Notice of solvency and operational plans for forsikringsselskaber1)
Under section 18, paragraph 1, section 143 (1) (8). 1, 2, 3, 5, 6 and 8, § 248, (2) and § 373, paragraph 4, of the financial business Act, see. lovbekendtgørelse nr. 793 of 20. August 2009, fixed:
The scope of the
§ 1. This Ordinance shall apply to insurance undertakings. By insurance companies shall be taken to mean life insurance companies, pension funds, cross-cutting non-life insurance companies, reinsurers and captive reinsurance undertakings and branches of foreign insurance companies with registered offices outside the European Union or outside the countries with which the community has entered into an agreement with, and which operates direct insurance in this country.
§ 2. By insurance classes for the purposes of this Ordinance the classes of insurance set out in annexes 7 and 8 of the law on financial business.
§ 3. Companies must develop capital adequacy statements in accordance with this Ordinance.
The requirement to base capital
§ 4. Insurance carriers shall at all times be in possession of a capital base that is at least equal to the maximum value of the individual solvency need and requirement, see. section 11, paragraph 5, and section 126 of the law on financial business. The capital requirement is the largest of the solvency requirement and the minimum capital requirement for the insurance company, see. section 127 of the financial business Act.
The individual solvency need
§ 5. The company must determine its individual solvency needs with a time horizon of one year. The individual solvency need to be decomposed as a sum.
(2). The Board shall meet at least once a year to identify and quantify the material risks, which the company is or will be exposed.
(3). The Board of Directors must approve the broad methods used in determining the individual solvency need.
(4). The Board of Directors must choose the level of security to be applied when determining the individual solvency need. The selected security level must be an expression of the fact that the probability that the insurance company cannot live up to its obligations to policyholders or beneficiaries, is very small.
(5). The Board of Directors must approve the Declaration of the individual solvency need.
(6). The Board of Directors must be continuously informed about the evolution of the material risks and their impact on the individual solvency need.
(7). The Board must decide a capital plan, which aims to ensure that the company's capital base will be sufficient to cover the risks to which the company can be expected to be exposed to the company's continued operation, in accordance with the established strategy.
(8). The Board must decide a capital contingency plan, which must include operational procedures which can be applied in practice, if capital plan assumptions bursts.
(9). The company shall quarterly report the individual solvency need for FSA.
Risk-weighted items for mathematical provisions
§ 6. Mathematical provisions for the calculation of the solvency requirement, see. However, section 7, paragraphs 2 and 3, shall be calculated according to the same method applied in the annual accounts referred to in article 6. §§ 15 and 66 of the ordonnance on financial reports for insurance companies and lateral pension funds. Mathematical provisions for the calculation of the solvency requirement is calculated as the maximum value of the sum of the guaranteed benefits and bonus potential of future premiums for each contract and the value which is guaranteed by the withdrawal of the contract, without prejudice. However, paragraph 2.
(2). If the probability of withdrawals before the contract expiration is less than 1, and the applied probability for withdrawals of less than 1 can be justified by that insured person access to buy back are contractually limited to take place in special situations, the value that is guaranteed by the withdrawals will be reduced in accordance with the probability of withdrawals.
(3). Reinsurers ' share of life assurance provisions shall be calculated by the same method, which is applied in the annual accounts referred to in article 6. section 8 of the Ordinance on financial reports for insurance companies and lateral pension funds.
§ 7. Risk-weighted items for mathematical provisions, see. section 126 (2) nr. 1 and 2, of the law on financial business, represent mathematical provisions deducted from the reinsurance units of mathematical provisions, subject to a minimum of 85 percent of life-assurance provisions.
(2). For the in class in the enclosed complementary insurances represent risk-weighted items for mathematical provisions 25 times the amount determined according to the § § 10-14.
(3). For insurance in class V constitute risk-weighted items for life insurance reserves life-assurance provisions.
(4). For class III posing risk-weighted items for mathematical provisions provisions for unit-linked contracts.
Records of risk sums
§ 8. At risk without deduction of reinsurance, is calculated for each insured as the difference between
1) the amount payable if the insured dies, as well as capital values determined at the insurance company's existing technical basis of the benefits payable after the insured's death, and
2) life-assurance provisions of the insured.
(2). Capital at risk on their own account are calculated in the same way as capital at risk without deduction of reinsurance, see. paragraph 1, with the exception of the insurance benefits and premiums, as the company has delivered in reinsurance.
(3). In the inventory of the company's total capital at risk shall be taken into account only the insured, as has a positive capital at risk.
§ 9. Risk-weighted items at risk for, see. section 126 (2) nr. 1, 2 and 3, in the financial business Act, constitute capital at risk on their own account, with a minimum of 50% of the capital at risk, without deduction of reinsurance.
(2). For insurance in insurance class in which is discontinuing life insurance with a term not exceeding 3 years, including group life assurance, constitute risk-weighted items at risk for 33 1/3 percent of the capital at risk for their own account, with a minimum of 16 2/3 per cent without deduction of reinsurance.
(3). For insurance in insurance class in which is discontinuing life insurance policies with a duration of over 3 years, but not more than 5 years, constitute risk-weighted items at risk for 50 per cent of the capital at risk for their own account, with a minimum of 25% without deduction of reinsurance.
Gross premiums and gross compensation for non-life insurance
§ 10. Risk-weighted items for gross premiums and risk-weighted items of gross claims incurred in an insurance company, which operates non-life-insurance business, represents the highest amount of
1) prize claim, as referred to in section 126 (2) nr. 5 (a) of the financial business Act, and
2) claim, as referred to in section 126 (2) nr. 5 (b) of the financial business Act.
§ 11. For class 11, 12 and 13 shall be increased the premiums that are the basis for the calculation of the premium requirement, with 50 per cent.
(2). By statement of claim to the insurer the premium undertake a risk weighting of the ratio of the sum of insurance company paid compensation for own account and the sum of gross claims payments. The statement must be on the basis of the past 3 financial years and risk weighting may not exceed 50 per cent.
§ 12. For class 11, 12 and 13 shall be increased the gross compensation, which is the basis for the calculation of the claim, with 50 per cent.
(2). The insurer has taken over a portfolio, it must take account of claims incurred in the 3 years for this stock in the calculation of the claim.
(3). When the insurance company mainly covers credit, storm, hail or frost risks, the statement of claim on the basis of the annual average of gross claims incurred in the last 7 years.
(4). By the insurance company's statement of claim shall be a risk weighting of the ratio of the sum of insurance company paid compensation for own account and the sum of gross claims payments. The statement must be on the basis of the past 3 financial years, and risk weighting may not exceed 50 per cent.
General rules relating to the solvency
§ 13. The Danish financial supervisory authority may reduce the risk weighting of the solvency requirements, which are made pursuant to sections 6, 9, article 11, paragraph 2, and article 12, paragraph 4, for when the nature or quality of reinsurance, the company's current reinsurance cover has changed significantly in relation to the reinsurance cover, there was in those years that form the basis of the calculated reduction. The FSA may also decrease the reduction, if the latter is calculated on the basis of contracts that do not involve the transfer of risk or only an insignificant risk transfer.
§ 14. Notwithstanding sections 10-13 and § 15 constitutes solvency requirement at least the solvency requirement for the previous year weighted by the ratio of outstanding claims, reinsurance deducted shares for outstanding claims at the end of the last financial year, and outstanding claims less any reinsurance for outstanding claims at the beginning of the last financial year. The weight must be a maximum of 100 per cent.
Reduced minimum capital requirements
§ 15. For mutual insurance companies, which are not covered by article 126, paragraph 6, of the law on financial business, the minimum capital requirements set out in section 126 (2) nr. 7 and 8, in the financial business Act shall be reduced by 25 per cent.
(2). To paragraph 1 may be applied, at least one of the following conditions must be met:
1) insurance company's instruments of incorporation must provide unlimited opportunity for calling up additional contributions or reducing benefits, or
2) in insurance contracts, the insurer must disclose that the company's minimum capital requirement is reduced by 25 per cent. For insurance contracts have already been concluded, this information must be given at least once a year.
(3). In the case of a mutual insurance companies, which are covered by the special reduced minimum capital requirements in § 126, paragraph 6, of the law on financial business, the insurer before the insurance contracts concluded, clearly and easily understood indicate that the company's minimum capital requirements are reduced as well as draw attention to the possibility of calling up additional contributions or reducing benefits. For insurance contracts have already been concluded, this information must be given at least once a year.
§ 16. Own funds shall be calculated in accordance with the Ordinance on financial reports for insurance companies and lateral pension funds.
(2). Equity must be subtracted from the equalisation reserves within class 14 and 15 of the basic regulation. Decree on leveling reserves within the credit and surety insurance.
(3). Intangible assets shall be calculated in accordance with the Ordinance on financial reports for insurance companies and lateral pension funds.
(4). For direct and indirect owned assets, representing a risk on a single enterprise or a group of enterprises, which constitute a single risk, see. § 131 (2). 3, of the law on financial business, the assets carrying amount is calculated according to the Decree on financial reports for insurance companies and lateral pension funds.
(5). Directly and indirectly-owned shares in the subsidiary finansieringsinstitutter and associated financial institutions that must be deducted from core capital, see. section 131, paragraph 7, of the financial business Act, shall be calculated in accordance with the Ordinance on financial reports for insurance companies and lateral pension funds.
Operating and recovery plans
§ 17. For use by the Danish FSA assessment of whether the insurer's capital base is sufficient, a insurance company application for an authorisation for insurance activities, be accompanied by a business plan of the company for which the company intends to operate. The business plan must include the company's first fiscal year and be 3 quarterly divided. Conducting the first accounts after a period of less than a year, the business plan must include this period and the three subsequent financial years.
(2). The business plan must include the following:
1) An opening balance sheet as the following articles of expenses is expected to be.
2) the expected accounting results in the form of income statements and balance sheets for the fiscal year, as the business plan includes.
3) A list of the cost, which is estimated to have incurred for building the insurance company's administration during the period covered by the business plan includes.
4) For insurance companies, which operates life insurance company, an indication of the technical basis, etc., as the business plan is based on.
5) explanation of the proposed reinsurance programs and creditworthiness (security).
6) information on the nature of the risks which the assurance undertaking proposes to cover.
7) For insurance companies, which operates non-life-insurance business, an account of the background to the company's expectations for premiums for own account in relation to claims incurred at its own expense.
8) explanation of the insurance company's investment policy.
9) calculation of expected capital requirements, individual solvency requirements and capital base after the end of each of the quarters as the business plan includes.
10) Information about the equipment that the insurance company has at its disposal for use for activities covered by class 18.
11) An evaluation of the likelihood that the insurance company within the first year cannot comply with the requirement and the individual solvency need.
12) An evaluation of the likelihood that the insurance company within the first year loses the entire base capital.
13) For insurance companies, which operates life insurance company, the Danish financial supervisory authority may require a longer period for the in no. 11 and 12 mentioned assessments.
(3). The Danish financial supervisory authority may in fact require the information deemed necessary for determining whether the results in the business plan must be considered as probable.
(4). The Danish financial supervisory authority may stipulate the reporting form and setting up the business plan must follow.
§ 18. FSA finds that the submitted information, see. § 17, have not been substantiated, to the insurance company in the operating plan included the period and by its expiry will be in possession of the necessary capital base, issued the permit does not.
§ 19. After issuing the permit must submit quarterly financial statements to the insurance company the financial supervisory authority in a form that makes it immediately possible to compare the company's actual results with the expected results contained in the business plan.
(2). There is a deterioration of the financial position of the insurance undertaking in relation to the business plan, can decide on a revision of the monitoring plan or a development of a new operating plan for the following three fiscal years.
§ 20. The provisions of §§ 17-19 shall apply mutatis mutandis where an insurance company applying for the extension of an existing authorisation, to the extent that the company, in conjunction with the desired expansion of the permit after the FSA estimates make it necessary.
§ 21. FSA has demanded that a company draws up a plan for the restoration of the financial position of the company, see. Chapter 16 of the financial business Act, this plan must at least include the 3 subsequent fiscal year.
(2). Plan for recovery shall at least include the following:
1) estimates of management expenses.
2) projected expenditure and income in connection with direct insurance company as well as the acquisition and donation of reinsurance.
3) a projected balance sheet.
4) the expected investment policy.
5) estimate of the size of the capital requirement, the individual solvency need and basic capital.
6) explanation of the proposed reinsurance programs and creditworthiness (security).
§ 22. Violation of section 3, article 17, paragraphs 1 and 2, article 19, paragraph 1, and section 21 are punishable by a fine.
(2). That can be imposed on companies, etc. (legal persons) criminal liability in accordance with the provisions of the criminal code 5. Chapter.
Date of entry into force of
§ 23. The notice shall enter into force on the 15. October 2009.
(2). At the same time repealed Executive Order No. 1523 by 13. December 2007 on solvency and operating plans for the insurance companies.
The Danish financial supervisory authority, the 12. October 2009 Ulrik Nødgaard/Per Ploug man Bærtelsen Official notes 1) Ordinance contains provisions implementing parts of the Council Directive 73/239, (Official Journal 1973, nr. L 228, p. 3), (1. non-life insurance directive), Council Directive 76/580, (Official Journal 1976 No. L 189, p. 13), (directive on the coordination of the provisions laid down by law, regulation or administrative action concerning access to the pursuit of the business of direct insurance other than life assurance) Council Directive 84/641, (Official Journal 1984 no. L 339, p. 21), (Tourist assistance directive), Council Directive 87/343, (Official Journal 1987 No. L 185, p. 72), (Credit insurance directive), Council Directive 92/49, (Official Journal 1992 nr. L 228, p. 1), (3. non-life insurance directive), Council Directive 98/78 (Official Journal 1998 No. L 330, p. 1), (insurance group directive), European Parliament and Council Directive 2002/83 (Official Journal of the European communities 2002 nr. L 345, p. 1), (life assurance Directive), and of the European Parliament and of the Council Directive 2005/68/EC (Official Journal of the European Union 2005 nr. L 323, p. 1) (reinsurance directive).