2021/0295(COD) | [ParlTrack]

Proposal for a directive
Recital 2

(2) The Covid-19 pandemic has caused tremendous socio-economic damage and left the EU economy in need of a sustainable, inclusive and fair recovery. Likewise, the economic and social consequences of the Russian war are still unfolding. This has made the work on the Union’s political priorities even more urgent, in particular ensuring that the economy works for people and attaining the objectives of the European Green Deal. The insurance and reinsurance sector can provide private sources of financing to European businesses and can make the economy more resilient by supplying protection against a wide range of risks. With this dual role, the sector has a great potential to contribute to the achievement of the Union’s priorities.

Amendment 207 #

Proposal for a directive
Recital 3

(3) As underlined in the Commission’s Communication of 24 September 2020 ‘A Capital Markets Union for people and businesses’18 , incentivising institutional investors, in particular insurers, to make more long-term investments will be instrumental in supporting re-equitisation in the corporate sector and financing the green and digital transition. To facilitate insurers’ contribution to the financing of the economic recovery of the Union, the prudential framework should be adjusted to better take into account the long-term nature of the insurance business. In particular, when calculating the Solvency Capital Requirement under the standard formula, the possibility to use a more favourable standard parameter for equity investments which are held with a long- term perspective should be facilitated, provided that insurance and reinsurance undertakings comply with sound and robust criteria, that preserve policyholder protection and financial stability. Such criteria should aim to ensureshould be strictly conditioned to the long term nature of thate insur~~ance and reinsurance undertakings are able to avoid forced selling of equities intended to be held for the long term, including under stressed market condition~~er’s liabilities and to the ability of the insurer to properly manage its risks. __________________ 18 COM/2050/590 final

Amendment 208 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 3

(3) As underlined in the Commission’s Communication of 24 September 2020 ‘A Capital Markets Union for people and businesses’18 , incentivising institutional investors, in particular insurers, to make more long-term investments will be instrumental in supporting re-equitisation in the corporate sector. To facilitate insurers’ contribution to the financing of the economic recovery of the Union, the prudential framework should be adjusted to better take into account the long-term nature of the insurance business. In particular, when calculating the Solvency Capital Requirement under the standard formula, the possibility to use a more favourable standard parameter for equity investments which are held with a long- term perspective should be facilitated~~, provided~~. Such criteria should aim to ensure that insurance and reinsurance undertakings ~~comply with sound and robust criteria, that preserve policyholder protection and financial stability. Such criteria should aim to ensure that insurance and reinsuranc~~are able to avoid forced selling of equities intended to be held for the long term, including under stressed market conditions. As insurance and reinsurance undertakings have a wide range of risk- management tools to avoid such forced selling, the criteria should not require the legal or contractual ring-fencing of long- term investment assets in order to benefit from the more favourable standard parameter for equity investments. Finally, the undertaking’s ~~are able to avoid forced selling of equities intended to be held for the lo~~management should commit to a minimum holding period of the equities through written policies and demonstrate its ability to maintain this portfolio over this holding tper~~m, including under stressed market conditions~~iod, rather than being compelled to invest for the said holding period. __________________ 18 COM/2050/590 final

Amendment 209 #

Proposal for a directive
Recital 3

(3) As underlined in the Commission’s Communication of 24 September 2020 ‘A Capital Markets Union for people and businesses’18 , incentivising institutional investors, in particular insurers, to make more long-term investments will be instrumental in supporting re-equitisation in the corporate sector. To facilitate insurers’ contribution to the financing of the economic recovery of the Union, the prudential framework should be adjusted to better take into account the long-term nature of the insurance business. In particular, when calculating the Solvency Capital Requirement under the standard formula, the possibility to use a more favourable standard parameter for equity investments which are held with a long- term perspective should be facilitated, provided that insurance and reinsurance undertakings comply with sound and robust criteria, that preserve policyholder protection and financial stability. Such criteria should aim to ensure that insurance and reinsurance undertakings are able to avoid forced selling of equities intended to be held for the long term, including under stressed market conditions. As insurance and reinsurance undertakings have a wide range of risk-management tools to avoid such forced selling, the criteria should recognise such variety and not require the legal or contractual ring- fencing of long-term investment assets in order to benefit from the more favourable standard parameter for equity investments. __________________ 18 COM/2050/590 final

Amendment 210 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 3

Amendment 211 #

Proposal for a directive
Recital 3 a (new)

(3 a) The need to properly reflect extremely low and negative interest rates in the insurance regulation has arisen due to what has been witnessed in recent years on the markets; this has to be achieved via a recalibration of the Interest Rate Risk sub-module to reflect the existence of a negative yield environment. At the same time, the methodology to be used shall not result in unrealistically large decreases in the liquid part of the curve; this can be avoided by foreseeing an explicit floor to represent a lower bound of interest rates. In line with interest rates dynamics, the floor should not be flat but term-dependent.

Amendment 212 #

Carlo CALENDA

Proposal for a directive
Recital 3 a (new)

Amendment 213 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 3 a (new)

Amendment 214 #

Raffaele FITTO

Proposal for a directive
Recital 3 a (new)

(3 a) The need to properly reflect extremely low and negative interest rates in the insurance regulation has arisen due to what has been witnessed in recent years on the markets; this has to be achieved via are calibration of the Interest Rate Risk sub-module to reflect the existence of a negative yield environment. At the same time, the methodology to be used shall not result in unrealistically large decreases in the liquid part of the curve; this can be avoided by foreseeing an explicit floor to represent a lower bound of interest rates. In line with interest rates dynamics, the floor should not be flat but term-dependent.

Amendment 215 #

Proposal for a directive
Recital 4

(4) In its Communication of 11 December 2019 on the European Green Deal19 , the Commission made a commitment to integrate better into the Union’s prudential framework the management of climate and environmental risks. The European Green Deal is the Union’s new growth strategy, which aims to transform the Union into a modern, resource-efficient and competitive economy with no net emissions of greenhouse gases by 2050. It will contribute to the objective of building an economy that works for the people, strengthening the Union’s social market economy, helping to ensure that it is future-ready and that it delivers stability, jobs, growth and investment. In its proposal of 4 March 2020 for a European Climate Law, the Commission proposed to make the objective of climate neutrality and climate resilience by 2050 binding in the Union. That proposal was adopted by the European Parliament and by the Council and it entered into force on 29 July 202120 . The Commission’s ambition to ensure global leadership by the EU on the path towards 2050 was reiterated in the 2021 Strategic Foresight Report21 , which identifies the building of resilient and future-proof economic and financial systems as a strategic area of action. __________________ 19 COM(2019)640 final 20 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1). 21 COM(2021)750 finaldeleted

Amendment 216 #

Stéphanie YON-COURTIN, Gilles BOYER, Pascal CANFIN, Pascal DURAND

Proposal for a directive
Recital 4

(4) In its Communication of 11 December 2019 on the European Green Deal19 , the Commission made a commitment to integrate better into the Union’s prudential framework the management of climate and environmental risks. The European Green Deal is the Union’s new growth strategy, which aims to transform the Union into a modern, resource-efficient and competitive economy with no net emissions of greenhouse gases by 2050. It will contribute to the objective of building an economy that works for the people, strengthening the Union’s social market economy, helping to ensure that it is future-ready and that it delivers stability, jobs, growth and investment. In its proposal of 4 March 2020 for a European Climate Law, the Commission proposed to make the objective of climate neutrality and climate resilience by 2050 binding in the Union. That proposal was adopted by the European Parliament and by the Council and it entered into force on 29 July 202120 . The Commission’s ambition to ensure global leadership by the EU on the path towards 2050 was reiterated in the 2021 Strategic Foresight Report21 , which identifies the building of resilient and future-proof economic and financial systems as a strategic area of action. To reflect that ambition, the insurance framework should be updated to ensure that insurance and reinsurance undertakings manage and mitigate climate and environmental risks. __________________ 19 COM(2019)640 final 20 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1). 21 COM(2021)750 final

Amendment 217 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 5

(5) The EU sustainable finance framework will play a key role in meeting the targets of the European Green Deal and environmental regulation should be complemented by a sustainable finance framework which channels finance to investments that reduce exposure to these climate and environmental risks. In its Communication of 6 July 2021 on a Strategy for Financing the Transition to a Sustainable Economy22 , the Commission committed to propose amendments to Directive 2009/138/EC to consistently integrate sustainability risks in risk management of insurers by requiring climate change scenario analysis by insurers. __________________ 22 COM(2021)390deleted

Amendment 218 #

Stéphanie YON-COURTIN, Gilles BOYER, Pascal CANFIN, Pascal DURAND

Proposal for a directive
Recital 5

(5) The ~~EU sustainable finance framework~~Commission estimates that EUR 260 billion additional investments will be needed in the EU to reach the 2030 energy and climate target. The EU sustainable finance framework, and in particular the insurance sector, will play a key role in meeting the targets of the European Green Deal and environmental regulation should be complemented by a sustainable finance framework which channels finance to investments that reduce exposure to these climate and environmental risks. In its Communication of 6 July 2021 on a Strategy for Financing the Transition to a Sustainable Economy22 , the Commission committed to propose amendments to Directive 2009/138/EC to consistently integrate sustainability risks in risk management of insurers by requiring climate change scenario analysis by insurers. __________________ 22 COM(2021)390

Amendment 219 #

Proposal for a directive
Recital 5

Amendment 220 #

Proposal for a directive
Recital 5 a (new)

(5 a) According to the International Energy Agency, to reach the carbon neutrality objective by 2050, no new fossil fuel exploration and expansion can take place. This means that fossil fuel exposures represent a higher risk both at micro level, as the value of such assets is set to decrease over time, and at macro level as financing fossil fuel activities jeopardises the objective of maintaining the global rise of temperature below 1.5°C and therefore threatens the financial stability. The higher risks embedded in such exposure should be reflected in the prudential framework, as of now.

Amendment 221 #

Proposal for a directive
Recital 5 a (new)

(5 a) Recent geopolitical developments emphasised the necessity of an open strategic autonomy of the European Union. The insurance industry is a key facilitator of economic activity in the Union, and particularly small and medium sized entities, as well as social wellbeing for EU citizens. Safeguarding the competitiveness of the EU insurance market and should be an objective of the review of Directive 2009/138/EC, its transposition, implementation and the supervision in accordance with the regime.

Amendment 222 #

Stéphanie YON-COURTIN, Gilles BOYER, Pascal CANFIN, Pascal DURAND

Proposal for a directive
Recital 5 b (new)

(5 b) The further integration of the single market for insurance is a key objective of this review of Directive 2009/138/EC. The integration of the EU single market for insurance increases competition and the availability of insurance products across Member States to the benefit of businesses and consumers. Insurance failures in the single market for insurance since the application of Solvency II emphasise the need for more consistency and convergence of supervision across the EU. The supervision of insurance undertakings operating under the freedom to provide services and the freedom of establishment should be further improved without undermining the objective of further integrating the single market for insurance to ensure consistent consumer protection and safeguarding fair competition across the EU single market.

Amendment 223 #

Proposal for a directive
Recital 6 a (new)

(6 a) To ensure an orderly transition towards the objective of carbon neutrality as established in Regulation (EU) 2021/1119(European Climate Law), insurance and reinsurance undertakings in the scope of Directive (EU) 2021/0104 (COD) [CSRD Directive], as regards corporate sustainability reporting shall develop and adopt a transition plan to ensure that their business model and strategy are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement.

Amendment 224 #

Christophe HANSEN

Proposal for a directive
Recital 9

(9) ~~Prior to~~Upon the granting of authorisation, the supervisory authority of the home Member State should ~~consult~~notify the supervisory authorities of any Member States concerned. In view of increased cross-border insurance activities, it is necessary to enhance the convergent application of Union law in cases of cross-border insurance activity and the exchange of information between the supervisory authorities, in particular before authorisations are granted. Therefore, where several supervisory authorities need to be consulted, any supervisory authority concerned should be allowed to request a joint assessment of an application for authorisation from the supervisory authority of the Member State where the authorisation process is ongoing.

Amendment 225 #

Proposal for a directive
Recital 9

(9) Prior to the granting of authorisation, the supervisory authority of the home Member State should consult the supervisory authorities of any Member States concerned. In view of increased cross-border insurance activities, it is necessary to enhance the convergent application of Union law in cases of cross- border insurance activity and the exchange of information between the supervisory authorities, in ~~particular~~cluding before authorisations are granted. ~~Therefore, where several supervisory authorities need to be consulted, any supervisory authority concerned should be allowed to request a joint assessment of an application for authorisation fro~~All supervisory authority concerned should be allowed to request information from the supervisory authority granting the authorisation about the business model and risks inherent in the business of the insurance or reinsurance undertaking seeking authorisation. Where any concerned supervisory authority identifies potential risks which have not been appropriately reflected by the supervisory authority granting the authorisation, it should inform theis supervisory authority ~~of the Member State where the authorisation process is ongoing~~without undue delay. The supervisory authority which is granting the authorisation might consider the issues raised by a concerned supervisory authority for its decision and should notify the concerned supervisory authority about its decision.

Amendment 226 #

Proposal for a directive
Recital 10

(10) Directive 2009/138/EC should be applied in accordance with the proportionality principle. To facilitate the proportionate and homogeneous application of the Directive to undertakings presenting a lower risk profile than the average undertaking, and to ensure that they are not subject to disproportionately burdensome requirements, it is necessary to provide risk-based criteria that allow for their identification.

Amendment 227 #

Eero HEINÄLUOMA

Proposal for a directive
Recital 11 a (new)

(11 a) By way of derogation from the automatic benefit from proportionality measures, where supervisory authorities have concerns in relation to the risk profile of an individual low-risk profile undertaking, the supervisory authorities should have the power to request the undertaking concerned to refrain from using one or several proportionality measures. Such power could be used where they identify that the risk profile of an undertaking changes significantly, as a result of a material deterioration of its solvency position, a deficiency in the functioning of its governance or a material change in the activities of the undertaking.

Amendment 228 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 11 a (new)

(11 a) Member States could make insurance undertakings that are excluded from the scope of Directive 2009/138/EC subject to provisions that are similar or identical to the ones provided for in that Directive.

Amendment 229 #

Proposal for a directive
Recital 14

(14) Captive insurance undertakings and captive reinsurance undertakings which only cover risks associated with the industrial or commercial group to which they belong, present a particular risk profile that should be taken into account when defining some requirements, in particular on own-risk and solvency assessment, disclosures and the related empowerments for the Commission to further specify the rules on such empowerments. ~~Moreover~~Therefore, captive insurance undertakings and captive reinsurance undertakings should ~~also be able to~~ benefit from the proportionality measures ~~when they are~~by being automatically classified as low- risk profile undertakings.

Amendment 230 #

Proposal for a directive
Recital 15 a (new)

(15 a) The lack of diversity in the administrative, management or supervisory bodies could lead to 'groupthink' phenomenon. This phenomenon is at the roots of ineffective decisions and systematic bias. Therefore, diversity should be one of the criteria for the composition of administrative, management or supervisory bodies. To facilitate independent opinions and critical challenges, administrative, management or supervisory bodies should be sufficiently diverse as regards age, gender, geographical provenance and educational and professional background to present a variety of views and experiences. Gender balance is of particular importance to ensure adequate representation of the population. Insurance and reinsurance undertaking shall set target and define measures to increase the representation of the underrepresented gender in the administrative, management or supervisory body. Employee representation in management bodies could also, by adding a key perspective and genuine knowledge of the internal workings of institutions, be seen as a positive way of enhancing diversity. Diversity should also be addressed in institutions' recruitment policy more generally. Such a policy should, for instance, encourage institutions to select candidates from shortlists including both genders.

Amendment 231 #

Proposal for a directive
Recital 15 b (new)

(15 b) The effectiveness of a prudential framework relies on the ability of the responsible supervisor to conduct its task in an objective and impartial manner. To avoid that any conflict of interest jeopardises the supervision of insurance and reinsurance undertakings, supervisors shall meet high-level independence criteria. Supervisors must not be allowed to trade any securities issued by a supervised entity and an appropriate cooling-off period shall be defined before a supervisor takes a position in a supervised entity or other related entity.

Amendment 232 #

Proposal for a directive
Recital 16

(16) Cooperation between the supervisory authority of the home Member State that granted authorisation to an insurance or reinsurance undertaking and the supervisory authorities of the Member States where that undertaking pursues activities by establishing branches or by providing services, should be strengthened in order to better prevent potential problems and to enhance the protection of policyholders across the Union. This cooperation should inc~~lude more information coming from the supervisory authority of the home Member State~~rease transparency and the regular exchange of information between concerned supervisory authorities, in particular regarding the outcome of the supervisory review process related to the cross-border activity, the financial condition of the undertaking and market conditions, which might impact the provision of services.

Amendment 233 #

Proposal for a directive
Recital 17

(17) Supervisory authorities should be entitled to receive from each supervised insurance and reinsurance undertaking and their groups, at least every t~~hree~~wo years, a regular narrative report with information on the business and performance, system of governance, risk profile, capital management and other relevant information for solvency purposes. The reporting frequency for low-risk profile undertakings shall be three years. In order to simplify this reporting requirement for insurance and reinsurance groups, it should be possible, subject to certain conditions, to submit the information of the regular supervisory report relating to the group and its subsidiaries in an aggregated way for the whole group.

Amendment 234 #

Proposal for a directive
Recital 19

(19) Reporting and disclosure deadlines should be clearly laid down in Directive 2009/138/EC. However, it should be recognised that extraordinary circumstances such as sanitary emergencies, natural catastrophes and other extreme events could make it impossible for insurance and reinsurance undertakings to submit such reports and disclosures, within the established deadlines. To this end, ~~the Commission~~EIOPA should be empowered to extend the deadlines under such circumstances.

Amendment 235 #

Proposal for a directive
Recital 20 a (new)

(20 a) Cyber risks remain top global risks for the financial sector and the economy and have increased during the Covid pandemic. Following the adoption of the Regulation 2020/0266 on digital operational resilience for the financial sector [DORA Regulation], cyber risks need to be better taken into account by insurers as part of their operational risks to prevent damages resulting from cyber- attacks. EIOPA should also consider how the insurance market could improve the coverage of cyber risks.

Amendment 236 #

Proposal for a directive
Recital 21

(21) As insurance activities ~~may~~could trigger or amplify risks for financial stability, insurance and reinsurance undertakings should incorporate macroprudential considerations and analysis in their investment and risk management activities. This could include taking into account the potential behaviour of other market participants, macroeconomic risks, such as credit cycle downturns or reduced market liquidity, developments related to climate change, or excessive concentrations at market level in certain asset types, counterparties or sectors.

Amendment 237 #

Proposal for a directive
Recital 21

(21) As insurance activities ~~may~~could trigger or amplify risks for financial stability, insurance and reinsurance undertakings should incorporate macroprudential considerations and analysis in their underwriting, investment and risk management activities. This could include taking into account the potential behaviour of other market participants, macroeconomic risks, such as credit cycle downturns or reduced market liquidity, or excessive concentrations at market level in certain asset types, counterparties or sectors.

Amendment 238 #

Eero HEINÄLUOMA

Proposal for a directive
Recital 22

(22) IWhere requested by the national supervisory authority, insurance and reinsurance undertakings should factor any relevant macroprudential information provided by the supervisory authorities in their own- risk and solvency assessment. In order to ensure a consistent application of such additional macroprudential measures, EIOPA should develop guidelines regarding its scope of application that specify the criteria to be taken into account by national supervisory authorities when identifying the undertaking to which the measure applies. To ensure that the assessment of macroprudential risks is holistic in nature, these guidelines should provide methods and indicators for national supervisory authorities to weigh and combine the relevant criteria when selecting the addressees of the requests for additional macro-prudential measures, without setting prescriptive thresholds in relation to individual criteria. The supervisory authorities should analyse the own-risk and solvency assessment supervisory reports of undertakings within their jurisdictions, aggregate them and provide input to undertakings on the elements that should be considered in their future own-risk and solvency assessments, particularly as regards macroprudential risks. Member States should ensure that, where they entrust an authority with a macroprudential mandate, the outcome and the findings of macroprudential assessments by the supervisory authorities are shared with that macroprudential authority.

Amendment 239 #

Proposal for a directive
Recital 22

(22) Insurance and reinsurance undertakings should factor any relevant macroprudential information provided by the supervisory authorities in their own- risk and solvency assessment. (ORSA).The supervisory authorities should analyse the own-risk and solvency assessment supervisory reports of undertakings within their jurisdictions, aggregate them and provide input to undertakings on the elements that should be considered in their future own-risk and solvency assessments, particularly as regards macroprudential risks. Member States should ensure that, where they entrust an authority with a macroprudential mandate, the outcome and the findings of macroprudential assessments by the supervisory authorities are shared with that macroprudential authority.

Amendment 240 #

Eero HEINÄLUOMA

Proposal for a directive
Recital 22 a (new)

(22 a) Supervisory authorities should have the power to set a capital add-on to address one or more entity, activity-, or behaviour-based sources of systemic risk. Supervisory authorities should have the discretion to make use of this tool, whenever they deem it necessary to mitigate an identified systemic risk or the build-up thereof. They should clearly document the rationale for the add-on, apply it in a proportionate way and only as long as the conditions that lead to the application of the add-on remain in force. Supervisory authorities must also take into account procyclical effects when considering the use of this tool. In order to assist consistent conditions of application and avoid inconsistent use across the Union, the Commission should adopt a delegated act on the procedures for decisions to trigger, set, calculate and remove capital add-on for systemic risk.

Amendment 241 #

Proposal for a directive
Recital 24

(24) Authorities with a macroprudential mandate are in charge of the macroprudential policy for their national insurance and reinsurance market. The macroprudential policy can be pursued by the supervisory authority or by another authority ~~or body~~ entrusted with this purpose.

Amendment 242 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 25

(25) Good coordination between supervisory authorities and the relevant ~~bodies and~~ authorities with a macroprudential mandate is important for identifying, monitoring and analysing possible risks to the stability of the financial system that may affect insurance and reinsurance undertakings, and for taking measures to effectively and appropriately address those risks. Cooperation between authorities should also aim to avoid any form of duplicative or inconsistent actions.

Amendment 243 #

Proposal for a directive
Recital 26

(26) Directive 2009/138/EC requires insurance and reinsurance undertakings to have, as an integrated part of their business strategy, a periodic own-risk and solvency assessment. Some risks, such as climate change risks, are difficult to quantify or they materialise over a period that is longer than the one used for the calibration of the Solvency Capital Requirement. Those risks can be better taken into account in the own-risk and solvency assessment. Where insurance and reinsurance undertakings have material exposure to climate risks, they should be required to carry out, within appropriate intervals and as part of the own-risk and solvency assessment, analyses of the impact of long-term climate change risk scenarios on their business. Such analyses should be proportionate to the nature, scale and complexity of the risks inherent in the business of the undertakings. In particular, while the assessment of the materiality of exposure to climate risks should be required from all insurance and reinsurance undertakings, long-term climate scenario analyses should not be required for low-risk profile undertakings.deleted

Amendment 244 #

Proposal for a directive
Recital 26

(26) Directive 2009/138/EC requires insurance and reinsurance undertakings to have, as an integrated part of their business strategy, a periodic own-risk and solvency assessment. Some risks, such as climate change risks, are difficult to quantify or they materialise over a period that is longer than the one used for the calibration of the Solvency Capital Requirement. Those risks can be better taken into account in the own-risk and solvency assessment. Where insurance and reinsurance undertakings have material exposure to climate risks, theyInsurance and reinsurance undertakings should be required to carry out, within appropriate intervals and as part of the own-risk and solvency assessment, analyses of the impact of long-term climate change risk scenarios on their business. Such analyses should be proportionate to the nature, scale and complexity of the risks inherent in the business of the undertakings. In particular, while the assessment of the materiality of exposure to climate risks should be required from all insurance and reinsurance undertakings, long-term climate scenario analyses should not be required for low-risk profile undertakings.

Amendment 245 #

Proposal for a directive
Recital 26

(26) Directive 2009/138/EC requires insurance and reinsurance undertakings to have, as an integrated part of their business strategy, a periodic own-risk and solvency assessment. Some risks, such as climate change risks, are difficult to quantify or they materialise over a period that is longer than the one used for the calibration of the Solvency Capital Requirement. Those risks can be better taken into account in the own-risk and solvency assessment. ~~Where i~~Insurance and reinsurance undertakings ~~have material exposure to climate risks, they~~ should be required to carry out, within appropriate intervals and as part of the own-risk and solvency assessment, analyses of the impact of long-term climate change risk scenarios on their business, except when the undertaking can prove that it has no material exposure to climate change risks. Such analyses should be proportionate to the nature, scale and complexity of the risks inherent in the business of the undertakings. In particular, while the assessment of the materiality of exposure to climate risks should be required from all insurance and reinsurance undertakings, long-term climate scenario analyses should not be required for low- risk profile undertakings.

Amendment 246 #

Proposal for a directive
Recital 26

(26) Directive 2009/138/EC requires insurance and reinsurance undertakings to have, as an integrated part of their business strategy, a periodic own-risk and solvency assessment. Some risks, such as climate change risks, are difficult to quantify or they materialise over a period that is longer than the one used for the calibration of the Solvency Capital Requirement (SCR). Those risks can be better taken into account in the own-risk and solvency assessment. Where insurance and reinsurance undertakings have material exposure to climate risks, they should be required to carry out, within appropriate intervals and as part of the own-risk and solvency assessment, analyses of the impact of long-term climate change risk scenarios on their business. Such analyses should be proportionate to the nature, scale and complexity of the risks inherent in the business of the undertakings. In particular, while the assessment of the materiality of exposure to climate risks should be required from all insurance and reinsurance undertakings, long-term climate scenario analyses should not be required for low- risk profile undertakings.

Amendment 247 #

Stéphanie YON-COURTIN, Gilles BOYER, Pascal DURAND, Pascal CANFIN

Proposal for a directive
Recital 27

(27) Directive 2009/138/EC requires the disclosure, at least, annually, of essential information through the solvency and financial condition report. That report has two main types of addressees: policyholders and beneficiaries on the one hand, and analysts and other market participants on the other hand. In order to address the needs and the expectations of those two different groups, the content of the report should be divided into two parts. The first part, addressed mainly to policyholders and beneficiaries, should contain the key information on business, performance, capital management and risk profile, including in relation to sustainability risks. The second part, addressed to analysts and other market participants, should contain detailed information on the system of governance, including the role of the administrative, management and supervisory body with regard to sustainability risks, specific information on technical provisions and other liabilities, the solvency position ~~as well as other data relevant for specialised analysts~~, the targets and milestones defined in the transition plan as well as other data relevant for specialised analysts, including for undertakings using internal models, the amount of the Solvency Capital Requirements that would have resulted from the application of the standard formula.

Amendment 248 #

Proposal for a directive
Recital 27 a (new)

(27 a) EIOPA is required to initiate and coordinate Union-wide assessments of the resilience of financial institutions to adverse market developments according to Article 32 of Regulation (EU) No 1094/2010. A first IORP stress test was launched in April 2022 with results expected in December 2022. Similarly, national supervisory authorities should perform stress tests on climate but also on environmental and social risks.

Amendment 249 #

Jessica POLFJÄRD

Proposal for a directive
Recital 28 a (new)

(28 a) The European Insurance and Occupational Pensions Authority (EIOPA) noted in its holistic impact assessment that certain changes would result in significant increases in certain provisions for insurance undertakings in some Member States, due to different characteristics in government bond and swap markets. Therefore, differences in currencies and national characteristics should be taken into account when determining the starting point for the extrapolation of risk-free interest rates and the appropriate convergence period to the ultimate forward rate.

Amendment 250 #

Stéphanie YON-COURTIN, Pascal DURAND, Gilles BOYER

Proposal for a directive
Recital 30

(30) In order to guarantee the highest degree of accuracy of the information disclosed to the public, a substantial part of the solvency and financial condition report should be subject to audit. Such ~~audit~~ requirement should cover the balance sheet assessed in accordance with the valuation criteria set out in Directive 2009/138/EC.

Amendment 251 #

Proposal for a directive
Recital 31

Amendment 252 #

Proposal for a directive
Recital 31

(31) The burden of the auditing requirement does not seem to be justified for low-risk profile undertakings, which are not expected to be relevant for the financial stability of the Union and whose policyholders are not numerous. One of the criteria that low-risk profile undertakings are required to meet is that they be small in size. To alleviate this burden, an exclusion from this requirement should be granted. However, as some Member States have already implemented audit requirements encompassing all undertakings and other parts of the solvency and financial condition report, they should have the possibility to apply auditing to all undertakings and other parts of the solvency and financial condition report.

Amendment 253 #

Proposal for a directive
Recital 31

Amendment 254 #

Proposal for a directive
Recital 32

(32) It should be acknowledged, that, although beneficial, the auditing requirement would be an additional burden for every undertaking. Therefore, annual reporting and disclosure deadlines for insurance and reinsurance undertakings and for insurance and reinsurance groups should be extended in order to give those undertakings sufficient time to produce audited reports.deleted

Amendment 255 #

Proposal for a directive
Recital 34

(34) The determination of the relevant risk-free interest rate term structure should balance the use of information derived from relevant financial instruments with the ability of insurance and reinsurance undertakings to hedge interest rates derived from financial instruments. In particular, it can happen that smaller insurance and reinsurance undertakings do not have the capacities to hedge interest rate risk with instruments other than bonds, loans or similar assets with fixed cash-flows. The relevant risk-free interest rate term structure should therefore be extrapolated for maturities where the markets for bonds are no longer deep, liquid and transparent. However, the method for the extrapolation should make use of information derived from relevant financial instruments other than bonds, where such information is available from deep, liquid and transparent markets for maturities where the bond markets are no longer deep, liquid and transparent. To ensure certainty and harmonised application while also allowing for timely reaction to changes in market conditions, the Commission should adopt delegated acts to specify how the new extrapolation method should apply. Under market conditions similar to those at the date of entry into force of this Directive, the starting point for the extrapolation of risk-free interest rates, in particular for the euro, should be at a maturity of 20 years. In addition, the extrapolated part of the relevant risk-free interest rate term structure, in particular for the euro, should converge so that for maturities40 years past the starting point of the extrapolation, the extrapolated forward rates do not differ more than seven basis points from the ultimate forward rate.

Amendment 256 #

Proposal for a directive
Recital 36

(36) Directive 2009/138/EC provides for a volatility adjustment, which seeks to mitigate the effect of exaggerations of bond spreads and is based on reference portfolios for the relevant currencies of insurance and reinsurance undertakings and, in the case of the euro, on reference portfolios for national insurance markets. The use of a uniform volatility adjustment for entire currencies or countries can lead to benefits in excess of a mitigation of exaggerated bond spreads, in particular where the sensitivity of relevant assets of those undertakings to changes in credit spreads is lower than the sensitivity of the relevant best estimate to changes in interest rates. In ~~order to avoid such excessive benefit~~versely, the use of a uniform volatility adjustment for entire currencies or countries can lead in exceptional circumstances to a situation where the sensitivity to changes in credit spreads of particular investments of undertakings are not sufficiently taken into account. In order to avoid inappropriate corrections from the volatility adjustment, the volatility adjustment should be subject to supervisory approval and its calculation should take into account undertaking- specific characteristics related to the spread sensitivity of assets and the interest rate sensitivity of the best estimate of technical provisions. Moreover, minimum conditions for the use of the volatility adjustment should be introduced as an additional safeguard. Member States, some of which already subject the use of the volatility adjustment to a supervisory approval process, should have the option to extend the conditions for approval to include an assessment against the underlying assumptions of the volatility adjustment. In light of the additional safeguards, insurance and reinsurance undertakings should be allowed to add up to an increased proportion of 85% of the risk-corrected spread derived from the representative portfolios to the basic risk- free interest rate term structure.

Amendment 257 #

Proposal for a directive
Recital 36

(36) Directive 2009/138/EC provides for a volatility adjustment, which seeks to mitigate the effect of exaggerations of bond spreads and is based on reference portfolios for the relevant currencies of insurance and reinsurance undertakings and, in the case of the euro, on reference portfolios for national insurance markets. The use of a uniform volatility adjustment for entire currencies or countries can lead to benefits in excess of a mitigation of exaggerated bond spreads, in particular where the sensitivity of relevant assets of those undertakings to changes in credit spreads is lower than the sensitivity of the relevant best estimate to changes in interest rates. In order to avoid such excessive benefits from the volatility adjustment, the volatility adjustment should be subject to supervisory approval and its calculation should take into account undertaking- specific characteristics related to the spread sensitivity of assets and the interest rate sensitivity of the best estimate of technical provisions. In particular, the long-term nature of insurance and reinsurance undertakings' balance sheets should be better integrated in the volatility adjustment by introducing a factor reflecting the illiquidity of the insurance or reinsurance undertaking's liabilities. In light of the additional safeguards, insurance and reinsurance undertakings should be allowed to add up to an increased proportion of 85% of the risk- corrected spread derived from the representative portfolios to the basic risk- free interest rate term structure.

Amendment 258 #

Proposal for a directive
Recital 36 a (new)

(36 a) Where the undertaking invests in debt instruments which have a better credit quality than the debt instruments contained in the representative portfolio for the calculation of the volatility adjustment, the volatility adjustment may overcompensate the loss of own funds caused by widening bond spreads and may lead to undue volatility in the own funds. Alternatively, where the undertaking invests in debt instruments which are underrepresented in the representative portfolio for the calculation of the volatility adjustment, the volatility adjustment may underestimate the loss of own funds caused by widening bond spreads and may lead to undue volatility in the own funds. With the objective to offset the artificial volatility caused by such inappropriate corrections, in these cases undertakings should be able to apply for a modification of the volatility adjustment that takes into account information on the undertaking specific investments in debt instruments.

Amendment 259 #

Proposal for a directive
Recital 36 a (new)

Amendment 260 #

Esther DE LANGE

Proposal for a directive
Recital 36 a (new)

Amendment 261 #

Proposal for a directive
Recital 37

(37) Directive 2009/138/EC provides for a country component in the volatility adjustment that aims to ensure that exaggerations of bond spreads in a specific country are mitigated. However, the activation of the country component is based on an absolute threshold and a relative threshold with respect to the risk- adjusted spread of the country, which can lead to cliff-edge effects and therefore increase the volatility of own funds of insurance and reinsurance undertakings. In order to ensure that exaggerations of bond spreads in a specific Member State whose currency is the euro are mitigated effectively, the country component should be replaced by a macro component which is to be calculated based on the differences between the risk adjusted spread for the euro and the risk adjusted spread for the country. In order to avoid cliff-edge effects, the calculation should avoid discontinuities with respect to the input parameters. Moreover, the methodology of the risk-correction should aim at ensuring the counter-cyclicality function of the Volatility Adjustment.

Amendment 262 #

Proposal for a directive
Recital 37 a (new)

(37 a) The Review of Directive 2009/138/EC should aim at granting the highest level of protection towards policy holders all over the Union. In the framework of its review, measurement methodologies and tools on illiquidity should be refrained from being used, when their design could have unintended consequences, being detrimental for the policy holders protection, or when they are not based on valid empirical analysis and data.

Amendment 263 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 39 a (new)

(39 a) Directive 2009/138/EC requires that the amount of eligible own funds necessary to support the insurance and reinsurance obligations be determined for the purpose of the risk margin calculation and that the Cost-of-Capital rate is equal to the additional rate, above the relevant risk-free interest rate, that an insurance or reinsurance undertaking would incur holding that amount of eligible own funds. Directive 2009/138/EC also requires that the Cost-of-Capital rate be reviewed periodically. For that purpose, the reviews should ensure that the Cost- of-Capital rate remains risk-based and is not set at an overly conservative level. In addition, the projection of future capital requirements for that purpose should take into account the time-dependence of risks in the aggregation of projected future capital requirements. In particular, projected future capital requirements for later years should have a lesser contribution to the risk margin than projected capital requirements of the same level pertaining to earlier years. The determination of the risk margin should take diversification effects at group level into account to reflect the positive impact of effective risk management of insurance and reinsurance groups.

Amendment 264 #

Proposal for a directive
Recital 39 a (new)

Amendment 265 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 40

(40) For the purposes of calculating their own funds under Regulation (EU) No 575/2013 of the European Parliament and of the Council23 , institutions which belong to financial conglomerates that are subject to Directive 2002/87/EC of the European Parliament and of the Council24 may be permitted not to deduct their significant investments in insurance or reinsurance undertakings, provided that certain criteria are met. There is a need to ensure that prudential rules applicable to insurance or reinsurance undertakings and credit institutions allow for an appropriate level- playing field between banking-led and insurance-led financial groups. Therefore, insurance or reinsurance undertakings should also be permitted not to deduct from their eligible own funds participations in credit and financial institutions, subject to similar conditions and to apply a capital requirement factor based on the market risk module, calculated in accordance with Directive 2009/138/EC, to the participations in credit and financial institutions. In particular, either group supervision in accordance with Directive 2009/138/EC or supplementary supervision in accordance with Directive 2002/87/EC should apply to a group encompassing both the insurance or reinsurance undertaking and the related institution. In addition, the institution should be an equity investment of strategic nature for the insurance or reinsurance undertaking and supervisory authorities should be satisfied as to the level of integrated management, risk management and internal controls regarding the entities in the scope of group supervision or supplementary supervision. The same prudential treatment based on the market risk module should also be permitted if the participations entail a risk exposure similar to investments in financial instruments issued by unrelated entities if specific condition in terms of level of shareholdings and liquidity of the investment are met. __________________ 23 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1). 24 Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p. 1).

Amendment 266 #

Proposal for a directive
Recital 40

(40) For the purposes of calculating their own funds under Regulation (EU) No 575/2013 of the European Parliament and of the Council23 , institutions which belong to financial conglomerates that are subject to Directive 2002/87/EC of the European Parliament and of the Council24 may be permitted not to deduct their significant investments in insurance or reinsurance undertakings, provided that certain criteria are met. There is a need to ensure that prudential rules applicable to insurance or reinsurance undertakings and credit institutions allow for an appropriate level- playing field between banking-led and insurance-led financial groups. Therefore, insurance or reinsurance undertakings should also be permitted not to deduct from their eligible own funds participations in credit and financial institutions, subject to similar conditions and to apply a capital requirement factor based on the market risk module, calculated in accordance with Directive 2009/138/EC, to the participations in credit and financial institutions. In particular, either group supervision in accordance with Directive 2009/138/EC or supplementary supervision in accordance with Directive 2002/87/EC should apply to a group encompassing both the insurance or reinsurance undertaking and the related institution. In addition, the institution should be an equity investment of strategic nature for the insurance or reinsurance undertaking and supervisory authorities should be satisfied as to the level of integrated management, risk management and internal controls regarding the entities in the scope of group supervision or supplementary supervision. To ensure a full level-playing field between banking-led and insurance-led financial groups. __________________ 23 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1). 24 Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p. 1).

Amendment 267 #

Antonio TAJANI, Herbert DORFMANN, Fulvio MARTUSCIELLO

Proposal for a directive
Recital 40

(40) For the purposes of calculating their own funds under Regulation (EU) No 575/2013 of the European Parliament and of the Council23 , institutions which belong to financial conglomerates that are subject to Directive 2002/87/EC of the European Parliament and of the Council24 may be permitted not to deduct their significant investments in insurance or reinsurance undertakings, provided that certain criteria are met. There is a need to ensure that prudential rules applicable to insurance or reinsurance undertakings and credit institutions allow for an appropriate level- playing field between banking-led and insurance-led financial groups. Therefore, insurance or reinsurance undertakings should also be permitted not to deduct from their eligible own funds participations in credit and financial institutions, subject to similar conditions and to apply a capital requirement factor based on the market risk module, calculated in accordance with Directive 2009/138/EC, to the participations in credit and financial institutions. In particular, either group supervision in accordance with Directive 2009/138/EC or supplementary supervision in accordance with Directive 2002/87/EC should apply to a group encompassing both the insurance or reinsurance undertaking and the related institution. In addition, the institution should be an equity investment of strategic nature for the insurance or reinsurance undertaking and supervisory authorities should be satisfied as to the level of integrated management, risk management and internal controls regarding the entities in the scope of group supervision or supplementary supervision. __________________ 23 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1). 24 Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p. 1).

Amendment 268 #

Proposal for a directive
Recital 40

(40) For the purposes of calculating their own funds under Regulation (EU) No 575/2013 of the European Parliament and of the Council23 , institutions which belong to financial conglomerates that are subject to Directive 2002/87/EC of the European Parliament and of the Council24 may be permitted not to deduct their significant investments in insurance or reinsurance undertakings, provided that certain criteria are met. There is a need to ensure that prudential rules applicable to insurance or reinsurance undertakings and credit institutions allow for an appropriate level- playing field between banking-led and insurance-led financial groups. Therefore, insurance or reinsurance undertakings should also be permitted not to deduct from their eligible own funds participations in credit and financial institutions, subject to similar conditions and to apply a capital requirement factor based on the market risk module, calculated in accordance with Directive 2009/138/EC, to the participations in credit and financial institutions. In particular, either group supervision in accordance with Directive 2009/138/EC or supplementary supervision in accordance with Directive 2002/87/EC should apply to a group encompassing both the insurance or reinsurance undertaking and the related institution. In addition, the institution should be an equity investment of strategic nature for the insurance or reinsurance undertaking and supervisory authorities should be satisfied as to the level of integrated management, risk management and internal controls regarding the entities in the scope of group supervision or supplementary supervision. __________________ 23 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1). 24 Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p. 1).

Amendment 269 #

Carlo CALENDA

Proposal for a directive
Recital 40

(40) For the purposes of calculating their own funds under Regulation (EU) No 575/2013 of the European Parliament and of the Council23 , institutions which belong to financial conglomerates that are subject to Directive 2002/87/EC of the European Parliament and of the Council24 may be permitted not to deduct their significant investments in insurance or reinsurance undertakings, provided that certain criteria are met. There is a need to ensure that prudential rules applicable to insurance or reinsurance undertakings and credit institutions allow for an appropriate level- playing field between banking-led and insurance-led financial groups. Therefore, insurance or reinsurance undertakings should also be permitted not to deduct from their eligible own funds participations in credit and financial institutions and to apply a risk-weighted adjustment factor to the non-deducted participations, subject to similar conditions. In particular, either group supervision in accordance with Directive 2009/138/EC or supplementary supervision in accordance with Directive 2002/87/EC should apply to a group encompassing both the insurance or reinsurance undertaking and the related institution. In addition, the institution should be an equity investment of strategic nature for the insurance or reinsurance undertaking and supervisory authorities should be satisfied as to the level of integrated management, risk management and internal controls regarding the entities in the scope of group supervision or supplementary supervision. __________________ 23 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1). 24 Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p. 1). (up)

Amendment 270 #

Proposal for a directive
Recital 41

(41) The existing limits imposed on the level of the symmetric adjustment restrict the ability of this adjustment to mitigate potential pro-cyclical effects of the financial system and to avoid a situation in which insurance and reinsurance undertakings are unduly forced to raise additional capital or sell their investments as a result of unsustained adverse movements in financial markets, such as the ones triggered by the Covid-19 pandemic. Therefore, the symmetric adjustment should be amended so that it allows for larger changes to the standard equity capital charge and further mitigates the impact of sharp increases or decreases in stock markets. To prevent an overshooting of the symmetric adjustment, the final capital charge should not be lower than the one which would have resulted from the application of an instantaneous decrease equal to 15% in the value of the equity investment.

Amendment 271 #

Proposal for a directive
Recital 44

(44) As part of the supervisory review process, it is important for supervisory authorities to be able to compare information across the companies they supervise. ~~Partial and full internal models allow to capture the individual risk of a company better and~~ Directive 2009/138/EC allows insurance and reinsurance undertakings to use ~~them~~partial or full internal models for determining capital requirements without limitations stemming from the standard formula. However, partial and full internal models make comparisons across companies more difficult and supervisory authorities would therefore benefit from access to the outcome of the calculation of standard formula capital requirements. All insurance and reinsurance undertakings should therefore regularly report such information to their supervisors. In case of a significant difference between the calculation of capital requirements by the standard formula and by the internal model, the insurance or reinsurance undertaking shall provide additional information and justification to its supervisory authority.

Amendment 272 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 44

(44) As part of the supervisory review process, it is important for supervisory authorities to be able to compare information across the companies they supervise. Partial and full internal models allow to capture the individual risk of a ~~company~~n undertaking better and Directive 2009/138/EC allows insurance and reinsurance undertakings to use them for determining capital requirements without limitations stemming from the standard formula. However, partial and full internal models make comparisons across companies more difficult and supervisory authorities would therefore benefit from access to the outcome of the calculation of standard formula capital requirements. All insurance and reinsurance undertakings should therefore regularly report such information to their supervisors.

Amendment 273 #

Proposal for a directive
Recital 45

(45) Directive 2009/138/EC provides for the possibility for insurance and reinsurance undertakings to calculate their Solvency Capital Requirement with an internal model subject to supervisory approval. Where an internal model is applied, that Directive does not prevent the insurance and reinsurance undertaking from taking into account the effect of credit spread movements on the volatility adjustment in its internal model. As the use of the volatility adjustment can lead to benefits in excess of a mitigation of exaggerated bond spreads in the calculation of the best estimate, such excessive benefits can also distort the calculation of the Solvency Capital Requirement where the effect of credit spread movements on the volatility adjustment is taken into account in the internal model. In order to avoid such distortion, the Solvency Capital Requirement should be floored, where supervisory authorities allow insurance and reinsurance undertaking to take into account the effect of credit spread movements on the volatility adjustment in their internal model, at a level below which benefits on the Solvency Capital Requirement in excess of a mitigation of exaggerated bond spreads are expected to occur.deleted

Amendment 274 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 47

(47) National supervisory authorities should be able to collect relevant macroprudential information on the investment strategy of undertakings, analyse it together with other relevant information that might be available from other market sources, and incorporate a macroprudential perspective in their supervision of undertakings. This could include supervising risks related to specific credit cycles, economic downturns and collective or herding behaviour in investments.

Amendment 275 #

Proposal for a directive
Recital 54

(54) Supervisory authorities should have the necessary powers to preserve the solvency position of specific insurance or reinsurance undertakings during exceptional situations such as adverse economic or ~~market~~sector events affecting a large part or the totality of the insurance and reinsurance market, in order to protect policyholders and preserve financial stability. Those powers should ~~include the possibility to restrict or suspend distributions to shareholders and other subordinated lend~~be applied on a case-by-case basis, as a matter of last resort and only if there is imminent dangers of ~~a given insurance or reinsurance undertaking before an actual breach~~policyholders' rights being endangered ofr t~~he Solvency Capital Requirement occurs~~o financial stability. Those ~~power~~measures should ~~be applied on a case-by-case basis,~~ respect common risk- based criteria and not undermine the functioning of the internal market.

Amendment 276 #

Proposal for a directive
Recital 54

(54) Supervisory authorities should have the necessary powers to preserve the solvency position of specific insurance or reinsurance undertakings during exceptional situations such as adverse economic or market events affecting a large part or the totality of the insurance and reinsurance market, in order to protect policyholders and preserve financial stability. Those powers should include the possibility to restrict or suspend distributions to shareholders and other subordinated lenders of a given insurance or reinsurance undertaking before an actual breach of the Solvency Capital Requirement (SCR) occurs. Those powers should be applied on a case-by-case basis, respect common risk-based criteria and not undermine the functioning of the internal market.

Amendment 277 #

Proposal for a directive
Recital 56 a (new)

(56 a) Despite the limited number of failures in the EU internal market for insurance, EIOPA found that particular unsustainable business models operating regulatory arbitrage caused consumer detriment. The supervisory authority granting authorisation to an insurance or reinsurance undertaking should particularly assess if the business model and the scheme of planned activity might pose particular risks to consumers in a specific Member State or across the EU internal market for insurance. Where the business plan of an insurance undertaking, which is seeking authorisation, includes activities carried out under the freedom to provide services or the freedom of establishment, the supervisory authority should notify all concerned supervisory authorities about the outcome of its assessment. Where the activities of an insurance undertaking carried out under the freedom to provide services or the freedom of establishment are considered to present a specific risk to consumers or the functioning of the internal market for insurance, these activities should be considered “significant cross-border activity”. A reassessment should be carried out where the insurance undertaking notifies the supervisory authority, granting the authorisation, that it intends to carry out activities in another Member State or where the risk profile of the undertaking changes materially .

Amendment 278 #

Proposal for a directive
Recital 57

(57) Under Directive 2009/138/EC, as amended by Directive (EU) 2019/2177 of the European Parliament and of the Council25, EIOPA has the power to set up and coordinate collaboration platforms to enhance collaboration between the relevant supervisory authorities where an insurance or reinsurance undertaking carries out, or intends to carry out, activities which are based on the freedom to provide services or the freedom of establishment. ~~However, in view of the complexity of the supervisory issues dealt with within those platforms, in~~ In several cases, national supervisory authorities fail to reach a common view on how to address issues related to an insurance or reinsurance undertaking which is operating on a cross-border basis. In the event that the supervisory authorities involved in the collaboration platforms cannot reach an agreement on issues related to an insurance or reinsurance undertaking which is operating on a cross- border basis, EIOPA should have the power to settle the disagreement in accordance with Article 19 of Regulation (EU) No 1094/2010. Further, the set-up and operation of collaboration platforms on an ad-hoc basis did not sufficiently address the need for coordination and collaboration between supervisory authorities. In order to improve the functioning of the platforms and the effective and efficient exchange of information, technology- based and digital solutions should be used. Standing digital collaboration platforms facilitated by EIOPA enable the efficient exchange of regularly available supervisory data, reports on the supervisory review process, coordination of supervisory activity and relevant market data can be shared. __________________ 25 Directive (EU) 2019/2177 of the European Parliament and of the Council of 18 December 2019 amending Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II), Directive 2014/65/EU on markets in financial instruments and Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money- laundering or terrorist financing (OJ L 334, 27.12.2019, p. 155).

Amendment 279 #

Proposal for a directive
Recital 58

(58) Under Directive 2009/138/EC, insurance or reinsurance undertakings are not required to provide information on the conduct of their business to the supervisory authorities of the host Member States in a timely manner. Such information may only be obtained by requesting it to the supervisory authority of the home Member State. However, such an approach does not ensure access to information in a reasonable period of time. TherefoEIOPA should be mandated to identify the information which should be shared between concerned supervisory authorities via collaboration platforms. In determining the data to be shared, EIOPA shall ensure that regularly available data is shared, the supervisory authorities of the host Member States, like the supervisory authority of the home Member State, should also have the power to directly request information to insurance or reinsurance undertakings in a timely mannerwhich allows all concerned supervisory authorities to carry out their respective mandates.

Amendment 280 #

Proposal for a directive
Recital 59

(59) Where an insurance or reinsurance undertaking carries out significant cross- border activities ~~in a host Member State, the~~any concerned supervisory authority ~~of that Member State~~ should have the power to request ~~basic~~additional information, which is not already shared through the collaboration platform, from the supervisory authority of the home Member State on the solvency position of that insurance or reinsurance undertaking. Where ~~the~~a concerned supervisory authority ~~of the host Member State~~ has serious concerns regarding thate solvency position, it should have the power to request the carrying out of a joint on-site inspection together with the supervisory authority of the home Member State, where there is a significant non-compliance with the Solvency Capital Requirement. ~~EIOPA should be invited to participate. In this regard, EIOPA should indicate as soon as practicable whether it intends to participate~~The home supervisory authority should coordinate a joint on-site inspection inviting all concerned supervisory authorities and EIOPA. Supervisory authorities should agree on the objectives of the onsite inspection before it is carried out. The home supervisory authority should inform all concerned supervisory authorities about the outcome of the inspection. Where supervisory authorities disagree on the opportunity to carry out a joint on-site inspection, its objectives or findings, EIOPA should have the power to settle the disagreement in accordance with Article 19 of Regulation (EU) No 1094/2010.

Amendment 281 #

Markus FERBER

Proposal for a directive
Recital 61

(61) In some cases, several insurance and reinsurance undertakings form a de facto group and behave as such, although they do not meet the definition of a group as set out in Directive 2009/138/EC. Therefore, Title III of that Directive does not apply to such insurance and reinsurance undertakings. In such cases, in particular for horizontal groups with no capital links between different undertakings, the group supervisors should have the power to identify the existence of a group. Objective criteria should also be provided to make such an identification.deleted

Amendment 282 #

Proposal for a directive
Recital 63

(63) Group supervisors may decide to exclude an undertaking from group supervision, in particular when such an undertaking is deemed of negligible interest with respect to the objectives of group supervision. EIOPA has noted diverging interpretations on the criterion of negligible interest, and has identified that, in some cases, such exclusions result in complete waivers of group supervision or in supervision at the level of an intermediate parent company. It is therefore necessary to clarify that such cases should only occur in very exceptional circumstances and that group supervisors should consult EIOPA before making such decisions. Criteria should also be introduced so that there is more clarity as to what should be deemed as negligible interest with respect to the objectives of group supervision. EIOPA shall issue guidelines to further specify such exceptional circumstances and the cases where an exclusion may be justified. The group supervisor shall reassess at least annually whether its decision remains appropriate.

Amendment 283 #

Proposal for a directive
Recital 63 a (new)

(63 a) Before excluding the ultimate parent undertaking from group supervision, the group supervisor should consult EIOPA, and where applicable, other supervisory authorities concerned, and should assess the impact of exercising group supervision at the level of an intermediate participating undertaking on the solvency position of the group. In this assessment on the features of the group, the group supervisor should consider the qualitative and quantitative risks, including those stemming from intragroup transactions, and the risks that the ultimate parent undertaking poses or may pose to the whole group. Any supervisory decision to exclude the top holding from scope of group supervision and to apply the group supervision at an intermediate level should carefully consider any potential impact on the solvency position of the group and fully overview of the risks the group faces or may face.

Amendment 284 #

Proposal for a directive
Recital 64

(64) There is a lack of clarity regarding the types of undertakings for which Method 2, namely a deduction and aggregation method as defined in Article 233 of Directive 2009/138/EC, may be applied when calculating group solvency, which is detrimental to the level-playing field in the Union. Therefore, it should be clearly specified which undertakings may be included in the group solvency calculation through Method 2. Such method should only apply to insurance and reinsurance undertakings, third-country insurance and reinsurance undertakings, undertakings belonging to other financial sectors, mixed financial holding companies, insurance holding companies, and other parent undertakings the main business of which is to acquire and hold participations in subsidiary undertakings, where those subsidiary undertakings are exclusively or mainly insurance or reinsurance undertakings, or third-country insurance or reinsurance undertakings. It is also important to ensure that prudential rules warrant a level-playing field at global level for all insurance groups which are subject to Title III of Directive 2009/138/EC and which operate in third countries. For this reason, where an international group includes insurance or reinsurance undertakings with head offices in third countries whose solvency regimes have been deemed equivalent or provisionally equivalent in accordance with Article 227 of that Directive, the group supervisor should give such a consideration priority when deciding on whether method 2 should be used instead of – or in combination with – method 1 (accounting-based consolidation method).

Amendment 285 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 64

Amendment 286 #

Proposal for a directive
Recital 64

Amendment 287 #

Proposal for a directive
Recital 67

(67) Under current rules, participating insurance and reinsurance undertakings are granted limited possibilities to use simplified calculations for the purpose of determining their group solvency when method 1, namely accounting consolidation-based method, is used. This generates disproportionate burden, in particular when groups hold participations in related undertakings that are ~~very small in size. Therefore, subject to prior supervisory approval~~classified as Low-Risk Profile Undertakings. Therefore, participating undertakings should be allowed to integrate related undertakings whose size is immaterial in their group solvency by using simplified approaches.

Amendment 288 #

Proposal for a directive
Recital 72

(72) There is no legal provision specifying how to calculate group solvency when a combination of Method 1 and Method 2 is used. This leads to inconsistent practices and uncertainties, in particular in relation to the way of calculating the contribution to the group Solvency Capital Requirement of insurance and reinsurance undertakings included through Method 2. Therefore, it should be clarified how group solvency is to be calculated when a combination of methods is used. In order to avoid material increases and double counting in capital requirements as well as to preserve a level playing field for insurance and reinsurance groups at global level, it should be clarified that, for the purpose of calculating the consolidated group Solvency Capital Requirement, no equity risk capital charge is to be applied to such holdings. For the same reason, and because currency risk c~~harge should only be app~~annot lead to a breach in the Solvency Capital Requirements as long as the solo undertakings are well capitalized to, currency risk of the value of those holdings that is in excess of the Solvency Capital Requirements of those related undertakings should be assessed and managed in the Own Risk and Solvency Assessment. Participating insurance or reinsurance undertakings should be allowed to take into account diversification between that currency risks and other risks underlying the calculation of the consolidated group Solvency Capital Requirement.

Amendment 289 #

Proposal for a directive
Recital 72

(72) There is no legal provision specifying how to calculate group solvency when a combination of Method 1 and Method 2 is used. This leads to inconsistent practices and uncertainties, in particular in relation to the way of calculating the contribution to the group Solvency Capital Requirement of insurance and reinsurance undertakings included through Method 2. Therefore, it should be clarified how group solvency is to be calculated when a combination of methods is used. In order to avoid material increases in capital requirements, it should be clarified that, for the purpose of calculating the consolidated group Solvency Capital Requirement, no equity risk capital charge is to be applied to such holdings. For the same reason, and because currency risk c~~harge should only be applied to the value of~~annot lead to a breach in those hsol~~dings that is in excess of~~vency capital requirements as long as the Ssol~~vency Capital Requirements of those related undertakings~~o undertakings are well capitalized, currency risk of those related undertakings should be assessed and managed in pillar II. Participating insurance or reinsurance undertakings should be allowed to take into account diversification between that currency risks and other risks underlying the calculation of the consolidated group Solvency Capital Requirement.

Amendment 290 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 77 a (new)

(77 a) When adopting the Delegated Act on the Preferential treatment for long- term investments in equity, the Commission shall ensure that this treatment is granted only under strict conditions in terms of fight against money laundering, terrorist financing and tax evasion, aiming at protecting the Union financial system and the proper functioning of the internal market. Therefore, a sub-set of equity investments may be treated as long term equity investments provided that this equity is not issued by companies which have the parent company, subsidiaries or branches in a third country, which is mentioned in Annex I or Annex II to the Council conclusions of 2020 on the revised EU list on non-cooperative jurisdictions for tax purposes, or in the Delegated Regulation in relation to third countries which have strategic deficiencies in their AML/CFT regimes that pose significant threats to the financial system of the Union ('high-risk third countries'), stemming from Article 9 of Directive (EU) 2015/849.

Amendment 291 #

Proposal for a directive
Recital 78

Amendment 292 #

Proposal for a directive
Recital 78

(78) Achieving the environmental and climate ambitions of the Green Deal requires the channelling of large amounts of investments from the private sector, including from insurance and reinsurance companies, towards sustainable investments. The provisions of Directive 2009/138/EC on the capital requirements should not impede sustainable investments by insurance and reinsurance undertakings but should reflect the full risk of investments in environmentally harmful activities. While there is not sufficient evidence at this stage on risk differentials between environmentally or socially harmful and other investments, such evidence may become available over the next years. I~~n order to ensure an appropriate assessment of the relevant evidence, EIOPA should~~f and once sufficiently meaningful, high-quality, comparable scientific data becomes available, EIOPA should be given a mandate to monitor and report ~~by 2023 on the~~on the potential evidence on the risk profile of environmentally or socially harmful investments. ~~Where~~If appropriate, EIOPA’s report should advise on changes to Directive 2009/138/EC, ands to ~~the delegated and implementing acts adopted pursuant to that Directive~~whether the SCR remains prudent for environmentally or socially harmful investments. EIOPA may also inquire whether it would be appropriate that certain environmental risks, other than climate change-related, should be taken into account and how. For instance, if evidence so suggests, EIOPA could analyse the need for extending scenario analyses as introduced by this Directive in the context of climate change- related risks to other environmental risks.

Amendment 293 #

Proposal for a directive
Recital 78

(78) Achieving the environmental and climate ambitions of the Green Deal requires the channelling of large amounts of investments from the private sector, including from insurance and reinsurance companies, towards sustainable investments. The provisions of Directive 2009/138/EC on the capital requirements should not impede sustainable investments by insurance and reinsurance undertakings but should reflect the full risk of investments in environmentally harmful activities. While there is not sufficient evidence at this stage on risk differentials between environmentally or socially harmful and other investments, such evidence may become available over the next years. In order to ensure an appropriate assessment of the relevant evidence, EIOPA should monitor and report by 2023 on the evidence on the risk profile of environmentally or socially harmful investments. Where appropriate, EIOPA’s report should advise on changes to Directive 2009/138/EC and to the delegated and implementing acts adopted pursuant to that Directive. EIOPA may also inquire whether it would be appropriate that certain environmental risks, other than climate change-related, should be taken into account and how. For instance, if evidence so suggests, EIOPA could analyse the need for extending scenario analyGiven the EU's ambition based on Regulation (EU) 2021/1119 ("Climate Law"), we already know that certain fossil intensive assets will become stranded if no appropriate transition is adhered to. For this reason, undertakings should develop and implement transition plans stipulating their pathway to adhere to the EU's Climate Law and to divest from activities that significantly harm environmental objectives as outlined in Article 17 of Regulation (EU) 2020/852 (Taxonomy Regulation). Significant divergences from these transition plans should indicate higher risk of exposure to stranded assets a~~s introduced by this Directive in the context of climate change-related risks to other environmental risk~~nd therefore have an impact on an undertaking's capital requirements.

Amendment 294 #

Stéphanie YON-COURTIN, Gilles BOYER, Pascal CANFIN, Pascal DURAND

Proposal for a directive
Recital 78

(78) Achieving the environmental and climate ambitions of the Green Deal requires the channelling of large amounts of investments from the private sector, including from insurance and reinsurance companies, towards sustainable investments. The provisions of Directive 2009/138/EC on the capital requirements should not impede sustainable investments by insurance and reinsurance undertakings but should reflect the full risk of investments in environmentally harmful activities. While there is not sufficient evidence at this stage on risk differentials between environmentally or socially harmful and other investments, such evidence may become available over the next years. In order to ensure an appropriate assessment of the relevant evidence, EIOPA should monitor and report by June 2023 on the evidence on the risk profile of environmentally or socially harmful investments. The report should assess whether a dedicated prudential treatment of exposures related to assets or insurance liabilities associated substantially with environmental or social objectives would be justified. Where appropriate, EIOPA’s report should advise on changes to Directive 2009/138/EC and to the delegated and implementing acts adopted pursuant to that Directive. EIOPA may also inquire whether it would be appropriate that certain environmental risks, other than climate change, including biodiversity loss-related, should be taken into account and how. For instance, if evidence so suggests, EIOPA could analyse the need for extending scenario analyses as introduced by this Directive in the context of climate change-related risks to other environmental risks. Prior to the publication of such a report, undertakings’ assessment of market risk should already reflect sustainability risks stemming from climate change. The assessment should include the impact of such risk on the undertaking, its customers and on the assets the undertaking has invested in. To that end, undertakings should consider any exposure to fossil fuel sectors as an exposure to the most volatile asset of each category.

Amendment 295 #

Jonás FERNÁNDEZ

Proposal for a directive
Recital 78

(78) Achieving the environmental and climate ambitions of the Green Deal requires the channelling of large amounts of investments from the private sector, including from insurance and reinsurance companies, towards sustainable investments. The provisions of Directive 2009/138/EC on the capital requirements should not impede sustainable investments by insurance and reinsurance undertakings but should reflect the full risk of investments in environmentally harmful activities. While there is not sufficient evidence at this stage on risk differentials between environmentally or socially harmful and other investments, such evidence may become available over the next years. In order to ensure an appropriate assessment of the relevant evidence, EIOPA should monitor and report by 2023 on the evidence on the risk profile of environmentally or socially harmful investments. Where appropriate, EIOPA’s report should advise on changes to Directive 2009/138/EC and to the delegated and implementing acts adopted pursuant to that Directive. EIOPA may also inquire whether sustainable investments exhibit better recovery rates as compared to ordinary investments and whether this could be integrated in the way the Matching Adjustment and Volatility Adjustment are calculated, and whether it would be appropriate that certain environmental risks, other than climate change-related, should be taken into account and how. For instance, if evidence so suggests, EIOPA could analyse the need for extending scenario analyses as introduced by this Directive in the context of climate change-related risks to other environmental risks.

Amendment 296 #

Proposal for a directive
Recital 78

Amendment 297 #

Proposal for a directive
Recital 78 a (new)

(78 a) With the aim of achieving climate neutrality by 2050 at the latest and in line with the broader transition towards a sustainable economy, insurance and reinsurance undertakings should draw up transition plans, including a comprehensive strategy and operational actions to reach the carbon neutrality objective by 2050 as well as science-based and quantifiable targets and milestones to monitor and address risks arising the short, medium and long-term. Supervisory authorities should approve such transition plans and verify that the investment policy of insurance and reinsurance undertakings is aligned with the objectives and targets set out in these plans.

Amendment 298 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Recital 78 b (new)

(78 b) Remuneration policies which encourage excessive risk-taking behaviour can endanger sound and effective risk management. Therefore, Member States should ensure that written policies on remuneration promote sound and effective risk management, including in relation to sustainability risks. The Commission should adopt delegated acts to specify remuneration schemes, including variable remuneration components linked to the achievement of targets set out in the transition plan of the undertaking.

Amendment 299 #

Proposal for a directive
Recital 79

(79) Climate change is affecting and will affect at least over the next decades the frequency and severity of natural catastrophes which are likely to further aggravate due to environmental degradation and pollution. This may also change the exposure of insurance and reinsurance undertakings to natural catastrophe risk and render invalid the standard parameters for natural catastrophe risk set out in Delegated Regulation (EU) 2015/35. In order to ensure that there is no persistent discrepancy between the standard parameters for natural catastrophe risk and the actual exposure of insurance and reinsurance companies to such risks, EIOPA should review regularly the scope of the natural catastrophe risk module and the calibrations of its standard parameters. For that purpose, EIOPA should take into account the latest available evidence from climate science and, where discrepancies are found, it should submit an opinion to the Commission accordingly.deleted

Amendment 300 #

Stéphanie YON-COURTIN, Gilles BOYER, Pascal CANFIN

Proposal for a directive
Recital 79

(79) Climate change is affecting and will affect at least over the next decades the frequency and severity of natural catastrophes which are likely to further aggravate due to rising temperatures, environmental degradation and pollution. This may also change the exposure of insurance and reinsurance undertakings to natural catastrophe risk and render invalid the standard parameters for natural catastrophe risk set out in Delegated Regulation (EU) 2015/35. In order to ensure that there is no persistent discrepancy between the standard parameters for natural catastrophe risk and the actual exposure of insurance and reinsurance companies to such risks, EIOPA should review regularly the scope of the natural catastrophe risk module and the calibrations of its standard parameters. For that purpose, EIOPA should take into account the latest available evidence from climate science and, where discrepancies are found, it should submit an opinion to the Commission accordingly.

Amendment 301 #

Proposal for a directive
Recital 79 a (new)

(79 a) Stewardship policies are a very effective way to align the activity of an investee company with the long-term interests of the policy holders of an insurance undertaking. As such, insurance undertakings should develop and report on their stewardship policies.

Amendment 302 #

Proposal for a directive
Recital 82 a (new)

(82 a) The supervision of phasing-in plans for the transitional measures on risk-free interest rates and on technical provisions should be improved, in particular by strengthening the power of the supervisor to withdraw those transitional measures where progress towards compliance with the Solvency Capital Requirement at the end of the transitional period is not achieved or where such compliance is unrealistic. In particular, the compliance could be considered unrealistic where it is based on the assumption that the situation of financial markets at the end of the transitional period is improved compared to the situation at the time of the assessment.

Amendment 303 #

Proposal for a directive
Recital 82 a (new)

Amendment 304 #

Engin EROGLU, Nicola BEER

Proposal for a directive
Recital 82 a (new)

(82 a) The risks, and the risk-weights, associated with securitisation products, and in particular those adhering to the principles of simple, transparent and standardized securitisation, deserve proper re-evaluation. Therefore based on a study by EIOPA the Commission should re-calibrate the risk-weights associated with securitisation investments.

Amendment 305 #

Proposal for a directive
Recital 82 a (new)

(82 a) Article 19a(5) of Directive 2013/34/EU should be amended so that low-risk profile undertakings as defined in Article 29a may limit their sustainability reporting according to the simplified SME sustainability reporting standards.

Amendment 306 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2009/138/EC
Article 4 – paragraph 1 – points a and b

~~(2) in Article 4(1), points (a) and (b) are replaced by the following: ‘ (a) written premium does not exceed EUR 15 000 000; (b) technical provisions,~~deleted the undertaking’s annual gross of the ~~amounts recoverable from reinsurance contracts and special purpose vehicles, as referred in Article 76, does not exceed EUR 50 000 000;; ’~~total of the undertaking’s

Amendment 307 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2009/138/EC
Article 4 – paragraph 1 – point a

(a) the undertaking’s annual gross written premium does not exceed EUR 125 000 000;

Amendment 308 #

Eero HEINÄLUOMA, Jonás FERNÁNDEZ, Aurore LALUCQ

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2009/138/EC
Article 4 – paragraph 1 – point a

(a) the undertaking’s annual gross written premium does not exceed EUR 150 000 000;

Amendment 309 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2009/138/EC
Article 4 – paragraph 1 – point b

(b) the total of the undertaking’s technical provisions, gross of the amounts recoverable from reinsurance contracts and special purpose vehicles, as referred in Article 76, does not exceed EUR 650 000 000;;

Amendment 310 #

Eero HEINÄLUOMA, Jonás FERNÁNDEZ, Aurore LALUCQ

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2009/138/EC
Article 4 – paragraph 1 – point b

Amendment 311 #

Engin EROGLU

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2009/138/EC
Article 4 – paragraph 1 – point c

(c) where the undertaking belongs to a group, the total of the technical provisions of the group defined as gross of the amounts recoverable from reinsurance contracts and special purpose vehicles does not exceed EUR ~~25 million; (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02009L0138-20210630)~~100 000 000; Or. en

Amendment 312 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2009/138/EC
Article 4 – paragraph 1 – point c

(c) where the undertaking belongs to a group, the total of the technical provisions of the group defined as gross of the amounts recoverable from reinsurance contracts and special purpose vehicles does not exceed EUR 265 ~~million; (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02009L0138-20210630)~~000 000; Or. en

Amendment 313 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2009/138/EC
Article 4 – paragraph 1 – point c

Amendment 314 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2009/138/EC
Article 4 – paragraph 1 – point c

Amendment 315 #

Proposal for a directive
Article 1 – paragraph 1 – point 2 a (new)

Directive 2009/138/EC
Article 4 – paragraph 1 – subparagraph 1 a (new)

(2a) in Article 4(1), the following subparagraph is added: 'Member States may define a threshold different to that laid down in point (a) of the first subparagraph if that different threshold applies to a material number of insurance and reinsurance undertakings with low risk profile and representing a residual market share. Such a threshold shall not exceed EUR 25 000 000.';

Amendment 316 #

Marco ZANNI, Valentino GRANT, Antonio Maria RINALDI

Proposal for a directive
Article 1 – paragraph 1 – point 2 a (new)

Directive 2009/138/EC
Article 4 – paragraph 4 – subparagraph 1 – introductory part

This Directive shall cease to apply to those insurance undertakings for which the supervisory authority has verified that all of the following conditions are met: (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02009L0138-20210630)(2a) in Article 14(4), the first subparagraph is amended as follows: "Unless decided otherwise by the supervisory authority, this Directive shall cease to apply to those insurance undertakings for which all of the following conditions are met: " Or. en

Amendment 317 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point b

Directive 2009/138/EC
Article 13 – paragraph 1 – point 10a

(10a) ‘low-risk profile undertaking’ means an insurance and reinsurance undertaking that meets the conditions set out in Article 29a and has been classified as such in accordance with Article 29b as well as a captive insurance undertaking and a captive reinsurance undertaking;

Amendment 318 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point b

Directive 2009/138/EC
Article 13 – paragraph 1 – point 10a

Amendment 319 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point b

Directive 2009/138/EC
Article 13 – paragraph 1 – point 10a a (new)

(10aa) ‘significant cross-border activities’ means insurance and reinsurance activities carried out by an insurance or reinsurance undertaking under the right of establishment and those carried out under the freedom to provide services in a given host Member State, which has been identified by the relevant supervisory authority of the home Member State and the supervisory authorities of any Member State the undertaking intends to carry-out its business on the basis of its nature, scale and complexity of risk inherent in the business model and pursuant to Article 26(5);

Amendment 320 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point b

Directive 2009/138/EC
Article 13 – paragraph 1 – point 10a a (new)

(10aa) Significant 'cross-border activities' means: - the total amount of Gross Written Premium in a given Host Member State based on Freedom of Establishment and Freedom of Services business is at least €15 million (i.e. the same threshold used for Solvency II measures to take effect generally); or - the activities carried out in a Host Member State are “of relevance” to the Host’s market, with EIOPA providing guidance on what “relevance” means.

Amendment 321 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point c a (new)

Directive 2009/138/EC
Article 13 – paragraph 1 – point 17

(c b) Article 13(17) is replaced by the following: "‘close links’ means a situation in which two or more natural or legal persons are linked by ~~control or participation, or a situation in which~~: (a) participation in the form of ownership, direct or by way of control, of 20 % or more of the voting rights or capital of an undertaking; (b) ‘control’ which means the relationship between a parent undertaking and a subsidiary, in all the cases referred two ~~or more natural or legal persons are~~in Article 22(1) and (2) of Directive 2013/34/EU, or a similar relationship between any natural or legal person and an undertaking, any subsidiary undertaking of a subsidiary undertaking also being considered to be a subsidiary of the parent undertaking which is at the head of those undertakings; (c) a permanently link~~ed to one and~~ of both or all of them to the same person by a control relationship; ~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02009L0138-20210630)~~" Or. en

Amendment 322 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point h a (new)

Directive 2009/138/EC
Article 13 – paragraph 1 – point 36 a (new)

(ha) the following point is inserted: ‘(36a) ‘climate change risk’ means the risk of any financial negative impact on the undertaking stemming from the current or prospective impacts of climate change factors, including factors related to the climate change mitigation or climate change adaptation objectives;’

Amendment 323 #

Othmar KARAS

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 – subparagraph 1 a (new)

For the purposes of Article 212(1)(f) ‘regulated undertaking’ means also an undertaking with no authorization in accordance with Article 14 and subject to supervision under the law of the Member State by the ‘supervisory authority’ within the meaning of Article 13(10);

Amendment 324 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 a (new)

(41a) 'science-based target' means a target defined on the basis of conclusive scientific evidence and with independent scientific validation, that when achieved by the undertaking ensures that the undertaking's impacts on sustainability matters, as referred to in Articles 132 and 44(2), will be aligned with the sustainability goals and criteria of the European Union for the specific sustainability matters;

Amendment 325 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 a (new)

(41a) ‘science-based target’ is a target defined on the basis of conclusive scientific evidence and with independent scientific validation, that when achieved by the undertaking ensures that the undertaking’s impacts on sustainability matters, as referred to in Articles 132 and 44(1), will be aligned with the sustainability goals and criteria of the European Union for the specific sustainability matters;

Amendment 326 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 a (new)

(41a) ‘fossil fuel sectors’ means sectors of the economy which produce, process, store or use fossil fuels as defined in Article 2(62) of Regulation EU 2018/1999 of the European Parliament and the Council;

Amendment 327 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 a (new)

(41a) ‘gender neutral remuneration policy’ means a remuneration policy based on equal pay for male and female workers for equal work or work of equal value;

Amendment 328 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41(a) (new)

(41a) ‘science-based target’ means a target defined on the basis of conclusive scientific evidence and with independent scientific validation, that when achieved by the undertaking ensures that the undertaking’s impacts on sustainability matters, as referred to in Articles 132 and 44(1), will be aligned with the sustainability goals and criteria of the European Union for the specific sustainability matters;

Amendment 329 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 b (new)

(41b) ‘crypto-assets’ means an asset- reference token, an e-money token or other crypto-asset as defined in [insert reference to MICA regulation];

Amendment 330 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 b (new)

(41b) 'climate neutrality' shall be read in accordance with Article 2(1) of the Regulation (EU) 2021/1119 ("European Climate Law");

Amendment 331 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 b (new)

(41b) ‘climate neutrality’ shall be read in accordance with the Article 2 of the Regulation (EU) 2021/1119 (“European Climate Law”);

Amendment 332 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41(b) (new)

(41b) ‘climate neutrality’ shall be read in accordance with the Article 2(1) of the Regulation (EU) 2021/1119 (“European Climate Law”);

Amendment 333 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 c (new)

(41c) 'fossil fuel sectors' means upstream sectors of the economy which produce, process, store, transport or use fossil fuels as defined in Article 2(62) of Regulation (EU) 2018/1999 of the European Parliament and of the Council1a; __________________ 1a Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action

Amendment 334 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 c (new)

(41c) ‘fossil fuel sectors’ are sectors of the economy which produce, process, store or use fossil fuels as defined in Article 2(62) of Regulation (EU) 2018/1999 of the European Parliament and of the Council;

Amendment 335 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – points 41(c) (new)

(41c) ‘fossil fuel sectors’ means upstream sectors of the economy which produce, process, store or use fossil fuels as defined in Article 2(62) of Regulation(EU) 2018/1999 of the European Parliament and of the Council1a ; __________________ 1a Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action

Amendment 336 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 d (new)

(41d) ‘sustainability risk’ means: (a) as regards investments, sustainability risk as defined in Article 2, point (22), of Regulation (EU) 2019/2088 of the European Parliament and of the Council; (b) as regards liabilities, an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the liability;

Amendment 337 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/128/EC
Article 13 – paragraph 1 – point 41 d (new)

(41d) 'sustainability risk' means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential negative impact on the value of the investment or on the value of the liability in line with Article 2(22) of Regulation (EU) 2019/20881a; __________________ 1a Regulation (EU) 2019/2088 of the European Parliament and of the European Council of 27 November 2019 on sustainability-related disclosures in the financial services sector

Amendment 338 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – points 41(d) (new)

(41d) ‘sustainability risk’ means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential negative impact on the value of the investment or on the value of the liability in line with Article 2(22) Regulation (EU)2019/20881b; __________________ 1b Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability- related disclosures in the financial services sector

Amendment 339 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – points 41(e) (new)

(41e) ‘sustainability factors’ means sustainability factors as defined in Article 2, point (24), of Regulation (EU) 2019/2088 of the European Parliament and of the Council.

Amendment 340 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 e (new)

(41e) 'sustainability factors' means sustainability factors as defined in Article 2, point (24) of Regulation (EU) 2019/2088 of the European Parliament and of the Council1a; __________________ 1a Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability- related disclosures in the financial services sector

Amendment 341 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 e (new)

(41e) ‘sustainability factor’ means sustainability factor as defined in Article 2, point (24), of Regulation (EU) 2019/2088;

Amendment 342 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 f (new)

(41f) 'transition plan' is the plan of an insurance or reinsurance undertaking to ensure that its business model and strategy are compatible with the transition to a sustainable economy and with the goals of the Paris Agreement to limit global warming to 1.5°C with no or limited overshoot, including plans to address the greenhouse gas emissions associated directly or indirectly with its asset and insurance portfolios;

Amendment 343 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 f (new)

(41f) ‘stewardship’ is the engagement strategy of the insurance or reinsurance undertaking to steer the activities of the assets it is holding (where its shareholders’ rights allow) and to influence the strategy and business of the firms in which it is investing, in order to progress towards sustainable economic activities and towards a more positive impact on sustainability factors;

Amendment 344 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point i

Directive 2009/138/EC
Article 13 – paragraph 1 – point 41 g (new)

(41g) 'stewardship' is the engagement strategy of the insurance or reinsurance undertaking to steer the activities of the assets it holds, as its shareholders' rights allow, and to influence the strategy and business of the firms in which it invests, in order to progress towards sustainable economic activities and towards a more positive impact on sustainability factors;

Amendment 345 #

Proposal for a directive
Article 1 – paragraph 1 – point 6

Directive 2009/138/EC
Article 18 – paragraph 1 – point i a (new)

(i a) to show evidence that it will not be significantly exposed to money laundering and terrorist financing risks;

Amendment 346 #

Proposal for a directive
Article 1 – paragraph 1 – point 6

Directive 2009/138/EC
Article 18 – paragraph 1 – subparagraph 1 a (new)

For the purpose of assessing the criterion referred to in point (i a) (new) of this paragraph, supervisory authorities shall consult the authorities competent for the supervision of the undertakings in line with Directive (EU) 2015/849.

Amendment 347 #

Proposal for a directive
Article 1 – paragraph 1 – point 9

Directive 2009/138/EC
Article 25 – paragraph 3 a (new) and 3 b (new)

Supervisory authorities shall refuse authorisation of the insurance or reinsurance undertaking at least where there are reasonable grounds to suspect that: a) the management body of the applicant insurance or reinsurance undertaking poses a threat toits effective, sound and prudent management and business continuity, and to the adequate consideration of the interest of policyholders and the integrity of the market, or exposes the insurance or reinsurance undertaking to a serious risk of money laundering or terrorism financing; b) the applicant is likely to fail to meet any requirements of this Directive; c) the authorisation of an undertaking would lead to money laundering of terrorist financing activities For the purpose of assessing the aspects related to money laundering or terrorism financing risks referred to in points a) and c) of the previous paragraph, supervisory authorities shall consult competent authorities for AML/CFT supervision as defined in [insert reference to AMLD]. An objection in writing by the authorities competent for the supervision of the obliged entities in accordance with[insert reference to AMLD] shall constitute reasonable grounds for refusal.

Amendment 348 #

Proposal for a directive
Article 1 – paragraph 1 – point 11

Directive 2009/138/EC
Article 26 – paragraph 4

4. Where several supervisory authorities need to be consulted pursuant to paragraph 1, any supervisory authority concerned may request additional information from the supervisory authority of the home Member State ~~to jointly assess the application for authorisation~~. The supervisory authority of the home Member State shall consider the views of all concerned supervisors when taking its final decision including the determination of “significant cross-border activities”. The supervisory authority of the home Member States shall ~~consider the conclusions of the joint assessment when taking its final decision~~notify all concerned supervisory authorities about the outcome and reason for its decision to all supervisory authorities consulted pursuant to paragraph 1 and to EIOPA.;

Amendment 349 #

Proposal for a directive
Article 1 – paragraph 1 – point 11

Directive 2009/13/8/EC
Article 26 – paragraph 4

Amendment 350 #

Proposal for a directive
Article 1 – paragraph 1 – point 11

Directive 2009/138/EC
Article 26 – paragraph 4 a (new)

4 a. The supervisory authority of the home Member State shall assess the nature, scale and complexity of the risks inherent in the business model of the insurance undertaking for any of the markets in which the insurance undertaking seeks authorisation for carrying out its business. The home Member State may consult with the relevant supervisory authority of host Member States and shall inform the relevant supervisory authority and EIOPA about the conclusion of this assessment. Where the relevant supervisory authority disagrees with the assessment, EIOPA may, at the request of any relevant supervisory authority, assist the supervisory authorities in reaching an agreement.

Amendment 351 #

Proposal for a directive
Article 1 – paragraph 1 – point 11 a (new)

Directive 2009/138/EC
Article 27 a (new)

(11a) the following Article is inserted: ‘Article 27a Additional objectives of supervision Without prejudice to the main objective of supervision as set out in Article 27, Member States shall ensure that, in the exercise of their general duties, supervisory authorities shall duly consider the potential impact of their decisions on: (a) the competitiveness of the Union’s insurance and reinsurance undertakings in the global market and fair competition across the single market; (b) the stability of the financial systems concerned in the European Union, in particular in emergency situations, taking into account the information available at the relevant time. In times of exceptional movements in the financial markets, supervisory authorities shall take into account the potential pro- cyclical effects of their actions.’

Amendment 352 #

Proposal for a directive
Article 1 – paragraph 1 – point 12 – point b

Directive 2009/138/EC
Article 29 – paragraph 6

6. In order to ensure consistent supervisory practices in the application of proportionality, EIOPA shall develop guidelines to facilitate common supervisory tools and further specifying the methodology to be used when classifying insurance and reinsurance undertakings as low-risk profile undertakings.; EIOPA shall review and update these guidelines every second year.

Amendment 353 #