustments that should be made to reflect the lack of transferability of those own-fund items that can only be used to cover losses arising from a particular segment of liabilities or from particular risks (ring-fenced funds).

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010."

▌;

(19a)   The following article is inserted:

"Article 106a

Calculation of the spread risk sub-module: symmetric adjustment mechanism

1.        The spread risk sub-module calculated in accordance with the standard formula shall include a symmetric adjustment to the spread capital requirement applied to cover the risk arising from changes in the level of bond prices and prices of other fixed income securities with similar cash-flow characteristics.

2.        The symmetric adjustment made to the standard spread capital requirement calibrated in accordance with Article 104(4), covering the risk arising from changes in the level of bond prices and prices of other fixed income securities with similar cash-flow characteristic, shall be based on a function of the current level of an appropriate fixed income securities index and a weighted average level of that index. The weighted average shall be calculated over an appropriate period of time which shall be the same for all insurance and reinsurance undertakings.

3.        The symmetric adjustment made to the standard spread capital requirement covering the risk arising from changes in the level of bond prices and prices of other fixed income securities with similar cash-flow characteristics shall not result in a spread capital requirement being applied that is more than 25 % lower or higher than the standard spread capital requirement.

4.        Insurance and reinsurance undertakings applying the adapted relevant risk-free interest rate term structure referred to in Article 77a(2) shall not apply the symmetric adjustment made to the standard spread capital requirement in the event the result of the adjustment in accordance with Article 106a is a spread capital requirement lower than the standard spread capital requirement.";

(19b)  In Article 105(6), the following subparagraph is inserted after the second subparagraph:

"Where a derivative contract is cleared through an authorised central counterparty, the corresponding counterparty default risk capital requirement shall be lower than if the contract were not cleared in this manner.";

(20)     The following article is inserted:

"Article 109a

Harmonised technical inputs to standard formula

1.        For the purposes of calculating the market risk module and counterparty default risk module referred to in Article 105(5) and (6), an external credit assessment may be used to determine the probability of default provided that the following conditions are met:

(a)    the external credit assessment is issued by an external credit assessment institution (ECAI);

(b)    the ECAI is a credit rating agency that has been registered or certified in accordance with Regulation (EC) No 1060/2009 or, where an ECAI is not registered in accordance with Regulation (EC) No 1060/2009, its eligibility has been assessed by the ESAs, through the Joint Committee as established under Article 54 of Regulation (EU) No1093/2010, of Regulation (EU) No1094/2010 and of Regulation (EU) No1095/2010 (the Joint Committee) and subject to the methodological requirements laid down in Articles 6 to 13 of Regulation (EC) No 1060/2009;

(c)    the external credit assessments are allocated to an objective scale of credit quality steps by the Joint Committee in accordance with paragraph 2;

2.        For the purposes of the first subparagraph the Joint Committee shall:

(a)    make publicly available a list of eligible ECAIs;

(b)    verify that individual credit assessments are accessible at equivalent terms at least to all institutions having a legitimate interest in those individual credit assessments;

(c)    without prejudice to Article 56 of Regulation (EU) No1093/2010, of Regulation (EU) No1094/2010 and of Regulation (EU) No1095/2010, allocate external credit assessments to an objective scale of credit quality steps applying the steps specified in accordance with Article 111(1)(n).

In order to avoid overreliance on ECAIs, insurance and reinsurance undertakings shall verify the appropriateness of external credit assessments as part of their risk management by using additional assessments wherever possible in order to avoid any automatic dependence on external assessments.

EIOPA shall develop draft implementing technical standards on the procedures to be followed to verify external credit assessments.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the third subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.

1a.      For the purposes of facilitating the calculation of the market risk module referred to in Article 105(5), EIOPA shall:

(a)    publish lists of regional governments and local authorities, exposures to whom are to be treated as exposures to the central government of the jurisdiction in which they are established, provided there is no difference in risk between such exposures because of specific revenue-raising powers of the former, and specific institutional arrangements exist, the effect of which is to reduce the risk of default;

(b)    specify the adjustments to be made for currencies pegged to the euro in the currency risk sub-module referred to Article 105(5)(e) applying the criteria specified in Article 111(1)(p); and

(c)    specify the appropriate equity index referred to in Article 106(2), calculate the symmetric adjustment referred to in Article 106 applying the methods, assumptions and standard parameters specified in accordance with Article 111(1)(c) and the detailed criteria specified in Article 111 (1)(o), and publish both sets of information on a monthly basis; and

(d)    specify the appropriate fixed income securities index referred to in Article 106a(2), calculate the symmetric adjustment referred to in Article 106a applying the methods, assumptions and standard parameters specified in accordance with Article 111(1)(c) and the detailed criteria specified in Article 111 (1)(o), and publish both sets of information on a monthly basis.

1b.      In order to avoid overreliance on ECAIs, insurance and reinsurance undertakings shall verify the appropriateness of external credit assessments as part of their risk management by using additional assessments wherever possible in order to avoid any automatic dependence of risk management on external assessments.

2.        For the purpose of facilitating the calculation of the health underwriting risk module referred to in Article 105(4), EIOPA shall publish, in accordance with the calculations provided by the supervisory authorities of the Member States concerned, standard deviations in relation to specific national legislative measures of Member States which permit the sharing of claims in respect of health risk amongst insurance and reinsurance undertakings and which meet the following criteria:

(a)    the mechanism for the sharing of claims is transparent and fully specified in advance of the annual period to which it applies;

(b)    the mechanism for the sharing of claims, the number of insurance undertakings that participate in the health risk equalisation system (HRES) and the risk characteristics of the business subject to the HRES ensure that for each undertaking participating in the HRES the volatility of annual losses of the business subject to the HRES is significantly reduced by means of the HRES, both in relation to premium and to reserve risk;

(c)    health insurance subject to the HRES is compulsory and serves as a partial or complete alternative to health cover provided by the statutory social security system;

(d)    in the event of default of insurance undertakings participating in the HRES, one or more Member States' governments guarantee to meet the policyholder claims of the insurance business that is subject to the HRES in full.

The Commission may adopt delegated acts, in accordance with Article 301a, laying down additional criteria.";

(21)     Article 111 is replaced by the following:

"Article 111

Regulatory technical standards concerning Articles 103 to 109

1.        In order to ensure consistent harmonisation in relation to Article 101 and Articles 103 to 109, EIOPA shall develop draft regulatory technical standards to specify:

(a)       a standard formula in accordance with the provisions of Articles 101 and 103 to 109;

(b)       any sub-modules necessary or covering more precisely the risks which fall under the respective risk modules referred to in Article 104 as well as any subsequent updates;

(c)       the methods, assumptions and standard parameters to be calibrated to the confidence interval referred to in Article 101(3) and to be used when calculating each of the risk modules or sub-modules of the basic Solvency Capital Requirement laid down in Articles 104, 105 and 304, the symmetric adjustment mechanism and the appropriate period of time, expressed in the number of months, as referred to in Article 106 and Article 106a, and the appropriate approach for integrating the method referred to in Article 304 in the Solvency Capital Requirement as calculated in accordance with the standard formula;

(d)       the correlation parameters, including, where necessary, those set out in Annex IV, and the procedures for updating those parameters;

(e)       where insurance and reinsurance undertakings use risk-mitigation techniques, the methods and assumptions to be used to assess the changes in the risk profile of the undertaking concerned and to adjust the calculation of the Solvency Capital Requirement;

(f)        the qualitative criteria that the risk-mitigation techniques referred to in point (e) must fulfil in order to ensure that the risk has been effectively transferred to a third party;

(fa)     the method to be used when assessing the capital requirement for counterparty default risk in the case of exposures to authorised central counterparties as referred to in Article 105. These parameters shall be set to ensure consistency with the treatment of such exposures in the case of credit institutions and investment firms as required under Directive 2012/xx./EU (CRD IV);

(g)       the methods and parameters to be used when assessing the capital requirement for operational risk set out in Article 107, including the percentage referred to in Article 107(3);

(h)       the methods and adjustments to be used to reflect the reduced scope for risk diversification of insurance and reinsurance undertakings relating to ring-fenced funds;

(i)        the method to be used when calculating the adjustment for the loss absorbing capacity of technical provisions or deferred taxes, as laid down in Article 108;

(j)        the subset of standard parameters in the life, non-life and health underwriting risk modules that may be replaced by undertaking-specific parameters as set out in Article 104(7);

(k)       criteria in relation to the standardised methods to be used by the insurance or reinsurance undertaking to calculate the undertaking-specific parameters referred to in point (j), and any criteria with respect to the completeness, accuracy, and appropriateness of the data used that must be met before supervisory approval is given together with the procedure to be followed for such approval;

(l)        the simplified calculations provided for specific sub-modules and risk modules, as well as the criteria that insurance and reinsurance undertakings, including captive insurance and reinsurance undertakings, shall be required to fulfil in order to be entitled to use each of those simplifications, as set out in Article 109;

(m)      the approach to be used with respect to related undertakings within the meaning of Article 212 in the calculation of the Solvency Capital Requirement, in particular the calculation of the equity risk sub-module referred to in Article 105(5), taking into account the likely reduction in the volatility of the value of those related undertakings arising from the strategic nature of those investments and the influence exercised by the participating undertaking on those related undertakings;

(n)       the allocation of credit assessment institutions and for the association of credit assessments to a scale of credit quality steps referred to in Article 109a(1)(c);

(o)       the detailed criteria for the equity index referred to in Article 109a(1a)(c) and fixed income securities index referred to in Article 109a(1a)(d);

(p)       the detailed criteria for the adjustments for currencies pegged to the euro for the purpose of facilitating the calculation of the currency risk sub-module referred to in Article 109a(1a)(b);

(q)       the conditions for a categorisation of regional governments and local authorities referred to in Article 109a(1a)(a);

(r) the detailed criteria that the national legislative measures arrangements shall meet, and the methodology and the requirements for the calculation of the standard deviation for the purpose of facilitating the calculation of the health underwriting risk module referred to in Article 109a(2).

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

In order to ensure uniform conditions of application of this Article, EIOPA shall develop draft implementing technical standards on the procedures to be followed and formats and templates to be used concerning:

(a)       the updating of the correlation parameters referred to in point (d);

(b)       the supervisory approval to use undertaking-specific parameters referred to in point (k).

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the fourth subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.

2.        In order to ensure consistent harmonisation of in relation to the Solvency Capital Requirement, EIOPA shall develop draft regulatory technical standards, laying down quantitative limits and asset eligibility criteria in order to address risks which are not adequately covered by a sub-module.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

Such regulatory technical standards shall apply to assets covering technical provisions, excluding assets held in respect of life insurance contracts where the investment risk is borne by the policy holders. Those regulatory technical standards shall be reviewed by the Commission in the light of developments in the standard formula and financial markets.";

(22)     Article 114 is replaced by the following:

"Article 114

Regulatory and implementing technical standards concerning the Solvency Capital Requirement internal models

1.        In order to ensure consistent harmonisation in relation to the Solvency Capital Requirement full and partial internal model, EIOPA shall develop draft regulatory technical standards to specify:

(b)       the adaptations to be made to the standards set out in Articles 120 to 125 in light of the limited scope of the application of the partial internal model;

(c)       ▌the policy for changing an internal model referred to in Article 115;

(d)       the way in which a partial internal model shall be fully integrated into the Solvency Capital Requirement standard formula referred to in Article 113(1)(c) and requirements for the use of alternative integration techniques.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the second subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

In order to ensure uniform conditions of application of this Article, EIOPA shall develop draft implementing technical standards on the procedures to be followed and formats and templates to be used concerning:

(a)       the approval of an internal model in accordance with Article 112; and

(b)       the approval of major changes to an internal model and changes to the policy for changing an internal model referred to in Article 115.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the fourth subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.";

(23)     Article 127 is replaced by following:

"Article 127

Regulatory technical standards concerning Articles 120 to 126

In order to ensure consistent harmonisation in relation to Articles 120 to 126 and to enhance the better assessment of the risk profile and management of the business of insurance and reinsurance undertakings, EIOPA shall develop draft regulatory technical standards to specify the use of internal models throughout the Union.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.";

(24)     Article 129 is amended as follows:

(a)       in paragraph 1, points (i), (ii) and (iii) is replaced by the following:

"(i)     EUR 2 300 000 for non-life insurance undertakings, including captive insurance undertakings, save in the case where all or some of the risks included in one of the classes 10 to 15 listed in Part A of Annex 1 are covered, in which case it shall be no less than EUR 3 500 000;

(ii)      EUR 3 500 000 for life insurance undertakings, including captive insurance undertakings;

(iii)      EUR 3 500 000 for reinsurance undertakings, except in the case of captive reinsurance undertakings, in which case the Minimum Capital Requirement shall be not less than EUR 1 100 000;";

(b)       in paragraph 3, the second subparagraph is replaced by the following:

"Member States shall allow their supervisory authorities, for a period ending no later than 31 December 2014, to require an insurance or reinsurance undertaking to apply the percentages referred to in the first subparagraph exclusively to the undertaking’s Solvency Capital Requirement calculated in accordance with Chapter VI, Section 4, Subsection 2.";

(c)       in paragraph 4, the following subparagraph is inserted after the first subparagraph:

"For the purposes of calculating the limits referred to in paragraph 3, undertakings shall not be required to calculate the Solvency Capital Requirement on a quarterly basis.";

▌

(d)       In paragraph 5, the first subparagraph is replaced by the following:

"5.      The Commission shall submit to the European Parliament and the European Insurance and Occupational Pensions Committee established by Commission Decision 2004/9/EC*, by 31 October 2017, a report on Member States' rules and supervisory authorities' practices adopted pursuant to paragraphs 1 to 4.

___________

* OJ L 3, 7.1.2004, p. 34.";

(27)     Article 130 is replaced by the following:

"Article 130

Regulatory technical standards

In order to ensure consistent harmonisation in relation to minimum capital requirements, EIOPA shall develop draft regulatory technical standards to specify the calculation of the Minimum Capital Requirement, referred to Articles 128 and 129.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.";

(28)     In the first paragraph of Article 131, the dates "31 October 2012" and "31 October 2013" are replaced by the dates "31 December 2012" and "31 December 2013 respectively".

(29)     Article 135 is replaced by the following:

"Article 135

Regulatory and implementing technical standards concerning qualitative requirements

1.        In order to ensure consistent harmonisation in relation to Articles 132(2) and 132(4), EIOPA shall develop draft regulatory technical standards to specify qualitative requirements in the following areas:

(a)       the identification, measurement, monitoring and managing ▌of risks arising from investments in relation to the first subparagraph of Article 132(2);

(b)       the identification, measurement monitoring and managing ▌of specific risks arising from investment in derivative instruments and assets referred to in the second subparagraph of Article 132(4) and the determination of to what extent the use of such assets qualifies as risk reduction or efficient portfolio management as referred to in the third subparagraph of Article 132(4).

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

1a.      In order to ensure uniform conditions of application of points (a) and (b) of the first subparagraph of paragraph 1, EIOPA shall develop draft implementing technical standards on the reporting procedures to be followed and formats and templates to be used.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.

2.        The Commission shall adopt delegated acts, in accordance with Article 301a ▌, laying down:

(a)       the requirements that need to be met by undertakings that repackage loans into tradable securities and other financial instruments (originators) in order for an insurance or reinsurance undertaking to be allowed to invest in such securities or instruments issued after 1 January 2011, including requirements that ensure that the originator retains a net economic interest of no less than 5 %;

(b)       qualitative requirements that must be met by insurance or reinsurance undertakings that invest in such securities or instruments;

(c)       the specifications for the circumstances under which a capital add-on may be imposed when the requirements laid down under points (a) and (b) of this paragraph have been breached, without prejudice to Article 101(3) ▌.

2a.      In order to ensure consistent harmonisation in relation to paragraph 2(c), EIOPA shall develop draft regulatory technical standards to specify the methodologies for the calculation of capital add-ons referred to therein.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

(30) Article 138(4) is replaced by the following:

▌"4.    In the event of an exceptional fall in financial markets, as declared by EIOPA, in accordance with this paragraph, and in consultation with the European Systemic Risk Board established under Regulation (EU) No 1092/2010, the supervisory authority may extend the period set out in the second subparagraph of paragraph 3 by an appropriate period of time taking into account all relevant factors including the average duration of the technical provisions.

Where the average duration of the technical provisions exceeds 12 years, one-third of the duration shall be deemed appropriate for the determination of the period in the first subparagraph with a maximum of seven years.

▌Without prejudice to Article 18 of Regulation (EU) No 1094/2010, for the purposes of this paragraph, EIOPA may, following a request by the supervisory authority concerned or on its own initiative, adopt a decision determining the existence of an exceptional fall in financial markets. An exceptional fall in financial markets exists, where there is a fall in financial markets across the Union which is unforeseen, sharp and steep, and which is different from the downturns that occur as part of the economic cycle ▌.

EIOPA shall at least once a month review whether the conditions referred to in the previous subparagraph still apply as of the date of the review ▌. To this end EIOPA may, upon a request by the supervisory authority concerned or on its own initiative, adopt a decision determining that the exceptional fall in financial markets has ceased to exist.

▌

Without prejudice to their competences, the supervisory authorities concerned shall inform in the framework of the colleges of supervisors its decision to refuse the extension of the period referred to in subparagraph 5.

Where there are diverging views in the college of supervisors concerning the refusal by the supervisory authority concerned to extend the period referred to in subparagraph 5, the group supervisor or any of the other supervisory authorities may consult EIOPA. EIOPA shall be consulted during one month and all supervisory authorities concerned shall be informed. Where EIOPA has been consulted, the supervisory authority concerned shall duly consider such advice before taking its decision. In accordance with Article 19(2) of Regulation (EU) No 1094/2010, EIOPA shall act as a mediator at that stage.

Where, at the end of the period referred to in subparagraph 7 of this Article, if no agreement has been reached within the college, the group supervisor or any of the supervisory authorities concerned has referred the refusal of the supervisory authority concerned to EIOPA in accordance with Article 19 of Regulation (EU) No 1094/2010, the supervisory authority concerned shall defer its decision and await any decision that EIOPA may take in accordance with Article 19(3) of that Regulation, and shall take its decision in conformity with EIOPA’s decision.

The period referred to in subparagraphs 6 and 7, shall be deemed the conciliation period within the meaning of Article 19(2) of that Regulation. EIOPA shall take its decision within two months. The matter shall not be referred to EIOPA after the end of the period referred to in paragraph or after an agreement among supervisory authorities concerned has been reached.

The insurance or reinsurance undertaking concerned shall, every three months, submit a progress report to its supervisory authority setting out the measures taken and the progress made to re-establish the level of eligible own funds covering the Solvency Capital Requirement or to reduce the risk profile to ensure compliance with the Solvency Capital Requirement.

The extension referred to in the first subparagraph shall be withdrawn where that progress report shows that there was no significant progress in achieving the re-establishment of the level of eligible own funds covering the Solvency Capital Requirement or the reduction of the risk profile to ensure compliance with the Solvency Capital Requirement between the date of the observation of non-compliance of the Solvency Capital Requirement and the date of the submission of the progress report.

▌";

(31)     Article 143 is replaced by the following:

"Article 143

Regulatory technical standards concerning Article 138(4)

1.        In order to ensure consistent harmonisation in relation to Article 138(4), EIOPA shall develop draft regulatory technical standards to specify the factors and criteria to be taken into account for the purpose of the application of Article 138(4) including the maximum ▌period of time, expressed in total number of months, which shall be the same for all insurance and reinsurance undertakings as referred to in the first subparagraph of Article 138(4).

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

1a.      In order to ensure uniform conditions of application of Article 138(4), EIOPA shall develop draft implementing technical standards to specify the procedures to be followed by EIOPA when determining the existence of an exceptional fall in the financial markets in accordance with Article 138(4).

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.

2.        In order to ensure consistent harmonisation in relation to Article 138(2), Article 139(2) and Article 141, EIOPA shall develop draft regulatory technical standards to specify the recovery plan referred to in Article 138(2), and the finance scheme referred to in Article 139(2) and with respect to Article 141, taking due care to avoid pro cyclical effects."

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.";

(31a)   in Article 149, paragraph 1 is replaced by the following:

"1.      Any change which an insurance undertaking intends to make to the information referred to in Article 147 shall be subject to the procedure provided for in Articles 147 and 148.";

(32)     the following subparagraph is inserted after the first subparagraph of Article 155(3):

"In addition, the supervisory authority of the home or the host Member State may refer the matter to EIOPA and request its assistance in accordance with Article 19, paragraphs 1 to 4 and 6 of Regulation (EU) No 1094/2010. In that case, EIOPA may act in accordance with the powers conferred on it by that Article.";

(32a)   in Article 155, paragraph 9 is replaced by the following:

"9.      Member States shall inform the Commission and EIOPA of the number and types of cases which led to refusals under Articles 146 and 148 or in which measures have been taken under paragraphs 3 and 4 of this Article.";

(33)     in Article 158(2), the following subparagraph is inserted after the first subparagraph:

"In addition, the supervisory authority of the home or the host Member State may refer the matter to EIOPA and request its assistance in accordance with Article 19(1) to (4) and (6) of Regulation (EU) No 1094/2010. In that case, EIOPA may act in accordance with the powers conferred on it by that article.";

(33a)   Article 159 is replaced by the following:

"Article 159

Statistical information on cross-border activities

Every insurance undertaking shall inform the competent supervisory authority of its home Member State, separately in respect of transactions carried out under the right of establishment and those carried out under the freedom to provide services, of the amount of the premiums, claims and commissions, without deduction of reinsurance, by Member State and as follows:

(a)       for non-life insurance, by lines of business as set out in the corresponding delegated act;

(b)       for life insurance, by each line of business I to IX, as set out in the corresponding delegated act.

As regards class 10 in Part A of Annex I, not including carrier’s liability, the undertaking concerned shall also inform that supervisory authority of the frequency and average cost of claims.

The supervisory authority of the home Member State shall forward the information referred to in the first and second subparagraphs within a reasonable time and in aggregate form to the supervisory authorities of each of the Member States concerned upon their request.";

(34)     Article 172 is replaced by the following:

"Article 172

Equivalence in relation to reinsurance undertakings

1.        The Commission shall adopt delegated acts, in accordance with Article 301a, ▌specifying the criteria to assess whether the supervisory regime of a third country applied to reinsurance activities of undertakings with their head office in that third country is equivalent to that laid down in Title I ▌.

2.        If the criteria adopted in accordance with paragraph 1 have been fulfilled by a third country, the Commission may, in accordance with Article 301a, and assisted by EIOPA in accordance with Article 33(2) of Regulation (EU) No 1094/2010, decide that the supervisory regime of that third country applied to reinsurance activities of undertakings with the head office in that third country is equivalent to that laid down in Title I of this Directive.

Those decisions shall be regularly reviewed, to take into account any significant changes to the supervisory regime laid down in Title I, and to the supervisory regime in the third country.

EIOPA shall publish and keep up to date on its website a list of all third countries referred to in the first subparagraph.

3.        Where in accordance with paragraph 2, the supervisory regime of a third country has been deemed to be equivalent to that laid down in this Directive, reinsurance contracts concluded with undertakings having their head office in that third country shall be treated in the same manner as reinsurance contracts concluded with undertakings authorised in accordance with this Directive.

4.        By way of derogation from paragraph 2, and even if the criteria specified in accordance with paragraph 1 have not been fulfilled, the Commission may, for a limited period and in accordance with Article 301a, and assisted by EIOPA in accordance with Article 33(2) of Regulation (EU) No 1094/2010, decide that the supervisory regime of a third country applied to reinsurance activities of undertakings with the head office in that third country is temporarily equivalent to that laid down in Title I, if that third country has complied with at least the following criteria:

(a)       it has given written commitments to the Union to adopt and apply a supervisory regime that is capable of being assessed equivalent in accordance with paragraph 2, before the end of that limited period;

(b)       it has established a convergence programme to fulfil the commitment under point (a);

(c)       it has allocated sufficient resources to fulfil the commitment under point (a);

(d)       it has a solvency regime that is risk based and based on economic valuation of assets and liabilities;

(e)       it has concluded agreements to exchange confidential supervisory information, in accordance with Article 264;

(f)       it has an independent system of supervision based on core principles, principles and standards adopted by the IAIS;

(g)       it has established obligations on professional secrecy for all persons acting on behalf of its supervisory authorities, in particular on the exchange of information with EIOPA and supervisory authorities as defined in Article 13(10).

Any decisions on temporary equivalence shall take into account the reports by the Commission in accordance with Article 177(2). Those decisions shall be regularly reviewed, on the basis of progress reports by the relevant third country, which are presented to and assessed by the Commission and EIOPA every six months.

EIOPA shall publish and keep up to date on its website a list of all third countries referred to in the first subparagraph.

The Commission may adopt delegated acts, in accordance with Article 301a, further specifying the conditions laid down in the first subparagraph.

5.        The period referred to in paragraph 4 shall be five years from 1 January 2014 or until the date on which, in accordance with paragraph 2, the supervisory regime of that third country has been deemed to be equivalent to that laid down in Title I, whichever is the earliest.

That period may be extended with a maximum of one more year, where such time is necessary for EIOPA and the Commission to carry out the assessment of equivalence for the purposes of paragraph 2.

6.        Reinsurance contracts concluded with undertakings having their head office in a third country, the supervisory regime of which has been deemed temporarily equivalent in accordance with paragraph 4, shall be accorded the same treatment as the one set out in paragraph 3. Article 173 shall also apply to reinsurance undertakings having their head office in a third country, the supervisory regime of which has been deemed temporarily equivalent in accordance with paragraph 4.

▌

(35a)   Article 176 is replaced by the following:

"Article 176

Information from Member States to the Commission and EIOPA

The supervisory authorities of the Member States shall inform the Commission, EIOPA and the supervisory authorities of the other Member States of any authorisation of a direct or indirect subsidiary, one or more of whose parent undertakings are governed by the laws of a third country.

That information shall also contain an indication of the structure of the group concerned.

Where an undertaking governed by the law of a third country acquires a holding in an insurance or reinsurance undertaking authorised in the Community which would turn that insurance or reinsurance undertaking into a subsidiary of that third country undertaking, the supervisory authorities of the home Member State shall inform the Commission, EIOPA and the supervisory authorities of the other Member States.";

(35b)   Article 177(1) is replaced by the following:

"1.      Member States shall inform the Commission and EIOPA of any general difficulties encountered by their insurance or reinsurance undertakings in establishing themselves and operating in a third country or pursuing activities in a third country.";

(36)     Article 210(2) is replaced by the following:

"2.       In order to ensure consistent harmonisation in relation to finite reinsurance, EIOPA shall develop draft regulatory technical standards to specify the monitoring, management and control of risks arising from finite reinsurance activities.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

2a.      In order to ensure uniform conditions of application of paragraph 1, EIOPA shall develop draft implementing technical standards on the reporting procedures to be followed and formats and templates to be used.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.";

(37)     In Article 211, paragraphs 2 and 3 are replaced by the following:

"2.       In order to ensure consistent harmonisation in relation to Article 211(1), EIOPA shall develop draft regulatory technical standards to specify the following criteria for supervisory approval:

(a)       the scope of authorisation;

(b)       mandatory conditions to be included in all contracts issued;

(c)       fit and proper requirements as referred to in Article 42 of the persons running the special purpose vehicle;

(d)       fit and proper requirements for shareholders or members having a qualifying holding in the special purpose vehicle;

(e)       sound administrative and accounting procedures, adequate internal control mechanisms and risk-management requirements;

(f)        accounting, prudential and statistical information requirements;

(g)       solvency requirements.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

2a.      In order to ensure uniform conditions of application of Article 211(1) and (2), EIOPA shall develop draft implementing technical standards on the procedures to be followed and formats and templates to be used for granting supervisory approval to establish special purpose vehicles.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.

2b.      In order to ensure uniform conditions of application of Article 211(1) and (2), EIOPA may develop draft implementing technical standards on the procedures to be followed and formats and templates to be used for the cooperation and exchange of information between supervisory authorities, where the special purpose vehicle which assumes risk from an insurance or reinsurance undertaking is established in a Member State which is not the Member State in which the insurance or reinsurance undertaking is authorised.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.

3.        Special purpose vehicles authorised prior to 31 December 2012 shall be subject to the law of the Member State that authorised the special purpose vehicle. However, any new activity commenced by such a special purpose vehicle after that date shall be subject to paragraphs 1, 2 and 2a.";

(37a)   In Article 212(1), point (e) is replaced by following:

"(e) 'college of supervisors' means permanent but flexible structure for the cooperation, coordination and facilitation of decision making concerning the supervision of a group, the members of which are:

–         the group supervisor,

–         supervisory authorities supervising undertakings of the group, not being the group supervisor, and

-          EIOPA, which for the purpose of this definition shall be considered a supervisory authority.";

(38)     Article 216 is amended as follows:

(a)       in paragraph 1, the second subparagraph is replaced by the following:

"In such a case, the supervisory authority shall explain its decision to both the group supervisor and the ultimate parent undertaking at Union level. The group supervisor shall notify the college of supervisors in accordance with Article 248(1)(a).";

(b)      in paragraph 4, the third subparagraph is replaced by the following:

"The supervisory authority shall explain such decisions to both the undertaking and the group supervisor. The group supervisor shall notify the college of supervisors in accordance with Article 248(1)(a).";

(c)       paragraph 7 is replaced by the following:

"7.       EIOPA shall develop draft regulatory technical standards, specifying the circumstances under which the decision referred to in paragraph 1 can be made. EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt those regulatory technical standards in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.";

(39)     Article 217 is amended as follows:

(a)       in paragraph 1, the following subparagraph is added:

"In such a case, the supervisory authorities shall explain their agreement to both the group supervisor and the ultimate parent undertaking at Union level. The group supervisor shall notify the college of supervisors in accordance with Article 248(1)(a).";

(b)       paragraph 3 is replaced by the following:

"3. The Commission shall adopt delegated acts, in accordance with Article 301a , specifying the circumstances under which the decision referred to in paragraph 1 can be made.";

(40)     Article 227 is replaced by the following:

"Article 227

Equivalence relating to third-country insurance and re-insurance undertakings

1.        When calculating the group solvency of an insurance or reinsurance undertaking which is a participating undertaking in a third-country insurance or reinsurance undertaking, in accordance with Article 233, the third-country insurance or reinsurance undertaking shall, solely for the purposes of that calculation, be treated as a related insurance or reinsurance undertaking.

However, where the third country in which that undertaking has its head office makes it subject to authorisation and imposes on it a solvency regime at least equivalent to that laid down in Title I, Chapter VI, Member States may provide that the calculation take into account, as regards that undertaking, the Solvency Capital Requirement and the own funds eligible to satisfy that requirement as laid down by the third country concerned.

2.        Where no decision has been taken in accordance with paragraph 4 or paragraph 6 the verification of whether the third-country regime is at least equivalent shall be carried out by the group supervisor at the request of the participating undertaking or on its own initiative. EIOPA shall assist the group supervisor in accordance with Article 33(2) of Regulation (EU) No 1094/2010.

In so doing, the group supervisor, assisted by EIOPA, shall consult the other supervisory authorities concerned and EIOPA before taking a decision on equivalence. That decision shall be taken in accordance with the criteria adopted in accordance with paragraph 3. The group supervisor shall not take any decision in relation to a third-country that is contradicting any decision taken vis-à-vis that third-country previously save where it is necessary to take into account of significant changes to the supervisory regime laid down in Title I, Chapter VI and to the supervisory regime in the third country.

Where supervisory authorities disagree with the decision taken in accordance with subparagraph 2, they may refer the matter to EIOPA and request its assistance in accordance with Article 19(1), (2), (3) and (6), of Regulation (EU) No 1094/2010 within three months after notification of the decision by the group supervisor. In that case, EIOPA may act in accordance with the powers conferred on it by that Article.

▌

3.        The Commission may adopt delegated acts, in accordance with Article 301a specifying the criteria to assess whether the supervisory regime of a third country is equivalent to that laid down in Title I, Chapter VI.

4.        If the criteria adopted in accordance with paragraph 3 have been fulfilled by a third country, the Commission may, in accordance with Article 301a, and assisted by EIOPA in accordance with Article 33(2) of Regulation (EU) No 1094/2010, decide that the supervisory regime of that third country is equivalent to that laid down in Title I, Chapter VI.

Those decisions shall be regularly reviewed, to take into account any significant changes to the supervisory regime laid down in Title I, Chapter VI, and to the supervisory regime in the third country.

EIOPA shall publish and keep up to date on its website a list of all third countries referred to in the first subparagraph.

▌

5.        By way of derogation from paragraph 4, and even if the criteria specified in accordance with paragraph 3 have not been fulfilled, the Commission may, for a limited period and in accordance with Article 301a, and assisted by EIOPA in accordance with Article 33(2) of Regulation (EU) No 1094/2010, decide that the supervisory regime of a third country applied to undertakings with the head office in that third country is temporarily equivalent to that laid down in Title I, Chapter IV, if that third country has at least complied with the following criteria:

(a)       it has given written commitments to the Union to adopt and apply a supervisory regime that is capable of being assessed equivalent in accordance with paragraph 2, before the end of that limited period;

(b)       it has established a convergence programme to fulfil the commitment under point (a);

(c)       it has allocated sufficient resources to fulfil the commitment under point (a);

(d)       it has a supervisory regime that is risk-based and based on economic valuation of assets and liabilities;

(e)       it has concluded agreements to exchange confidential supervisory information in accordance with Article 264;

(f)       it has an independent system of supervision based on core principles, principles and standards adopted by the IAIS;

(g)       it has been established obligations on professional secrecy for all persons acting on behalf of its supervisory authorities, in particular on the exchange of information with EIOPA and supervisory authorities as defined in Article 13(10).

Any decisions on temporary equivalence shall take into account the reports by the Commission in accordance with Article 177(2). Those decisions shall be regularly reviewed on the basis of progress reports by the relevant third country, which are presented to and assessed by the Commission and EIOPA every six months.

EIOPA shall publish and keep up to date on its website a list of all third countries referred to in the first subparagraph.

The Commission may adopt delegated acts, in accordance with Article 301a, further specifying the conditions laid down in the first subparagraph.

6.        The period referred to in paragraph 5 shall be five years from the date referred to in Article 310 or until the date on which, in accordance with paragraph 4, the supervisory regime of that third country has been deemed to be equivalent to that laid down in Title I, Chapter VI, whichever is the earliest.

That period may be extended with a maximum of one more year, where such time is necessary for EIOPA and the Commission to carry out the assessment of equivalence for the purposes of paragraph 4.

7.        Where in accordance with paragraph 5 a decision has been taken that the supervisory regime of a third country is temporarily equivalent, that third country shall be deemed to be equivalent of the purposes of the second subparagraph of paragraph 1.";

(40a)   Article 231 is replaced by the following:

"Article 231

Group internal model

1.        In the case of an application for permission to calculate the consolidated group Solvency Capital Requirement, as well as the Solvency Capital Requirement of insurance and reinsurance undertakings in the group, on the basis of an internal model, submitted by an insurance or reinsurance undertaking and its related undertakings, or jointly by the related undertakings of an insurance holding company, the supervisory authorities concerned shall cooperate to decide whether or not to grant that permission and to determine the terms and conditions, if any, to which such permission is subject.

An application as referred to in the first subparagraph shall be submitted to the group supervisor.

The group supervisor shall inform and forward the complete application to the other members of the college of supervisors without delay.

2.        The supervisory authorities concerned shall do everything within their power to reach a joint decision on the application within six months from the date of receipt of the complete application by the group supervisor.

3.        If, within the six-month period referred to in paragraph 2, any of the supervisory authorities concerned has referred the matter to EIOPA in accordance with Article 19 of Regulation (EU) No 1094/2010, the group supervisor shall defer its decision and await any decision that EIOPA may take in accordance with Article 19(3) of that Regulation, and shall take its decision in conformity with EIOPA's decision. That decision shall be recognised as determinative and applied by the supervisory authorities concerned.

If, in accordance with Article 41(2) and (3) and Article 44(1)(3) of Regulation (EU) No 1094/2010, the decision proposed by the panel is rejected, the group supervisor shall take a final decision. That decision shall be recognised as determinative and applied by the supervisory authorities concerned. The six-month period shall be deemed the conciliation period within the meaning of Article 19(2) of that Regulation.

EIOPA shall take its decision within one month. The matter shall not be referred to EIOPA after the end of the six-month period or after a joint decision has been reached.

4.        EIOPA may develop draft implementing technical standards to ensure uniform conditions of application of the joint decision process referred to in paragraph 2 with regard to the applications for permissions referred to in paragraph 1, with a view to facilitating joint decisions.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.

5.        Where the supervisory authorities concerned have reached a joint decision referred to in paragraph 2, the group supervisor shall provide the applicant with a document setting out the full reasons.

6.        In the absence of a joint decision within six months from the date of receipt of the complete application by the group, the group supervisor shall make its own decision on the application.

In making its decision, the group supervisor shall duly take into account any views and reservations of the other supervisory authorities concerned expressed during the applicable period.

The group supervisor shall provide the applicant and the other supervisory authorities concerned with a document setting out its fully reasoned decision.

That decision shall be recognised as determinative and applied by the supervisory authorities concerned.

7.        Where any of the supervisory authorities concerned considers that the risk profile of an insurance or reinsurance undertaking under its supervision deviates significantly from the assumptions underlying the internal model approved at group level, and as long as that undertaking has not properly addressed the concerns of the supervisory authority, that authority may, in accordance with Article 37, impose a capital add-on to the Solvency Capital Requirement of that insurance or reinsurance undertaking resulting from the application of such internal model.

In exceptional circumstances, where such capital add-on would not be appropriate, the supervisory authority may require the undertaking concerned to calculate its Solvency Capital Requirement on the basis of the standard formula referred to in Title I, Chapter VI, Section 4, Subsections 1 and 2. In accordance with Article 37(1)(a) and (c), the supervisory authority may impose a capital add-on to the Solvency Capital Requirement of that insurance or reinsurance undertaking resulting from the application of the standard formula.

The supervisory authority shall explain any decision referred to in the first and second subparagraphs to both the insurance or reinsurance undertaking and the other members of the college of supervisors.

EIOPA may issue guidelines to ensure consistent and coherent application of this paragraph.";

(40b)   In Article 232, the third paragraph is replaced by the following:

"Article 37(1) to (5), together with the delegated acts, regulatory implementing technical standards taken in accordance with Article 37(6) and (7), shall apply mutatis mutandis."

(40c)   In Article 233(6), the third subparagraph is replaced by the following:

"Article 37(1) to (5), together with the delegated acts, regulatory and implementing technical standards taken in accordance with Article 37(6) and (7), shall apply mutatis mutandis."

▌

(44)     Article 234 is replaced by the following:

"Article 234

Regulatory technical standards concerning Articles 220 to 229 and 230 to 233

In order to ensure consistent harmonisation of this Article, EIOPA shall develop draft regulatory technical standards to specify the technical principles and methods set out in Articles 220 to 229 and the application of Articles 230 to 233, reflecting the economic nature of specific legal structures.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.";

(45)     Article 237 is replaced by the following:

"Article 237

Subsidiaries of an insurance or reinsurance undertaking: decision on the application

1.        In the case of applications for permission to be subject to the rules laid down in Articles 238 and 239, the supervisory authorities concerned shall work together within the college of supervisors, in full consultation, to decide whether or not to grant the permission sought and to determine the other terms and conditions, if any, to which such permission should be subject.

An application as referred to in the first subparagraph shall be submitted only to the supervisory authority having authorised the subsidiary. That supervisory authority shall inform and forward the complete application to the other members of the college of supervisors without delay.

2.        The supervisory authorities concerned shall do everything within their power to reach a joint decision on the application within three months from the date of receipt of the complete application by all supervisory authorities within the college of supervisors.

3.        If, within the three-month period referred to in paragraph 2, any of the supervisory authorities concerned has referred the matter to EIOPA in accordance with Article 19 of Regulation (EU) No 1094/2010, the group supervisor shall defer its decision and await any decision that EIOPA may take in accordance with Article 19(3) of that Regulation, and shall take its decision in conformity with EIOPA's decision. That decision shall be recognised as determinative and applied by the supervisory authorities concerned.

If, in accordance with Article 41(2) and (3) and Article 44(1)(3) of Regulation (EU) No 1094/2010, the decision proposed by the panel is rejected, the group supervisor shall take a final decision. That decision shall be recognised as determinative and applied by the supervisory authorities concerned. The three-month period shall be deemed the conciliation period within the meaning of Article 19(2) of that Regulation.

EIOPA shall take its decision within one month. The matter shall not be referred to EIOPA after the end of the three-month period or after a joint decision has been reached.

4.        EIOPA may develop draft implementing technical standards to ensure uniform conditions of application of the joint decision process referred to in paragraph 2 with regard to the applications for permissions referred to in paragraph 1, with a view to facilitating joint decisions.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.

5.        Where the supervisory authorities concerned have reached a joint decision referred to in paragraph 2, the supervisory authority having authorised the subsidiary shall provide the applicant with a document setting out the full reasons. The joint decision shall be recognised as determinative and shall be applied by the supervisory authorities concerned.

6.        In the absence of a joint decision of the supervisory authorities concerned within the three-month period set out in paragraph 2, the group supervisor shall take its own decision with regard to the application.

In taking its decision, the group supervisor shall duly consider the following:

(a)       any views and reservations of the supervisory authorities concerned expressed during the applicable period;

(b)       any reservations of the other supervisory authorities within the college of supervisors expressed during the applicable period.

The decision shall state the full reasons and shall contain an explanation of any significant deviation from the reservations of the other supervisory authorities concerned. The group supervisor shall provide the applicant and the other supervisory authorities concerned with a copy of the decision. The decision shall be recognised as determinative and shall be applied by the supervisory authorities concerned.”;

(45a)   In Article 238, paragraph 4 is replaced by the following:

"4. The college of supervisors shall do everything within its power to reach an agreement on the proposal of the supervisory authority having authorised the subsidiary or on other possible measures.

That agreement shall be recognised as determinative and applied by the supervisory authorities concerned.";

(46)     Article 238(5) is replaced by the following:

"5.       Where the supervisory authority and the group supervisor disagree, either supervisor may, within one month from the proposal of the supervisory authority, refer the matter to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010. In that case, EIOPA may act in accordance with the powers conferred to it by that Article, and shall take its decision within one month of such referral. The one-month period shall be deemed the conciliation period within the meaning of Article 19(2) of that Regulation. The matter shall not be referred to EIOPA after the end of the one month period referred to in this subparagraph or after an agreement has been reached within the college in accordance with paragraph 4 of this Article.

The supervisory authority having authorised that subsidiary shall defer its decision and await any decision that EIOPA may take in accordance with Article 19 of that Regulation, and shall take its decision in conformity with EIOPA's decision.

That decision shall be recognised as determinative and applied by the supervisory authorities concerned.

The decision shall state the full reasons on which it is based.

The decision shall be submitted to the subsidiary and to the college of supervisors.";

(47)     In Article 239 the following paragraph is added:

"4.       Where any of the supervisory authorities concerned disagrees on the approval of the recovery plan within the four-month period referred to in paragraph 1 or on the approval of the proposed measures within the one month period referred to in paragraph 2, any supervisory authority may ▌refer the matter to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010. In that case, EIOPA may act in accordance with the powers conferred to it by that Article, and shall take its decision within one month of such referral. The matter shall not be referred to EIOPA after the end of the four-month or the one-month period respectively referred to in this subparagraph or after an agreement has been reached within the college in accordance with the second subparagraph of paragraph 1 or the second subparagraph of paragraph 2. The four-month or the one-month period respectively shall be deemed the conciliation period within the meaning of Article 19(2) of that Regulation.

The supervisory authority having authorised that subsidiary shall defer its decision and await any decision that EIOPA may take in accordance with Article 19(3) of that regulation, and shall take its final decision in conformity with EIOPA's decision. That decision shall be recognised as determinative and applied by the supervisory authorities concerned.

The decision shall state the full reasons on which it is based.

The decision shall be submitted to the subsidiary and to the college of supervisors.";

(48)     Article 241 is replaced by the following:

"Article 241

Subsidiaries of an insurance or reinsurance undertaking:

delegated acts

The Commission shall adopt delegated acts, in accordance with Article 301a ▌specifying:

(a)       the criteria to be applied when assessing whether the conditions stated in Article 236 are satisfied;

(b)       the criteria to be applied when assessing what should be considered an emergency situation under Article 239(2);

(c)       the procedures to be followed by supervisory authorities when exchanging information, exercising their rights and fulfilling their duties in accordance with Articles 237 to 240.";

(49)     Article 242(1) is replaced by the following:

"1.      By 31 December 2014, the Commission shall make an assessment of the application of Title III, in particular as regards the cooperation of supervisory authorities within, and functionality of, the college of supervisors and the supervisory practices concerning setting the capital add-ons, and shall present a report to the European Parliament and the Council accompanied, where appropriate, by proposals for the amendment of this Directive.";

(50)     Article 242(2) is amended as follows:

(a)       the date "31 October 2015" is replaced by the date "31 December 2015";

(b)       point (e) is deleted;

(51)     Article 244(4) is replaced by the following:

"4.       The Commission shall adopt delegated acts in accordance with Article 301a ▌as regards the definition and identification of a significant risk concentration ▌for the purposes of paragraphs 2 and 3.

In order to ensure consistent harmonisation in relation to supervision of risk concentration, EIOPA shall develop draft regulatory technical standards to specify the identification of a significant risk concentration and the determination of appropriate thresholds for the purposes of paragraph 3.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the second subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

4a.      In order to ensure uniform conditions of application of this Article, EIOPA shall develop draft implementing technical standards to establish standard forms, templates and procedures for the reporting on such risk concentrations for the purposes of paragraph 2.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.";

(52)     Article 245(4) is replaced by the following:

"4.       The Commission may adopt delegated acts in accordance with Article 301a as regards the definition of a significant intra-group transaction for the purposes of paragraphs 2 and 3.

In order to ensure consistent harmonisation in relation to supervision of intra-group transactions, EIOPA may develop draft regulatory technical standards to specify the identification of a significant intra-group transaction for the purposes of paragraph 3.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the second subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

4a.      In order to ensure uniform conditions of application of this Article, EIOPA may develop draft implementing technical standards to establish standard forms, templates and procedures for the reporting on such intra-group transactions for the purposes of paragraph 2.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the fourth subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.";

(53)     In Article 247, paragraphs 3 to 7 are replaced by the following:

"3.      In particular cases, the supervisory authorities concerned may, at the request of any of the authorities, take a joint decision to derogate from the criteria set out in paragraph 2 where their application would be inappropriate, taking into account the structure of the group and the relative importance of the insurance and reinsurance undertakings’ activities in different countries, and designate a different supervisory authority as group supervisor.

For that purpose, any of the supervisory authorities concerned may request that a discussion be opened on whether the criteria referred to in paragraph 2 are appropriate. Such a discussion shall not take place more often than annually.

The supervisory authorities concerned shall do everything within their power to reach a joint decision on the choice of the group supervisor within three months from the request for discussion. Before taking their decision, the supervisory authorities concerned shall give the group an opportunity to state its opinion.

The designated group supervisor shall submit the joint decision to the group stating the full reasons.

4.        If, within the three-month period referred to in the third subparagraph of paragraph 3, any of the supervisory authorities concerned has referred the matter to EIOPA in accordance with Article 19(1), (2), (3) and 6, of Regulation (EU) No 1094/2010, the supervisory authorities concerned shall defer their joint decision and await any decision that EIOPA may take in accordance with Article 19(3) of that Regulation, and shall take their joint decision in conformity with EIOPA's decision. That joint decision shall be recognised as determinative and applied by the supervisory authorities concerned. The three-month period shall be deemed the conciliation period within the meaning of Article 19(2) of that Regulation.

EIOPA shall take its decision within one month of a referral under the first subparagraph. The matter shall not be referred to EIOPA after the end of the three-month period or after a joint decision has been reached. The designated group supervisor shall submit the joint decision to the group and to the college of supervisors stating the full reasons.

▌

6.        In the absence of a joint decision ▌, the task of group supervisor shall be exercised by the supervisory authority identified in accordance with paragraph 2 of this Article. ▌

7.        EIOPA shall inform the European Parliament, the Council and the Commission of any major difficulties with the application of paragraphs 2, 3 and 6 on at least an annual basis.

In the event that any major difficulties arise from the application of the criteria set out in paragraphs 2 and 3 of this Article, the Commission shall adopt delegated acts in accordance with Article 301a further specifying those criteria.";

(54)     Article 248 is amended as follows:

(a)       in paragraph 2, the following subparagraph is added:

"Where the group supervisor fails to carry out the tasks referred to in paragraph 1 or where the members of the college of supervisors do not cooperate to the extent required in this paragraph, any of the supervisory authorities concerned may refer the matter to EIOPA and request its assistance in accordance with Article 19(1), (2), (3) and 6 of Regulation (EU) No 1094/2010. In that case, EIOPA may act in accordance with the powers conferred on it by Article 19 of that Regulation.";

(aa)     in paragraph 3, the first subparagraph is replaced by the following:

"3. The membership of the college of supervisors shall include the group supervisor, the supervisory authorities of all the Member States in which the head office of all subsidiary undertakings is situated, and EIOPA.";

(b)       in paragraph 4, the second subparagraph is replaced by the following:

"Where diverging views concerning the coordination arrangements arise, any member of the college of supervisors may refer the matter to EIOPA and request its assistance in accordance with Article 19(1), (2), (3) and 6, of Regulation (EU) No 1094/2010. In that case, EIOPA may act in accordance with the powers conferred on it by Article 19 of that Regulation. That decision shall be recognised as determinative and applied by the supervisory authorities concerned.

▌";

(ba)     in paragraph 5, the second paragraph is replaced by the following:

"Without prejudice to the rights and duties allocated by this Directive to the group supervisor and to other supervisory authorities, the coordination arrangements may entrust additional tasks to the group supervisor, the other supervisory authorities or EIOPA where this would result in the more efficient supervision of the group and would not impair the supervisory activities of the members of the college of supervisors in respect of their individual responsibilities.";

(c)       paragraphs 6 and 7 are replaced by the following:

"6.       EIOPA shall elaborate guidelines for the operational functioning of colleges of supervisors on the basis of comprehensive reviews of their work in order to assess the level of convergence between them. Such reviews shall be carried out at least every three years. Member States shall ensure that the group supervisor transmits to EIOPA the information on the functioning of the colleges of supervisors and on any difficulties encountered that are relevant for those reviews.

In order to ensure consistent harmonisation in relation to the coordination between supervisory authorities, EIOPA may develop draft regulatory technical standards to specify the operational functioning of colleges of supervisors based on the guidelines referred to in the first subparagraph.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the second subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

7.        In order to ensure consistent harmonisation in relation to the coordination between supervisory authorities, EIOPA shall develop draft regulatory technical standards to specify the coordination arrangements for group supervision for the purposes of paragraphs 1 to 6, including the definition of "significant branch".

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.";

(55)     Article 249 is amended as follows:

(a)       in paragraph 1, the second subparagraph is replaced by the following:

"With the objective of ensuring that the supervisory authorities, including the group supervisor, have the same amount of relevant information available to them, without prejudice to their respective responsibilities, and irrespective of whether they are established in the same Member State, they shall provide one another with such information in order to allow and facilitate the exercise of the supervisory tasks of the other authorities under this Directive. In that regard, the supervisory authorities concerned and the group supervisor shall communicate to one another without delay all relevant information as soon as it becomes available or exchange information on request. The information referred to in this subparagraph includes, but is not ; to, information about actions of the group and supervisory authorities, and information provided by the group."

(b)       the following paragraph is inserted:

"1a.     Where a supervisory authority has not communicated relevant information or a request for cooperation, in particular to exchange relevant information, has been rejected or has not been acted upon within two weeks, the supervisory authorities may refer the matter to EIOPA.

Where the matter is referred to EIOPA, without prejudice to the provisions of Article 258 TFEU, EIOPA may act in accordance with the powers conferred on it by Article 19(1), (2), (3) and 6, of Regulation (EU) No 1094/2010.";

▌

(c)       paragraph 3 is replaced by the following:

"3.       In order to ensure consistent harmonisation in relation to the coordination between supervisory authorities, EIOPA shall develop draft regulatory technical standards to specify:

–         the items which are, on a systematic basis, to be gathered by the group supervisor and disseminated to other supervisory authorities concerned or to be transmitted to the group supervisor by the other supervisory authorities concerned.

–         the items essential or relevant for supervision at group level with a view to enhancing convergence of supervisory reporting.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.";

(d)       the following paragraph is added:

"4.       In order to ensure uniform conditions of application in relation to the coordination between supervisory authorities, EIOPA may develop draft implementing technical standards to establish standard forms, templates and procedures for the submission of information to the group supervisor as well as the procedure for the cooperation and the exchange of information between supervisory authorities as laid down in this Article.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.";

▌

(56a)   Article 250 is amended as follows:

"Article 250

Consultation between supervisory authorities

1.        Without prejudice to Article 248, the supervisory authorities concerned shall, where a decision is of importance for the supervisory tasks of other supervisory authorities, prior to that decision, consult each other in the college of supervisors with regard to the following:

(a)       changes in the shareholder structure, organisational or management structure of insurance and reinsurance undertakings in a group, which require the approval or authorisation of supervisory authorities; and

(b)       major sanctions or exceptional measures taken by supervisory authorities, including the imposition of a capital add-on to the Solvency Capital Requirement under Article 37 and the imposition of any limitation on the use of an internal model for the calculation of the Solvency Capital Requirement under Title I, Chapter VI, Section 4, Subsection 3.

For the purposes of point (b), the group supervisor shall always be consulted.

For the purpose of consultation on the imposition of a capital add-on under Article 37, the procedure set out in Article 238(4) and (5) shall apply mutadis mutandis, whereby only the group supervisor may refer the matter to EIOPA.

In addition, the supervisory authorities concerned shall, where a decision is based on information received from other supervisory authorities, consult each other prior to that decision.";

▌

(58)     In Article 255(2), the following subparagraph is added:

"Where the request to another supervisory authority to have a verification carried out in accordance with this paragraph has not been acted upon within two weeks, or where the supervisory authority is practically prohibited to exercise its right to participate in accordance with the third subparagraph, the requesting authority may refer the matter to EIOPA and may request its assistance in accordance with Article 19(1), (2) and (6), of Regulation (EU) No 1094/2010. In that case, EIOPA may act in accordance with the powers conferred on it by that Article.";

(58a)   In Article 255(2), the following subparagraph is added:

"In accordance with Article 21 of Regulation (EU) No 1094/2010, EIOPA shall be entitled to participate in on-site verifications where they are carried out jointly by two or more supervisory authorities.";

(59)     Article 256 is amended as follows:

(a)       paragraph 1 is replaced by the following:

"1. Member States shall require participating insurance and reinsurance undertakings and insurance holding companies and mixed financial holding companies to disclose publicly, on an annual basis, a report on the solvency and financial condition at the level of the group. Articles 51, 53, 54 and 55 shall apply mutatis mutandis.";

(b)       paragraph 4 is replaced by the following:

"4. The Commission shall adopt delegated acts in accordance with Article 301a ▌further specifying the information which must be disclosed ▌as regards the single solvency and financial condition report.";

(c)       the following paragraph is added:

"5. In order to ensure uniform conditions of application in relation to the group solvency and financial condition report, EIOPA shall develop draft implementing technical standards on the procedures to be followed and formats and templates to be used for the disclosure of the group solvency and financial report as laid down in this Article.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.";

(59a)   The following article is inserted:

"Article 256a

Group structure

Member States shall require insurance and reinsurance undertakings to disclose publicly, at the level of the insurance or reinsurance group, on an annual basis, the legal structure and the governance and organisational structure, including all regulated entities, non-regulated entities and material branches belonging to the group.";

(60)     Article 258(3) is replaced by the following:

"3. The Commission may adopt delegated acts in accordance with Article 301a ▌for the coordination of enforcement measures referred to in paragraphs 1 and 2."

(61)     Article 259 is replaced by the following:

"Article 259

Reporting of EIOPA

1.        EIOPA shall report to the European Parliament annually in accordance with Article 50 of Regulation (EU) No 1094/2010.

2.        EIOPA shall report, inter alia, on all relevant and significant experiences of the supervisory activities and cooperation between supervisors in the framework of Title III, and, in particular:

(a)       the process of the nomination of the group supervisor, the number of group supervisors and geographical spread;

(b)       the working of the college of supervisors, in particular the involvement and commitment of supervisory authorities where they are not the group supervisor.

3.        EIOPA may, for the purposes of paragraph 1 of this Article, also report on the main lessons drawn from the reviews referred to in Article 248(6), where appropriate.";

(62)     Article 260 is replaced by the following:

"1. In the case referred to in Article 213(2)(c), the supervisory authorities concerned shall verify whether the insurance and reinsurance undertakings, the parent undertaking of which has its head office outside the Union, are subject to supervision, by a third-country supervisory authority, which is equivalent to that provided for by this Title on the supervision at the level of the group of insurance and reinsurance undertakings referred to in Article 213(2)(a) and (b).

Where no decision has been taken in accordance with paragraph 3 or 5 the verification shall be carried out by the supervisory authority which would be the group supervisor if the criteria set out in Article 247(2) were to apply (hereinafter the "acting group supervisor"), at the request of the parent undertaking or of any of the insurance and reinsurance undertakings authorised in the Union or on its own initiative. EIOPA shall assist the acting group supervisor in accordance with Article 33(2) of Regulation (EU) No 1094/2010.

In so doing, that acting group supervisor shall, assisted by EIOPA, consult the other supervisory authorities concerned and EIOPA, before taking a decision on equivalence. That decision shall be taken in accordance with the criteria adopted in accordance with paragraph 2. The acting group supervisor shall not take any decision in relation to a third country that is in opposition to any previous decision taken vis-à-vis that third-country save where it is necessary to take into account of significant changes to the supervisory regime laid down in Title I and to the supervisory regime in the third country.

Where supervisory authorities disagree with the decision taken in accordance with subparagraph 3, they may refer the matter to EIOPA and request its assistance in accordance with Article 19(1), (2), (3) and (6), of Regulation (EU) No 1094/2010 within three months after notification of the decision by the acting group supervisor. In that case, EIOPA may act in accordance with the powers conferred on it by that Article.";

2.        The Commission may adopt delegated acts in accordance with Article 301a, specifying the criteria to assess whether the supervisory regime in a third country for the supervision of groups is equivalent to that laid down in this Title.

3.        If the criteria adopted in accordance with the paragraph 2 have been fulfilled by a third country, the Commission may, in accordance with Article 301a, and assisted by EIOPA in accordance with Article 33(2) of Regulation (EU) No 1094/2010, decide that the supervisory regime of that third country is equivalent to that laid down in this Title.

Such a Commission decision shall be regularly reviewed to take into account any significant changes to the supervisory regime laid down in this Title, and to the supervisory regime in the third country.

EIOPA shall publish and keep up to date on its website a list of all third countries referred to in the first subparagraph.

4. In the absence of a decision adopted by the Commission in accordance with paragraph 3 or 5, Article 262 shall apply.

5.        By way of derogation from paragraph 3, and even if the criteria specified in accordance with paragraph 2 have not been fulfilled the Commission may, for a limited period and in accordance with Article 301a, and assisted by EIOPA in accordance with Article 33(2) of Regulation (EU) No 1094/2010, decide that the supervisory regime of a third country applied to undertakings with the head office in that third country is temporarily equivalent to that laid down in Title I, if that third country has complied with at least the following criteria:

(a)       it has given written commitments to the Union to adopt and apply a supervisory regime that is capable of being assessed equivalent in accordance with paragraph 3, before the end of that limited period;

(b)       it has established a convergence programme to fulfil the commitment under point (a);

(c)       it has allocated sufficient resources to fulfil the commitment under point (a);

(d)       it has a supervisory regime that is risk based and based on economic valuation of assets and liabilities;(e)  it has concluded agreements to exchange confidential supervisory information in accordance with Article 264;

(f)       it has an independent system of supervision based on core principles, principles and standards adopted by the IAIS;

(g)       it has established, for all persons acting on behalf of its supervisory authorities, obligations on professional secrecy in particular on the exchange of information with EIOPA and supervisory authorities as defined in Article 13(10).

Any decisions on temporary equivalence shall take into account the reports by the Commission in accordance with Article 177(2). Those decisions shall be regularly reviewed, on the basis of progress reports by the relevant third country, which are presented to and assessed by the Commission and EIOPA every six months.

EIOPA shall publish and keep up to date on its website a list of all third countries referred to in the first subparagraph.

The Commission may adopt delegated acts in accordance with Article 301a further specifying the conditions laid down in the first subparagraph.

6. The period referred to in paragraph 5 shall be five years from the date referred to in Article 310 or until the date on which, in accordance with paragraph 3, the supervisory regime of that third country has been deemed to be equivalent to that laid down in this Title, whichever is the earliest.

That period may be extended with a maximum of one more year, where such time is necessary for EIOPA and the Commission to carry out the assessment of equivalence for the purposes of paragraph 3.

7. Where a decision in accordance with paragraph 5 is taken that the supervisory regime of a third country is temporarily equivalent, Member States may apply Article 261. EIOPA shall issue guidelines for the consistent and coherent application by Member States of this paragraph by 1 January 2014. Member States shall make every effort to comply with those guidelines. Where a Member State decides not to apply Article 261 in respect of a group, no other Member State may apply that Article in respect of that group."

(63)     In Article 262 the first subparagraph of paragraph 1 is replaced by the following:

"1. In the absence of equivalent supervision referred to in Article 260, or where a Member State does not apply Article 261 in the event of temporarily equivalence in accordance with Article 260(7), that Member State shall apply either of the following to insurance and reinsurance undertakings:

(a)       Articles 218 to 235, and Articles 244 to 258 mutatis mutandis;

(b)       one of the methods set out in paragraph 2.";

▌

(66)     In ▌ Article 300, the first paragraph is replaced by the following:

"The amounts expressed in euro in this Directive shall be revised every five years, by increasing the base amount in euro by the percentage change in the Harmonised Indices of Consumer Prices of all Member States as published by Eurostat starting from 31 December 2012 until the date of revision and rounded up to a multiple of EUR 100 000.".

(67)     In Article 301, paragraphs 2 and 3 are deleted.

(68)     The following articles ▌are inserted:

"Article 301a

Exercise of the delegation

1.        The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.

▌

1a.      The delegation of power referred to in Articles 17, 37, 50, 56, 109a, 172, 216, 217, 227, 241, 244, 245, 247, 256, 258, 260 shall be conferred on the Commission for a period of four years from ....

*         OJ please insert the date of entry into force of this Directive.

1b.      The delegation of power referred to in Articles 17, 37, 50, 56, 109a, 172, 216, 217, 227, 241, 244, 245, 247, 256, 258, 260 may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect on the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

2.        As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

3.        A delegated act adopted pursuant to Articles 17, 37, 50, 56, 109a, 172, 216, 217, 227, 241, 244, 245, 247, 256, 258, 260 shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of three months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by three months at the initiative of the European Parliament or the Council.

▌

Article 301b

Sunrise clause

When adopting for a first time the regulatory technical standards provided for in Article 35(6), Article 37(6a), Article 50, Article 58(8), Article 75(2), Article 86, Article 92(1), Article 97(1), Article 99(1), Article 111(1) and (2), Article 114(1), Article 127, Article 130, Article 135(1) and (2a), Article 143(1) and (2), Article 210(2), Article 211(2), Article 234, Article 245(4) Article 248(6) and (7), Article 249(3) and for a transitional period of a maximum two years after ...* the publication of this Directive in the Official Journal of the European Union the Commission shall follow the procedure for the adoption of delegated acts as set out in Article 301a. Any amendments to such delegated acts or, after the transitional period has expired, any new regulatory technical standards shall be adopted in accordance with the procedures as set out in the relevant Articles.";

(69)     In Article 304, paragraph 2 is replaced by the following:

"The Commission shall submit to the European Insurance and Occupational Pensions Committee and the European Parliament, by 31 December 2015, a report on the application of the approach set out in paragraph 1 and the supervisory authorities’ practices adopted pursuant to paragraph 1, accompanied, where appropriate, by adequate proposals. That report shall address, in particular, cross-border effects of the use of that approach with a view to preventing regulatory arbitrage by insurance and reinsurance undertakings.";

(70)     The following section is inserted:

"SECTION 3

Insurance and reinsurance

Article 308a

Phasing-in

1.        Between 1 January and 31 December 2013, insurance and reinsurance undertakings and supervisory authorities shall take all measures necessary to comply as of 1 January 2014 with the national laws, regulations and administrative provisions implementing this Directive.

2.        From 1 January 2013 Member States shall ensure that the supervisory authorities have the power to:

(a)       decide on:

(i)       the approval of undertaking specific parameters in accordance with Article 104 (7);

(ii)      the approval of ancillary own funds in accordance with Article 90;

(iii)     the approval of the classification of own funds items referred to in the third paragraph of Article 95;

(iv)      the approval of a full or partial internal model in accordance with Articles 112 and 113;

(v)       the approval of special purpose vehicles to be established in their territory;

(vi)      the approval of ancillary own funds of an intermediate insurance holding company in accordance with Article 226(2);

(vii)    a decision referred to in Article 228;

(viii)   the approval of a group internal model in accordance with Article 231 and Article 233(5);

(ixi)    the permission to be subject to Articles 238 and 239, in accordance with Article 236;

(b)       determine the level and scope of group supervision in accordance with Sections 2 and 3 of Title III, Chapter I;

(c)       determine the choice of method to calculate group solvency in accordance with Article 220;

(d)       make the determination on equivalence and temporary equivalence in accordance with Articles 227 and 260;

(e)       identify the group supervisor in accordance with Article 247;

(f)       establish a college of supervisors in accordance with Article 248;

(g)       make the determinations referred to in Articles 262 and 263; and

(h)      determine the application of waivers and transitional periods in accordance with Article 308a(3) and Article 308b.

Member States shall oblige the supervisory authorities concerned to consider applications submitted by insurance and reinsurance undertakings for approval or permission in accordance with paragraph 3. The decisions taken by the supervisory authorities on applications for approval or permission shall not become applicable before the date referred to Article 310.

3.        Without prejudice to Article 308b, as of 1 July 2013 insurance and reinsurance undertakings shall:

(a)       calculate estimates for the Solvency Capital Requirement, the Minimum Capital Requirement and the amount of own funds, determine the balance sheet in accordance with this Directive, and provide the supervisory authorities concerned with this information;

(b)       provide supervisory authorities with the information referred to in Article 35 on an annual basis in relation to the financial year ending on or after 1 July 2013.

The reference date of the balance sheet referred to in point (a) shall be the first day of the financial year starting on or after 1 July 2012, but before 1 July 2013.

Supervisory authorities may waive the requirement laid down in point (b) for insurance and reinsurance undertakings which do not comply fully with the requirements to have appropriate systems and structures in place in accordance with Article 35(5), provided that insurance and reinsurance undertakings remain subject to the reporting requirements in force in their respective jurisdiction before the date referred to in Article 309(1).

▌

Article 308b

Transitional periods

1.        Member States may allow insurance and reinsurance undertakings or insurance and reinsurance groups with a balance sheet total less than EUR25 billion, which do not comply with the Solvency Capital Requirement on the date referred to in Article 310 a period not exceeding two years in which to do so provided that such undertakings or groups have, in accordance with Article 138(2) and Article 142, submitted for the approval of the supervisory authorities concerned the measures which they propose to take for such purpose.

2.        Member States may allow insurance and reinsurance undertakings which do not comply fully with the requirements to have appropriate systems and structures in place in accordance with Article 35(5) and Article 55(1) on the date referred to in Article 310, a period not exceeding two years in which to do so.

3.        During that period, Member States may allow insurance and reinsurance undertakings which do not comply fully with the requirements to disclose publicly the information referred to in Articles 51 and 53, 54 and 55, to disclose and include in regular supervisory reporting only the information which implemented systems and structures are able to provide.

4.        Member States may allow insurance and reinsurance groups which do not comply fully with the requirements to have appropriate systems and structures in place in accordance with Articles 254 on the date referred to in Article 310 a period not exceeding two years in which to do so.

5.        During that period, Member States may allow insurance and reinsurance groups which do not comply fully with the requirements to disclose publicly the information referred to in Article 256, to disclose and include in regular supervisory reporting only the information which implemented systems and structures are able to provide.

6.        Notwithstanding Article 94, basic own-fund items that were issued prior to ...*, and that could be used to meet the available solvency margin up to at least 50 % of the solvency margin according to Article 16(3) of Directive 73/239/EEC, Article 1 of Directive 2002/13/EC, Article 27(3) of Directive 2002/83/EC and Article 36(3) of Directive 2005/68/EC shall be included in Tier 1 basic own funds for up to 10 years after the date referred to in Article 310.

7.        Notwithstanding Article 94, basic own-fund items that were issued prior to ...*, and that could be used to meet the available solvency margin up to 25 % of the solvency margin according to Article 16(3) of Directive 73/239/EEC, Article 1 of Directive 2002/13/EC, Article 27(3) of Directive 2002/83/EC and Article 36(3) of Directive 2005/68/EC shall be included in Tier 2 basic own funds for up to 10 years after the date referred to in Article 310.

8.        With respect to insurance and reinsurance undertakings investing in tradable securities or other financial instruments based on repackaged loans that were issued before 1 January 2011, the requirements referred to in Article 135(2)(a) shall apply from 31 December 2014, but only in circumstances where new underlying exposures are added or substituted after 31 December 2014.

9.        The standard parameters to be used for equities that the undertaking purchased on or before ...*, when calculating the equity risk sub-module in accordance with the standard formula without the option set out in Article 304 shall be calculated as the weighted averages of:

(a)       the standard parameter to be used when calculating the equity risk sub-module in accordance with Article 304; and

(b)       the standard parameter to be used when calculating the equity risk sub-module in accordance with the standard formula without the option set out in Article 304.

The weight for the parameter expressed in point (b) of the first subparagraph shall increase at least linearly at the end of each year from 0 % during the year starting on 1 January 2014 to 100 % as from 7 years after 1 January 2014.

The Commission shall adopt delegated acts in accordance with Article 301a further specifying the criteria to be met, including the equities that may be subject to the transitional period.

In order to ensure uniform conditions of application of that transitional period, EIOPA shall develop draft implementing technical standards on the procedures to be followed for the application of this paragraph.

EIOPA shall submit those draft implementing technical standards to the Commission by [...].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the fourth subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.

10.      Where, on ...*, Member States applied provisions referred to in Article 4 of Directive 2003/41/EC, such Member States may, until amendments to Articles 17 to 17c of Directive 2003/41/EC have been adopted, continue to apply the laws, regulations and administrative provisions that had been adopted by them with a view to complying with Articles 1 to 19, 27 to 30, 32 to 35 and 37 to 67 of Directive 2002/83/EC as in force on the last date of application of Directive 2002/83/EC.

11.      Third countries applying legislation which is recognised as equivalent to this Directive may apply transitional periods equivalent to those laid down in paragraphs 1 to 10.

12.      Member States may allow the ultimate parent insurance or reinsurance undertaking during a period of up to seven years after the date referred to in Article 309(1) to apply for the approval of an internal group model applicable to a part of a group where both the undertaking and the ultimate parent undertaking are located in the same member state and if this part forms a distinct part having a significantly different risk profile from the rest of the group.

Article 308c

Matching adjustment for certain life insurance obligations

1.        By way of derogation from Articles 75, 76 and 77, Member States may allow life insurance undertakings to calculate the rates of the relevant risk-free interest rate term structure to calculate the best estimate with respect to life insurance obligations with a matching adjustment as set out in paragraphs 2 and 3, provided that the following conditions relating to the life insurance obligations and the assets covering them are met:

(a)       the life insurance undertaking has assigned a portfolio of assets, consisting of bonds and other assets with similar cash-flow characteristics, to cover the best estimate of the portfolio of life insurance obligations and maintains that assignment over the lifetime of the obligations, except for the purpose of maintaining the replication of cash-flows between assets and liabilities where the cash-flows have materially changed such as the default of a bond;

(b)       the portfolio of life insurance obligations to which the matching adjustment is applied and the assigned portfolio of assets are ring-fenced, managed and organised separately from the other activities of the life insurance undertaking, without any possibility of transfer;

(c)       the future cash-flows of the assigned portfolio of assets replicate each of the future cash-flows of the portfolio of life insurance obligations in the same currency and any mismatch does not give rise to risks which are material in relation to the risks inherent in the life insurance business to which a matching adjustment is applied;

(d)       the life insurance contracts underlying the portfolio of life insurance obligations do not give rise to future premium payments;

(e)       the only underwriting risks connected to the portfolio of life insurance obligations are longevity risk, expense and revision risk and the contracts underlying the life insurance obligations include no options for the policy holder or only a surrender option where the surrender value does not exceed the value of the assets, valued in accordance with Article 75, covering the life insurance obligations at the time the surrender option is exercised;

(f)       the cash-flows of the assets of the assigned portfolio of assets are fixed;

(g)       the cash-flows of the assets of the assigned portfolio of assets cannot be changed by the issuers of the assets or any third parties;

(h)      no assets of the assigned portfolio of assets have a credit quality below the adequate credit quality determined in accordance with paragraph 7;

(i)       the life insurance undertaking publicly discloses the application of the matching adjustment in accordance with this Article and the monetary effect on its financial position;

(j)        the activities of the life insurance undertaking in relation to which the matching adjustment is applied in accordance with this Article are pursued only in the Member State where the undertaking has been authorised;

(k)       the supervisory authority has approved the application of the matching adjustment to the portfolio of life insurance obligations where it is satisfied that the requirements set out in points (a) to (j) are complied with.

Where cash-flows of the life insurance obligations as referred to in point (f) depend on inflation, the life insurance undertaking may use assets where the cash-flows are fixed except for a dependence on inflation, provided that those assets replicate the inflation included cash-flows of the portfolio of life insurance obligations.

2.        For each currency and in respect of each maturity the matching adjustment shall be calculated in accordance with the following principles:

(a)       the matching adjustment shall be equal to the difference of the following:

(i)       the annual effective rate, calculated as the single discount rate that, where applied to the cash-flows of the portfolio of life insurance obligations, results in a value that is equal to the value in accordance with Article 75 of the portfolio of assigned assets; and

(ii)      the annual effective rate, calculated as the single discount rate that, where applied to the cash-flows of the portfolio of life insurance obligations, results in a value that is equal to the value of the best estimate of the portfolio of life insurance obligations where the time value is taken into account using the basic risk-free interest rate term structure;

(b)       the matching adjustment shall not include the fundamental spread reflecting the risks retained by the life insurance undertaking;

(c)       the matching adjustment shall provide the right management incentives, taking into account at least the credit quality of the assigned assets.

3.        For the purposes of paragraph 2(b) the fundamental spread shall be:

(a)       assessed dynamically on an ongoing basis, and shall be equal to the sum of the following:

(i)       the credit spread corresponding to the probability of default of the assets; and

(ii)      the credit spread corresponding to the expected loss resulting from downgrading of the asset.

(b)       no lower than 75 % of the long term average of the spread over the basic risk free interest rate of assets of the same duration, credit quality and asset class, as observed in financial markets.

The probability of default referred to in point (a)(i) shall be based on long-term default statistics that are relevant for the asset in relation to its duration, credit quality and asset class.

4.        Life insurance undertakings applying the calculation method laid down in paragraphs 2 and 3 shall not be allowed to apply any other adjustments to the risk-free interest rate term structure. Life insurance undertakings that apply the matching adjustment to a portfolio of life insurance obligations shall not revert back to the approach that does not include a matching adjustment. Where a life insurance undertaking that applies the matching adjustment is no longer able to comply with the conditions set out in paragraph 1, it shall immediately inform the supervisory authority and take the necessary measures to restore compliance with these conditions. Where such undertaking is not able to restore compliance with these conditions within two months it shall cease applying the matching adjustment to any of its life insurance obligations and shall only be able to apply the matching adjustment again after a period of 24 months.

5.        Life insurance undertakings applying the matching adjustment laid down in this Article shall not be allowed to apply the adapted relevant risk-free interest rate term structure referred to in Article 77a or the symmetric adjustment mechanism referred to in Article 106a.

6.        The Commission shall adopt delegated acts in accordance with Article 301a further specifying:

(a)       the criteria to be met by life insurance undertakings in order to be eligible to apply the matching adjustment referred to in this Article;

(b)       the criteria in order to approve and verify the compliance with the requirements set out in paragraph 1;

(c)       the assumptions and methods to apply in the calculation of the fundamental spread referred to in paragraph 3;

(d)       the criteria to verify compliance with the requirements set out in paragraph 2(c).

7.        In order to ensure consistent harmonisation in relation to the credit quality of the assets, EIOPA shall develop draft regulatory technical standards to specify the credit quality of the assigned assets, which shall be higher than the minimum quality generally considered to be investment grade, for the purposes of paragraph 1(h), including, where relevant, appropriate limits necessary to guarantee an adequate credit quality of all assets for the undertaking as a whole.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the second subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

8.        Where life insurance undertakings calculate all or a material part of their technical provisions with a relevant risk-free interest rate term structure that includes a matching adjustment larger than zero, they shall submit to the supervisory authority annually the following written information:

(a)       a description of the impact of a reduction of the matching adjustment to zero;

(b)       where the reduction of the matching adjustment to zero would result in non-compliance with the Solvency Capital Requirement, an analysis of the undertaking's plans to re-establish in such a situation the level of eligible own funds covering the Solvency Capital Requirement or to reduce the risk profile to ensure compliance with the Solvency Capital Requirement;

(c)       the amount of technical provisions for life insurance obligations to which the matching adjustment is applied.

9.        EIOPA, in close cooperation with the ESRB, and after conducting a public consultation, shall assess the application of Articles 77a, 77b, 106, 106a, 304 and paragraphs 1 to 8 of this Article, including the delegated and implementing acts adopted pursuant thereto. That assessment shall be made in relation to the availability of long-term guarantees in life insurance products, the behaviour of life insurance undertakings as long-term investors and, more generally, financial stability. Based on that assessment, the Commission shall send a report to the European Parliament and to the Council by1 January 2021, or, where appropriate for the matching adjustment, by 1 January 2019.

The report shall focus, in particular, on the effects on:

(a)       the functioning and stability of European life insurance markets;

(b)       the internal market and in particular competition and level playing field in European life insurance markets;

(c)       policy holder protection;

(d)       the extent to which life insurance undertakings continue to operate as long-term investors;

(e)       the availability and pricing of annuity products;

(f)       the availability and pricing of other (competing) products;

(g)       long-term investment strategies by undertakings in relation to products to which paragraphs 1 to 7 is applied relative to those in relation to other long-term guarantees;

(h)      consumer choice and consumer awareness of risk;

(i)       well-diversified and less well-diversified life insurance undertakings; and

(j)        other effects on the real economy.

In addition, the report shall build on the supervisory experience with the application of Articles 77a, 77b, 106, 106a, 304 and paragraphs 1 to 8 of this Article including the delegated and implementing acts adopted pursuant thereto.

The report shall be followed, if necessary, by appropriate legislative proposals.

10.      Where the report referred to in paragraph 9 concludes that the matching adjustment is not the appropriate measure in the context of a well-functioning and stable life insurance market and the underlying principles of this Directive, the Commission shall adopt a delegated act in accordance with Article301a to replace this Article with the following transitional provisions for the application of the matching adjustment:

Article 308c

Transitional measure for the matching adjustment for certain life insurance obligations

1.        By way of derogation from Articles 75, 76 and 77, Member States may allow life insurance undertakings to calculate the rates of the relevant risk-free interest rate term structure to calculate the best estimate with respect to life insurance obligations with a matching adjustment as set out in paragraphs 2 and 3, provided that the following conditions relating to the life insurance obligations and the assets covering them are met:

(a)       the life insurance undertaking has assigned a portfolio of assets, consisting of bonds and other assets with similar cash-flow characteristics, to cover the best estimate of the portfolio of life insurance obligations and maintains that assignment over the lifetime of the obligations, except for the purpose of maintaining the replication of cash-flows between assets and liabilities where the cash-flows have materially changed such as the default of a bond;

(b)       the portfolio of life insurance obligations to which the matching adjustment is applied and the assigned portfolio of assets are ring-fenced, managed and organised separately from the other activities of the life insurance undertaking, without any possibility of transfer;

(c)       the future cash-flows of the assigned portfolio of assets replicate each of the future cash-flows of the portfolio of life insurance obligations in the same currency and any mismatch does not give rise to risks which are material in relation to the risks inherent in the life insurance business to which a matching adjustment is applied;

(d)       the life insurance contracts underlying the portfolio of life insurance obligations do not give rise to future premium payments;

(e)       the only underwriting risks connected to the portfolio of life insurance obligations are longevity risk, expense and revision risk; the contracts underlying the life insurance obligations include no options for the policy holder or only a surrender option where the surrender value does not exceed the value of the assets, valued in accordance with Article 75, covering the life insurance obligations at the time the surrender option is exercised;

(f)       the cash-flows of the assets of the assigned portfolio of assets are fixed;

(g)       the cash-flows of the assets of the assigned portfolio of assets cannot be changed by the issuers of the assets or any third parties;

(h)      no assets of the assigned portfolio of assets have a credit quality below the adequate credit quality determined in accordance with paragraph 7;

(i)       the life insurance undertaking publicly discloses the application of the matching adjustment in accordance with this Article and the monetary effect on its financial position;

(j)        the activities of the life insurance undertaking in relation to which the matching adjustment is applied in accordance with this Article are pursued only in the Member State where the undertaking has been authorised;

(k)       the supervisory authority has approved the application of the matching adjustment to the portfolio of life insurance obligations where it is satisfied that the requirements set out in points (a) to (j) are complied with;

Where cash-flows of the life insurance obligations as referred to in point (f) depend on inflation, the life insurance undertaking may use assets where the cash-flows are fixed except for a dependence on inflation, provided that those assets replicate the inflation included cash-flows of the portfolio of life insurance obligations.

2.        For each currency and in respect of each maturity the matching adjustment shall be calculated in accordance with the following principles:

(a)       the matching adjustment shall be equal to the difference of the following:

(i)       the annual effective rate, calculated as the single discount rate that, where applied to the cash-flows of the portfolio of life insurance obligations, results in a value that is equal to the value in accordance with Article 75 of the portfolio of assigned assets; and

(ii)      the annual effective rate, calculated as the single discount rate that, where applied to the cash-flows of the portfolio of life insurance obligations, results in a value that is equal to the value of the best estimate of the portfolio of life insurance obligations where the time value is taken into account using the basic risk-free interest rate term structure.

(b)       the matching adjustment shall not include the fundamental spread reflecting the risks retained by the life insurance undertaking.

(c)       the matching adjustment shall provide the right management incentives, taking into account at least the credit quality of the assigned assets.

3.        For the purposes of paragraph 2(b) the fundamental spread shall be:

(a)       assessed dynamically on an ongoing basis, and equal to the sum of the following:

(i)       the credit spread corresponding to the probability of default of the assets; and

(ii)      the credit spread corresponding to the expected loss resulting from downgrading of the asset.

(b)       no lower than 75 % of the long-term average of the spread over the basic risk free interest rate of assets of the same duration, credit quality and asset class, as observed in financial markets.

The probability of default referred to in point (a)(i) shall be based on long-term default statistics that are relevant for the asset in relation to its duration, credit quality and asset class.

4.        Life insurance undertakings applying the calculation method laid down in paragraphs 2 and 3 shall not be allowed to apply any other adjustments to the risk-free interest rate term structure. Life insurance undertakings that apply the matching adjustment to a portfolio of life insurance obligations shall not revert back to the approach that does not include a matching adjustment. Where a life insurance undertaking that applies the matching adjustment is no longer able to comply with the conditions set out in paragraph 1, it shall immediately inform the supervisory authority and take the necessary measures to restore compliance with these conditions. Where such undertaking is not able to restore compliance with these conditions within two months it shall cease applying the matching adjustment to any of its life insurance obligations and shall only be able to apply the matching adjustment again after a period of 24 months.

5.        Life insurance undertakings applying the matching adjustment laid down in this Article shall not be allowed to apply the adapted relevant risk-free interest rate term structure referred to in Article 77a or the symmetric adjustment mechanism referred to in Article 106a.

6.        The Commission shall adopt delegated acts in accordance with Article 301a further specifying:

(a)       the criteria to be met by life insurance undertakings in order to be eligible to apply the matching adjustment referred to in this Article;

(b)       the criteria in order to approve and verify the compliance with the requirements set out in paragraph 1;

(c)       the assumptions and methods to apply in the calculation of the fundamental spread referred to in paragraph 3;

(d)       the criteria to verify compliance with the requirements set out in paragraph 2(c).

7.        In order to ensure consistent harmonisation in relation to the credit quality of the assets, EIOPA shall develop draft regulatory technical standards to specify the credit quality of the assigned assets, which shall be higher than the minimum quality generally considered to be investment grade, for the purposes of paragraph 1 point h, including, where relevant, appropriate limits necessary to guarantee an adequate credit quality of all assets for the undertaking as a whole.

EIOPA shall submit those draft regulatory technical standards to the Commission by [...].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the second subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

8.        Where life insurance undertakings calculate all or a material part of their technical provisions with a relevant risk-free interest rate term structure that includes a matching adjustment larger than zero, they shall submit to the supervisory authority annually the following written information:

(a)       a description of the impact of a reduction of the matching adjustment to zero;

(b)       where the reduction of the matching adjustment to zero would result in non-compliance with the Solvency Capital Requirement, an analysis of the undertaking's plans to re-establish in such a situation the level of eligible own funds covering the Solvency Capital Requirement or to reduce the risk profile to ensure compliance with the Solvency Capital Requirement;

(c)       the amount of technical provisions for life insurance obligations to which the matching adjustment is applied.

9.        For each currency and in respect of each maturity the interest rate shall be calculated as the weighted average of:

(a)       the interest rate referred to in paragraphs 1 to 8; and

(b)       the interest rate for that maturity of the relevant risk-free interest rate term structure as measured in accordance with Articles 75, 76 and 77.

The weight for the interest rate shall increase at least linearly at the end of each year from one-seventh during the first year of application of this Article, to 100 % as from seven years after the application date of this Directive.";

(72)     in Article 309, paragraph 1 is replaced by the following:

"1.       Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with Articles 4, 10, 13, 14, Article 17(3), Articles 18, 23, 26 to 32, 34 to 49, 51 to 55, Article 58(8), Articles 67, 68, 71, 72, 74 to 85, 87 to 91, 93 to 96, 98,100 to 110, 112, 113, 115 to 126, 128, 129, 131 to 134, 136 to 142, 143, 144, 146, 148, 162 to 167, 172, 173, 178, 185, 190, 192, 210 to 233, 235 to 240, 243 to 258, 260 to 263, 265, 266, 303 and 304, and Annexes III and IV by 31 December 2012. They shall forthwith communicate to the Commission the text of those provisions and a correlation table between those provisions and this Directive.";

(73)     in the first paragraph of Article 310, the date "1 November 2012" is replaced by the date "1 January 2014".

(73a)   the following Article is inserted:

"Article 310a

Staff and resources of EIOPA

EIOPA shall asses the staffing and resources needs arising from the assumption of its powers and duties in accordance with this Directive and submit a report to the European Parliament, the Council and the Commission.";

(74)     Article 311 is replaced by the following:

"Article 311

Entry into force

This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

Articles 308a und 308b shall apply from 1 January 2013.

Articles 1, 2, 3, 5 to 9, 11, 12, 15, 16, Article 17(2), Articles 19 to 22, 24, 25, 33, 57, Article 58(1) to (7), Articles 59 to 66, 69, 70, 73, 145, 147, 149 to 161, 168 to 171, 174 to 177, 179 to 184, 186 to 189, 191, 193 to 209, 267 to 300, 302, 305 to 308, and Annexes I and II, V, VI and VII shall apply from 1 January 2014.

The Commission may adopt delegated acts, regulatory and implementing technical standards prior to the date referred to in the third paragraph.";

(75)     in Annex III, part A, point 28 is replaced by the following:

"28.     in any event and as an alternative to the forms of non-life insurance undertaking listed in points (1) to (27) and (29), the form of a European Company (SE) as defined in Council Regulation (EC) No 2157/2001(1)";

(76)     in Annex III, part A, the following point is added:

"29.     to the extent that the Member State concerned allows for the legal form of a cooperative society to take up the business of non-life insurance and as an alternative to the forms of non-life insurance undertaking listed in points (1) to (28), the form of a European Cooperative Society (SCE) as defined in Council Regulation (EC) No 1435/2003

OJ L 207, 18.8.2003, p. 1.

(77)     in Annex III, part B, point 28 is replaced by the following:

"28.     in any event and as an alternative to the forms of life insurance undertaking listed in points (1) to (27) and (29), the form of a European Company (SE) as defined in Regulation (EC) No 2157/2001";

(78)     in Annex III, part B, the following point is added:

"29.     to the extent that the Member State concerned allows for the legal form of a cooperative society to take up the business of life insurance and as an alternative to the forms of life insurance undertaking listed in points (1) to (28), the form of a European Cooperative Society (SCE) as defined in Regulation (EC) No 1435/2003."

(79)     in Annex III, part C, point 28 is replaced by the following:

"28.     in any event and as an alternative to the forms of reinsurance undertaking listed in points (1) to (27) and (29), the form of a European Company (SE) as defined in Regulation (EC) No 2157/2001"

(80)     in Annex III, part C, the following point is added:

"29.     to the extent that the Member State concerned allows for the legal form of a cooperative society to take up the business of reinsurance and as an alternative to the forms of reinsurance undertaking listed in points (1) to (28), the form of a European Cooperative Society (SCE) as defined in Regulation (EC) No 1435/2003.";

(81)     the correlation table in Annex VII is amended as follows:

(a)       Under "This Directive", Article 13(27) is inserted as corresponding to Article 5(d) of Directive 73/239/EEC.

(b)       Under "This Directive", the references to Article 210(1)(f) and ▌ (g) are replaced respectively with references to Article 212(1)(f) and ▌ (g).

Article 2a

Amendments to Regulation (EC) No 1060/2009

Regulation (EC) No 1060/2009 is amended as follows:

Article 2(3) is replaced by the following:

"3.      A credit rating agency shall apply for registration under this Regulation as a condition for being recognised as an External Credit Assessment Institution (ECAI) in accordance with Article 81 of Directive 2006/48/EC or Article 109a of Directive 2009/138/EC, unless it only issues the credit ratings referred to in paragraph 2.".

Article 2b

Revision

The Commission shall, by 1 January 2015 and every year thereafter, submit to the European Parliament and to the Council a report specifying whether the ESAs have submitted the draft regulatory and implementing technical standards provided for in Directives 2002/92/EC, 2003/71/EC and 2009/138/EC, whether the submission of such draft regulatory technical or implementing standards is mandatory or optional, with any appropriate proposals.

Article 3

Transposition

1.        Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with Article 1(1) and Article 2(3), (6), (8), (9), (12), (13), (24), (25), (28), (30), (32), (33), (37), (40) to (43), (45), (46), (47), (53) to (55), (57), (59), (62), (63), (66) and (75) to (80) of this Directive by 31 December 2012. They shall forthwith communicate to the Commission the text of those provisions and a correlation table between those provisions and this Directive.

They shall apply those measures from 1 January 2013.

When Member States adopt those measures, they shall contain a reference to this Directive or shall be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.

2.        Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.

Article 4

Entry into force

This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

Article 2(15), (20) and (59a) shall apply from 1 January 2013.

Article 5

Addressees

This Directive is addressed to the Member States.

Done at

For the European Parliament                                       For the Council

The President                                                         The President

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