Directive (EU) 2025/2 of the European Parliament and of the Council of 27 November 2024 amending Directive 2009/138/EC as regards proportionality, quality of supervision, reporting, long-term guarantee measures, macro-prudential tools, sustainability risks and group and cross-border supervision, and amending Directives 2002/87/EC and 2013/34/EU (Text with EEA relevance)

‘2 In the cases referred to in paragraph 1, points (b)(i) and (b)(ii), the condition that the accident or breakdown must have happened in the territory of the Member State of the undertaking providing cover shall not apply where the beneficiary is a member of the body providing cover and the breakdown service or conveyance of the vehicle is provided simply on presentation of a membership card, without any additional premium being paid, by a similar body in the country concerned on the basis of a reciprocal agreement.’

‘4 Where several supervisory authorities need to be consulted pursuant to paragraph 1, any supervisory authority concerned may request, within one month of the date of receipt, the supervisory authority of the home Member State of the undertaking seeking authorisation to jointly assess the application for authorisation. The supervisory authority of the home Member State of the undertaking seeking authorisation shall take into consideration the conclusions of the joint assessment when making its final decision.’

‘3 Member States shall ensure that the requirements laid down in this Directive are applied in a manner which is proportionate to the nature, scale and complexity of the risks inherent in the business of an insurance or reinsurance undertaking, in particular with respect to undertakings classified as small and non-complex undertakings.

4 The delegated acts and the regulatory and implementing technical standards adopted by the Commission shall take into account the principle of proportionality, thereby ensuring the proportionate application of this Directive, in particular in relation to small and non-complex undertakings. The draft regulatory technical standards submitted by EIOPA in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010, the draft implementing technical standards submitted in accordance with Article 15 of that Regulation, and the guidelines and recommendations issued in accordance with Article 16 of that Regulation, shall ensure the proportionate application of this Directive, in particular in relation to small and non-complex undertakings.

5 The Commission shall supplement this Directive by adopting delegated acts, in accordance with Article 301a, specifying: (a) the criteria laid down in Article 29a(1), including the approach for calculating the sum referred to in points (a)(iv), (b)(v) and (c)(vii) thereof; (b) the methodology to be used when classifying undertakings as small and non-complex undertakings; and (c) the conditions for granting or withdrawing supervisory approval for proportionality measures to be used by undertakings not classified as small and non-complex undertakings referred to in Article 29d.’

1 Member States shall ensure that undertakings are classified as small and non-complex undertakings, in accordance with the process set out in Article 29b, where, for the two consecutive financial years directly prior to such classification, the undertakings meet the following criteria: (a) For undertakings pursuing life activities and for undertakings pursuing both life and non-life activities whose technical provisions related to the life activities represent 20 % or more of the total technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76, and whose annual gross written premium income related to the non-life activities represents less than 40 % of the total annual gross written premium, all of the following criteria shall be met: (i) the interest rate risk submodule referred to in Article 105(5), second subparagraph, point (a), is not higher than 5 % of the technical provisions, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76; (ii) annual gross written premium income from business underwritten in Member States other than the home Member State where the undertaking received its authorisation in accordance with Article 14 is lower than either of the following thresholds: (1) EUR 20000000; (2) 10 % of its total annual gross written premium income; (iii) technical provisions from life activities, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76, are not higher than EUR 1000000000; (iv) the sum of the following is not higher than 20 % of total investments: (1) the market risk module referred to in Article 105(5); (2) the part of the counterparty default risk module referred to in Article 105(6), that corresponds to exposures to securitisations, derivatives, receivables from intermediaries and other investment assets which are not covered in the spread risk sub-module; (3) any capital requirement that is applicable to investments in intangible assets that are not covered by the market risk and the counterparty default risk modules; (v) the reinsurance accepted by the undertaking does not exceed 50 % of its total annual gross written premium income; (vi) the Solvency Capital Requirement is complied with. (b) For undertakings pursuing non-life activities and for undertakings pursuing both life and non-life activities whose annual gross written premium income related to the non-life activities represent 40 % or more of their total annual gross written premium income and whose technical provisions related to the life activities represent less than 20 % of their total technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76, all of the following criteria shall be met: (i) the average combined ratio for non-life activities net of reinsurance of the last three years is less than 100 %; (ii) annual gross written premium income from business underwritten in Member States other than the home Member State where the undertaking received its authorisation in accordance with Article 14 is lower than either of the following thresholds: (1) EUR 20000000; (2) 10 % of its total annual gross written premium income; (iii) the annual gross written premium income from non-life activities is not higher than EUR 100000000; (iv) the sum of the annual gross written premiums in classes 5 to 7, 11, 12, 14 and 15 in Part A of Annex I is not higher than 30 % of total annual written premiums of non-life business; (v) the sum of the following is not higher than 20 % of total investments: (1) the market risk module referred to in Article 105(5); (2) the part of the counterparty default risk module referred to in Article 105(6), that corresponds to exposures to securitisations, derivatives, receivables from intermediaries and other investment assets which are not covered in the spread risk sub-module; (3) any capital requirement that is applicable to investments in intangible assets that are not covered by the market risk and the counterparty default risk modules; (vi) the reinsurance accepted by the undertaking does not exceed 50 % of its total annual gross written premium income; (vii) the Solvency Capital Requirement is complied with. (c) For undertakings pursuing both life and non-life activities whose technical provisions related to the life activities represent 20 % or more of their total technical provisions gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76, and whose annual gross written premium income related to the non-life activities represents 40 % or more of their total annual gross written premium income, all of the following criteria shall be met: (i) the interest rate risk submodule referred to in Article 105(5), second subparagraph, point (a), is not higher than 5 % of the technical provisions, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76; (ii) the average combined ratio for non-life activities net of reinsurance of the last three years is less than 100 %; (iii) technical provisions from life activities, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76, are not higher than EUR 1000000000; (iv) the annual gross written premium income from non-life activities is not higher than EUR 100000000; (v) annual gross written premium income from business underwritten in Member States other than the home Member State where the undertaking received its authorisation in accordance with Article 14 is lower than either of the following thresholds: (1) EUR 20000000; (2) 10 % of its total annual gross written premium income; (vi) the sum of the annual gross written premium in classes 5 to 7, 11, 12, 14 and 15 in Part A of Annex I is not higher than 30 % of total annual written premiums of non-life business; (vii) the sum of the following is not higher than 20 % of total investments: (1) the market risk module referred to in Article 105(5); (2) the part of the counterparty default risk module referred to in Article 105(6), that corresponds to exposures to securitisations, derivatives, receivables from intermediaries and other investment assets which are not covered in the spread risk sub-module; (3) any capital requirement that is applicable to investments in intangible assets that are not covered by the market risk and the counterparty default risk modules; (viii) the reinsurance accepted by the undertaking does not exceed 50 % of its total annual gross written premium income; (ix) the Solvency Capital Requirement is complied with. The criteria laid down in points (a)(ii) and (v), points (b)(ii) and (vi), and points (c)(v) and (viii) of the first subparagraph shall not apply to captive insurance undertakings or to captive reinsurance undertakings. By way of derogation from the first subparagraph, captive insurance undertakings and captive reinsurance undertakings shall also be classified as small and non-complex undertakings where they do not comply with the criteria laid down in the first subparagraph provided they comply with both of the following criteria: (a) the insured persons and beneficiaries are any of the following: (i) legal entities of the group of which the captive insurance undertaking or captive reinsurance undertaking is part, (ii) natural persons eligible to be covered under that group’s insurance policies, provided that the business covering those natural persons remains below 5 % of technical provisions; (b) the insurance obligations and the insurance contracts underlying the reinsurance obligations of the captive insurance undertaking or captive reinsurance undertaking do not consist of any compulsory third-party liability insurance.

2 For undertakings which have obtained authorisation in accordance with Article 14 within the last two financial years, compliance with the criteria set out in paragraph 1 of this Article shall be assessed with reference to the last financial year prior to the classification, or where the authorisation has been obtained within the last 12 months, the scheme of operations referred to in Article 23.

3 The following undertakings shall never be classified as small and non-complex undertakings: (a) undertakings that use an approved partial or full internal model to calculate the Solvency Capital Requirement, in accordance with the requirements for full and partial internal models set out in Chapter VI, Section 4, Subsection 3; (b) undertakings that are parent undertakings of a financial conglomerate within the meaning of Article 2, point (14), of Directive 2002/87/EC or of a group within the meaning of Article 212 of this Directive, to which group supervision applies in accordance with Article 213(2), point (a) or (b), of this Directive unless the group is classified as a small and non-complex group; (c) undertakings that are the parent undertaking of an undertaking referred to in Article 228(1), points (a) to (e); (d) undertakings that manage group pension funds within the meaning of Article 2(3), points (b)(iii) and (b)(iv), where the value of the assets of the group pension funds exceeds EUR 1000000000.

1 Member States shall ensure that undertakings complying with the criteria set out in Article 29a may notify the supervisory authority of such compliance with a view to being classified as small and non-complex undertakings.

2 The notification referred to in paragraph 1 of this Article shall be submitted by the undertaking to the supervisory authority of the Member State that granted the prior authorisation referred to in Article 14. That notification shall include all of the following: (a) evidence of the compliance with all criteria set out in Article 29a applicable to that undertaking; (b) a declaration that the undertaking does not plan any strategic change that would lead to non-compliance with any of the criteria set out in Article 29a within the next three years; (c) an identification of the proportionality measures the undertaking expects to implement, in particular if the best estimate simplification is intended to be used and whether the undertaking plans to use the simplified method to calculate technical provisions laid down in Article 77(8).

3 The supervisory authority may oppose the classification as a small and non-complex undertaking within two months of receipt of the complete notification referred to in paragraph 1 on grounds related exclusively to any of the following: (a) non-compliance with the criteria provided for in Article 29a; (b) non-compliance with the Solvency Capital Requirement, assessed without the use of any of the transitional measures referred to in Article 77a(2), Article 308c, Article 308d or, where relevant, Article 111(1), second subparagraph; (c) the undertaking represents more than 5 % of the life market or, where applicable, non-life market in accordance with Article 35a(1), second subparagraph, of the home Member State of the undertaking.

4 Any decision of the supervisory authority to oppose the classification as a small and non-complex undertaking shall state the reasons therefor and shall be communicated to the undertaking concerned in writing. In the absence of such a decision, the undertaking shall be classified as a small and non-complex undertaking as of the end of the two-month period referred to in paragraph 3. Where, before the end of the two-month period referred to in paragraph 3, the supervisory authority has issued a decision confirming compliance with the criteria, the undertaking shall be classified as a small and non-complex undertaking as of the date of such decision.

5 With respect to requests received by supervisory authorities within the first six months of 30 January 2027, the period referred to in paragraph 3 shall be extended to four months.

6 An undertaking shall be classified as a small and non-complex undertaking for as long as such classification does not cease in accordance with this paragraph. Where a small and non-complex undertaking no longer complies with any of the criteria set out in Article 29a(1), it shall inform the supervisory authority without delay. Where such non-compliance continuously persists over two consecutive years, the undertaking shall inform the supervisory authority thereof, and shall cease to be classified as a small and non-complex undertaking as from the following financial year. Where an undertaking that has been classified as a small and non-complex undertaking fulfils any of the exclusion criteria set out in Article 29a(3), that undertaking shall inform the supervisory authority without delay and shall cease to be classified as a small and non-complex undertaking as from the following financial year.

1 Member States shall ensure that undertakings classified as small and non-complex undertakings may use all proportionality measures.

2 By way of derogation from paragraph 1, where the supervisory authority has serious concerns in relation to the risk profile of a small and non-complex undertaking, the supervisory authority may request the undertaking concerned to refrain from using one or several proportionality measures, provided that the request is duly justified in writing with reference to the specific concerns relating to the risk profile of the undertaking. A serious concern shall be considered to exist where: (a) the Solvency Capital Requirement is no longer complied with, or there is a risk of non-compliance in the following three months assessed, where applicable, without the use of any of the transitional measures referred to in Article 77a(2), Article 308c, Article 308d or, where relevant, Article 111(1), second subparagraph; (b) the system of governance of the undertaking is not effective within the meaning of Article 41; or (c) material changes in the risk profile of the undertaking could lead to significant non-compliance of any of the criteria set out in Article 29a(1).

1 Member States shall ensure that insurance and reinsurance undertakings that are not classified as small and non-complex undertakings may only use proportionality measures as provided for in Article 35(5a), Article 41, Article 45(1b), Article 45(5), Article 77(8) and Article 144a(4) and proportionality measures as provided for in the delegated acts adopted pursuant to this Directive that are both explicitly applicable to small and non-complex undertakings in accordance with Article 29c and identified for the purposes of this Article, with the prior approval of the supervisory authority. The insurance or reinsurance undertaking shall submit a request in writing for approval to the supervisory authority. That request shall include: (a) a list of the proportionality measures intended to be used and the reasons why their use is justified in relation to the nature, scale and complexity of the risks inherent in the business of the undertaking; (b) any other material information regarding the risk profile of the undertaking; (c) a declaration that the undertaking does not plan any strategic change that would have an impact on the risk profile of the undertaking within the next three years.

2 The supervisory authority shall, within two months of receipt of the request referred to in paragraph 1, second subparagraph, assess the request and inform the undertaking of its approval or rejection, as well as of the proportionality measures the use of which has been approved. Where the supervisory authority approves the use of proportionality measures under certain terms or conditions, the approval decision shall contain the reasons for those terms and conditions. A decision of the supervisory authority to oppose the use of one or more of the proportionality measures listed in the request shall be notified in writing, and state the reasons for the supervisory authority’s decision. Such reasons shall be linked to the risk profile of the undertaking.

3 The supervisory authority may request any further information that is necessary to complete the assessment referred to in paragraph 2. The period referred to in that paragraph shall be suspended for the period between the date of the first request for information by the supervisory authorities and the receipt of a response thereto by the concerned undertaking. Any further requests by the supervisory authority shall not result in a suspension of the assessment period.

4 With respect to requests received by supervisory authorities before 31 July 2027, the period referred to in paragraph 2 shall be four months.

5 Approval to use proportionality measures may be amended or withdrawn at any point in time if the insurance or reinsurance undertaking’s risk profile has changed. Any decision of the supervisory authority to amend or withdraw that approval shall state the reasons therefor and shall be communicated to the undertaking concerned in writing.

1 Within one year of their classification as small and non-complex undertakings, insurance and reinsurance undertakings shall report to their supervisory authorities information on the proportionality measures used as part of the information to be provided for supervisory purposes referred to in Article 35. Where such undertakings intend to change the list of proportionality measures to be used, they shall notify their supervisory authorities immediately.

2 Where insurance and reinsurance undertakings which use proportionality measures pursuant to Article 29d decide to stop using any such measures, they shall inform their supervisory authorities thereof.

3 Insurance and reinsurance undertakings applying any proportionality measures that correspond to existing measures under this Directive by 28 January 2025 may continue to apply such measures without applying the requirements set out in Articles 29b, 29c and 29d, for a period not exceeding four financial years.’

1 Without prejudice to Article 129(4), where the predefined periods referred to in Article 35(2), point (a)(i), are shorter than one year, the supervisory authorities concerned may limit regular supervisory reporting, where: (a) the submission of that information would be overly burdensome in relation to the nature, scale and complexity of the risks inherent in the business of the undertaking; (b) the information is reported at least annually. That limitation to regular supervisory reporting shall be granted only to undertakings that collectively do not represent more than 20 % of a Member State’s life and non-life insurance and reinsurance market respectively, where the life market share is based on gross technical provisions and the non-life market share is based on gross written premiums. When determining the eligibility of undertakings for those limitations, supervisory authorities shall give priority to small and non-complex undertakings.

2 The supervisory authorities concerned may limit regular supervisory reporting, or exempt insurance and reinsurance undertakings from reporting on an item-by-item basis, where: (a) the submission of that information would be overly burdensome in relation to the nature, scale and complexity of the risks inherent in the business of the undertaking; (b) the submission of that information is not necessary for the effective supervision of the undertaking; (c) the exemption does not undermine the stability of the financial systems concerned in the Union; and (d) the undertaking is able to provide the information upon request. The exemption from reporting on an item-by-item basis shall be granted only to undertakings that collectively do not represent more than 20 % of a Member State’s life and non-life insurance and reinsurance market respectively, where the life market share is based on gross technical provisions and the non-life market share is based on gross written premiums. When determining the eligibility of undertakings for those limitations or exemptions, supervisory authorities shall give priority to small and non-complex undertakings.

3 Captive insurance undertakings and captive reinsurance undertakings shall be exempted from regular supervisory reporting on an item-by-item basis where the predefined periods referred to in Article 35(2), point (a)(i), are shorter than one year, provided that they comply with both of the following conditions: (a) the insured persons and beneficiaries are any of the following: (i) legal entities of the group of which the captive insurance undertaking or captive reinsurance undertaking is part, (ii) natural persons eligible to be covered under that group’s insurance policies, provided that the business covering those natural persons remains below 5 % of technical provisions; (b) the insurance obligations and the insurance contracts underlying the reinsurance obligations of the captive insurance undertaking or captive reinsurance undertaking do not consist of any compulsory third-party liability insurance.

4 For the purposes of paragraphs 1 and 2 of this Article, as part of the supervisory review process, in respect of undertakings classified as small and non-complex undertakings, supervisory authorities shall assess whether the submission of information would be overly burdensome in relation to the nature, scale and complexity of the risks of the undertaking, taking into account, at least: (a) the market risks that the investments of the undertaking give rise to; (b) the level of risk concentrations; (c) possible effects of the management of the assets of the undertaking on financial stability; (d) the systems and structures of the undertaking to provide information for supervisory purposes and the written policy referred to in Article 35(5).

5 For the purposes of paragraphs 1 and 2, as part of the supervisory review process, in respect of undertakings not classified as small and non-complex undertakings, supervisory authorities shall assess whether the submission of information would be overly burdensome in relation to the nature, scale and complexity of the risks of the undertaking, taking into account, at least, paragraph 4, points (a) to (d), and the following: (a) the volume of premiums, technical provisions and assets of the undertaking; (b) the volatility of the claims and benefits covered by the undertaking; (c) the total number of classes of life and non-life insurance for which authorisation is granted; (d) the appropriateness of the system of governance of the undertaking; (e) the level of own funds covering the Solvency Capital Requirement and the Minimum Capital Requirement; (f) whether the undertaking is a captive insurance undertaking or a captive reinsurance undertaking only covering risks associated with the industrial or commercial group to which it belongs.

6 In order to ensure the coherent and consistent application of paragraphs 1 to 5 of this Article, EIOPA shall issue guidelines in accordance with Article 16 of Regulation (EU) No 1094/2010 to further specify: (a) the methods for determining the market shares referred to in paragraph 1, second subparagraph, and in paragraph 2, second subparagraph, of this Article; (b) the process to be used by the supervisory authorities to inform the insurance and reinsurance undertakings about any limitation or exemption referred to in this Article.

1 Member States shall ensure that insurance and reinsurance undertakings submit to the supervisory authorities the information referred to in Article 35(1) to (4) on an annual or less frequent basis within 16 weeks of the end of the undertaking’s financial year.

2 Member States shall ensure that insurance and reinsurance undertakings submit to the supervisory authorities the information referred to in Article 35(1) to (4) on a quarterly basis within five weeks of the end of each quarter.

3 Member States shall ensure that insurance and reinsurance undertakings submit to the supervisory authorities the regular supervisory report referred to in Article 35(5a) within 18 weeks of the end of the undertaking’s financial year.’

1 For the purposes of the identification and assessment of risks referred to in Article 45(2), the undertaking concerned shall also assess whether it has any material exposure to climate change risks. The undertaking shall demonstrate the materiality of its exposure to climate change risks in the assessment referred to in Article 45(1).

2 Where the undertaking concerned has material exposure to climate change risks, the undertaking shall specify at least two long-term climate change scenarios, including the following: (a) a long-term climate change scenario where the global temperature increase remains below two degrees Celsius; (b) a long-term climate change scenario where the global temperature increase is significantly higher than two degrees Celsius.

3 At regular intervals, the assessment referred to in Article 45(1) shall contain an analysis of the impact on the business of the undertaking of the long-term climate change scenarios specified pursuant to paragraph 2 of this Article. Those intervals shall be proportionate to the nature, scale and complexity of the climate change risks inherent in the business of the undertaking, but shall be no longer than three years.

4 The long-term climate change scenarios referred to in the paragraph 2 shall be reviewed at least every three years, and updated where necessary. When reviewing the long-term climate change scenarios, insurance and reinsurance undertakings shall take into account the performance of tools and principles used in previous climate change scenarios, so as to enhance their effectiveness.

5 By way of derogation from paragraphs 2, 3 and 4, small and non-complex undertakings shall not be required to specify climate change scenarios or assess their impact on the business of the undertaking.’

1 Member States shall, taking into account the information required pursuant to Article 35(3) and the principles set out in paragraph 4 of that Article, require insurance and reinsurance undertakings to disclose publicly, on an annual basis, a report on their solvency and financial condition. The solvency and financial condition report shall consist of two parts, clearly identified and disclosed jointly. The first part shall consist of information specifically targeted at policy holders and beneficiaries, and the second part shall consist of information targeted at market professionals.

1a The part of the solvency and financial condition report consisting of information targeted at policy holders and beneficiaries shall contain the following information: (a) a brief description of the business and the performance of the undertaking; (b) a brief description of the capital management and the risk profile of the undertaking, including in relation to sustainability risks; and (c) a statement of whether the undertaking discloses the plans referred to in Article 19a or Article 29a of Directive 2013/34/EU.

1b The part of the solvency and financial condition report consisting of information targeted at market professionals shall contain the following information, either in full or by way of references to equivalent information, both in nature and scope, disclosed publicly under other legal or regulatory requirements: (a) a description of the business and the performance of the undertaking; (b) a description of the system of governance; (c) a description, separately for assets, technical provisions and other liabilities, of the bases and methods used for their valuation; (d) a description of the capital management and the risk profile, including at least the following: (i) the structure and amount of own funds, and their quality; (ii) the amounts of the Solvency Capital Requirement and of the Minimum Capital Requirement; (iii) for insurance and reinsurance undertakings relevant for the stability of the financial systems in the Union, information on risk sensitivity; (iv) the option set out in Article 304 used for the calculation of the Solvency Capital Requirement; (v) information allowing a proper understanding of the main differences between the underlying assumptions of the standard formula and those of any internal model used by the undertaking for the calculation of its Solvency Capital Requirement; (vi) the amount of any non-compliance with the Minimum Capital Requirement or any significant non-compliance with the Solvency Capital Requirement during the reporting period, even if subsequently resolved, with an explanation of its origin and consequences as well as any remedial measures taken; (e) an indication of whether the undertaking has any material exposure to climate change risks following the materiality assessment referred to in Article 45a(1), and, where relevant, if it has put in place any actions; (f) a statement of whether the undertaking discloses the plans referred to in Article 19a or Article 29a of Directive 2013/34/EU; (g) the elements referred to in Article 44(2c), point (d).

1c Where the matching adjustment referred to in Article 77b is applied, the description referred to in paragraph 1b, point (c), and points (d)(i) and (ii), of this Article shall also describe the matching adjustment and the portfolio of obligations and assigned assets to which the matching adjustment is applied, as well as a quantification of the impact of a change to zero of the matching adjustment on the undertaking’s financial position. The description referred to in paragraph 1b, point (c), and points (d)(i) and (ii), of this Article shall also contain a statement on whether the volatility adjustment referred to in Article 77d is used by the undertaking and, where the volatility adjustment is used, it shall disclose the following information: (a) a quantification of the impact of a change to zero of the volatility adjustment on the undertaking’s financial position; (b) for each relevant currency or, as applicable, country, the volatility adjustment calculated in accordance with Article 77d and the corresponding best estimates for insurance or reinsurance obligations.

2 The description referred to in paragraph 1b, point (d)(i), shall include an analysis of any significant changes as compared to the previous reporting period and an explanation of any major differences in relation to the value of such elements in financial statements, and a brief description of the capital transferability. The disclosure of the Solvency Capital Requirement referred to in paragraph 1b, point (d)(ii), of this Article shall show separately the amount calculated in accordance with Chapter VI, Section 4, Subsections 2 and 3 and any capital add-on imposed in accordance with Article 37 or the impact of the specific parameters the insurance or reinsurance undertaking is required to use in accordance with Article 110, together with concise information on its justification by the supervisory authority concerned. The disclosure of the Solvency Capital Requirement shall be accompanied, where applicable, by an indication that its final amount is still subject to supervisory assessment.

3 Captive insurance undertakings shall not be required to disclose the part targeted at policy holders and beneficiaries and shall only be required to include in the part targeted at market professionals the quantitative data required by the implementing technical standards referred to in Article 56 provided that those undertakings meet the following conditions: (a) the insured persons and beneficiaries are legal entities of the group of which the captive insurance undertaking is part or natural persons eligible to be covered under that group’s insurance policies and the business covering natural persons eligible to be covered under the group insurance policies remains below 5 % of technical provisions; (b) the insurance obligations of the captive insurance undertaking do not consist of any compulsory third-party liability insurance.

4 Captive reinsurance undertakings shall not be required to disclose the part targeted at policy holders and beneficiaries and they shall only be required to include in the part targeted at market professionals the quantitative data required by the implementing technical standards referred to in Article 56, provided that those undertakings meet the following conditions: (a) the insured persons and beneficiaries are legal entities of the group of which the captive reinsurance undertaking is part or natural persons eligible to be covered under that group’s insurance policies and the business covering natural persons eligible to be covered under the group insurance policies remains below 5 % of technical provisions; (b) the insurance contracts underlying the reinsurance obligations of the captive reinsurance undertaking do not relate to any compulsory third-party liability insurance; (c) loans in place with the parent or any group company, including groups cashpools do not exceed 20 % of total assets held by the captive reinsurance undertaking; and (d) the maximum loss resulting from the gross technical provisions can be deterministically assessed without using stochastic methods.

5 By way of derogation from paragraph 1, reinsurance undertakings may choose not to disclose the part of the solvency and financial condition report targeted at policy holders and beneficiaries.

6 By way of derogation from paragraph 1b of this Article, small and non-complex undertakings may disclose only the quantitative data required by the implementing technical standards referred to in Article 56 in the part of the solvency and financial condition report consisting of information targeted at other market professionals, provided that they disclose a full report containing all the information required in this Article every three years.

7 Member States shall ensure that insurance and reinsurance undertakings publicly disclose and submit to the supervisory authority the information referred to in this Article on an annual or less frequent basis within 18 weeks of the end of the undertaking’s financial year.

8 As part of the report referred to in paragraph 1 of this Article, insurance and reinsurance undertakings shall be required to disclose the impact of using, for the purpose of determining the technical provisions set out in Article 77, the risk-free interest rate term structure determined without the application of the transitional for the extrapolation as referred to Article 77e(1), point (aa), instead of the relevant risk-free interest rate term structure. However, by way of derogation from the first subparagraph, the disclosure requirement shall not apply to a currency for which any of the following applies: (a) the share of future cash flows associated with insurance or reinsurance obligations in that currency relative to all future cash flows associated with insurance or reinsurance obligations does not exceed 5 %; (b) with respect to future cash flows associated with insurance or reinsurance obligations in that currency, the share of future cash-flows pertaining to maturities where the relevant risk-free interest rate term structure is extrapolated relative to all future cash flows associated with insurance or reinsurance obligations does not exceed 10 %.’

1 For insurance and reinsurance undertakings other than small and non-complex undertakings and captive insurance undertakings and captive reinsurance undertakings, the balance sheet disclosed as part of the solvency and financial condition report in accordance with Article 51(1) or the balance sheet disclosed as part of the single solvency and financial condition report in accordance with Article 256(2), point (b), shall be subject to an audit.

2 By way of derogation from Article 29c, Member States may extend the requirement laid down in paragraph 1 of this Article to undertakings classified as small and non-complex undertakings, captive insurance undertakings and captive reinsurance undertakings.

3 Member States may extend the scope of the audit requirement referred to in paragraph 1 to other elements of the solvency and financial condition report.

4 The audit shall be carried out by a statutory auditor or an audit firm, in accordance with the auditing standards applicable pursuant to Article 26 of Directive 2006/43/EC. Statutory auditors and audit firms, when performing this task, shall comply with the duties of auditors set out in Article 72 of this Directive.

5 In Member States where on 28 January 2025 registered actuaries are authorised pursuant to national law to audit technical provisions, reinsurance recoverables and related items, those registered actuaries may continue to carry out such audits provided they act in accordance with binding standards that ensure a high-quality audit and cover at least the area of audit practice, independence and internal quality controls when performing such audits, and in compliance with the duties referred to in Article 72.

6 A separate report, including a description of the nature, and the results, of the audit, prepared by the statutory auditor or the audit firm shall be submitted together with the solvency and financial condition report to the supervisory authority by the insurance and reinsurance undertakings.’

1 The determination of the relevant risk-free interest rate term structure referred to in Article 77(2) shall make use of, and be consistent with, information derived from relevant financial instruments. That determination shall take into account relevant financial instruments of those maturities where the markets for those financial instruments are deep, liquid and transparent. For maturities beyond the first smoothing point, the relevant risk-free interest rate shall be extrapolated in accordance with the third subparagraph. The first smoothing point for a currency shall be the longest maturity for which the following conditions are met: (a) the markets for financial instruments of that maturity are deep, liquid and transparent; (b) the percentage of outstanding bonds of that or a longer maturity among all outstanding bonds denominated in that currency is sufficiently high. The extrapolated part of the relevant risk-free interest rate term structure shall be based on forward rates converging smoothly from the applicable forward rate at the first smoothing point to an ultimate forward rate (UFR). The extrapolated forward rate shall be equal to a weighted average of a liquid forward rate and the UFR. The liquid forward rate shall be based on one or a set of forward rates in relation to the longest maturities for which the relevant financial instrument can be observed in a deep, liquid and transparent market. For maturities of at least 40 years past the first smoothing point the weight of the UFR shall be at least 77,5 %. The extrapolated part of the relevant risk-free interest rates shall take into account information from financial instruments other than bonds where the markets for those financial instruments are deep, liquid and transparent.

2 Insurance and reinsurance undertakings may, subject to prior approval by their supervisory authority, apply the phasing-in mechanism set out in the second subparagraph. The phasing-in mechanism referred to in the first subparagraph shall consist of the following: (a) on 30 January 2027, the parameters determining the speed of the convergence of the forward rates towards the ultimate forward rate of the extrapolation shall be set such that the risk-free interest rate term structure is sufficiently similar to the risk-free interest rate term structure on that date determined in line with the rules for the extrapolation applicable on 29 January 2027; (b) the parameters determining the speed of the convergence of the forward rates towards the ultimate forward rate of the extrapolation shall be decreased linearly at the beginning of each calendar year, such that the final parameters of the extrapolation are applied as of 1 January 2032. The phasing-in mechanism referred to in the first subparagraph of this paragraph shall not affect the determination of the depth, liquidity and transparency of financial markets and the first smoothing point referred to in paragraph 1. Insurance and reinsurance undertakings applying the first and second subparagraphs of this paragraph shall within the part of their report on their solvency financial condition consisting of information targeted at market professionals referred to in Article 51(1b) publicly disclose: (a) the fact that they apply the phasing-in mechanism for extrapolation; and (b) the quantification of the impact of not applying the phasing-in mechanism on their financial position.

3 Notwithstanding paragraph 1, on 28 January 2025, the first smoothing point for the euro, shall be at a maturity of 20 years.’

1 By way of derogation from Article 101(3), and as part of the equity risk sub-module referred to in Article 105(5), second subparagraph, point (b), Member States shall allow insurance and reinsurance undertakings which comply with the conditions laid down in the second subparagraph of this paragraph, to apply to a specific subset of equity investments held with a long-term perspective a capital requirement in accordance with paragraph 4 of this Article. For the purposes of the first subparagraph, a sub-set of equity investments may be treated as long-term equity investments if the insurance or reinsurance undertaking demonstrates, to the satisfaction of the supervisory authority, that all of the following conditions are met: (a) the sub-set of equity investments is clearly identified and managed separately from the other activities of the undertaking; (b) a policy for long-term investment management is set up for each long-term equity portfolio and reflects the undertaking’s commitment to hold the overall exposure to equity in the sub-set of equity investment for a period that exceeds five years on average. The administrative, management or supervisory body of the undertaking shall explicitly endorse the investment management policies and those policies are frequently reviewed against the actual management of the portfolios, and reported in the own-risk and solvency assessment of the undertaking referred to in Article 45; (c) the sub-set of equity investments consists only of equities that are listed in countries that are member of the EEA or of the Organisation for Economic Co-operation and Development (OECD) or of unlisted equities of companies that have their head offices in countries that are member of the EEA or of the OECD; (d) on an ongoing basis and under stressed conditions, the insurance or reinsurance undertaking is able to avoid forced selling of equity investments within the sub-set for five years; (e) the risk management, asset-liability management and investment policies of the insurance or reinsurance undertaking reflect the undertaking’s intention to hold the sub-set of equity investments for a period that is compatible with the requirement laid down in point (b) and the undertaking’s ability to meet the requirement laid down in point (d); (f) the sub-set of equity investments is appropriately diversified in such a way as to avoid excessive reliance on any particular issuer or group of undertakings and excessive accumulation of risk in the portfolio of long-term equity investments as a whole with the same risk profile; (g) the sub-set of equity investments does not include participations.

2 Where equities are held within European long-term investment funds or within certain types of collective investment undertaking, including alternative investment funds, which are identified in the delegated acts adopted pursuant to this Directive as having a lower risk profile, the conditions laid down in paragraph 1 may be assessed at the level of the funds and not of the underlying assets held within those funds.

3 Insurance or reinsurance undertakings that treat a sub-set of equity investments as long-term equity investments in accordance with paragraph 1 shall not revert back to an approach that does not include long-term equity investments. Where an insurance or reinsurance undertaking that treats a sub-set of equity investments as long-term equity investments no longer complies with the conditions laid down in paragraph 1, it shall immediately inform the supervisory authority and take the necessary measures to restore compliance. Within one month of the date of the first observation of non-compliance with the conditions laid down in paragraph 1, the insurance or reinsurance undertaking shall provide the supervisory authority with the necessary information and the actions to be taken by the undertaking to achieve, within six months of the date of the first observation of non-compliance, the re-establishment of compliance with those conditions. Where the undertaking is not able to restore compliance within six months of the date of the first observation of non-compliance, it shall cease to classify any equity investment as a long-term equity investment in accordance with this Article for a period of two and a half years, or as long as compliance with the conditions laid down in paragraph 1 is not restored, whichever period is longer.

4 The capital requirement for long-term equity investments shall be equal to the loss in the basic own funds that would result from an instantaneous decrease equal to 22 % in the value of investments that are treated as long-term equity.

5 The Commission shall adopt delegated acts in accordance with Article 301a to supplement this Directive by further specifying: (a) the conditions set out in paragraph 1, second subparagraph, of this Article; (b) the types of collective investment undertaking referred to in paragraph 2 of this Article; (c) the information to be included in the solvency and financial condition report referred to in Article 51(1) and in the regular supervisory report referred to in Article 35(5a).’

1 Insurance and reinsurance undertakings may use a simplified calculation for a specific risk module or risk sub-module where all the following conditions are met: (a) the nature, scale and complexity of the risks they face justifies the use of a simplified calculation; (b) it would be disproportionate to require the insurance or reinsurance undertaking to apply the standardised calculation; (c) the error compared to the standardised calculation does not lead to a material misstatement of the Solvency Capital Requirement, except in cases where the simplified calculation leads to a Solvency Capital Requirement which exceeds the Solvency Capital Requirement that results from the standardised calculation. Notwithstanding the first subparagraph, small and non-complex undertakings may use a simplified calculation for a specific risk module or risk sub-module where they can demonstrate to the satisfaction of the supervisory authority and at least every five years that the following conditions are met: (a) each individual risk module or risk sub-module for which a simplified calculation is intended to be used, represents, without applying the simplification, less than 2 % of the Basic Solvency Capital Requirement; (b) the sum of all risk modules or risk sub-modules for which a simplified calculation is intended to be used, represents, without applying the simplification, less than 10 % of the Basic Solvency Capital Requirement. For the purposes of this paragraph, simplified calculations shall be calibrated in accordance with Article 101(3).

2 Without prejudice to paragraph 1 of this Article and to Article 102(1), where an insurance or reinsurance undertaking calculates the Solvency Capital Requirement and a risk module or risk sub-module does not represent a share of more than 5 % of the Basic Solvency Capital Requirement referred to in Article 103, point (a), the undertaking may use a simplified calculation for that risk module or risk sub-module during a period of no more than three years following that calculation of the Solvency Capital Requirement.

3 For the purposes of paragraph 2, the sum of the shares, relative to the Basic Solvency Capital Requirement, of each risk module or risk sub-module where the simplified calculations pursuant to that paragraph are applied shall not exceed 10 %. The share of a risk module or risk sub-module relative to the Basic Solvency Capital Requirement referred to in the first subparagraph of this paragraph shall be that share as calculated the last time when the risk module or risk sub-module was calculated without a simplified calculation pursuant to paragraph 2.’

1 Following a notification pursuant to Article 136 or following the identification of deteriorating financial conditions pursuant to Article 36(3), where the solvency position of the undertaking deteriorates, the supervisory authorities shall have the power to take the necessary measures to remedy that deterioration.

2 The measures referred to in paragraph 1 shall be proportionate to the risk and commensurate with the significance of the deteriorating conditions. Member States shall ensure that supervisory authorities have the power to take at least the following measures: (a) requiring the administrative, management, or supervisory body of the undertaking to update the pre-emptive recovery plan drawn up in accordance with Article 5 of Directive (EU) 2025/1 of the European Parliament and of the Council , where the circumstances are different from the assumptions set out in that plan; (b) requiring the administrative, management, or supervisory body of the undertaking to take measures set out in the pre-emptive recovery plan drawn up in accordance with Article 5 of Directive (EU) 2025/1; where the plan is updated pursuant to point (a) of this paragraph, the measures taken shall contain any updated measures; (c) requiring the administrative, management, or supervisory body of an undertaking that does not have in place a pre-emptive recovery plan as referred to in Article 5 of Directive (EU) 2025/1, to identify the causes of the non-compliance or likely non-compliance with regulatory requirements and to identify suitable measures and a timeframe for the implementation of those regulatory requirements; (d) requiring the administrative, management, or supervisory body of the undertaking to suspend or restrict variable remuneration and bonuses, distributions on own fund instruments or repayment or repurchase of own fund items.

1 Insurance and reinsurance undertakings shall inform the supervisory authority immediately where they observe that the Minimum Capital Requirement is no longer complied with, or where there is a risk of non-compliance in the following three months. For the purposes of the first subparagraph of this paragraph, the requirement to inform the supervisory authority shall apply irrespective of whether the insurance or reinsurance undertaking observes the failure to comply with the Minimum Capital Requirement or the risk of non-compliance during a calculation of the Minimum Capital Requirement pursuant to Article 129(4) or during a calculation of the Minimum Capital Requirement between two dates when such calculation is reported to the supervisory authority pursuant to Article 129(4).

2 Within one month of the observation of non-compliance with the Minimum Capital Requirement or of the observation of the risk of non-compliance, the insurance or reinsurance undertaking concerned shall submit, for approval by the supervisory authority, a realistic short-term finance scheme to restore, within three months of that observation, the eligible basic own funds, at least to the level of the Minimum Capital Requirement or to reduce its risk profile to ensure compliance with the Minimum Capital Requirement.

3 If a winding-up proceeding is not opened within two months of receipt of the information referred to in paragraph 1, the supervisory authority of the home Member State shall consider restricting or prohibiting the free disposal of assets of the insurance or reinsurance undertaking. It shall inform the supervisory authorities of the host Member States accordingly. At the request of the supervisory authority of the home Member State, those authorities shall take the same measures. The supervisory authority of the home Member State shall designate the assets to be covered by such measures.

4 EIOPA may develop guidelines for the actions that supervisory authorities should take when they observe a failure to comply with the Minimum Capital Requirement or the risk of non-compliance referred to in paragraph 1.’

1 Where any of the measures referred to in Articles 136a, 138 and 139 are considered by the supervisory authorities to be ineffective or insufficient to address the deterioration of the solvency position of the undertaking, the supervisory authorities shall have the power to take all measures which are necessary to safeguard the interests of policy holders in the case of insurance contracts, or the obligations arising out of reinsurance contracts.

2 Those measures shall be proportionate and thus reflect the level and duration of the deterioration of the solvency position of the insurance or reinsurance undertaking concerned.’

1 Member States shall ensure that the liquidity risk management of insurance and reinsurance undertakings referred to in Article 44(2), second subparagraph, point (d), ensures that they maintain adequate liquidity to settle their financial obligations towards policy holders and other counterparties when they fall due, even under stressed conditions.

2 For the purposes of paragraph 1, Member States shall ensure that insurance and reinsurance undertakings draw up and keep up to date a liquidity risk management plan covering liquidity analysis over the short term, projecting the incoming and outgoing cash flows in relation to their assets and liabilities. When requested by the supervisory authorities, insurance and reinsurance undertakings shall extend the liquidity risk management plan to cover also liquidity analysis over medium and long-term. Member States shall ensure that insurance and reinsurance undertakings develop and keep up to date a set of liquidity risk indicators to identify, monitor and address potential liquidity stress.

3 Member States shall ensure that insurance and reinsurance undertakings submit to the supervisory authorities the liquidity risk management plan as part of the information referred to in Article 35(1).

4 Member States shall ensure that small and non-complex undertakings and undertakings which have obtained prior approval from the supervisory authority pursuant to Article 29d are not obliged to draw up a liquidity risk management plan as referred to in paragraph 2 of this Article.

5 Member States shall ensure that, where insurance and reinsurance undertakings apply the matching adjustment referred to in Article 77b or the volatility adjustment referred to in Article 77d, they may combine the liquidity risk management plan referred to in paragraph 2 of this Article with the plan required in accordance with Article 44(2), fourth subparagraph.

1 As part of the regular supervisory review process, supervisory authorities shall monitor the liquidity position of insurance and reinsurance undertakings. Where they identify material liquidity risks, they shall inform the insurance or reinsurance undertaking concerned thereof. The insurance or reinsurance undertaking shall explain how it intends to address those liquidity risks.

2 Member States shall ensure that supervisory authorities have the necessary powers to require undertakings to reinforce their liquidity position when material liquidity risks or deficiencies are identified. Such powers shall be applied where there is sufficient evidence regarding the existence of material liquidity risks and the absence of effective remedies taken by the insurance or reinsurance undertaking. The measures taken by a supervisory authority on the basis of this paragraph shall be reviewed by it at least every six months and be removed when the undertaking has taken effective remedies. Where relevant, the supervisory authority shall share the evidence of vulnerabilities in terms of liquidity risks with EIOPA.

3 Member States shall ensure that, in relation to individual undertakings facing material liquidity risks that may cause an imminent threat to the protection of policy holders or to the stability of the financial system, supervisory authorities have the power to temporarily: (a) restrict or suspend dividend distributions to shareholders and other subordinated creditors; (b) restrict or suspend other payments to shareholders and other subordinated creditors; (c) restrict or suspend share buy-backs and repayment or redemption of own fund items; (d) restrict or suspend bonuses or other variable remuneration; (e) suspend redemption rights of life insurance policy holders (“redemption rights”). The power to suspend redemption rights shall only be exercised in exceptional circumstances which affect the undertaking, as a last resort measure and where that is in the collective interest of policy holders and beneficiaries of the undertaking. Before exercising that power, the supervisory authority shall take into account potential unintended effects on financial markets and on the rights of policy holders and beneficiaries of the undertaking, including in a cross-border context. Supervisory authorities shall make public their reasons for the application of that power. The application of any measure referred to in the first subparagraph shall last no more than three months. Member States shall ensure that a measure can be renewed if the reasons that justify it are still present and that it is no longer applied when those reasons are no longer present. Without prejudice to Article 144c(6), Member States shall ensure that, until the suspension of redemption rights is lifted by the supervisory authorities, insurance and reinsurance undertakings concerned do not: (a) make any distributions or other payments to shareholders or other subordinated creditors; (b) proceed with share buy-backs or repay or redeem any own fund items; or (c) pay bonuses or other variable remuneration to members of the administrative, management or supervisory body, key function holders or senior management. Member States shall ensure that supervisory authorities have the necessary powers to enforce the requirements referred to in the fourth subparagraph. Member States shall ensure that bodies and authorities with a macroprudential mandate, where different from the supervisory authorities, are duly informed in a timely manner of the supervisory authority’s intention to make use of the powers referred to in this paragraph, and are involved in assessing the potential unintended effects referred to in the second subparagraph. Member States shall ensure that supervisory authorities notify EIOPA and ESRB whenever the powers referred to in this paragraph are exercised to address a risk for the stability of the financial system.

4 When exercising the power referred to in paragraph 3 of this Article, supervisory authorities shall duly take into account the proportionality criteria referred to in Article 29(3). Where, after consulting the ESRB, EIOPA considers that the exercise of the powers referred to in paragraph 3 by the competent authority is excessive, it shall issue an opinion to the supervisory authority concerned to the effect that the decision of that supervisory authority should be reviewed. That opinion shall not be made public.

5 When exercising the power referred to in paragraph 3 of this Article, supervisory authorities shall take into account the evidence resulting from the supervisory review process and a forward-looking assessment of the solvency and financial position of the undertakings concerned, in line with the assessment referred to in Article 45(1), second subparagraph, points (a) and (b).

6 The powers referred to in paragraph 3 may be exercised in relation to undertakings concerned operating in a given Member State where the exceptional circumstances referred to in paragraph 3 affect the whole or a significant part of the insurance market. Member States shall appoint an authority to exercise the powers referred to in the first subparagraph. Where the appointed authority is different from the supervisory authority, the Member State shall ensure proper coordination and exchange of information between the different authorities. In particular, all authorities shall be required to cooperate closely and to share all the information that may be necessary for the adequate performance of the duties entrusted to the authority appointed pursuant to this paragraph.

7 Member States shall ensure that the authority referred to in paragraph 6, second subparagraph, notifies in due time EIOPA, and, where the measure is taken to address a risk to the stability of the financial system, the ESRB, of the use of the powers referred to in paragraph 6. The notification shall include a description of the measure applied, its duration, and the reasons for the use of the power, including the reasons why the measure was considered to be effective and proportionate in relation to its negative effects on policy holders.

8 In order to ensure consistent application of this Article, EIOPA shall, after consulting the ESRB, develop guidelines further specifying: (a) the measures to address deficiencies in liquidity risk management and the form, activation and calibration of powers that supervisory authorities may exercise to reinforce the liquidity position of undertakings where liquidity risks are identified and not adequately remedied by those undertakings; (b) the existence of exceptional circumstances that justify the temporary suspension of redemption rights; (c) the conditions for ensuring the consistent application of the temporary suspension of redemption rights as a last resort measure across the Union and the aspects to consider for equally and adequately protecting policy holders in all home and host jurisdictions.

1 Without prejudice to Article 141, Member States shall ensure that supervisory authorities have the power to take measures to preserve the financial position of individual insurance or reinsurance undertakings during periods of exceptional sector-wide shocks that have the potential to threaten the financial position of the undertaking concerned or the stability of the financial system.

2 During periods of exceptional sector-wide shocks, supervisory authorities shall have the power to require undertakings with a particularly vulnerable risk profile to take at least the following measures: (a) restrict or suspend dividend distributions to shareholders and other subordinated creditors; (b) restrict or suspend other payments to shareholders and other subordinated creditors; (c) restrict or suspend share buy-backs and repayment or redemption of own fund items; (d) restrict or suspend bonuses or other variable remuneration. Member States shall ensure that the relevant national bodies and authorities with a macroprudential mandate are duly informed of the national supervisory authority’s intention to make use of the powers provided for in this Article, and are appropriately involved in the assessment of exceptional sector-wide shocks in accordance with this paragraph.

3 When exercising the power referred to in paragraph 2 of this Article, supervisory authorities shall duly take into account the proportionality criteria referred to in Article 29(3), and the existence of approved risk tolerance limits by the undertaking and thresholds in its risk management system.

4 When exercising the power referred to in paragraph 2 of this Article, supervisory authorities shall take into account the evidence resulting from the supervisory review process and a forward-looking assessment of the solvency and financial position of the undertakings concerned, in line with the assessment referred to in Article 45(1), second subparagraph, points (a) and (b).

5 The application of the measures referred to in paragraph 2 shall last for as long as the reasons that justify the measures are present. Those measures shall be reviewed at least every three months and shall be removed as soon as the reasons that justified the measures have ceased to exist.

6 For the purposes of this Article, significant intra-group transactions referred to in Article 245(2), including intra-group dividend distributions, shall only be suspended or restricted where they are a threat to the solvency or liquidity position of the group or of at least one of the undertakings within the group. The supervisory authorities of the related undertakings shall consult the group supervisor before suspending or restricting transactions with the rest of the group.

7 In order to ensure consistent application of this Article, EIOPA shall, after consulting the ESRB, develop draft regulatory technical standards to specify the criteria for the identification of exceptional sector-wide shocks. EIOPA shall submit those draft regulatory technical standards to the Commission by 29 January 2026. Power is conferred on the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Article 10 to 14 of Regulation (EU) No 1094/2010.

1 In order to ensure consistent application of the macroprudential tools referred to in Article 45(1), point (e), Article 132(6) and Article 144a(2), EIOPA shall develop draft regulatory technical standards on the criteria to be taken into account by supervisory authorities when defining the insurance or reinsurance undertakings and groups which shall be requested to: (a) carry out the additional macroprudential analyses referred to in Article 45(1), point (e), taking into account the circumstances referred to in paragraph 9 of that Article; (b) incorporate macroprudential considerations as part of the prudent person principle referred to in Article 132(6), taking into account the circumstances referred to in paragraph 8 of that Article; (c) draw up and maintain a liquidity risk management plan covering liquidity analysis over the medium and long term in accordance with Article 144a(2). EIOPA shall submit the draft regulatory technical standards referred to in the first subparagraph to the Commission by 29 January 2026. Power is conferred on the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Article 10 to 14 of Regulation (EU) No 1094/2010.

2 In order to ensure the consistent application of the macroprudential tools referred to in Article 144a(2), EIOPA shall develop draft regulatory technical standards specifying the content and frequency of update of liquidity risk management plans, taking into account possible combination of plans as referred to in paragraph 5 of that Article. EIOPA shall submit those draft regulatory technical standards to the Commission by 29 January 2026. Power is conferred on the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

3 For the purposes of paragraph 1, points (a) and (b), the criteria to be taken into account shall be proportionate to the nature, scale, and complexity of the risks, and in particular the level of interconnectedness with financial markets, the cross-border nature of insurance and reinsurance activities, and the investments of the insurance and reinsurance undertakings.

4 For the purposes of paragraph 1, point (c), the criteria to be taken into account shall be proportionate to the nature, scale, and complexity of the risks, and in particular the composition of the asset and liability portfolios, the nature and variability of insurance and reinsurance obligations and the exposure of assets’ expected cash-flows to market fluctuations.’

1 The procedure provided for in Articles 147 and 148 shall apply to any change which an insurance undertaking intends to make to the information referred to in Article 147.

2 Where there is a change in the business pursued by the insurance undertaking under the freedom to provide services that is materially affecting its risk profile or materially influencing the insurance activities in one or more host Member States, the insurance undertaking shall inform the supervisory authority of the home Member State immediately. The supervisory authority of the home Member State shall inform the supervisory authorities of the host Member States concerned without delay.’

1 For the purposes of this Section, “significant cross-border activities” means insurance and reinsurance activities carried out in a given host Member State under the right of establishment or freedom to provide services by an insurance or reinsurance undertaking which is not classified as a small and non-complex undertaking, and which meets any of the following requirements: (a) the total annual gross written premium income corresponding to the activities carried out by the undertaking in that host Member State under the right of establishment and under the freedom to provide services exceeds EUR 15000000; (b) the activities carried out under the right of establishment or under the freedom to provide services are considered by the supervisory authority of the host Member State to be of relevance with respect to the host Member State’s market.

2 For the purposes of paragraph 1, point (b), of this Article, EIOPA shall develop draft regulatory technical standards to further specify the conditions and criteria to be used when determining which insurance or reinsurance undertakings are of relevance with respect to the host Member State’s market. EIOPA shall submit the draft regulatory technical standards referred to in the first subparagraph to the Commission by 29 January 2026. Power is conferred on the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

3 For the purposes of paragraph 1, point (b), where the supervisory authority of the host Member State considers the activities carried out under the right of establishment or under the freedom to provide services are of relevance with respect to the host Member State’s market, it shall notify the supervisory authority of the home Member State stating the reasons therefor.

4 Where the supervisory authority of the home Member State disagrees on the relevance of the activities carried out under the right of establishment or under the freedom to provide services, it shall notify the supervisory authority of the host Member State within one month, stating the reasons thereof. In the event of a disagreement on the relevance of the activities carried out under the right of establishment or under the freedom to provide services, the supervisory authorities may refer the matter to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010. In that event, EIOPA may act in accordance with the powers conferred by that Article.

1 In the event of significant cross-border activities, the supervisory authority of the home Member State and the supervisory authority of the host Member State shall cooperate with each other to assess whether the undertaking has a clear understanding and a sound management of the risks that it faces, or may face, in the host Member State. Cooperation shall be commensurate with the risks entailed by the significant cross-border activities and shall cover at least the following aspects: (a) the system of governance including the ability of the administrative, management or supervisory body to understand the cross-border market specificities, risk management tools, internal controls in place and compliance procedures for the cross-border business; (b) outsourcing and distribution partnerships; (c) business strategy and claims handling; (d) consumer protection.

2 The supervisory authority of the home Member State shall, in a timely manner, inform the supervisory authority of the host Member State about the outcome of its supervisory review process related to the significant cross-border activities where potential issues of compliance with the legislative and administrative provisions applicable in the host or the home Member State or material issues related to the aspects referred to in paragraph 1, second subparagraph, have been identified, and such issues affect or are likely to affect the exercise of activities in the host Member State. The supervisory authority of the home Member State shall provide to the supervisory authority of the host Member State in which the undertaking carries out significant cross-border activities, at least annually, or more frequently in the case of a request by the supervisory authority of the host Member State concerned, the following information: (a) the Solvency Capital Requirement and the Minimum Capital Requirement, as reported by the insurance or reinsurance undertaking; (b) the amounts of eligible own funds to cover the Solvency Capital Requirement and the Minimum Capital Requirement, respectively, as reported by the insurance or reinsurance undertaking; (c) an indication of potential concerns by the supervisory authority of the home Member State regarding the calculation by the insurance or reinsurance undertaking of technical provisions, as well as regarding the items referred to in points (a) and (b). The supervisory authority of the home Member State shall inform the supervisory authority of the host Member State in which the undertaking carries out significant cross-border activities without delay where it identifies deteriorating financial conditions or a risk of non-compliance with the Solvency Capital Requirement or Minimum Capital Requirement within the next three months. The supervisory authority of a host Member State where an insurance or reinsurance undertaking carries out significant cross-border activities may address a duly justified request to the supervisory authority of the home Member State of that undertaking for receiving information other than that mentioned in the first, second and third subparagraphs, provided that it is related to the solvency, the system of governance or the business model of that undertaking. The supervisory authority of the home Member State shall provide such information in a timely manner.

3 Where the supervisory authority of the home Member State does not provide in a timely manner the information referred to in paragraph 2 of this Article, the supervisory authority of the host Member State concerned may refer the matter to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010.

4 Where an insurance or reinsurance undertaking carrying out significant cross-border activities does not comply with or is likely not to comply with the Solvency Capital Requirement or the Minimum Capital Requirement in the following three months, the supervisory authority of the host Member State in which that undertaking has significant cross-border activities may request the supervisory authority of the home Member State to carry out with it a joint on-site inspection of the insurance or reinsurance undertaking, explaining the reasons for such a request. The supervisory authority of the home Member State shall accept or refuse the request referred to in the first subparagraph within one month of its receipt.

5 Where the supervisory authority of the home Member State agrees to carry out a joint on-site inspection, it shall invite EIOPA to participate in that inspection. After the conclusion of the joint on-site inspection, the supervisory authorities concerned shall reach joint conclusions, including on the most appropriate supervisory actions, within two months. The supervisory authority of the home Member State shall take those joint conclusions into account when deciding on adequate supervisory actions. Where the supervisory authorities cannot reach a joint conclusion concerning the joint on-site inspection, either of them may, within two months of the expiry of the period referred to in the second subparagraph of this paragraph, and without prejudice to the supervisory actions and powers to be taken by the supervisory authority of the home Member State to address the non-compliance with the Solvency Capital Requirement or the non-compliance or likely non-compliance with the Minimum Capital Requirement, refer the matter to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010. The matter shall not be referred to EIOPA after the expiry of the two-month period referred to in this subparagraph or after an agreement on joint conclusions has been reached between supervisory authorities in accordance with the second subparagraph of this paragraph. If, within the two-month period referred to in the third subparagraph of this paragraph, any of the supervisory authorities concerned has referred the matter to EIOPA in accordance with Article 19 of Regulation (EU) No 1094/2010, the supervisory authority of the home Member State shall defer the adoption of the final conclusions of the joint on-site inspection and await any decision that EIOPA may take in accordance with Article 19(3) of that Regulation, and shall adopt the conclusions in conformity with EIOPA’s decision. All supervisory authorities concerned shall recognise those conclusions as determinative.

6 Where the supervisory authority of the home Member State refuses to carry out a joint on-site inspection, it shall explain in writing the reasons for such refusal to the supervisory authority of the host Member State. Where supervisory authorities disagree with the reasons for refusal, they may refer the matter to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010 within one month of the notification of the decision by the supervisory authority of the home Member State. In that case, EIOPA may act in accordance with the powers conferred on it by that Article.’

1 The supervisory authority of the host Member State may require the information which it is entitled to request with regard to the business of an insurance or reinsurance undertaking operating in the territory of that Member State from the supervisory authority of the home Member State of that undertaking. That information shall be supplied within 20 working days of the date of receipt of the request, in the official language or languages of the host Member State, or in another language accepted by the supervisory authority of the host Member State. By way of derogation from the first subparagraph, in duly justified cases, where the information requested is not readily available to the supervisory authority of the home Member State and is complex to collect, the deadline referred to in that subparagraph may be extended by 20 working days.

2 Where the supervisory authority of the home Member State fails to provide the information within the relevant time referred to in paragraph 1, the supervisory authority of the host Member State may address the request to the insurance or reinsurance undertaking directly. In that case, the supervisory authority of the host Member State shall inform the supervisory authority of the home Member State about the information request before addressing the request to the undertaking. The insurance or reinsurance undertaking shall be required to provide that information without delay.’

1 Groups within the meaning of Article 212 that are subject to group supervision in accordance with Article 213(2), points (a) and (b), shall be classified as small and non-complex groups by their group supervisor, following the procedure set out in paragraph 2 of this Article where they meet all the following criteria at the level of the group for the last two financial years directly prior to such classification: (a) where at least one insurance or reinsurance undertaking in the scope of the group is not a non-life undertaking, all of the following criteria shall be met: (i) the interest rate risk submodule referred to in Article 105(5), second subparagraph, point (a), calculated on the basis of consolidated data, is not higher than 5 % of the group consolidated technical provisions, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred to in Article 76, excluding undertakings to which method 2, which is laid down in Article 233, is applied; (ii) the total of the consolidated technical provisions from life insurance activities of the group, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, is not higher than EUR 1000000000; (b) where at least one insurance or reinsurance undertaking in the scope of the group is not a life undertaking, all of the following criteria shall be met: (i) the averaged combined ratio for non-life insurance activities net of reinsurance of the last three financial years is less than 100 %; (ii) the annual gross written premium income of the group is not higher than EUR 100000000; (iii) the sum of the annual gross written premiums in classes 5 to 7, 11, 12, 14 and 15 in Part A of Annex I is not higher than 30 % of total annual written premiums of non-life activities of the group; (c) annual gross written premium income from business underwritten by insurance and reinsurance undertakings in the scope of the group which have their head offices in Member States other than the Member State of the group supervisor is lower than either of the following thresholds: (i) EUR 20000000; (ii) 10 % of the group’s total annual gross written premium income; (d) annual gross written premium income from business underwritten by the group in Member States other than the Member State of the group supervisor is lower than either of the following thresholds: (i) EUR 20000000; (ii) 10 % of the group’s total annual gross written premium income; (e) the sum of the following is not higher than 20 % of total investments calculated on the basis of consolidated data: (i) the market risk module referred to in Article 105(5); (ii) the part of the counterparty default risk module referred to in Article 105(6) that corresponds to exposures to securitisations, derivatives, receivables from intermediaries and other investment assets which are not covered in the spread risk sub-module; (iii) any capital requirement that is applicable to investments in intangible assets that are not covered by the market risk and the counterparty default risk modules; (f) the reinsurance accepted by the undertakings of the group does not exceed 50 % of the total annual gross written premium income of the group; (g) the difference referred to in Article 230(1) where method 1 is used, in Article 233(1) where method 2 is used, or in Article 233a(1) where a combination of methods is used, is positive; (h) where method 2 or a combination of methods 1 and 2 is used, each undertaking to which method 2 is applied is a small and non-complex undertaking. The criteria laid down in the first subparagraph, point (a)(i) and point (e), shall not apply to groups where only method 2 is used.

2 Article 29b shall apply mutatis mutandis at the level of the ultimate parent insurance or reinsurance undertaking, insurance holding company or mixed financial holding company

3 Groups to which group supervision applies in accordance with Article 213(2), points (a) and (b), for less than two years shall take into account only the last financial year when assessing whether they meet the criteria set out in paragraph 1 of this Article.

4 The following groups shall never be classified as small and non-complex groups: (a) groups which are financial conglomerates within the meaning of Article 2, point 14, of Directive 2002/87/EC; (b) groups where at least one subsidiary undertaking is an undertaking referred to in Article 228(1); (c) groups which use an approved partial or full internal model to calculate their group Solvency Capital Requirement.

5 Articles 29c, 29d and 29e shall apply mutatis mutandis.

6 The Commission shall supplement this Directive by adopting delegated acts, in accordance with Article 301a, specifying: (a) the criteria laid down in paragraph 1, including the approach for calculating the sum referred to in the first subparagraph, point (e), of that paragraph; (b) the methodology to be used when classifying groups as small and non-complex groups; and (c) the conditions for granting or withdrawing supervisory approval for proportionality measures to be used by groups not classified as small and non-complex groups.

1 In the cases referred to in Article 213(2), point (b), the insurance holding company or mixed financial holding company shall ensure that: (a) the internal arrangements and distribution of tasks within the group are adequate for the purpose of complying with this Title and, in particular, are effective to: (i) coordinate all the subsidiary undertakings of the insurance holding company or mixed financial holding company, including, where necessary, through an adequate distribution of tasks among those undertakings; (ii) prevent or manage intra-group conflicts; and (iii) enforce the group-wide policies set by the insurance holding company or mixed financial holding company throughout the group; (b) the structural organisation of the group of which the insurance holding company or mixed financial holding company is part does not obstruct or otherwise prevent the effective supervision of the group and its subsidiary insurance and reinsurance undertakings, taking into account, in particular: (i) the position of the insurance holding company or mixed financial holding company in a multi-layered group; (ii) the shareholding structure; and (iii) the role of the insurance holding company or mixed financial holding company within the group.

2 Where the conditions set out in paragraph 1, point (a), are not satisfied, the group supervisor shall have the power to require the insurance holding company or mixed financial holding companies to change internal arrangements and distributions of tasks within the group. Where the conditions set out in paragraph 1, point (b), of this Article are not satisfied, the insurance holding company or mixed financial holding company shall be subject to appropriate supervisory measures by the group supervisor to ensure or restore, as the case may be, continuity and integrity of group supervision and compliance with the requirements laid down in this Title. In particular, Member States shall ensure that supervisory authorities, when acting as group supervisors in accordance with Article 247, have the power to require the insurance holding company or mixed financial holding company to structure the group in a way which enables the relevant supervisory authority to effectively exercise group supervision. Supervisory authorities shall only exercise that power in exceptional circumstances, after consulting EIOPA and, where applicable, other supervisory authorities concerned, and shall provide the insurance holding company or mixed financial holding company with a justification thereof.

3 In the cases referred to in Article 213(2), points (a) and (b), of this Directive, where the structural organisation of a group which consists of undertakings linked to each other by a relationship as set out in Article 22(7) of Directive 2013/34/EU and their related undertakings, or which is identified on the basis of Article 212(3) of this Directive, is such that it obstructs or prevents the effective supervision of that group or it prevents that group from complying with this Title, the group shall be subject to appropriate supervisory measures to ensure or restore, as the case may be, continuity and integrity of group supervision and compliance with this Title. In particular, Member States shall ensure that supervisory authorities when acting as group supervisors in accordance with Article 247 of this Directive have the power to require the establishment of an insurance holding company or a mixed financial holding company which has its head office in the Union, or the establishment of an undertaking in the Union which effectively exercises, through centralised coordination, a dominant influence over the decisions, including financial decisions, of the insurance or reinsurance undertakings that are part of the group. In that case, that insurance holding company, mixed financial holding company or undertaking which effectively exercises centralised coordination shall be responsible for complying with this Title.’

1 Irrespective of the method used in accordance with Article 220 of this Directive, for the purpose of calculating the group solvency, the participating insurance or reinsurance undertaking shall take into account the contribution to the group eligible own funds and to the group Solvency Capital Requirement of the following undertakings: (a) credit institutions within the meaning of Article 4(1), point (1), of Regulation (EU) No 575/2013 or investment firms within the meaning of Article 4(1), point (2), of that Regulation; (b) UCITS management companies within the meaning of Article 2(1), point (b), of Directive 2009/65/EC and investment companies authorised pursuant to Article 27 of that Directive provided that they have not designated a management company pursuant to that Directive; (c) alternative investment fund managers (AIFMs) within the meaning of Article 4(1), point (b), of Directive 2011/61/EU of the European Parliament and of the Council ; (d) undertakings other than regulated undertakings which carry one or more of the activities referred to in Annex I to Directive 2013/36/EU where those activities constitute a significant part of their overall activity; (e) institutions for occupational retirement provision within the meaning of Article 6, point (1), of Directive (EU) 2016/2341.

2 The contribution to the group eligible own funds of the undertakings referred to in paragraph 1 of this Article shall be calculated as the sum of the proportional share of the own funds of each undertaking, where those own funds are calculated as follows: (a) for each related undertaking referred to in paragraph 1, point (a), of this Article in accordance with the relevant sectoral rules, as defined in Article 2, point (7), of Directive 2002/87/EC; (b) for each related undertaking referred to in paragraph 1, point (b), of this Article in accordance with Article 2(1), point (l), of Directive 2009/65/EC; (c) for each related undertaking referred to in paragraph 1, point (c), of this Article in accordance with Article 4(1), point (ad), of Directive 2011/61/EU; (d) for each related undertaking referred to in paragraph 1, point (d), of this Article in accordance with the relevant sector rules as defined in Article 2, point (7), of Directive 2002/87/EC if they were regulated entities within the meaning of Article 2, point (4), of that Directive; (e) for each related undertaking referred to in paragraph 1, point (e), of this Article the available solvency margin calculated in accordance with Article 16 of Directive (EU) 2016/2341. For the purposes of the first subparagraph of this paragraph, the amount of own funds of each related undertaking corresponding to non-distributable reserves and other items identified by the group supervisor as having a reduced loss-absorbency capacity, as well as preference shares, subordinated mutual members accounts, subordinated liabilities, and deferred tax assets, that are included in the own funds in excess to the capital requirements calculated in accordance with paragraph 3, shall not be taken into account, unless the participating insurance or reinsurance undertaking is able to justify, to the satisfaction of the group supervisor, that those items can be made available to cover the group Solvency Capital Requirement. When determining the composition of the excess own funds, the participating insurance or reinsurance undertaking shall take into account that certain requirements of some related undertakings shall only be met with Common Equity 1 capital or Additional Tier 1 capital within the meaning of Regulation (EU) No 575/2013.

3 The contribution to the group Solvency Capital Requirement of the related undertakings referred to in paragraph 1 shall be calculated as the sum of the proportional share of the capital requirement or notional capital requirement of each related undertaking. That capital requirement or notional capital requirement shall be calculated as follows: (a) for related undertakings as referred to in paragraph 1, point (a), of this Article, in accordance with the following: (i) for each investment firm which is subject to own fund requirements in accordance with Regulation (EU) 2019/2033, the sum of the requirement laid down in Article 11 of that Regulation, the specific own funds requirements referred to in Article 39(2), point (a), of Directive (EU) 2019/2034 of the European Parliament and of the Council , or the local own funds requirements in third countries; (ii) for each credit institution, the higher of the following: (1) the sum of the requirement laid down in Article 92(1), point (c), of Regulation (EU) No 575/2013, including measures referred to in Articles 458 and 459 of that Regulation, the specific own funds requirements to address risks other than the risk of excessive leverage referred to in Article 104 of Directive 2013/36/EU, the combined buffer requirement defined in Article 128, point (6), of that Directive, or the local own funds requirements in third countries; (2) the sum of the requirements laid down in Article 92(1), point (d), of Regulation (EU) No 575/2013, including measures referred to in Articles 458 and 459 of that Regulation, the specific own funds requirements to address the risk of excessive leverage referred to in Article 104 of Directive 2013/36/EU, the leverage ratio buffer requirement laid down in Article 92(1a) of Regulation (EU) No 575/2013, or the local own funds requirements in third countries insofar as those requirements are to be met by Tier 1 capital; (b) for each related undertaking referred to in paragraph 1, point (b), of this Article, in accordance with Article 7(1), point (a), of Directive 2009/65/EC; (c) for each related undertaking referred to in paragraph 1, point (c), of this Article, in accordance with Article 9 of Directive 2011/61/EU; (d) for each related undertaking referred to in paragraph 1, point (d), of this Article, the capital requirement with which the related undertaking would have to comply under the relevant sector rules as defined in Article 2, point (7), of Directive 2002/87/EC if it was a regulated entity within the meaning of Article 2, point (4), of that Directive; (e) for each related undertaking referred to in paragraph 1, point (e), of this Article, the higher of the required solvency margin calculated in accordance with Article 17 of Directive (EU) 2016/2341 and the total capital requirements imposed under national law of the Member States where the related undertaking is registered or authorised.

4 Where several related undertakings as referred to in paragraph 1 of this Article form a subgroup which is subject to a capital requirement on a consolidated basis in accordance with one of the Directives or Regulations referred to in paragraph 3 of this Article, including where a financial holding company within the meaning of Article 4(1), point (20), of Regulation (EU) No 575/2013, or a mixed financial holding company is a subsidiary undertaking of a group, the group supervisor may require calculating the contribution of those related undertakings to the group eligible own funds as the proportional share of that subgroup’s own funds instead of applying paragraph 2, points (a) to (e), of this Article, to each individual undertaking belonging to that subgroup. In that case, the participating insurance or reinsurance undertaking shall also calculate the contribution of those related undertakings to the group Solvency Capital Requirement as the proportional share of that subgroup’s capital requirement, instead of applying paragraph 3, points (a) to (e), of this Article, to each individual undertaking belonging to that subgroup. All financial institutions within the meaning of Article 4(1), point (26), of Regulation (EU) No 575/2013, as well as ancillary services undertakings within the meaning of point (18) of that paragraph, which are in the scope of the subgroup shall be included in the calculation of the subgroup’s own funds and capital requirement. For the purposes of the first subparagraph of this paragraph, paragraphs 2 and 3 of this Article shall apply to the specific subgroup, on the basis of its consolidated situation within the meaning of either Article 4(1), point (47), of Regulation (EU) No 575/2013 or Article 4(1), point (11), of Regulation (EU) 2019/2033, or on the basis of its consolidated position, as appropriate.

5 Notwithstanding paragraphs 1 to 4, Member States shall allow their supervisory authorities, where they assume the role of group supervisor with regard to a particular group, to decide, at the request of the participating undertaking or on their own initiative, to deduct any participation as referred to in paragraph 1, points (a) to (d) from the own funds eligible for the group solvency of the participating undertaking.

1 For the purposes of Article 230, the group supervisor, after consulting the other supervisory authorities concerned, may allow the participating insurance or reinsurance undertaking to apply a simplified approach to participations in related undertakings that are immaterial. The application of the simplified approach referred to in the first subparagraph to one or several related undertakings shall be duly justified by the participating undertaking to the group supervisor, considering the nature, scale and complexity of the risks of the related undertaking or undertakings. Member States shall require the participating undertaking to assess, on an annual basis, whether the use of the simplified approach is still justified, and to publicly disclose, in its report on solvency and financial condition at the level of the group as referred to in Article 256(1), the list and size of the related undertakings subject to that simplified approach.

2 For the purposes of paragraph 1, the participating insurance and reinsurance undertaking shall demonstrate, to the satisfaction of the group supervisor, that the application of the simplified approach to participations in one or several related undertakings is sufficiently prudent to avoid an underestimation of risks stemming from that undertaking or from those undertakings when calculating the group solvency. When applied to a third-country insurance or reinsurance undertaking which has its head office in a country that is not equivalent or provisionally equivalent within the meaning of Article 227, the simplified approach shall not result in a contribution of the related undertaking to the group Solvency Capital Requirement that is lower than the capital requirement of that related undertaking, as laid down by the third country concerned. The simplified approach shall not be applied to a related third-country insurance or reinsurance undertaking, where the participating insurance or reinsurance undertaking has no reliable information on the capital requirement as laid down in that third country.

3 For the purposes of paragraph 1, related undertakings shall be deemed immaterial where the book value of each of them represents less than 0,2 % of the group’s assets calculated on the basis of consolidated data and the sum of the book values of all such undertakings represents less than 0,5 % of the group’s assets calculated on the basis of consolidated data.’

1 The group solvency of the participating insurance or reinsurance undertaking shall be the difference between the following: (a) the sum of the following: (i) for undertakings to which method 1 is applied, the own funds eligible to cover the Solvency Capital Requirement, calculated on the basis of consolidated data; (ii) for each related insurance or reinsurance undertaking to which method 2 is applied, the proportional share of the participating insurance or reinsurance undertaking in the own funds eligible for the Solvency Capital Requirement of the related insurance or reinsurance undertaking; (iii) the contribution of related undertakings referred to in Article 228(1), calculated in accordance with Article 228(2) or Article 228(4); and (b) the sum of the following: (i) for undertakings to which method 1 is applied, the consolidated group Solvency Capital Requirement, calculated in accordance with Article 230(2) on the basis of consolidated data; (ii) for each related insurance or reinsurance undertaking to which method 2 is applied, the proportional share of its Solvency Capital Requirement; (iii) the contribution of related undertakings referred to in Article 228(1), calculated in accordance with Article 228(3) or Article 228(4).

2 For the purposes of paragraph 1, point (a)(i), and paragraph 1, point (b)(i), of this Article, holdings in related undertakings referred to in Article 228(1) shall not be included in the consolidated data.

3 For the purposes of paragraph 1, point (a)(i), and paragraph 1, point (b)(i), of this Article, holdings in related undertakings referred to in Article 220(3) to which method 2 is applied shall not be included in the consolidated data. For the purposes of paragraph 1, point (b)(i), of this Article, the value of holdings in undertakings referred to in Article 220(3) to which method 2 is applied, in excess of the proportional share of their own Solvency Capital Requirement, shall be included in the consolidated data when calculating the sensitivity of assets and liabilities to changes in the level or in the volatility of currency exchange rates (currency risk). However, the value of those holdings shall not be assumed to be sensitive to changes in the level or in the volatility of market prices of equities (equity risk).

4 Article 233(4) shall apply mutatis mutandis for the purposes of paragraph 1, points (a)(ii) and (b)(ii), of this Article.

5 Article 231 shall apply mutatis mutandis 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.

6 The minimum consolidated group Solvency Capital Requirement shall be calculated in accordance with Article 230(2). The minimum consolidated group Solvency Capital Requirement shall be covered by eligible basic own funds as determined in accordance with Article 98(4), calculated on the basis of consolidated data. For the purposes of that calculation, holdings in related undertakings referred to in Article 228(1) shall not be included in the consolidated data. For the purpose of determining whether such eligible own funds qualify to cover the minimum consolidated group Solvency Capital Requirement, the principles set out in Articles 221 to 229a shall apply mutatis mutandis. Article 139(1) and (2) shall apply mutatis mutandis. Where the own funds eligible to cover the Solvency Capital Requirement, calculated on the basis of consolidated data exceed the Solvency Capital Requirement at group level calculated on the basis of consolidated data, and the minimum consolidated group Solvency Capital Requirement is not complied with, Article 138(1) to (4) shall apply mutatis mutandis, whereas Article 139(1) and (2) shall not apply. For the purposes of this subparagraph, the reference to “Solvency Capital Requirement” in Article 138 shall be read as a reference to “minimum consolidated group Solvency Capital Requirement”.

7 In determining whether the amount calculated in paragraph 1, point (b)(ii), of this Article appropriately reflects the risk profile of the group with regard to undertakings referred to in Article 220(3) to which method 2 is applied, the supervisory authorities concerned shall pay particular attention to any specific risks existing at group level which would not be sufficiently covered because they are difficult to quantify. Where the risk profile of the group with regard to undertakings referred to in Article 220(3) to which method 2 is applied deviates significantly from the assumptions underlying the aggregated group Solvency Capital Requirement referred to in Article 233(3), a capital add-on to the amount calculated in paragraph 1, point (b)(ii), of this Article may be imposed. Article 37(1) to (5), together with the delegated acts and implementing technical standards adopted in accordance with Article 37(6), (7) and (8), shall apply mutatis mutandis.

Where method 1 or a combination of methods is used, participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies shall be allowed to apply Article 105a to a sub-set of equity investments. The Commission shall supplement this Directive by adopting delegated acts in accordance with Article 301a specifying: (a) the approach to be used when assessing compliance with the conditions referred to in Article 105a(1) and when calculating the amount of equities that are treated as long-term equity investments where method 1 or a combination of methods is used; (b) the information to be included in the report on solvency and financial condition at the level of the group referred to in Article 256(1) or the single solvency and financial condition report referred to in Article 256(2), and in the regular supervisory report at the level of the group referred to in Article 256b(1) or the single regular supervisory report referred to in Article 256b(2).’

The Commission shall supplement this Directive by adopting delegated acts in accordance with Article 301a specifying: (a) the technical principles and methods set out in Articles 220 to 229; (b) the technical details of the simplified approach set out in Article 229a(1), as well as the criteria on the basis of which supervisory authorities may approve the use of the simplified approach; (c) the application of Articles 230 to 233a, reflecting the economic nature of specific legal structures. The Commission may supplement this Directive by adopting delegated acts in accordance with Article 301a specifying the criteria on the basis of which the group supervisor may approve the application of the simplified approach set out in Article 229a(2).’

1 Member States shall require participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies to draw up and keep up to date a liquidity risk management plan at the level of the group covering liquidity analysis over the short term and, when requested by the group supervisor, covering also liquidity analysis over the medium and long-term. Article 144a shall apply mutatis mutandis.

2 By way of derogation from Article 144a, Member States shall ensure that insurance or reinsurance subsidiaries which are in the scope of group supervision in accordance with Article 213(2), points (a) and (b), are exempted from drawing up and keeping up to date a liquidity risk management plan at individual level whenever the liquidity risk management plan pursuant to paragraph 1 of this Article covers the liquidity management and liquidity needs of the subsidiaries concerned. Member States shall require each individual insurance or reinsurance undertaking benefiting from the exemption pursuant to the first subparagraph to submit the parts of the liquidity risk management plan covering the situation of the whole group and their own situation to its supervisory authority.

3 Notwithstanding paragraph 2, supervisory authorities may require an insurance or reinsurance subsidiary undertaking to draw up and keep up to date a liquidity risk management plan at individual level whenever they detect a specific liquidity vulnerability or the liquidity management plan at group level does not include appropriate information which the supervisory authority having authorised the subsidiary undertaking requires comparable undertakings to provide for the purpose of monitoring their liquidity position.

4 In order to ensure consistent application of this Article, EIOPA shall develop draft regulatory technical standards to further specify the content and frequency of update of the liquidity risk management plan at group level. EIOPA shall submit those draft regulatory technical standards to the Commission by 29 January 2026. Power is conferred on the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.

Articles 144b and 144c shall apply mutatis mutandis at the level of the participating insurance or reinsurance undertaking, insurance holding company or mixed financial holding company.’

1 Member States shall require participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies to submit to the group supervisor, on an annual basis, a regular supervisory report at the level of the group. Article 35(5a), first subparagraph and second subparagraph, point (a), shall apply mutatis mutandis. Member States shall ensure that insurance and reinsurance undertakings submit the information referred to in this Article on an annual or less frequent basis within 24 weeks of the end of the undertaking’s financial year.

2 A participating insurance or reinsurance undertaking, an insurance holding company or a mixed financial holding company may, subject to the agreement of the group supervisor, provide a single regular supervisory report which shall comprise the following: (a) the information at the level of the group, which shall be reported in accordance with paragraph 1; (b) the information for any of the subsidiaries within the group, which shall be individually identifiable, shall be reported in accordance with Article 35(5a) and shall not result in less information than the information that would be provided by insurance and reinsurance undertakings submitting a regular supervisory report in accordance with Article 35(5a). Before granting the agreement in accordance with the first subparagraph, the group supervisor shall consult and duly take into account any views and reservations of the members of the college of supervisors. The non-agreement by the national supervisory authorities concerned shall be duly justified. If the single regular supervisory report in accordance with this paragraph is approved by the college of supervisors, each individual insurance and reinsurance undertaking shall submit the single regular supervisory report to its supervisory authority. Each supervisory authority shall have the power to supervise the part of the single regular supervisory report that is specific to the relevant subsidiary undertaking.

3 If the single regular supervisory report submitted is not satisfactory for the national supervisory authorities, the agreement referred to in paragraph 2 can be withdrawn.

4 Where the report referred to in paragraph 2 fails to include information which the supervisory authority that authorised a subsidiary undertaking within the group requires comparable undertakings to provide, and where the omission is material, the supervisory authority concerned shall have the power to require the subsidiary undertaking concerned to report the necessary additional information.

5 Where the supervisory authority having authorised a subsidiary undertaking within the group identifies any non-compliance with Article 35(5a) or requests any amendment or clarification regarding the single regular supervisory report it shall also inform the college of supervisors and the group supervisor shall submit to the participating insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company the same request.

6 The Commission shall supplement this Directive by adopting delegated acts in accordance with Article 301a further specifying the information referred to in this Article which shall be reported.

1 Member States shall ensure that a participating insurance or reinsurance undertaking, an insurance holding company or a mixed financial holding company of a group is subject to an audit requirement for the group balance sheet disclosed as part of the report on solvency and financial condition at the level of the group referred to in Article 256(1) or as part of the single solvency and financial condition report referred to in Article 256(2).

2 A separate report, including the identification of the type of assurance as well as the results of the audit, prepared by the audit firm shall be submitted to the group supervisory authority together with the report on solvency and financial condition at the level of the group referred to in Article 256(1) or the single solvency and financial condition report referred to in Article 256(2) by the participating insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company.

3 Where there is a single solvency and financial condition report as referred to in Article 256(2), the audit requirements imposed on a related insurance or reinsurance undertaking shall be complied with and the report referred to in Article 51a(6) shall be submitted to the supervisory authority of that undertaking by the participating insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company.

4 Article 51a shall apply mutatis mutandis.’

Member States shall require those who effectively run the insurance holding company or the mixed financial holding company, and, where applicable, the persons who are responsible for other key functions, to be fit and proper to perform their duties. Article 42 shall apply mutatis mutandis.’

1 EIOPA, after consulting the ESRB, shall assess, on the basis of available data and the findings of the Platform on Sustainable Finance referred to in Article 20 of Regulation (EU) 2020/852 of the European Parliament and of the Council , and EBA in the context of its work under the mandate set out in Article 501c(1), point (c), of Regulation (EU) No 575/2013, whether a dedicated prudential treatment of exposures related to assets or activities associated substantially with environmental or social objectives would be justified. In particular, EIOPA shall assess the potential effects of a dedicated prudential treatment of exposures related to assets and activities which are associated substantially with environmental or social objectives or which are associated substantially with harm to such objectives on the protection of policy holders and financial stability in the Union, including fossil fuel related assets. EIOPA shall submit a report on its findings to the Commission by 1 March 2025. Where appropriate, the report shall consider a possible risk-based prudential treatment of exposures related to assets and activities which are associated substantially with environmental or social objectives or which are associated substantially with harm to such objectives. The report shall be accompanied by an assessment of the impact of that possible risk-based prudential treatment of such exposures on insurance and reinsurance undertakings.

2 EIOPA shall review at least every five years, with respect to natural catastrophe risk, the scope and the calibration of the standard parameters of the non-life catastrophe risk sub-module of the Solvency Capital Requirement referred to in Article 105(2), third subparagraph, point (b). For the purposes of those reviews, EIOPA shall take into account the latest available relevant evidence on climate science and the relevance of risks in terms of the risks underwritten by insurance and reinsurance undertakings that use the standard formula for the calculation of the non-life catastrophe risk sub-module of the Solvency Capital Requirement. The first review pursuant to the first subparagraph shall be completed by 29 January 2027. Where EIOPA finds, during a review pursuant to the first subparagraph, that, due to the scope or the calibration of the standard parameters of the non-life catastrophe risk sub-module, there is a significant discrepancy between the part of the Solvency Capital Requirement relating to natural catastrophes and the actual natural catastrophe risk that insurance and reinsurance undertakings face, EIOPA shall submit an opinion on natural catastrophe risk to the Commission. An opinion on natural catastrophe risk submitted to the Commission pursuant to the third subparagraph shall consider the scope or the calibration of the standard parameters of the non-life catastrophe risk sub-module of the Solvency Capital Requirement in order to remedy the discrepancy found and be accompanied by an assessment of the impact of the proposed amendments on insurance and reinsurance undertakings.

3 EIOPA shall evaluate whether and to what extent insurance and reinsurance undertakings assess their material exposure to risk related to biodiversity loss as part of the assessment referred to in Article 45(1). EIOPA shall subsequently assess which actions are to be taken to ensure that insurance and reinsurance undertakings duly consider those risks. EIOPA shall submit a report with its findings to the Commission by 30 June 2025. EBA, EIOPA and ESMA shall, through the Joint Committee referred to in Article 54 of Regulations (EU) No 1093/2010, (EU) No 1094/2010 and (EU) No 1095/2010, develop guidelines to ensure that consistency, long-term considerations and common standards for assessment methodologies are integrated into the stress testing of environmental, social and governance risks. The Joint Committee shall publish those guidelines by 10 January 2026. EBA, EIOPA and ESMA shall, through that Joint Committee, explore how social and governance-related risks can be integrated into stress testing.

1 EIOPA shall assess whether the requirement on the separation of life and non-life insurance business referred to in Article 73(1) is still justified. In particular, EIOPA shall assess the effects of maintaining, and the potential effects of lifting, the composite ban at least with respect to policy holder protection, potential cross-subsidisation between life and non-life activities, market efficiency and competitiveness. For the purposes of the assessment, EIOPA shall take into account the supervisory experiences with composite undertakings. EIOPA shall submit a report with its findings to the Commission by 31 January 2028.

2 EIOPA shall monitor until 31 January 2032 the contribution to group Solvency Capital Requirements referred to in Article 228(3), point (a)(ii), of this Directive of the combined buffer requirement of related credit institutions, as defined in Article 128, point (6), of Directive No 2013/36/EU. For that purpose, EIOPA shall liaise with EBA and report to the Commission on any findings.

1 In the event of an exceptional health emergency, natural catastrophe or other extreme event, EIOPA, on its own initiative or upon request from one or more supervisory authorities or from the Commission, shall assess whether such an exceptional health emergency, natural catastrophe or other extreme event is such as to affect materially the operational capabilities of insurance and reinsurance undertakings, preventing them from submitting information within the deadlines set out in Article 35b(1), (2) and (3), Article 51(7), Article 254(3), Article 256(1) and Article 256b(1). When carrying out that assessment, EIOPA shall cooperate closely with the relevant supervisory authorities to determine the impact of the extreme event on the ability to submit information within the deadlines set out in those provisions. EIOPA shall submit its assessment to the Commission without undue delay and no later than one week after receipt of the request referred to in the first subparagraph. Where EIOPA considers that an exceptional health emergency, natural catastrophe or other extreme event affects materially the operational capabilities of insurance and reinsurance undertakings preventing them from meeting the deadlines set out in Article 35b(1), (2) and (3), Article 51(7), Article 254(3), Article 256(1) and Article 256b(1), EIOPA, as well as the relevant supervisory authorities, shall publish that information on their respective websites. The Commission may extend those deadlines by means of a delegated act adopted in accordance with this Article.

2 In order to ensure a level playing field in relation to the application of paragraph 1, the Commission may supplement this Directive by adopting delegated acts in accordance with Article 301a for individual extreme events which: (a) define the scope of application of deadlines extension taking into account the insurance and reinsurance undertakings affected by the event; (b) set out exceptional extended deadlines for reporting, which may be up to 10 weeks longer than those provided in Article 35b(1), (2) and (3), Article 51(7), Article 254(3), Article 256(1) and Article 256b(1); and (c) specify which information referred to in Article 35b(1), (2) and (3), Article 51(7), Article 254(3), Article 256(1) and Article 256b(1) is to be reported under such extended deadlines. Where EIOPA has not submitted an assessment in accordance with paragraph 1, the Commission shall seek the views of EIOPA, as appropriate, before adopting a delegated act in accordance with this Article.

In the part targeted at market professionals of the report on their solvency and financial condition referred to in Article 51(1), insurance and reinsurance undertakings shall publicly disclose the combined impact on their financial position of not applying the phasing-in and transitional measures set out in Article 77a(2), Articles 308c and 308d and, where relevant, Article 111(1), second subparagraph.’

‘6 By way of derogation from paragraphs 2 to 4 of this Article, and without prejudice to paragraphs 9 and 10 of this Article, small and medium-sized undertakings as referred to in paragraph 1 of this Article, small and non-complex institutions as defined in Article 4(1), point (145), of Regulation (EU) No 575/2013, captive insurance undertakings as defined in Article 13, point (2), of Directive 2009/138/EC of the European Parliament and of the Council , captive reinsurance undertakings as defined in Article 13, point (5), of that Directive, and small and non-complex undertakings as defined in Article 13, point (10a), of that Directive may limit their sustainability reporting to the following information: (a) a brief description of the undertaking’s business model and strategy; (b) a description of the undertaking’s policies in relation to sustainability matters; (c) the principal actual or potential adverse impacts of the undertaking on sustainability matters, and any actions taken to identify, monitor, prevent, mitigate or remediate such actual or potential adverse impacts; (d) the principal risks to the undertaking related to sustainability matters and how the undertaking manages those risks; (e) key indicators necessary for the disclosures referred to in points (a) to (d). Small and medium-sized undertakings, small and non-complex institutions, captive insurance and reinsurance undertakings and small and non-complex undertakings that rely on the derogation referred to in the first subparagraph of this paragraph shall report in accordance with the sustainability reporting standards for small and medium-sized undertakings referred to in Article 29c.

‘3 By 31 December 2027, the Commission shall in a report to the European Parliament and the Council assess the functioning of this Directive and Directive 2009/138/EC on the aspects listed below, in particular taking into account the prudential treatment of cross-sectoral participation ownerships under sectoral rules, in terms of a level playing field: (a) whether the fact that there are financial services undertakings that are subject to financial supervision under sectoral rules, but are not listed in any of the financial sectors identified in this Directive, creates an uneven playing field among financial conglomerates; (b) whether all financial conglomerates implement rules governing capital adequacy requirements, including those set out in Commission Delegated Regulation (EU) No 342/2014 , in a consistent manner, and whether those rules impose comparable overall quantitative requirements to financial conglomerates, irrespective of whether the main financial sector of the financial conglomerate is the banking sector, the insurance sector or the investment services sector; (c) whether the supervisory review processes, and the allocation of mandates and enforcement powers between coordinators and sectoral supervisors, in particular as regards capital adequacy requirements, are sufficiently clear and harmonised to ensure that capital adequacy requirements are effectively enforced in a consistent manner throughout the Union, irrespective of the main financial sector in which a financial conglomerate operates; (d) whether the absence of identification of an undertaking that is ultimately responsible for complying with this Directive poses issues with regard to ensuring a level playing field.

1 Member States shall adopt and publish, by 29 January 2027, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall immediately communicate the text of those measures to the Commission. They shall apply those measures from 30 January 2027. When Member States adopt those measures, they shall contain a reference to this Directive or 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.

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

This Directive is addressed to the Member States.