Amendments to Directive 98/78/EC

Directive 98/78/EC (opens EUR-Lex in a new tab) is amended as follows:

1. in Article 1 points (g), (h), (i) and (j) shall be replaced by the following:

‘(g) “participating undertaking” shall mean an undertaking which is either a parent undertaking or other undertaking which holds a participation, or an undertaking linked with another undertaking by a relationship within the meaning of Article 12(1) (opens EUR-Lex in a new tab) of Directive 83/349/EEC (opens EUR-Lex in a new tab);

(h) “related undertaking” shall mean either a subsidiary or other undertaking in which a participation is held, or an undertaking linked with another undertaking by a relationship within the meaning of Article 12(1) (opens EUR-Lex in a new tab) of Directive 83/349/EEC (opens EUR-Lex in a new tab);

(i) “insurance holding company” shall mean a parent undertaking, the main business of which is to acquire and hold participations in subsidiary undertakings, where those subsidiary undertakings are exclusively or mainly insurance undertakings, reinsurance undertakings, or non-member-country insurance undertakings, at least one of such subsidiary undertakings being an insurance undertaking, and which is not a mixed financial holding company within the meaning of 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 (⁽³⁴⁾);

(j) “mixed-activity insurance holding company” shall mean a parent undertaking, other than an insurance undertaking, a non-member country insurance undertaking, a reinsurance undertaking, an insurance holding company or a mixed financial holding company within the meaning of Directive 2002/87/EC, which includes at least one insurance undertaking among its subsidiary undertakings.

2. in Article 6(3) the following sentence shall be added:

‘The competent authority which made the request may, if it so wishes, participate in the verification when it does not carry out the verification itself.’

3. in Article 8(2) the first subparagraph shall be replaced by the following:

‘Member States shall require insurance undertakings to have in place adequate risk management processes and internal control mechanisms, including sound reporting and accounting procedures, in order to identify, measure, monitor and control transactions as provided for in paragraph 1 appropriately. Member States shall also require at least annual reporting by insurance undertakings to the competent authorities of significant transactions. These processes and mechanisms shall be subject to overview by the competent authorities.’

4. the following Articles shall be inserted:

‘Article 10a

Cooperation with third countries' competent authorities

1. The Commission may submit proposals to the Council, either at the request of a Member State or on its own initiative, for the negotiation of agreements with one or more third countries regarding the means of exercising supplementary supervision over:

(a) insurance undertakings which have, as participating undertakings, undertakings within the meaning of Article 2 which have their head office situated in a third country; and

(b) non-member country insurance undertakings which have, as participating undertakings, undertakings within the meaning of Article 2 which have their head office in the Community.

2. The agreements referred to in paragraph 1 shall in particular seek to ensure both:

(a) that the competent authorities of the Member States are able to obtain the information necessary for the supplementary supervision of insurance undertakings which have their head office in the Community and which have subsidiaries or hold participations in undertakings outside the Community; and

(b) that the competent authorities of third countries are able to obtain the information necessary for the supplementary supervision of insurance undertakings which have their head office in their territories and which have subsidiaries or hold participations in undertakings in one or more Member States.

3. The Commission and the Insurance Committee shall examine the outcome of the negotiations referred to in paragraph 1 and the resulting situation.

Article 10b

Management body of insurance holding companies

The Member States shall require that persons who effectively direct the business of an insurance holding company are of sufficiently good repute and have sufficient experience to perform these duties.’

5. in Annex I.1.B. the following paragraph shall be added:

‘Where there are no capital ties between some of the undertakings in an insurance group, the competent authority shall determine which proportional share will have to be taken account of.’

6. in Annex I.2. the following point shall be added:

‘2.4a. Related credit institutions, investment firms and financial institutions

When calculating the adjusted solvency of an insurance undertaking which is a participating undertaking in a credit institution, investment firm or financial institution, the rules laid down in Article 16(1) (opens EUR-Lex in a new tab) of Directive 73/239/EEC (opens EUR-Lex in a new tab) and in Article 18 (opens EUR-Lex in a new tab) of Directive 79/267/EEC (opens EUR-Lex in a new tab) on the deduction of such participations shall apply mutatis mutandis, as well as the provisions on the ability of Member States under certain conditions to allow alternative methods and to allow such participations not to be deducted.’