Key Benefits:
GENERAL INDEX
Title I. General provisions.
Chapter I. Object and scope of application.
Article 1. Object.
Article 2. Scope of application.
Chapter II. Advisory body
Article 3. Advisory Board of Insurance and Pension Funds.
Title II. Access to the insurance and reinsurance activity.
Chapter I. Access to the activity of Spanish insurance companies and reinsurers.
Section 1. Activity Access Conditions.
Article 4. Administrative authorisation.
Article 5. Amendments to the documentation provided.
Article 6. Effects of the authorisation.
Article 7. Requirements for the extension of the administrative authorisation of insurance and reinsurance entities.
Article 8. Organizations and groups of insurance companies.
Article 9. Social name.
Article 10. Registered office.
Article 11. Programme of activities.
Article 12. Details of the programme of activities in classes 2, 17, 18 and 19 of the classification of classes of insurance other than life insurance contained in the Annex to the Law on the ordination, supervision and solvency of insurance and reinsurance undertakings.
Article 13. Implementation of the programme of activities.
Article 14. Increases and reductions in social capital and mutual fund. Non-cash contributions.
Article 15. Partners. Assessment of the acquisition of significant holdings in insurance and reinsurance entities.
Article 16. Collaboration between supervisory authorities for the assessment of the acquisition of significant holdings in insurance and reinsurance entities.
Article 17. Computation of significant holdings in insurance and reinsurance entities.
Article 18. Honorability and fitness of those who exercise the effective management or perform functions that integrate the entity's governance system.
Article 19. Administrative registration.
Article 20. Registration of acts relating to insurance companies and reinsurers and their groups.
Article 21. Registration of acts relating to persons exercising the effective management of insurance and reinsurance undertakings.
Article 22. Registration of the acts relating to the organisations for the distribution of the risk coverage between insurance entities or for the provision of common services related to the activity of the insurance institutions and their senior positions.
Article 23. Registration of the special control measures.
Article 24. Cancellation of the registration of the imposed sanctions.
Section 2. Activity of Spanish insurance companies and reinsurers under the right of establishment and freedom to provide services in the European Union.
Article 25. Duty of information to the policyholder.
Article 26. The duty of statistical information relating to the cross-border activities of the Spanish insurance companies.
Article 27. General remission.
Article 28. Establishment of branches.
Article 29. Communication to operate in freedom to provide services.
Chapter II. Access to the activity in Spain of insurance companies and reinsurers from other Member States of the European Union.
Section 1. General provisions for insurance and reinsurance entities.
Article 30. Management and supervision of authorised insurers.
Section 2. Activity under the right of establishment of insurance and reinsurance undertakings domiciled in other Member States.
Article 31. Determination of the conditions of exercise.
Article 32. Supervision of branches in Spain by the authorities of the State of origin.
Article 33. Reinsurers domiciled in other Member States of the European Economic Area.
Section 3. Activity under the freedom to provide services of insurance undertakings and reinsurers domiciled in other Member States.
Article 34. Start and change of activity.
Section 4. Third Regime of the subscription agencies.
Article 35. Requirements and procedure for the authorisation of the subscription agencies.
Chapter III. Access to the activity in Spain of insurance companies and reinsurers from third countries.
Article 36. Authorisation of branches of insurance institutions in third countries.
Article 37. Conditions for the exercise of the insurance business.
Article 38. Financial guarantees for branches of insurance companies and reinsurers domiciled in third countries.
Article 39. Advantages in the scheme of branches of entities domiciled in third countries, authorised in several Member States.
Article 40. Information to the European Commission and other Member States on subsidiaries of insurance and reinsurance entities in third countries.
Article 41. Special scheme for the establishment of branches of Swiss insurance companies operating in the field of insurance other than life insurance.
Article 42. Procedure for the authorisation of branches of Swiss insurance companies operating in insurance other than life insurance.
Article 43. Third-country reinsurers entities.
Title III. Exercise of the activity.
Chapter I. System of government of insurance and reinsurance entities
Article 44. General requirements of the government system.
Article 45. Risk management.
Article 46. Internal risk assessment and solvency.
Article 47. Actuarial Function.
Chapter II. Valuation of assets and liabilities, financial guarantees and investments.
Section 1. Rules on technical provisions.
Article 48. Calculation of technical provisions: general principles.
Article 49. Other elements to be taken into account in the calculation of technical provisions.
Article 50. Segmentation of obligations by homogeneous groups.
Article 51. Amounts recoverable from reinsurance contracts and special purpose entities.
Article 52. Quality of data used in the calculation of technical provisions.
Article 53. Use of approximations in the calculation of technical provisions.
Article 54. A relevant temporary structure of interest rates without risk.
Article 55. Adjustment for cash flows from the relevant temporary structure of interest rates without risk.
Article 56. Calculation of the adjustment for flows.
Article 57. Volatility adjustment of the relevant temporary structure of interest rates without risk.
Article 58. Technical provisions of death insurance.
Section 2. Own Funds.
Article 59. Determination of own funds.
Article 60. Classification of own funds at levels.
Article 61. Classification of own funds specific to insurance.
Article 62. Eligibility of own funds and limits applicable to levels 1, 2 and 3.
Section 3. Compulsory Solvency Capital.
Subsection 1. General Rules.
Article 63. Calculation of the Solvency Capital Requirement.
Article 64. Methods of calculation of the Solvency Capital Requirement.
Article 65. Requirement for additional mandatory solvency capital.
Article 66. Procedure for the requirement of additional mandatory solvency capital.
Article 67. Information on the requirement for additional mandatory solvency capital.
Subsection 2. Standard Formula.
Article 68. Structure of the standard formula.
Article 69. Configuration of the basic Solvency Capital Requirement.
Article 70. Calculation of the Solvency Capital Requirement using the standard formula.
Article 71. Insurance subscription risk module other than life insurance of basic compulsory capital.
Article 72. Basic mandatory capital life insurance subscription risk module.
Article 73. Risk module for the subscription of the basic compulsory capital sickness insurance.
Article 74. Basic mandatory capital market risk module.
Article 75. Variable income risk sub-module based on duration.
Article 76. Details of the calculation of the solvency capital requirement for death insurance.
Article 77. Risk module for non-compliance with the basic mandatory capital counterparty.
Subsection 3.
Article 78. Calculation of the Solvency Capital Requirement by internal models.
Article 79. Authorization of internal models.
Article 80. Additional requirements for the authorisation of partial internal models.
Article 81. Internal model modification policy.
Article 82. Failure to comply with the internal model.
Article 83. Use of the internal model in decision making and management activities.
Article 84. Standards of statistical quality of the internal models.
Article 85. Calibration standards for the internal models.
Article 86. Allocation of profit and loss.
Article 87. Standards for validation of internal models.
Article 88. Documentation of the internal models.
Section 4.
Article 89. Rules on investments by insurers and reinsurers.
Article 90. Assets representing the technical provisions in those life insurance in which the taker assumes the risk of the investment.
Chapter III. Public information on the financial and solvency situation.
Article 91. Form of the report on the financial and solvency situation.
Article 92. Content of the report on the financial and solvency situation.
Article 93. Time limits for the disclosure of the report on the financial and solvency situation.
Article 94. Updates to the report on the financial and solvency situation and additional voluntary information.
Chapter IV. Accounting obligations.
Article 95. Accounting of insurance and reinsurance entities.
Article 96. Books and accounting records of insurance and reinsurance entities.
Article 97. Accounting obligations of insurance and reinsurance entities.
Article 98. Audit of the annual accounts of insurance and reinsurance entities.
Chapter V. Corporate operations.
Section 1. Third Portfolio.
Article 99. Transfer of portfolio between Spanish insurance companies.
Article 100. Procedure for the authorisation of the transfer of the portfolio of Spanish insurance companies.
Article 101. Transfer of a portfolio by a Spanish insurer of contracts entered into under the right of establishment or under the freedom to provide services, or which are to be subscribed to in any of those schemes.
Article 102. Transfer of portfolio of entities operating in Spain domiciled in another Member State.
Article 103. Transfer of portfolio of branches in Spain from insurance companies domiciled in third countries.
Article 104. Transfer of portfolio to a branch in Spain of insurance companies domiciled in third countries.
Article 105. Transfer of portfolio of reinsurers.
Section 2.
Subsection 1.
Article 106. Transformation of insurance entities.
Article 107. Procedure for the authorisation of the processing of insurance institutions.
Article 108. Transfer of the registered office abroad.
Subsection 2.
Article 109. Merger of insurance companies.
Article 110. Procedure for the authorisation of the merger of insurance companies.
Article 111. Cross-border mergers.
Subsection 3. Global transfer of assets and liabilities.
Article 112. Global transfer of assets and liabilities.
Subsection 4. ª.
Article 113. Division of insurance institutions.
Article 114. Procedure for the authorisation of the division of insurance institutions.
Section 3. First groupings and temporary unions of insurance or reinsurance entities.
Article 115. Economic interest groups and temporary joint ventures.
Chapter VI. Market behaviors.
Section 1. Statutes, policies and fees.
Article 116. Statutes.
Article 117. Policies and premium rates.
Article 118. General rules on technical bases.
Article 119. Peculiarities of the technical bases of life insurance.
Article 120. Peculiarities of the technical bases of death insurance.
Article 121. Special features of the technical bases of sickness insurance.
Section 2.
Article 122. General duty of information to be provided to policyholders or policyholders.
Article 123. Information in insurance contracts offered under the right of establishment or freedom to provide services.
Article 124. Special duty of information in life insurance.
Article 125. Special duty of information in death insurance.
Article 126. Special duty of information in sickness insurance.
Article 127. Advertising.
Chapter VII. Special solvency regime.
Section 1. Application Scope.
Article 128. Scope of application.
Section 2. Valuation Of Technical Provisions.
Article 129. List of technical provisions.
Article 130. Provision of premiums.
Article 131. The provision of life insurance.
Article 132. Interest rate.
Article 133. Tables of mortality, survival, disability and morbidity.
Article 134. Administration and acquisition expenses.
Article 135. Rescues.
Article 136. Provision of life insurance when the taker assumes the risk of the investment and assimilated.
Article 137. Provision of participation in benefits and for extortionate.
Article 138. Provision of outstanding claims.
Article 139. Provision of outstanding claims for settlement or payment.
Article 140. Provision of outstanding claims outstanding.
Article 141. Provision of internal claims settlement expenses.
Article 142. Provision of death insurance.
Article 143. Provision of sickness insurance.
Article 144. Provision of deviations in capitalization operations by lot.
Section 3. Investment valuation.
Article 145. Rules on investments by insurance companies.
Section 4. Own Funds. Valuation of assets and liabilities.
Article 146. Determination of own funds.
Article 147. Valuation of assets.
Section 5. Compulsory Solvency Capital and Minimum Capital Requirement.
Article 148. Calculation of the Solvency Capital Requirement and the Minimum Capital Requirement in the special solvency regime.
Article 149. Risk module for the subscription of insurance other than the life insurance of basic compulsory capital in the special solvency scheme.
Article 150. Risk module for the subscription of the life insurance of the basic compulsory capital in the special solvency scheme.
Article 151. Risk module for the subscription of the basic compulsory capital sickness insurance scheme under the special solvency scheme.
Article 152. The market risk module of the core mandatory capital in the special solvency regime.
Article 153. Risk module for non-compliance with the basic mandatory capital counterparty in the special solvency regime.
Section 6.
Article 154. Requirements of the System of Government under the special solvency regime.
Chapter VIII. Simultaneous exercise of life and insurance activity other than life insurance.
Article 155. Insurance entities authorized to operate simultaneously in life insurance and in insurance other than life insurance.
Article 156. Separate management of life insurance and insurance operations other than life insurance.
Article 157. Obligations arising from the separate management of life insurance and insurance operations other than life insurance.
Title IV. Supervision of insurance and reinsurance entities.
Chapter I. General principles.
Article 158. Transparency of supervisory action.
Article 159. Information to be provided for supervisory, statistical and accounting purposes.
Article 160. Time limits for the submission of information for monitoring, statistical and accounting purposes.
Article 161. Limitation of the submission of periodic reporting for supervisory, statistical and accounting purposes.
Article 162. Exemption or limitation of submission of detailed information.
Article 163. Information on the limitation or exemption in the submission of information for supervisory, statistical and accounting purposes.
Article 164. Monitoring of outsourced functions and activities.
Article 165. Inspection activities on the permanent presence of the insurance companies.
Chapter II. Financial supervision.
Article 166. Content of the financial supervision.
Chapter III. Supervision by inspection.
Article 167. Inspector staff.
Article 168. Initiation of the monitoring procedure by inspection.
Article 169. Development of the inspection activities.
Article 170. Excuse, refusal or resistance to the inspector's performance.
Article 171. Proceedings.
Article 172. Formalisation of the inspection report.
Article 173. Completion of the inspection activities.
Article 174. Duty of communication.
Title V. Supervision of groups of insurers and reinsurers.
Chapter I. Exercise of group supervision.
Article 175. Assumption of the role of group supervisor by the Directorate General of Insurance and Pension Funds in special cases.
Article 176. Exceptions to the assumption of the role of group supervisor by the Directorate-General for Insurance and Pension Funds.
Article 177. Colleges of Supervisors.
Article 178. Access to information and verification.
Article 179. Cooperation and exchange of information between supervisory authorities.
Chapter II. Group financial situation.
Section 1. Group Solvency.
Subsection 1. General Principles.
Article 180. Supervision of group solvency.
Article 181. Report on the financial and solvency situation at the group level.
Article 182. Advertising of the group structure.
Subsection 2. Calculation Methods.
Article 183. Method based on accounting consolidation.
Article 184. Consolidated group internal model and group insurance and reinsurance entities.
Article 185. Requirement for additional consolidated group Solvency Capital Requirement.
Article 186. Method of deduction and aggregation.
Article 187. Inclusion of proportional participation.
Article 188. Abolition of double counting of eligible own funds.
Article 189. Abolition of the creation of intra-group capital.
Article 190. Valuation.
Subsection 3. Calculation Of Group Solvency according to the type of related entity
Article 191. Related insurance companies and reinsurers.
Article 192. Equivalence with respect to insurance institutions and related reinsurers from third countries.
Article 193. Determination of the temporary equivalence with respect to insurance institutions and related reinsurers from third countries.
Article 194. Intermediate insurance holding companies and intermediate mixed financial holding companies.
Article 195. Credit institutions, investment firms and related financial institutions.
Article 196. Lack of information on related entities.
Subsection 4. Group with centralized risk management.
Article 197. Group scheme with centralised risk management.
Article 198. Authorisation to benefit from the system of groups with centralised risk management.
Article 199. Determination of the Solvency Capital Requirement of the subsidiary.
Article 200. Non-compliance with respect to the Solvency Capital Requirement and the Minimum Capital Requirement of the subsidiary.
Article 201. Termination of the application of the group scheme with centralised risk management.
Section 2. Risk Concentration and Intragroup Operations.
Article 202. Supervision of the risk concentration.
Article 203. Supervision of intra-group transactions.
Article 204. Exclusions for the supervision of the concentration of risk and intra-group transactions.
Section 3. Risk Management and Internal Control.
Article 205. Monitoring of the group's governance system.
Chapter III. Specific provisions for certain classes of groups.
Section 1. Groups with matrices in the European Union, other than insurance companies and reinsurers.
Article 206. Insurance holding companies. Mixed financial holding companies. Mixed insurance holding companies.
Section 2. Group with parent entities outside the European Union.
Article 207. Equivalent monitoring.
Article 208. Determination by the European Commission of the temporary equivalence of third countries in which the group's parent insurers and reinsurers are domiciled.
Article 209. Lack of equivalence of supervision of groups from third countries.
Article 210. Parent entities outside the European Union: levels.
Chapter IV. Mutual groups.
Article 211. Mutual groups.
Title VI. Situations of financial deterioration. Special control measures.
Chapter I. Situations of financial deterioration.
Article 212. Exceptional adverse situations and content of the recovery plan and the short-term financing plan.
Chapter II. Procedure.
Article 213. Procedure for the adoption of special control measures.
Article 214. Collaboration functions of the Insurance Compensation Consortium in relation to the special control measures adopted.
Chapter III. Administrative intervention.
Article 215. Administrative intervention of the insurance institutions.
Article 216. Intervention to ensure the correct implementation of the special control measures.
Article 217. Intervention in the liquidation.
Title VII. Revocation, dissolution and liquidation.
Chapter I. Revocation of the administrative authorisation.
Article 218. Lack of effective activity and abandonment of the registered office.
Chapter II. Dissolution and liquidation of insurance and reinsurance entities.
Section 1. Dissolution.
Article 219. Calculation of the net worth for the purpose of dissolution.
Article 220. Communication of the existence of the cause of dissolution.
Article 221. Procedure for administrative dissolution.
Section 2.
Article 222. The anticipated maturity of the insurance contracts.
Article 223. Assignment of trade in the insurance portfolio in the liquidation.
Article 224. Documentation to be sent to the Directorate-General for Insurance and Pension Funds by the administrators and the liquidators.
Article 225. Duty of collaboration of the former administrators and managers.
Article 226. Information to creditors.
Article 227. Completion of settlement operations.
Chapter III. Liquidation by the Insurance Compensation Consortium
Article 228. Purchase of credits from resources of the Insurance Compensation Consortium.
Article 229. Liquidation of solvent entities.
Article 230. Liquidation of insolvent entities.
Additional disposition first. Registration on compulsory insurance.
Additional provision second. Procedure for the authorisation of special purpose entities.
Additional provision third. Maximum amount of liability coverage as an ancillary risk.
Additional provision fourth. Enquiries, complaints and complaints relating to credit and security insurance.
Additional provision fifth. Arrangements for the calculation of technical provisions for accounting purposes.
Additional provision sixth. Allocation of technical provisions. Minimum amount.
Additional provision seventh. Programme of activities of the insurance brokers.
Additional disposition octave. Special administrative register of insurance intermediaries, reinsurance brokers and their senior officials.
Additional provision ninth. Abusive practices.
Additional provision 10th. Value of the euro.
Additional provision eleventh. Insurance experts, Commissioners of Averages and Liquidators of breakdowns.
Additional disposition twelfth. External collaborators of insurance intermediaries.
Additional disposition thirteenth. Regulatory referrals.
Additional disposition fourteenth. Control of personnel expenses.
Additional provision 15th. Distribution of competences.
Additional provision sixteenth. Electronic access to the services of the General Directorate of Insurance and Pension Funds.
Additional 17th disposition. Coverage of the civil liability of the subscription agencies.
First transient disposition. Transitional measure on interest rates without risk.
Second transient disposition. Transitional measure on technical provisions.
Transitional provision third. Non-compliance with the Solvency Capital Requirement without the application of the transitional measure on interest rates without risk or on technical provisions.
Transitional disposition fourth. Transitional measure for the classification of own funds.
Transient disposition fifth. Transitional measure on the concentration and differential sub-modules of the market risk.
Transitional disposition sixth. Transitional measure on the stock market risk sub-module.
Transitional disposition seventh. A transitional measure on investment in marketable securities or other financial instruments based on packaged loans.
Transient disposition octave. A transient measure for requesting approval of an internal group model applicable to a part of the group.
transient disposition ninth. Report on the financial and solvency situation.
Transient disposition tenth. Time limits for the disclosure of the report on the financial and solvency situation.
Transient disposition eleventh. Time limits for the submission of information for monitoring, statistical and accounting purposes.
Transient Disposition twelfth. Adaptation of pre-existing pension schemes to the provisions of the fourth final provision, amending the Regulation on pension schemes and funds, approved by Royal Decree 304/2004 of 20 February 2004.
transient disposition thirteenth. Insurance companies and reinsurers who, as of 1 January 2016, do not subscribe to new contracts.
Transitional disposition fourteenth. Reporting by insurance companies and reinsurers in respect of the financial year 2015 to be submitted in 2016.
15th transient disposition. Transitional arrangements for the Solvency Capital Requirement.
Transient disposition sixteenth. Distribution of dividends or branches.
transient disposition seventeenth. Simplified sanctioning procedure.
Single repeal provision. Regulatory repeal.
Final disposition first. Amendment of Royal Decree 1588/1999 of 15 October 1999 approving the Regulation on the implementation of the pension commitments of companies with workers and beneficiaries.
Final disposition second. Amendment of the Royal Decree 1430/2002 of 27 December on the adoption of the Social Welfare Mutual Funds Regulation.
Final disposition third. Amendment of Royal Decree 300/2004 of 20 February approving the Regulation on the insurance of extraordinary risks.
Final disposition fourth. Amendment of Royal Decree 304/2004 of 20 February 2004 approving the Regulation on pension schemes and funds.
Final disposition fifth. Amendment of Royal Decree 1317/2008 of 24 July approving the Accounting Plan of the insurance institutions.
Final disposition sixth. Amendment of Order ECO/805/2003 of 27 March 2003 on rules for the valuation of immovable property and certain rights for certain financial purposes.
Final disposition seventh. Amendment of the Order of 25 February 2000 establishing and regulating the National Defunctions Index.
Final disposition octave. Safeguarding the regulatory range.
Final disposition ninth. Competence title.
Final disposition tenth. Incorporation of European Union law.
Final disposition eleventh. Regulatory enablement.
Final disposition twelfth. Entry into force.
Attachment. Standard formula for Solvency Capital Requirement (SCR).
I
With the approval of Law 20/2015 of 14 July, of the management, supervision and solvency of insurance and reinsurance entities, LOSSEAR, in part, is partially transposed into Spanish legal order Directive 2009 /138/EC of the European Parliament and of the Council of 25 November 2009 on access to insurance and reinsurance business and its financial year, hereinafter, Solvency II Directive, as amended mainly by Directive 2014 /51/EU of the European Parliament and of the Council of 16 April 2014 amending the Directives 2003 /71/EC and 2009 /138/EC and Regulations (EC) No 1060/2009, (EU) No 1094/2010 and (EU) No 1095/2010 as regards the powers of the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority), better known as Omnibus II. This European legislation introduces important new developments, in respect of the previous legislation, in terms of the solvency regime to which insurance and reinsurance entities are subject for access and the exercise of their activity.
This royal decree for the management, supervision and solvency of insurance and reinsurance entities has the primary purpose of completing the transposition of the Solvency II Directive carried out by the LOSSEAR as regards those of its precepts whose transposition does not require legal status. Since this is an eminently technical matter, there are numerous legal provisions that expressly refer to a regulatory development that complements the regulation contained in the law. To greater abundance, the final seventeenth law provision establishes this mandate in broad terms. Without prejudice to the above, this royal decree does not exhaust the necessary regulatory development work, although it constitutes an essential element of the law. In this respect, it is necessary to mention the development of European Community secondary legislation in general and more specifically the guidelines and guidelines of the European Insurance and Occupational Pensions Authority (EIOPA) which, to a large extent, will be carried out subsequently through ministerial or circular orders from the Directorate-General for Insurance and Pension Funds. Furthermore, it is important to remember that the national regulations will have to coexist, avoiding any type of collision, with the European Union regulations that will be of direct application in our legal system, which is increasingly abundant in this normative field. In this respect, the recent entry into force of Delegated Regulation (EU) 2015/35 of the Commission of 10 October 2009 supplementing Directive 2009 /138/EC of the European Parliament and of the Council on access to insurance and reinsurance business and its financial year (Solvency II) is particularly significant.
On the other hand, since the entry into force of the Regulation on the Management and Supervision of Private Insurance, approved by Royal Decree 2486/1998 of 20 November, the experience acquired with its application advises to introduce provisions that collect interpretative criteria and supervisory practices in order to improve the previously existing regime, taking into account the circumstances in which the Spanish insurance sector is currently developing, both in the European context and in the rest of the world.
However, much of the provisions of the previous regulation are preserved in this royal decree, because they are fully applicable to the current reality, but in many cases, with the logical updates that demand the consistency of terminology and content with the new regime of Solvency II.
In the formulation and implementation of these rules, it is necessary to combine the solvency of insurance companies and the protection of consumers and users, with the promotion and development of the market, especially considering the effectiveness of the European Economic Area.
The real decree, like the LOSSEAR, regulates with an omnicomprensivo spirit the circumstances that are related to the evolution of the insurance and reinsurers entities. In addition, it contains provisions regarding pension plans and funds, private insurance mediation, Insurance Compensation Consortium, Insurance Contract Law, Civil Liability Law and Insurance in the Motor Vehicle Circulation and Accounting Plan of the Insurance Entities.
As regards the technical criteria used in the elaboration of the standard, it has been chosen to develop exclusively those subjects of the LOSSEAR which it is considered necessary to expand. This solution requires the maximum coordination between the standard developed and the present text, which is reflected in a full identity of the structure of the LOSSEAR and this royal decree. The interrelationship between the law and the royal decree leads to the need for a joint consideration of both to have a comprehensive view of the rules contained therein. In the exercise of this systematic interpretation, the powers granted to the Directorate-General for Insurance and Pension Funds shall be without prejudice to the powers which, where appropriate, correspond to the Autonomous Communities, in accordance with Article 19 of Law 29/2015 of 14 July.
On the other hand, the legislator preferred to order only those differential aspects of the insurance companies with respect to the other commercial entities. In all that, in what is not appreciated a singularity of the insurance activity, the reference to the general rules is complete and absolute.
According to Law 11/2007, of June 22, of electronic access of citizens to Public Services, the procedures regulated in this royal decree that involve communications of the insurance companies and reinsurers with the General Directorate of Insurance and Pension Funds, can be completed electronically.
II
As for its structure, the royal decree faithfully follows the distribution of the law, distinguishing seven titles, seventeen additional provisions, seventeen transitional provisions, a derogation provision, twelve final provisions and an annex.
Title I develops the general provisions of the law, in particular the delimitation of its object and the operations that have the consideration of insurance and private reinsurance. It also provides for the possibility of consultation by the parties concerned to the Directorate-General for Insurance and Pension Funds when specific questions are raised about this, as well as the correlative obligation of the latter to answer them in a reasoned manner. The functions and structure of the Advisory Board of Pensions and Pension Funds are also detailed in Chapter II.
Title II, which refers to the access to the insurance and reinsurance activity, devotes each of its three chapters to the types of entities that can act in Spain, differentiated according to their origin. The first, to the Spanish insurance companies and reinsurers. It provides detailed rules for the application and approval procedure, the documentation to be provided or the effects of the authorisation, including the fact that the authorisation granted to an entity to operate throughout the Spanish territory means that it will also be able to do so throughout the territory of the European Union, which is known as a Community passport or a single licence. It also regulates this chapter the particularities that affect the denomination or the registered office of the entities and specific aspects of great importance such as the program of activities, the increases and reductions of the social capital or mutual fund, the regime of acquisition and reduction of significant participations and the administrative registry. This makes it necessary to define its content and operational mechanics. This chapter continues with the development of the requirements of good repute and competence required of the partners and those who exercise the effective direction or the fundamental functions that integrate the system of government of the entity. The second Chapter of Title II provides for the requirements to be met by insurers and reinsurers authorised in other European Union states wishing to act in Spain under the right of establishment or freedom to provide services, all of which is governed by the principle of supervision by the country of origin and taking into account the relations which the supervisory authorities of the Member States have to maintain in order to ensure that supervision is effective and efficient. Finally, Chapter III regulates the particularities of the authorisation for access to the activity in Spain of insurance and reinsurance undertakings from third countries, distinguishing the special arrangements applicable to branches of Swiss insurance companies operating in insurance other than life insurance, pursuant to the application of Council Directive 91 /371/EEC of 20 June concerning the application of the Agreement between the European Economic Community and the Swiss Confederation on direct insurance other than life assurance.
Title III addresses the exercise of the insurance or reinsurance activity. Chapter I is dedicated to the system of governance of insurance and reinsurance entities, subject to which the Solvency II Directive attaches great importance, so in this chapter the general requirements that must be met by the system of government are developed to ensure a sound and prudent management of the activity, as the specific ones of each of the fundamental functions that integrate it. It also contains this title, in Chapter II, the rules for the valuation of assets and liabilities, financial guarantees and investments for solvency purposes, following the guidelines set out in the law. Also included in this chapter are essential issues in the new solvency regime such as the rules for the proper calculation of technical provisions, the determination, classification and eligibility of own funds, or the calculation of the Solvency Capital Requirement, both by standard formula and through internal models. Chapter III regulates the form and content of the financial and solvency report to be drawn up by both the insurance and reinsurance entities and their groups, as well as the time limits for their disclosure and updates. Chapter IV contains some provisions in relation to the accounting obligations of insurance companies. Chapter V sets out the procedures for the authorisation of corporate transactions, differentiating between portfolio transfer and structural changes. Within the latter, a distinction is made between the societary transformation, the merger, the global transfer of assets and liabilities and the division. Two specialties are present in these figures; on the one hand, the insurance activities themselves; on the other, the specific legal and economic nature of these entities. With regard to the first, it is noted that the transfer of portfolio involves the transfer of insurance contracts into a block, with its inherent rights and obligations. The principles of clarity, transparency, publicity and legal certainty should govern the transmission of contracts en masse. The same chapter also covers the particularities of the transfer of the registered office abroad, as well as of the economic interest groups and temporary unions of undertakings of which insurance companies are part. Chapter VI contains provisions dealing with market conduct, regulating aspects relating to statutes, policies and tariffs. In this chapter, the content is given, the Community rules on the matter are transposed and the particularities in relation to the advertising of insurance and reinsurance are regulated. Chapter VII sets out the general principles laid down in the law for the regulation of the special solvency regime to which those entities which do not carry out activities under the right of establishment or freedom to provide services in other Member States of the European Union could benefit from and do not exceed the limits laid down, as well as the social security mutual societies which fulfil the conditions laid down for that purpose. Chapter VIII puts an end to Title III with the special provisions concerning the simultaneous exercise of direct life insurance and direct insurance activities other than life insurance, which is only possible in the case of entities authorised to operate in both areas under regimes prior to the entry into force of the law.
Title IV, referred to the supervision of insurance and reinsurance entities, in Chapter I, develops certain aspects of the law on this subject, in particular the information to be disclosed by the supervisory authority, the information to be provided by the institutions for the purposes of supervision, statistics and accounting, their time limits and the exemptions or limitations to their presentation or the supervision of outsourced activities and functions. Chapter II specifies the content of the financial supervision and Chapter III, aspects of supervision by inspection of major relevance such as those relating to the staff inspector or those governing the different stages of the procedure, from initiation to the completion of the inspection activities.
Title V is dedicated to the supervision of groups of insurance and reinsurance entities. The new solvency II regime shifts the focus from supervision to the solvency of the group at European level without dispensing with the supervision of the individual institutions. This new approach requires close collaboration between the control authorities under whose jurisdiction different entities belonging to the same group operate, and involves the emergence of new figures such as the college of supervisors or the group supervisor, which are regulated in Chapter I. The core of this regulation is contained in Chapter II, which relates to the financial situation of the group. Section 1 sets out the method of calculation of the group solvency which, in general, will be based on the consolidation of accounts. However, the method of deducting-aggregation or a combination of both may be used in certain cases. Certain specialties of the group's solvency calculation on the calculation at individual entity level, such as the elimination of double counting of eligible own funds, the abolition of the creation of intra-group capital, the peculiarities of certain entities integrated in the group, such as intermediate insurance holding companies and intermediate mixed financial holding companies, the determination of equivalence or temporary equivalence with respect to related insurance and reinsurance entities of third countries are regulated. Section 1 of this Chapter II ends with the regulation of groups with centralised risk management. Section 2. is dedicated to the other two pillars, together with the solvency, on which financial supervision is based, the supervision of the concentration of intra-group risks and the supervision of intra-group transactions. Section 3 puts an end to Chapter II with the introduction of some specialties for risk management and internal control at the group level. Chapter III contains certain specific provisions applicable to groups with matrices in the European Union but which do not have the status of insurance or reinsurance entities and groups with matrices located outside the European Union. Chapter IV and last of Title V contains a single article dedicated to the specialties of the mutual groups.
Title VI regulates situations of financial deterioration of entities and special control measures. In particular, the content of the recovery plan and the short-term financing plan to be submitted by the institutions is regulated where their eligible own funds are not eligible to cover the Solvency Capital Requirement or the Minimum Capital Requirement, respectively. The procedure for the adoption of special control measures in line with the previous regulation is also developed by introducing adaptations to the new solvency regime and the improvements recommended by the experience of its implementation. It is important to highlight the attribution to the Insurance Compensation Consortium of new functions of collaboration in the application of special control measures adopted. In the case of administrative intervention, the regulation maintains and clarifies the distinction between the intervention adopted to ensure the correct compliance with other special control measures and the intervention in the liquidation.
Title VII completes the regulation contained in the law on the revocation, dissolution and liquidation of insurance and reinsurance entities. The cessation of the activity is governed by the law by the principles of protection of the creditors, in particular of the insured, agility and transparency. The administration can intervene and protect the eesc, supervising the process of revocation, dissolution, liquidation and extinction. In relation to the revocation, the royal decree specifies what is meant by a lack of effective activity and by the abandonment of the registered office. As for the dissolution, it collects the calculation of the net worth for the purposes of dissolution, the obligation to communicate to the supervisory authority the existence of a cause of dissolution, as well as the dissolution agreement adopted. The peculiarities of the administrative dissolution procedure are also regulated, expressly referring to the rules contained in the legislation of the capital companies or the legislation of cooperatives, in the case of entities with the latter legal form. As far as the liquidation is concerned, it is worth noting the regulation of the anticipated maturity of the insurance contracts, the assignment of the insurance portfolio in the liquidation, the special protection of the credit for the insurance contract or the process and the completion of the liquidation operations. Special mention deserves the regulation that Chapter III of this Title VII dedicates to the liquidation by the Consortium of Insurance Compensation, which develops and completes the provisions on the matter collected in the law. Among other aspects, the maximum period of nine months available to the Consortium to determine the percentage to be offered to the creditors by insurance contract is collected, and is distinguished between the liquidation of solvent entities and insolvent entities.
The royal decree contains seventeen additional provisions. The first one attributes to the Insurance Compensation Consortium the management of the public register of compulsory insurance, created ex novo by the law, in compliance with the Solvency II Directive. This register must include all insurance which has been established by a state or regional law and is enabled for the Directorate-General for Insurance and Pension Funds to regulate by means of a resolution the information to be sent to the register when compulsory insurance and the referral procedure are established. The second provision regulates the administrative authorisation procedure to operate as a special purpose vehicle. The third sets the maximum amount of liability coverage when you have the consideration of ancillary risk in accordance with Annex A) b) of the law. The fourth attribute to the Claims Service of the Directorate-General for Insurance and Pension Funds is the competence to resolve queries, complaints and complaints in relation to credit and security insurance when the policyholder or the insured person is not professional or the risk does not relate to a professional activity. The fifth lays down the scheme to be applied for the calculation of technical provisions for accounting purposes. The sixth sets out the amounts to be calculated as the minimum amount of technical provisions. The seventh adds the obligation to report in the programme of activities to be presented in order to obtain and maintain the administrative authorization as insurance brokers of the structure of the organization that includes the marketing systems, as well as the forecasts of income and expenses for the first three exercises of activity and of the adequacy to these of the resources and resources available. The eighth additional provision specifies the acts subject to registration in the special administrative register of insurance and reinsurance brokers, insurance and reinsurance brokerage companies and their senior officials. The ninth qualifies as abusive practices within the meaning of Article 55 (2) and (3) (g) of Law 26/2006 of 17 July of mediation in private insurance and reinsurance, certain conduct. The tenth transposes the provisions of the Solvency II Directive in relation to the value of the euro in other national currencies of the European Union. The 11th requires sufficient knowledge of the insurance expertise of insurance experts, breakdown commissioners, and breakdown liquidators to intervene in a contradictory expert assessment procedure. The 12th enables the Directorate-General for Insurance and Pension Funds to develop the incompatibilities and training required of external partners. The additional provision thirteenth states that the normative references made by other provisions to Royal Decree 2486/1998 of 20 November, will be understood to be made to the corresponding precepts of this royal decree. The additional fourteenth provision states that the measures contained in the royal decree may not entail an increase in appropriations or personnel costs. The additional provision, fifteenth, concerning the distribution of powers, transfers, in certain cases, references to the Directorate-General for Insurance and Pension Funds, to the competent bodies of the Autonomous Communities. The additional 16th provision provides for citizens to be able to relate to the Directorate-General for Insurance and Pension Funds by electronic means. The additional seventeenth provision provides for the coverage of the civil liability of the subscription agencies.
The royal decree contains seventeen transitional provisions. The first provides for the possibility of applying an adjustment in the interest rate curve without risk to reduce the impact that would occur on the technical provisions of life for the change in the interest rate used for its calculation. This adjustment may be applied subject to the authorisation of the Directorate-General for Insurance and Pension Funds when the conditions set out are met, and shall be reduced in a linear manner each year until 2032, in order to ensure that the impact is progressively produced. The second transitional provision allows the application of an adjustment on the calculated amount of technical provisions. As in the case above, this is about reducing the impact that the calculation system change would cause. The implementation of these transitional measures is foreseen in the Solvency II Directive. The third transitional provision provides, for institutions applying the first or second transitional measures, in the event that a non-compliance with the Solvency Capital Requirement is observed if the adjustments allowed by them are not applied, the need to prepare and submit to the Directorate-General for Insurance and Pension Funds a progressive introduction plan to restore the level of eligible own funds coverage and thereby ensure compliance with the Solvency Capital Requirement at the end of the transitional period. The fourth transitional provision allows for the classification as basic own funds of level I, for ten years, of own funds elements issued before 18 January 2016 that meet the requirements set out therein. The fifth transitional provision provides for a measure on the sub-modules of concentration and differential, within the market risk, with the aim of distributing over time the impact of the new regime. The sixth transitional provision provides for a measure on the sub-module of shares, within the market risk, allowing for a progressive distribution of its impact over eight years. The transitional provision seventh lays down a measure on investment in marketable securities or other financial instruments based on packaged loans, so that only the instruments issued before 1 January 2011 have to be applied to the requirements under the new solvency regime. The eighth transitional provision provides for a measure allowing the Directorate-General for Insurance and Pension Funds, until 31 March 2022, to apply for approval of an internal model applicable to a part of the group where the ultimate parent to which it applies is located in Spain and that part constitutes a differentiated fraction with a risk profile substantially different from the rest of the group. The transitional provision novena, relating to the report on the financial and solvency situation, allows it not to be mandatory until December 2020 to include in the description of capital management the separate indication of the requirement for additional mandatory solvency capital or the impact of the specific parameters to be used for significant deviations from the calculation assumptions of the standard formula. The transitional provision 10th introduces a transitional regime for the progressive reduction of the reporting deadlines for the financial and solvency situation, both for individual entities and for groups. The 11th transitional provision extends the previous measure to the annual information for supervisory, statistical and accounting purposes to be sent to the supervisor by the insurance institutions and their groups. The transitional provision twelfth sets a period of six months for the adaptation of the pre-existing pension schemes to the provisions of the fourth final provision, amending the Regulation on pension schemes and funds. The transitional provision thirteenth specifies the minimum content to be collected by the annual progress report on the liquidation of institutions which, as from 1 January 2016, do not subscribe to new contracts. The transitional provision fourteenth specifies that all insurers and reinsurers, as well as their groups, shall forward the periodic information referred to in Article 66 of Royal Decree 2486/1998 of 20 November 1998 within the time limits laid down in that Article. The transitional provision fifteenth contains the arrangements applicable to the institutions which dispute the minimum solvency margin required by the rules applicable to it on the day before the entry into force of the new solvency regime, but do not, in the first year of application of this royal decree, have sufficient eligible own funds to cover the Solvency Capital Requirement. These entities are allowed to take the necessary steps to adapt to the new regime until December 31, 2017. The transitional provision sixteenth prevents the distribution of dividends to the entities authorised to apply the transitional measures on interest rates without risk or on technical provisions where, without the application of those measures, they present a required solvency capital or minimum capital deficit, or they may be able to present it as a result of the distribution of dividends. The transitional provision seventeenth provides for a system of simplified sanctioning procedure as long as the Law 39/2015 of 1 October of Common Administrative Procedure of the Public Administrations does not enter into force.
The only derogating provision repeals how many provisions of equal or lower rank are contrary to the provisions of this royal decree, and in particular Royal Decree 2486/1998 of 20 November, except as provided for in Articles 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 23; and the fifth and sixth additional provisions. The transitional provision of Royal Decree 1317/2008, of 24 July, approving the Accounting Plan of the insurance institutions and the third paragraph of the Resolution of the Directorate-General for Insurance and Pension Funds of 20 October 2008, on the reporting obligations of insurance companies that market insured insurance plans, is also expressly repealed.
The dispositive part closes with twelve final provisions. The final provision first introduces certain amendments to the Regulation on the implementation of the pension commitments of companies with workers and beneficiaries, approved by Royal Decree 1588/1999 of 15 October 1999, with the main aim of adapting the regulatory references to the interest rate applied in relation to the value of the rescue of collective insurance to the new Solvency II regime. The second final provision amends two articles of the Social Welfare Mutual Regulation, approved by Royal Decree 1430/2002 of 27 December, in order to clarify the legal status of the protective partners and to establish the possibility that persons who do not have the status of mutualists may be a member of the Board of Directors, thus allowing greater professionalization of the administrative body of this type of insurance institution. The third final provision amends the Extraordinary Risk Insurance Regulation, approved by Royal Decree 300/2004 of 20 February, in order to collect the extent of the insurance cover for extraordinary risks to damage to vehicles which are only contracted by compulsory motor vehicle liability insurance. In addition, an express mention is made of the coverage of the uninhabitability of housing due to damage caused by extraordinary events. The fourth final provision amends the Regulation on pension schemes and funds, approved by Royal Decree 304/2004 of 20 February 2004. Specific aspects of information and investment in open pension funds and external guarantees for the profitability of pension schemes are developed. The fifth final provision introduces in the Accounting Plan of the Assured Entities, approved by Royal Decree 1317/2008, of 24 July, the essential modifications that demand coherence with the new solvency regime and in addition to the Plan a sixth part, containing the rules on the formulation of the consolidated annual accounts of the groups of insurance and reinsurer entities, and that it replaces the current regulation transiently on this matter contained in the Plan of 1997. The sixth final provision amends Article 84 of Order ECO/805/2003 of 27 March 2003 on rules for the valuation of immovable property and certain rights for certain financial purposes, in order to align its terminology with the new solvency regime and to clarify that, in general, a new official assessment should be requested before two years have elapsed since the previous one. In the seventh final provision, insurance companies are enabled for access to the National Defunctions Index, with the aim of verifying the survival of beneficiaries who receive either temporary or temporary income from insurance operations, or, in the case of death insurance, to be able to speed up the payment of benefits to insurance beneficiaries. The eighth final provision safeguards the normative range of the provisions of the ministerial order as amended by the previous final provision. The final disposition ninth contains the title of competence following the line marked by Law 20/2015, of July 14. The tenth final provision specifies the directives of the European Union, the transposition of which is supplemented by this royal decree. The final provision eleventh enables the Minister of Economy and Competitiveness to develop, on a proposal from the Directorate-General for Insurance and Pension Funds and prior report of the Advisory Board of Insurance and Pension Funds, the content of this royal decree when necessary and the final provision twelfth provides that the entry into force of the royal decree will take place on January 1, 2016, in compliance with what is established by the Solvency II Directive and at the same time when the law will also take effect.
Finally, the Annex transpose the breakdown for the different risk modules and sub-modules of the standard formula for the calculation of the Solvency II Solvency Capital Requirement.
III
During its process of drafting the project was submitted to the Advisory Board of Insurance and Pension Funds, at its meeting of 28 May 2015 and submitted to a public hearing. The Ministry of Employment and Social Security, the Ministry of Health, Social Services and Equality, the Ministry of Justice, the Spanish Agency for Data Protection, the Accounting and Audit Institute, the National Commission for Markets and Competition, the Banco de España, the National Securities Market Commission and the Autonomous Communities have also been consulted.
In its virtue, on the proposal of the Minister of Economy and Competitiveness, after the approval of the Minister of Finance and Public Administrations, in agreement with the Council of State and after deliberation of the Council of Ministers at its meeting of November 20, 2015,
DISPONGO:
TITLE I
General provisions
CHAPTER I
Object and Scope
Article 1. Object.
This royal decree aims to develop the regulation of the private insurance and reinsurance activity carried out by Law 20/2015 of July 14, of the management, supervision and solvency of insurance and reinsurance entities, as well as to complete the transposition into national law of Directive 2009 /138/EC of the European Parliament and of the Council of 25 November 2009 on the access to insurance and reinsurance activities and their financial year (Solvency II Directive), all with the ultimate aim of protecting the rights of policyholders, insured persons. and to promote the transparency and development of the insurance business.
Article 2. Scope of application.
1. For the objective scope:
(a) They shall have the consideration of insurance activities in which the requirements laid down in the regulatory provisions of the insurance contract are met.
(b) The provision of professional services, agreed credit agreements for the provision of conservation, maintenance, repair and the like shall not be taken into consideration by private insurance activities, provided that the obligations of the parties do not cover the coverage of a technically insurable risk, nor the mere obligation to provide mechanical services to the car made to its members by the car clubs.
2 With regard to the subjective field, no consideration will be given to insurers by persons who have adequate infrastructure to provide, some of the services mentioned in the previous section, referred to health care, legal defense, assistance to persons or deaths, due to their remuneration for each of the acts they perform and regardless of the person who satisfies them.
3. The doubts that may arise regarding the qualification of an operation, for the purposes of its submission to the Law 20/2015, of July 14 and its standards of development, will be resolved in administrative way by the Directorate General of Insurance and Pension Funds. Where the doubt relates to whether the operation is part of the compulsory social security, the competent ministry shall be required to report on the matter.
For these purposes, the insurance companies and any person who accredit to be the holder of a legitimate interest may make inquiries in writing addressed to the General Directorate of Insurance and Pension Funds in which, in relation to the question raised, the background and circumstances of the case, the object of the consultation and the other data, elements and documents that may contribute to the formation of judgment by the Administration shall be expressed clearly and with an extension. This document shall contain the name, surname, name or social name, address of the person concerned and, where appropriate, the person representing him, as well as the place, date and signature of those persons.
If the consultation document does not meet the requirements set out in the above paragraphs, the person concerned will be required to submit the necessary documents within ten days, indicating that, if he does not do so, the document will be archived without further processing.
In the defence, the Directorate-General for Insurance and Pension Funds must apply the criteria stated in replies to similar consultations previously evacuated unless it considers it appropriate to change the criterion, in which case it must give reasons for such a change.
The response shall be notified to the person concerned within the maximum period of 60 working days, counted from the receipt of the consultation in the Directorate-General for Insurance and Pension Funds or, where appropriate, the remedy of the deficiencies reported and against it, in its nature as mere information and not as an administrative act, no recourse may be made, without prejudice to the fact that the act or administrative acts dictated in accordance with the criteria stated therein may be contested.
CHAPTER II
Advisory Body
Article 3. Advisory Board of Insurance and Pension Funds.
1. The Advisory Board of Insurance and Pension Funds shall have the following functions:
(a) Report the draft general provisions on matters directly related to private insurance, reinsurance, pension plans and funds and mediation in insurance and reinsurance, with the aim of making the principle of the hearing of the sectors concerned effective in the procedure for drawing up such provisions. The report you issue will not be binding.
b) Make as many studies and reports as requested by your President.
(c) Formulate general or special recommendations in the areas referred to in (a) and in relation to compulsory insurance.
2. The Advisory Board of Insurance and Pension Funds is constituted by a President, a Vice President, Vocals and a Secretary.
3. The Director-General of Insurance and Pension Funds shall be President, to which it is appropriate to exercise, inter alia, the following functions:
(a) Represent the Advisory Body.
b) Agreed to be convened.
c) Set the agenda, moderate the development of the sessions and suspend them, if any.
d) Vising the minutes.
e) Request the participation of those individuals, entities and organizations that you consider convenient.
f) To point out the deadlines for the presentation of observations and particular votes by the vowels.
g) Designate work commissions for specific issues.
4. The Vice President of the Advisory Board of Insurance and Pension Funds shall be the Deputy Director General of Insurance and Regulation of the General Directorate of Insurance and Pension Funds, who is responsible for replacing the President in case of vacancy, absence or illness.
5. The Registrar, appointed by the Director-General of Insurance and Pension Funds between officials belonging to the Higher Body of State Insurance Inspectors of the State with a destination in the Directorate-General for Insurance and Pension Funds, shall draw up the minutes of each session held, which shall include the assistants, the agenda of the meeting, the circumstances of the place and time at which it has been held and the main points of the matters dealt with.
The minutes will be approved in the same or the next meeting of the Advisory Board of Insurance and Pension Funds.
In case of absence or illness, the Secretary shall be replaced by the person appointed by the Chair of the Advisory Board of Insurance and Pension Funds.
6. They will be vocal, the technical secretary general of the Ministry of Economy and Competitiveness, as well as the Deputy Directors-General of the Directorate General of Insurance and Pension Funds and the State Advocate in the said management center.
On a proposal from the Director-General of Insurance and Pension Funds, after consultation of the most representative associations and institutions in each case, four vowels appointed representing the insurance institutions, two representing the pension fund management entities, two representing the insurance intermediaries, one representing the private insurance-related prestige corporations, one representing the insurance actuaries, one on behalf of the insurance experts and commissioners of insurance, will be appointed. breakdown, two representatives of trade union organisations and one representing the General Council of the Chambers of Commerce, Industry and Navigation of Spain, and one representing the Insurance Compensation Consortium.
The Minister of Justice will propose the appointment of a vocal; likewise, the Minister of Education, Culture and Sport will propose the appointment of a vocal who will fall to a university professor in commercial matters.
The Minister of Health Services Social Services and Equality will propose the designation of two vowels, representing consumers.
All the vowels will be appointed by the Minister of Economy and Competitiveness.
7. It will be up to the members of the Advisory Board of Insurance and Pension Funds:
(a) Attend meetings and issue written observations as appropriate.
b) Other related to the functions of the Board entrusted to them by the President.
TITLE II
Access to insurance and reinsurance activity
CHAPTER I
Access to the activity of Spanish insurance companies and reinsurers
Section 1. Activity Access Conditions
Article 4. Administrative authorisation.
1. The application for authorisation of access to the insurance activity shall be submitted to the Directorate-General for Insurance and Pension Funds and shall be accompanied by the following supporting documents on compliance with the general requirements laid down in Article 22 of Law 20/2015 of 14 July:
(a) Authorised copy of the deed of incorporation duly registered in the Commercial Registry and, where applicable, in the Register of Cooperative Societies, in which the accreditation of the effectiveness of the subscription and disbursement of the social capital or mutual fund is recorded in the terms laid down in Articles 33 and 34 of Law 20/2015 of 14 July.
b) The relationship of all the partners, with the expression of the shares held in the share capital or the contributions to the mutual fund. In the case of partners holding a significant participation, the questionnaire containing the information included in the list that the Minister of Economy and Competitiveness approves in order to prove that the conditions of suitability referred to in Article 36 of Law 20/2015, of 14 July 2015, are met, shall be accompanied, individually filled out.
(c) The relationship of the partners who have the status of an insurance undertaking, credit institution or investment firm, as well as, where applicable, the shares, irrespective of their value, of which any partner in an insurance undertaking, credit institution or investment firm is the holder.
d) Detailed description of those relationships that constitute close links in accordance with the provisions of Article 9 of Law 20/2015 of 14 July.
(e) a programme of activities containing at least the indications and justifications provided for in Articles 11 and 12.
(f) The relationship of those who, under any title, exercise the effective direction or form part of the government system of the entity, or of the dominant entity, to which the questionnaire containing the information provided in the list that the Minister of Economy and Competitiveness approves in order to prove that the conditions of good repute and fitness referred to in Article 38 of Law 20/2015, of July 14, are fulfilled.
(g) If the entity intends to cover the risks of the civil liability class in motor vehicles, excluding the liability of the carrier, it shall communicate the name and address of the designated representative in each of the Member States of the European Union other than Spain, which is responsible for the processing and settlement of claims occurring in a Member State other than that of the injured party or in a country that is a signatory to the Green Charter system.
(h) If the entity intends to operate in the disease class, it shall indicate whether it will ensure risks in which only pecuniary benefits are granted, risks in which only the provision of services is guaranteed, or whether it is to ensure both types of risks.
(i) If the entity intends to operate in the legal defence branch, it shall indicate the management mode chosen from the options set out in the Annex to Law 20/2015 of 14 July.
2. The authorisation or refusal shall be adopted and shall notify the institution, within a maximum period of six months, of a specific reasoned ministerial order against which the administrative and administrative appeal may be brought.
Article 5. Amendments to the documentation provided.
1. The amendments to the documentation provided which have been used as a basis for granting the administrative authorisation for access to the insurance business shall be notified to the Directorate-General for Insurance and Pension Funds by referring, where appropriate, to the full certification of the agreements of the competent social bodies, within 10 days of the approval of the relevant minutes.
However, in the event of a change in the relationship of partners referred to in Article 4, the provisions of the preceding paragraph shall apply only where the shares are rated as significant or where, without such a rating, they are equal to or greater than five per cent of the capital or voting rights.
Within the maximum period of one month, from the date of its award, it shall be transmitted to the Directorate-General for Insurance and Pension Funds, which is authorized to write lifting to the public of such agreements, where appropriate. In the event that such agreements are to be entered into the Trade Register, the authorized copy of the deed referred to in this paragraph shall be forwarded to the General Directorate of Insurance and Pension Funds within one month of registration.
Any modification of the designated representatives pursuant to the provisions of Article 4.1.g) shall be communicated to the Insurance Compensation Consortium within 10 days of the date of its modification.
2. The amendments to the documentation provided to the Directorate-General for Insurance and Pension Funds or, where appropriate, to the Insurance Compensation Consortium in the case of the representatives for the processing and settlement of claims referred to in Article 4.1.g), which determine that the insurance undertaking no longer complies with the requirements laid down in Law 20/2015 of 14 July and in the royal decree for the granting of the administrative authorisation, shall give rise to the initiation of the administrative procedure for revocation, without prejudice to the possible (a) the procedure for the application of the provisions of Article 16 (6) of that law.
Article 6. Effects of the authorisation.
1. The authorisation shall determine the entry in the register referred to in Article 40 of Law 20/2015 of 14 July 2015. This authorisation shall allow insurance undertakings to carry out operations only in the classes for which they have been authorised and, where appropriate, in the ancillary or ancillary risks, as appropriate, by adjusting their arrangements for the programme of activities, statutes and other requirements determining their granting.
2. The authorisation may cover only part of the risks associated with a class, at the request of the applicant insurance undertaking. In this case, the authorisation procedure and requirements shall be the same as those provided for in Law 20/2015 of 14 July and in this royal decree for the relevant class, but in the programme of activities referred to in Article 32 of that Law and Articles 11 and 12 of this royal decree, the indications, justifications and forecasts shall be appropriate to the specific risks to which the application for authorisation is limited.
3. In the case of sickness, the authorisation may be granted independently for the risks in which the health care service is exclusively provided or exclusively provided.
Article 7. Requirements for the extension of the administrative authorisation of insurance and reinsurance entities.
1. The extension of the administrative authorisation so that an insurance undertaking may extend its business to other classes other than those authorised and the extension of an authorisation comprising only a part of the risks included in a class or allowing the insurer to carry out its business in a territory of a higher scope than initially requested and authorised, shall require administrative authorisation in the terms set out in Article 4.2 and shall be subject to the following requirements being met by the insurance undertaking:
(a) To have basic own funds eligible to cover the minimum capital requirement laid down in Article 78 of Law 20/2015 of 14 July 2015, and eligible own funds to cover the Solvency Capital Requirement provided for in Article 74 of that Act, in relation to the classes in which it is already authorised to operate.
Also, in relation to the classes in which it applies for authorisation, it must maintain basic own funds eligible to cover at all times the minimum capital requirement, as well as eligible own funds to cover the Solvency Capital Requirement.
(b) If for the classes in which the extension of activity is requested, a social capital or a mutual fund is required and an absolute minimum amount of the minimum capital requirement is higher than the previous ones, it must be available to them.
(c) In the case of insurance companies carrying out insurance activities in the life class and applying for administrative authorisation to extend their activity to classes 1 (accidents) or 2 (disease) as provided for in the Annex to Law 20/2015 of 14 July, or, in the case of those entities exercising activity in classes 1 (accidents) or 2 (disease), request administrative authorization to extend their activity to the class of life, they shall certify:
1. That they have basic own funds eligible to cover the absolute minimum of the minimum required capital required of the entities that carry out business in the class of life, as well as to cover the absolute minimum of the minimum required capital required of the entities that carry out activities in classes other than those of life.
2. That they undertake to cover at all times the minimum financial obligations provided for in Article 157 in relation to the insurance companies authorized to operate in the life class and in classes other than those of life.
d) Present a program of activities in the terms provided for in article 32 of Law 20/2015, of July 14 and articles 11 and 12 of this royal decree.
2. The insurance institution shall send the supporting documentation of the fulfilment of the requirements set out in this Article and shall provide certification of the agreement adopted by the competent social body within 10 days of the approval of the relevant minutes.
3. Administrative authorisation shall also be required to enable a reinsurer entity to extend its activity to a different entity than the one initially authorised, which shall be granted subject to the conditions laid down in paragraphs (a), (b) and (d) of paragraph 1.
4. In the case referred to in Article 45.2.d of the Law 20/2015 of 14 July 2015, the social security funds which wish to operate by classes shall, at least, exceed one of the two amounts referred to in Article 128.1.a) and b).
Article 8. Organizations and groups of insurance companies.
The organisations and groups provided for in Articles 25 and 93 of the Law 20/2015 of 14 July 2015 shall report to the Directorate-General for Insurance and Pension Funds, at one month's notice, on the commencement of their activity, providing:
(a) Authorised copy of the writing of the constitution, duly registered, if applicable, in the Trade Register.
b) Statutes of the organization or grouping.
c) Detailed memory of the activities to be performed.
(d) Information relating to the insurance companies that make up them.
Article 9. Social name.
1. No entity may adopt the name that comes using another name, which leads to confusion or refers to another activity other than the insurer itself.
2. It shall be prohibited to include in the name social words which may be interpreted as defining the legal or official legal nature of the entity, unless the entity has such a nature.
Article 10. Registered office.
1. Insurance and reinsurance entities shall have their documentation at the disposal of the Directorate-General for Insurance and Pension Funds at the registered office which they have communicated for registration in the administrative register referred to in Article 40 of Law 20/2015 of 14 July.
2. In the building where the registered office is situated, the registered name of the entity shall be prominently displayed and, in the case of a transfer, the label shall continue with the indication of the new address for a period of not less than three months.
Article 11. Programme of activities.
1. The programme of activities referred to in Article 32 of Law 20/2015 of 14 July 2015 shall contain complete and appropriate indications or justifications, concerning at least:
a) The reasons, causes, and objectives of the project being presented.
(b) The classes in which it is intended to operate, specifying the nature of the risks or commitments that the insurance or reinsurance undertaking intends to cover, as well as the conditions and characteristics of the products.
c) The guiding principles and geographical scope of action.
d) The structure of the organization, including established internal control procedures.
e) The marketing systems.
f) The means of advertising.
g) The governance system.
(h) The means to cover the economic, financial and solvency requirements and to provide assistance which, where appropriate, is committed.
i) Basic own funds eligible to cover the absolute minimum of the minimum capital requirement.
j) The policy on reinsurance and retrocession. In the case of reinsurer entities, the type of reinsurance agreements they intend to conclude with transferor entities. In any event, insurance and reinsurance undertakings shall establish their reinsurance plans in such a way as to relate to their economic capacity for the appropriate technical-financial balance of the institution.
(k) The forecast for the installation costs of the administrative services and the marketing systems, as well as the financial means to deal with such expenditure.
l) The mechanisms adopted for the attention and resolution of complaints and complaints from policyholders, policyholders, beneficiaries, injured parties and associations.
m) appropriate internal control and communication procedures and bodies to prevent and prevent the conduct of money laundering related operations under the conditions laid down in the applicable rules. In the case of acting through insurance intermediaries, specific procedures and criteria shall be established to ensure compliance with the obligations laid down in that regulation.
2. In addition to the above, the programme of activities should include for the first three social exercises:
a) A forecast of the balance sheet.
b) A forecast of the cash flow statement.
(c) On the basis of the balance sheet forecast, an estimate of the future mandatory minimum capital and the future Solvency Capital Requirement, as well as the method of calculation, assumptions and their justification and, where applicable, other financial and accounting statements used to derive such estimates.
(d) The forecasts for the financial means for the coverage of the Solvency Capital Requirement and the Minimum Capital Requirement.
e) With regard to insurance other than life insurance and reinsurance, the following information:
1. No revisions relating to management costs other than installation costs, in particular current overheads and commissions.
2. º revisions concerning premiums or quotas and claims.
(f) As regards life insurance, in addition, a plan showing detailed estimates of revenue and expenditure for both direct operations and reinsurance acceptances and for reinsurance disposals.
3. Where the application for authorisation is to operate at national level, it shall contain the following information:
(a) The territorial scope in which the insurance undertaking initially intends to operate.
b) The provision of means to operate in that initial territorial scope.
c) A forecast of means to expand the scope of action in the national territory.
If the insurance institution subsequently expands its scope to the initially planned, it must inform the General Directorate of Insurance and Pension Funds and provide the supporting documentation of the means with which it will operate.
Article 12. Details of the programme of activities in classes 2, 17, 18 and 19 of the classification of classes of insurance other than life insurance contained in the Annex to the Law on the ordination, supervision and solvency of insurance and reinsurance undertakings.
1. In the fields of sickness, legal protection, assistance and death, in which the insurance undertaking intends to ensure the provision of a service, the programme of activities shall, in addition to the provisions of Article 11, contain indications and justifications relating to the capacity to organise the services to which it is engaged in the contracts. For these purposes, the following documents shall, where appropriate, present:
(a) Explanatory note to the entity's infrastructure, detailing the material and organizational means for the benefit to be performed. It shall also be detailed if the means to be used are the property of the entity or of a third party which does not have the consideration of an insurer, accompanying a copy of the agreement under which it acts.
(b) A reinsurance contract for the provision of services with an insurance undertaking which is duly authorised to operate in the European Economic Area and which has been justified by the Directorate-General for Insurance and Pension Funds or the supervisory authority of its registered office, if the latter is located in another Member State of the European Economic Area, the capacity to provide the services.
2. In the field of legal protection, entities operating in several classes shall be eligible for one of the management arrangements laid down in Annex A (a) (a) to the Law 20/2015 of 14 July, specifying in the activities programme the modality chosen.
Article 13. Implementation of the programme of activities.
During the first three financial years, if the activity of the entity does not conform to its activities program, the General Directorate of Insurance and Pension Funds may take appropriate measures to protect the interests of the policyholders, insured and beneficiaries of insurance contracts, except that it is for having developed the activity in a territorial area lower than the authorized one. In order to verify its implementation, the Directorate-General for Insurance and Pension Funds may require detailed information during this period.
Article 14. Increases and reductions in social capital and mutual fund. Non-cash contributions.
1. Increases and reductions in social capital or mutual funds shall be communicated to the Directorate-General for Insurance and Pension Funds in accordance with the provisions of Article 5.
2. In the cases of increase in social capital or mutual fund by means of non-cash contributions, the report of independent expert must be attached, in the terms of the provisions of the recast text of the Law of Capital Companies, approved by Royal Legislative Decree 1/2010 of 2 July.
The Directorate-General for Insurance and Pension Funds may initiate proceedings for the verification of the value of the assets provided, by means of the capitalisation or imputation of income, the application of average prices on the market or of quotations on domestic or foreign markets, the opinion of experts of the Administration or any other means of such significance.
The procedure shall be initiated by agreement, duly reasoned, with reference to the means of verification indicated, in which the institution shall be informed of the possible insufficiency of the assets of the assets provided, granting the institution a period of 15 days to make claims and to present the documents and justifications it deems relevant.
After the indicated period, the Directorate-General for Insurance and Pension Funds shall give a decision in which it may require the institution to reduce the share capital or mutual fund or to provide other supplementary goods.
In the non-regulated specifically, the legislation of the common administrative procedure will apply.
3. In any document that is quoted the social capital figure must be made reference to the subscribed and the paid-up.
Article 15. Partners. Assessment of the acquisition of significant holdings in insurance and reinsurance entities.
1. In order to assess the suitability of the partners referred to in Article 36 of Law 20/2015 of 14 July, and in order to ensure sound and prudent management, any natural or legal person seeking to acquire or increase a significant participation in an insurance or reinsurance undertaking shall contribute to the notification referred to in Article 85.2 thereof, a questionnaire, completed individually, containing the information approved by the Minister for Economic Affairs and Competitiveness.
The questionnaire will detail, in accordance with the following criteria, the information deemed necessary to carry out the assessment:
(a) The commercial and professional honorability of who intends to acquire or increase significant participation.
b) The commercial and professional honorability and experience of those who are to lead the effective management of the insurance or reinsurance entity as a result of the proposed acquisition or increase.
(c) The financial soundness of those who intend to acquire or increase significant participation in order to meet the commitments assumed in relation to the type of activity pursued or intended to be exercised by the insurance or reinsurance undertaking.
(d) the solvency and capacity of the insurance or reinsurance undertaking to comply in a durable manner with the supervisory rules applicable to it and, in particular, where appropriate, if the group of which it becomes a party has a structure which does not prevent the exercise of effective supervision or the necessary information, and which allows for an effective exchange of information between the competent authorities to carry out such supervision and to determine the division of responsibilities between them.
e) The existence of rational indications to assume that, or have been carried out or attempted, money laundering or terrorist financing operations are being carried out or attempted, or that the said acquisition may increase the risk of such operations being carried out.
(f) The possibility that the institution may be inappropriately exposed to the risk of the non-financial activities of its promoters or where, in the case of financial activities, the institution's stability or control may be affected by the high risk of those activities.
The information to be provided should, in any case, refer to the following aspects:
(a) On the proposed acquirer and, where appropriate, on any person who effectively directs or controls their activities:
1. The identity of the proposed acquirer, the structure of the shareholding and the composition of the management bodies of the proposed acquirer.
2. The commercial and professional honorability of the potential acquirer and, where applicable, any person who effectively directs or controls his or her activities.
3. The commercial and professional honorability and experience of those who are to lead the effective management of the insurance institution as a result of the proposed acquisition or increase.
4. The detailed structure of the group to which it belongs.
5. The existence of links or relationships, financial or otherwise, of the potential acquirer with the acquired entity and its group.
6. The patrimonial and financial situation of the potential acquirer and the group to which it may belong.
7. The solvency and capacity of the insurance undertaking to comply in a durable manner with the rules of management and supervision applicable to it and, in particular, where appropriate, whether the group of which will become a party has a structure which allows effective supervision or the necessary information to be exercised, and which allows for an effective exchange of information between the competent authorities to carry out such supervision and to determine the division of responsibilities between them.
8. The evaluations carried out by international bodies of the rules on the prevention of money laundering and terrorist financing of the country of nationality of the proposed acquirer, except in the case of a Member State of the European Union, as well as the trajectory in the field of prevention of money laundering and the financing of terrorism by the potential acquirer and of the entities incorporated in his group which are not domiciled in the European Union.
In the case of Member States of the European Union, information on this trajectory will be obtained in the consultation that the Directorate General of Insurance and Pension Funds will make to the supervisory authorities of this State in accordance with article 16.1.
b) On the proposed acquisition:
1. The identity of the entity that is the object of the acquisition.
2. The purpose of the acquisition.
3. The degree of exposure of the institution to the risk of the non-financial activities of its promoters or to the risk of financial activities where the stability or control of the institution may be affected.
4. º The amount of the acquisition, as well as the form and time period in which it will be carried out.
5. The effects of the acquisition on capital and voting rights before and after the proposed acquisition.
6. The existence of a concerted action expressly or tacitly with third parties with relevance to the proposed operation.
7. The existence of agreements with other shareholders of the entity subject to the acquisition.
8. No rational hints that allow us to assume:
(i) That, in connection with the proposed acquisition, money laundering or terrorist financing operations have been or have been made or attempted in the manner provided for in the rules for the prevention of such activities; or
(ii) that the said acquisition cannot increase the risk of such operations being carried out.
c) On the financing of the acquisition:
The source of the financial resources used for the acquisition, entities through which they will be channeled and the availability of the same.
d) In addition, it will be required:
1. In the event of a significant participation that produces changes in the control of the entity, a business plan shall be detailed, including information on the strategic development plan of the acquisition, the financial statements and other provisional data. The main changes in the entity to be purchased by the proposed acquirer shall also be detailed. In particular, on the impact that the acquisition will have on the system of government, on the structure and on the resources available, on the internal control bodies and on the procedures for the prevention of money laundering and the financing of terrorism.
2. In the case of a significant participation that does not lead to changes in the control of the entity, the policy of the proposed acquirer shall be reported in relation to the acquisition and its intentions with respect to the entity acquired, in particular, on its participation in the government of the entity.
3. In the previous two cases, the aspects relating to the commercial and professional honorability of administrators and managers who are going to direct the activity of the insurer as a result of the proposed acquisition.
The Directorate-General for Insurance and Pension Funds will advertise the content of the above list of information on its website or website.
2. As soon as it receives the notification referred to in Article 85.2 of Law 20/2015 of July 14, the General Directorate of Insurance and Pension Funds will request, in the cases in which it comes in accordance with the regulations in force in the field of money laundering, the report of the Executive Service of the Commission for the Prevention of the Money Laundering and Monetary Violations, in order to obtain an adequate assessment of this criterion. With that request, the General Directorate of Insurance and Pension Funds will transmit to the Executive Service how much information it has received from whom it is proposed to acquire or increase the participation or to have, in exercise of its competences, that it can be relevant for the assessment of this criterion. The Executive Service shall forward the report to the General Directorate of Insurance and Pension Funds within the maximum period of thirty working days from the day following the day on which the application is received with the information indicated.
The calculation of the 30 working days provided for the Executive Service of the Commission for the Prevention of the Money Laundering and Monetary Violations to refer your report to the General Directorate of Insurance and Pension Funds, will be interrupted in the same terms in which it interrupts the calculation of the assessment period in accordance with the provisions of the following paragraph.
3. The Directorate-General for Insurance and Pension Funds shall have a maximum period of 60 working days from the date on which it has made the acknowledgement of receipt of the notification referred to in Article 85.2 of Law 20/2015 of 14 July 2015 to assess the operation and, where appropriate, to oppose the acquisition of the significant participation or of each of its increases which match or exceed the limits referred to in Article 85 (1) and (2) of the Act or which make the insurance undertaking in a company controlled by the holder of the significant holding.
The acknowledgement of receipt shall be made in writing within two working days from the date of receipt of the notification by the Directorate-General for Insurance and Pension Funds, provided that it is accompanied by any documentation that is required, and the exact date on which the assessment period expires shall be indicated. If the notification does not contain all the information required, it shall be required to whom it is proposed to acquire or increase the participation so that, within ten days, the required information is remedied or accompanied, indicating that, if it does not do so, the proposed acquisition shall be withdrawn from it.
If deemed necessary, the Directorate-General for Insurance and Pension Funds may request additional information which, in general, should be required in accordance with the provisions of this Article, in order to assess the proposed acquisition accordingly. This request shall be made in writing and shall specify the necessary additional information. Where the request for additional information is made within the first 50 working days of the period laid down in the first subparagraph of this paragraph, the Directorate-General for Insurance and Pension Funds may interrupt the calculation of the same, for a single time, during the period between the date of the request for additional information and the date of receipt thereof. This interruption may be for a maximum of 20 working days, which may be extended for up to 30 days if the proposed acquisition or increase is intended to be carried out by a natural or legal person who:
(a) is domiciled or authorised outside the European Union; or
b) is not subject to financial supervision in Spain or the European Union.
4. The opposition of the Directorate-General for Insurance and Pension Funds to the intended acquisition or increase shall be based on the lack of suitability of the acquirer on the basis of the criteria and aspects set out in paragraph 1 of this Article, or on the fact that the information provided for the assessment is incomplete. If that Directorate-General does not object to the acquisition or increase of significant participation, it may set a maximum period for the acquisition and extend it where appropriate.
5. If, after the completion of the evaluation, the Directorate-General for Insurance and Pension Funds will raise objections to the proposed acquisition, it shall inform the person who intends to acquire or increase the participation, in writing and motivating its decision, within two working days, without in any case being able to exceed the maximum period for carrying out the assessment. If the Directorate-General for Insurance and Pension Funds does not take a decision within the assessment period, the acquisition or increase of the participation may be carried out.
6. The Directorate-General for Insurance and Pension Funds may not impose prior conditions as to the amount of the share to be acquired, nor shall it take into account the economic needs of the market when carrying out the assessment.
7. The resolution of the Directorate-General for Insurance and Pension Funds shall, where appropriate, collect any comments or reservations expressed by the authority responsible for the supervision of the acquirer.
At the request of the acquirer or ex officio, the Directorate-General for Insurance and Pension Funds may make public the reasons for its decision, provided that the information disclosed does not affect third parties outside the operation.
8. Where the Directorate-General for Insurance and Pension Funds receives two or more notifications referring to the same institution, it shall treat all those who intend to acquire a participation in a non-discriminatory manner.
Article 16. Collaboration between supervisory authorities for the assessment of the acquisition of significant holdings in insurance and reinsurance entities.
1. For the purposes of the assessment referred to in Article 15, the Directorate-General for Insurance and Pension Funds shall consult the authorities responsible for the supervision of the acquirers of other Member States of the European Economic Area provided that the acquirer is:
(a) A credit institution, an insurance or reinsurance undertaking, an investment firm or a management company of collective investment institutions or pension funds authorised in another Member State of the European Economic Area.
(b) The parent company of a credit institution, an insurance or reinsurance undertaking, an investment firm or a management company of collective investment institutions or pension funds authorised in another Member State of the European Economic Area.
(c) A natural or legal person exercising the control of a credit institution, an insurance or reinsurance undertaking, an investment firm or a management company of collective investment institutions or pension funds authorised in another Member State of the European Economic Area.
2. The Directorate-General for Insurance and Pension Funds, when carrying out the assessment referred to in the previous paragraph, shall consult the Bank of Spain and the National Securities Market Commission in the field of its powers.
3. The Directorate-General for Insurance and Pension Funds shall reciprocate the consultations referred to it by the competent authorities of other Member States, and, where appropriate, the Banco de España or the National Securities Market Commission. In addition, all information that is essential for the assessment, as well as the other information requested, shall be made available to them on their own initiative and without undue delay, provided that it is appropriate for the assessment.
Article 17. Computation of significant holdings in insurance and reinsurance entities.
1. For the purposes of Article 85 (3) of Law 20/2015 of 14 July 2015, the shares, contributions or voting rights to be included in the calculation of a holding shall include:
(a) Those acquired directly by the proposed acquirer.
b) Those acquired through companies controlled or participated by the potential acquirer.
c) Those acquired by companies incorporated in the same group as the potential acquirer, or participated by entities in the group.
d) Those acquired by other persons acting on behalf of the potential acquirer or in concert with him or with companies in his group.
In any case, they will be included:
1. The voting rights which may be exercised under an agreement with a third party obliging the proposed acquirer and the third party itself to adopt, by means of the concerted exercise of the voting rights they hold, a lasting common policy in relation to the management of the insurance undertaking or which is intended to influence in a relevant manner therein.
2. The voting rights that may be exercised under an agreement with a third party, which provides for the temporary transfer and for consideration of the voting rights in question.
e) Those with the potential acquirer linked to shares acquired through a person.
(f) The voting rights that may be controlled, expressly stating the intention to exercise them, as a consequence of the deposit of the corresponding shares as collateral.
g) The voting rights that may be exercised under agreements to establish a right of usufruct on shares.
(h) Voting rights that are linked to shares deposited in the proposed acquirer, provided that the acquirer may exercise it discretionally in the absence of specific instructions from the shareholders.
(i) The voting rights that the proposed acquirer may exercise as a proxy, when it may exercise it at its discretion in the absence of specific instructions from the shareholders.
(j) Voting rights that may be exercised under agreements or business as provided for in points (f) to (i), concluded by an entity controlled by the potential acquirer.
2. The voting rights shall be calculated on the whole of the shares allocated to them, even in cases where the exercise of such rights is suspended.
3. For the purposes of Article 85 (3) of Law 20/2015 of 14 July 2015, the shares, contributions or voting rights to be included in the calculation of a holding shall not include:
(a) Shares acquired exclusively for clearing and settlement purposes within the usual short settlement cycle. For these purposes, the maximum duration of the usual short-term settlement cycle shall be three trading days from the transaction and shall apply both to transactions carried out on an official secondary market or to another regulated market as well as to those made outside the market. The same principles shall also apply to transactions carried out on financial instruments.
(b) Shares which may be held for having provided the assurance or placement of financial instruments on the basis of a firm commitment, provided that the corresponding voting rights are not exercised or used to intervene in the management of the insurance undertaking and are transferred within one year of its acquisition.
(c) Shares held under a contractual relationship for the provision of the service of administration and custody of securities, provided that the entity is only able to exercise the voting rights inherent in such actions with instructions issued by the owner, in writing or by electronic means.
(d) Shares or shares acquired by a market maker acting in their status as such, provided that:
1. "1" is authorised to operate as such under the provisions transposing Directive 2014 /65/EU of the European Parliament and of the Council of 15 May 2014 on the markets for financial instruments and amending Directive 2002/92/EC and Directive 2011 /61/EU; and
2011 /61/EU; and2. Do not intervene in the management of the insurance undertaking concerned, or exercise any influence over the management of the insurer to acquire such shares, or support the price of the action in any other way.
(e) Shares or units incorporated in a managed portfolio are discretionary and individualised, provided that the investment firm, the management company of collective investment institutions or credit institution, can only exercise the voting rights inherent in such actions with precise instructions on the part of the client.
4. In order to carry out the calculation of a holding for the purposes of paragraph 1, where the potential acquirer is a dominant entity of a management company of collective investment institutions or of an entity exercising control of an investment firm, the following shall be taken into account:
(a) The dominant entity of a management company of collective investment institutions shall not be required to add the proportion of voting rights that it attributes to the shares held by the share of voting rights of shares that are part of the equity of the collective investment institutions managed by that management company provided that it exercises the voting rights independently of the dominant entity.
notwithstanding the foregoing, the provisions of the foregoing paragraphs shall apply where the dominant entity or other entity controlled by it has invested in shares that integrate the assets of the collective investment institutions managed by the management company and that has no discretion to exercise the corresponding voting rights and can only exercise them in accordance with the direct or indirect instructions of the dominant entity or another entity controlled by it.
(b) The entity exercising the control of an undertaking providing investment services shall not be required to aggregate the proportion of voting rights that it holds for the shares held by the entity to the proportion that it manages on an individual basis as a result of the provision of the portfolio management service, provided that the following conditions are met:
1. That the investment firm, the credit institution or the management company of collective investment institutions are authorised for the provision of the portfolio management service in the terms set out in Article 140.d) and 145 of the recast text of the Securities Market Act, approved by Royal Legislative Decree 4/2015 of 23 October;
2. That you may exercise only the voting rights inherent in such actions by following written instructions or by electronic means or, failing that, that each of the portfolio management services is provided independently of any other service and under conditions equivalent to those provided for in Law 35/2003 of 5 November, of collective investment institutions, by the creation of appropriate mechanisms; and
3. You exercise your voting rights independently of the dominant entity.
By way of derogation from this paragraph, the provisions of the preceding paragraphs shall apply where the dominant entity or other entity controlled by it has invested in shares managed by an investment firm of the group and is not entitled to exercise the voting rights attached to such shares and may exercise only the voting rights corresponding to those shares following direct or indirect instructions from the dominant entity or another entity controlled by it.
5. Indirect holdings shall be taken for their value when the proposed acquirer has the control of the holding company, and, as a result of applying the percentage of participation in the holding, otherwise.
When a significant share is held, in whole or in part, indirectly, changes in the persons or entities through which such participation is held shall be communicated in advance to the General Directorate of Insurance and Pension Funds, which may be opposed as provided for in Article 85 (2) of Law 20/2015 of 14 July.
6. Controlled companies shall be considered to be those in which the proposed acquirer has control over any of the assumptions provided for in Article 42 of the Trade Code, and those in which it is held, directly or indirectly, at least twenty per cent of the voting rights or the capital of an undertaking or entity.
Article 18. Honorability and fitness of those who exercise the effective management or perform functions that integrate the entity's governance system.
1. Commercial and professional honorability in those who have been showing a personal, commercial and professional conduct that does not raise doubts about their ability to perform a sound and prudent management of the entity.
2. To assess the concurrency of commercial and professional honorability, all available information must be considered, including:
(a) The trajectory of the charge in question in its relationship with the regulatory and supervisory authorities; the reasons for which it would have been dismissed or terminated in previous posts or positions; its history of personal solvency and performance of its obligations; or if it had been disabled under Law 22/2003, of 9 July, Insolvency, until the period of disablement fixed in the judgment of qualification of the contest and the broken and the unrehabilitated have been completed in proceedings before the entry into force of the said contest. law.
b) The conviction by the commission of crimes or misconduct and the sanction by the commission of administrative violations taking into account:
1. The intentional or imprudent character of the offense, lack or administrative infraction.
2. º If the conviction or sanction is firm or not.
3. º The severity of the sentence or penalty imposed.
4. The criminalization of the facts that led to the conviction or punishment, especially if it were crimes against the patrimony, money laundering, against the socioeconomic order and against the Public Finance and Social Security, or to suppose infraction of the regulatory norms of the exercise of the activity of the insurance, banking or the market of values, or of protection of the consumers.
5. º If the facts that led to the conviction or sanction were made for the benefit of himself or to the detriment of the interests of third parties whose administration or business management would have been entrusted to him, and where appropriate, the relevance of the facts for which the conviction or sanction occurred in relation to the functions assigned to him or to be assigned to the office in question in the insurance or reinsurer entity.
6. The prescription of unlawful acts of a criminal or administrative nature or the possible extinction of criminal liability.
7. The existence of mitigating circumstances and subsequent conduct from the commission of the offence or offence.
8. The reiteration of convictions or penalties for offences, offences or offences.
The entities shall comply with the reporting obligations necessary for the assessment provided for in this letter, by sending to the Directorate-General for Insurance and Pension Funds a criminal record of the person subject to assessment, without prejudice to the powers of that Directorate-General for Insurance and Pension Funds in order to obtain directly from the person whose good repute is the subject of an assessment of all the additional information necessary for the assessment of the elements referred to in this letter.
The Directorate-General for Insurance and Pension Funds will also consult the databases of the European Insurance and Occupational Pensions Authority, the European Banking Authority and the European Securities and Markets Authority on administrative sanctions.
c) The existence of relevant and well-founded investigations, both in criminal and administrative matters, on any of the facts mentioned in the previous letter. There shall be no lack of good repute on the basis of the fact that, in the course of his duties, a counsellor, director-general or similar person, or other employees responsible for the functions of government of the institution, are the subject of such investigations.
If, during the course of your activity, the person assessed any of the above circumstances, and is relevant to the assessment of his or her good repute, the insurer or reinsurer shall inform the General Directorate of Insurance and Pension Funds within a maximum of 15 working days of his/her knowledge.
The members of the administrative body, directors-general or similar and other employees who are responsible for the governance functions of the insurer or reinsurer, and who have knowledge that they are in any of the circumstances described in this paragraph, shall inform their entity.
The processing of the data that the insurance and reinsurance entities carry out in the framework of the provisions of this precept shall be limited to the exclusive purpose of providing the information to the General Directorate of Insurance and Pension Funds, with the number of persons of the entity who may have access to that data expressly limited.
3. In relation to fitness, they shall be deemed to have adequate knowledge and experience to perform their duties in insurance or reinsurance entities who are trained in the appropriate level and profile, in particular in the area of insurance and financial services, and practical experience derived from their previous occupations for sufficient periods of time. This will take into account both the knowledge acquired in an academic environment and the experience in the professional development of functions similar to those that will be developed in other entities or companies.
In the assessment of practical and professional experience, particular attention must be paid to the nature and complexity of the positions held, the powers and powers of decision and responsibilities assumed, as well as the number of persons in charge, the technical knowledge reached on the financial sector and the risks to be managed.
In any case, the knowledge and experience criteria shall be applied by assessing the nature, size and complexity of the activity of each financial institution and the specific roles and responsibilities of the post assigned to the person assessed.
The management body of an insurance or reinsurance undertaking shall also have members who, taken as a whole, have sufficient knowledge and professional experience in at least the following areas:
a) Insurance and financial markets.
b) Strategies and business models.
c) Governance system.
d) Financial and actuarial analysis.
e) Regulatory framework.
Article 19. Administrative registration.
A book shall be opened for each of the types of entities and persons referred to in Article 40 of Law 20/2015 of 14 July.
Article 20. Registration of acts relating to insurance companies and reinsurers and their groups.
1. They are acts subject to registration in the administrative register referred to in Article 40 of Law 20/2015, of July 14, the initial authorization, the extension of the authorization, those relating to the establishment of branches or to the exercise of the activity in freedom to provide services provided for in that law and in this royal decree, changes of social denomination, changes of registered office, increase or reduction of social capital or mutual fund and other statutory modifications, significant participations, transfer of portfolio, merger, transformation, transfer asset and liabilities, division, membership of a group, economic interest groups and temporary joint ventures, revocation of the administrative authorisation and rehabilitation thereof, dissolution agreement, appointment and termination of liquidators, domicile of the liquidator's office, intervention in the liquidation, termination and cancellation of the authorisation to operate, as well as the penalties which, where appropriate, would have been imposed, except for the private one. It shall also be the subject of registration of the proxies granted to the subscription agencies, as well as the branches or risks that comprise such proxies.
2. In relation to the groups and sub-groups of Article 40.1.c) of Law 20/2015 of 14 July, all entities forming part of them shall be entered, irrespective of their legal nature and social object, indicating their percentage of participation.
3. Where registration is the cause of the Administration's agreements, the seat shall be made on its own initiative on the basis of the relevant administrative act. Where appropriate, the institutions shall request the entry of the relevant agreements within 15 days of the date on which they were adopted, to which effect the certification of the relevant social bodies shall be transmitted.
In any case, the corresponding public deed must be filed, justifying its registration in the Commercial Registry, within one month from its registration in the Register.
Article 21. Registration of acts relating to persons exercising the effective management of insurance and reinsurance undertakings.
1. They are acts subject to registration in the administrative register referred to in Article 40 of Law 20/2015 of 14 July, the appointment, suspension, revocation, cessation of any cause and disablement, as well as the penalties which, if any, would have been imposed on them, except for the private one. The name or social name, address, nationality, sex, number of the national identity document, and in the case of foreign nationals, where applicable, that of the residence permit or passport shall be entered. Where the effective management is carried out by legal persons, the data relating to its appointed representatives shall be entered.
2. Where the registration brings cause for agreements of the Administration, the seat shall be carried out on its own initiative on the basis of the corresponding administrative act. Where the insurance institutions act, they must apply for the registration of the relevant agreements within 15 days of the date on which the appointment or revocation has been agreed, to which effect the certification of the relevant social bodies shall be transmitted. Where it is due in accordance with applicable law, the corresponding public deed shall be filed, as well as justification for its registration in the Commercial Registry, within one month of its registration in that Register.
Article 22. Registration of the acts relating to the organisations for the distribution of the risk coverage between insurance entities or for the provision of common services related to the activity of the insurance institutions and their senior positions.
1. They are acts subject to registration in the administrative register referred to in Article 40 of Law 20/2015 of 14 July, the initial communication of activity, changes in the name, object and registered office, and other changes affecting the organisations referred to in this Article.
2. It shall also include in the said Register, in the book relating to the required organisation, the relationship of the entities which it comprises and the persons to whom the administration or address is conferred, the same data as provided for in Article 21.2.
3. Where the registration in the register brings cause of agreements of the Administration, the seat shall be practiced on the basis of the corresponding administrative act. Where appropriate, the organisations concerned must apply for the registration of the relevant agreements within 15 days of the date on which they were adopted, to which effect the certificate issued by the competent body shall be referred to. Where it is due in accordance with applicable law, the corresponding public deed shall be filed, as well as justification for its registration in the Commercial Registry, within one month of its registration in that Register.
Article 23. Registration of the special control measures.
1. The special control measures shall be entered in the Register referred to in Article 40 of Law 20/2015 of 14 July, when it is agreed to give publicity to them in accordance with the provisions of Article 213.
2. In any event, the special control measures provided for in Articles 163 and 165 of Law 20/2015 of 14 July 2015 shall be registered.
Article 24. Cancellation of the registration of the imposed sanctions.
The entries relating to the penalties imposed shall be cancelled in the Register provided for in the preceding articles, ex officio or at the request of the person concerned.
The cancellation of trade will proceed when there has been a resolution or a firm judgment of the action brought against the sanction.
The person concerned shall have the right to request from the Directorate-General for Insurance and Pension Funds the cancellation of the registration of the penalty imposed on him, provided that no new offence has been committed, within two years of the date of the finality of the penalty for the case of the minor offences, five years in the case of the serious and eight years in the case of the very serious ones.
The initiation of an administrative penalty file shall interrupt the time limits provided for in the preceding paragraph. If the procedure concludes with the imposition of a new sanction, the registration of the new sanction will be cancelled when the cancellation period applicable to the new sanction takes place, unless the period of cancellation of any previous sanction entered is higher, in which case it will be attended to this last date of cancellation.
Produced the cancellation, the General Directorate of Insurance and Pension Funds will not be able to take into consideration the penalties whose registration would have been cancelled for the purposes of the provisions of the articles 36, 38 and 85 of the Law 20/2015, of 14 July and 15 of this royal decree.
Section 2. Activity of Spanish insurance companies and reinsurers under the right of establishment and freedom to provide services in the European Union
Article 25. Duty of information to the policyholder.
1. Prior to the conclusion by a Spanish insurance undertaking of an insurance contract, other than the insurance contract for major risks, under the right of establishment or under the freedom to provide services, the institution must inform the policyholder of the insurance that it is domiciled in Spain or, if appropriate, inform the State of the branch with which the contract is to be concluded, which shall also be included in the documents which are, if necessary, delivered to the policyholder or the insured.
2. The policy and any other document in which any insurance contract is formalised under the right of establishment or under the freedom to provide services, including insurance contracts for major risks, must indicate the address of the registered office or, where appropriate, the branch of the Spanish insurance undertaking providing the cover; and, in the case of contracts for liability insurance in motor vehicles, excluding liability of the carrier, concluded under the freedom to provide services, must be stated also the name and address of the representative referred to in Article 58.1 of Law 20/2015 of 14 July, when required by the Member State of location of the risk.
Article 26. The duty of statistical information relating to the cross-border activities of the Spanish insurance companies.
1. In accordance with Article 49 of Law 20/2015 of 14 July 2015, Spanish insurance companies operating under the right of establishment or under the freedom to provide services shall report to the Directorate-General for Insurance and Pension Funds separately for the operations carried out in each of those schemes and per Member State, on the amount of premiums, claims and commissions, without deduction of reinsurance. The information will be provided with separation between life insurance and insurance other than life insurance, and within these by lines of business.
With regard to civil liability insurance in motor vehicles (class 10), excluding the liability of the carrier, the entity shall also inform the Directorate-General for Insurance and Pension Funds of the frequency and average cost of the claims.
The Directorate-General for Insurance and Pension Funds shall provide such information, on an aggregated basis, to the supervisory authorities of the Member States concerned upon request.
2. In the case of Spanish insurance companies operating under the right of establishment, they shall forward to the Directorate-General for Insurance and Pension Funds information on the activity carried out in each Member State of the European Economic Area in accordance with the rules of the European Union of direct application.
Spanish insurance companies operating under the freedom to provide services shall report separately from the operations they perform from the headquarters of those other entities which are carried out from branches established in other Member States.
Article 27. General remission.
In all other cases, Spanish insurance companies operating under the right of establishment or under the freedom to provide services will comply with the provisions of Law 20/2015 of 14 July, with the exception of the rules contained in Article 95.2 of the Law and 23.4 of the consolidated text of the Legal Statute of the Insurance Compensation Consortium, approved by Royal Legislative Decree 7/2004 of 29 October, when the risks are located outside Spain.
Article 28. Establishment of branches.
1. Any Spanish insurance undertaking which proposes to establish a branch in the territory of another Member State shall communicate it to the Directorate-General for Insurance and Pension Funds, accompanying the following information:
(a) The Member State in whose territory the branch is proposed to be established.
(b) Programme of activities, indicating the type of operations envisaged and the organic structure of the branch.
c) Address in the Member State of the branch where they can claim and deliver the documents to you.
(d) Name of the general manager of the branch, which must be given sufficient powers to bind the entity to third parties and to represent it before the judicial authorities and bodies of the Member State of the branch.
(e) If the insurance undertaking intends to have its branch cover the risks of civil liability in motor vehicles, excluding the liability of the carrier, it shall declare that it has been associated with the national office and the national guarantee fund of the Member State of the branch.
(f) If the entity intends to cover the risks of the legal defence branch, the choice between the different management modalities provided for in the Annex to the Law 20/2015 of 14 July 2015.
2. The programme of activities referred to in the preceding paragraph shall contain indications or justifications relating to:
(a) The transactions that the institution intends to carry out, specifying the nature of the risks or commitments it intends to ensure, together, where appropriate, with the ancillary and ancillary risks, in accordance with the provisions of the Annex to Law 20/2015 of 14 July.
(b) The guiding principles for reinsurance.
(c) forecasts of the costs of installation of the administrative services and, where appropriate, of the production network; the financial means to deal with them and, if the risks to be covered are classified in class 18 of paragraph A (a) of the Annex to Law 20/2015 of 14 July 2015, the means available to the institution.
d) The structure of the branch organization.
e) The forecasts, for the first three social years, of the management costs other than those of installation, as well as of the premiums or contributions and of the claims for the insurance other than life insurance.
3. The institution shall submit the documentation referred to in the previous two paragraphs in the Directorate-General for Insurance and Pension Funds, accompanied by a sworn translation into the official language of the Member State in which the insurance undertaking intends to establish the branch.
4. Within three months of receipt of the complete information referred to in the preceding paragraphs, and no objection has been made, the Directorate-General for Insurance and Pension Funds shall forward to the supervisory authority of the Member State of the branch the sworn translation referred to in paragraph 3, accompanied by certification in Spanish, that the insurance institution has the legally enforceable Solvency Capital Requirement and the branches and risks in which it is authorised to operate, and indicating the precise name and address of the registered office of the same. The Directorate-General for Insurance and Pension Funds shall inform the insurance undertaking of such communication.
5. Any draft amendment to the information contained in paragraphs (b), (c) or (d) of paragraph 1 shall be notified by the insurance undertaking at the same time to the Directorate-General for Insurance and Pension Funds and to the supervisory authority of the Member State of the branch.
The insurance institution shall submit all documents containing such changes in the Directorate-General for Insurance and Pension Funds, accompanied by a sworn translation into the official language of the Member State of the branch.
Within one month, from the full receipt of the draft amendment, and none of the assumptions provided for in Article 47.3 of Law 20/2015 of 14 July 2015, the Directorate-General for Insurance and Pension Funds shall forward to the supervisory authority of the Member State of the branch the sworn translation referred to in the preceding paragraph, and shall inform the insurance institution thereof.
The insurance institution may adjust its activity under the right of establishment to the draft amendment since it receives the communication from the supervisory authority of the branch Member State referred to in paragraph 47.4 of Law 20/2015 of 14 July, or failing that, from the date of one month from the receipt of the information from the Directorate-General for Insurance and Pension Funds referred to in this Article.
Article 29. Communication to operate in freedom to provide services.
1. Any Spanish insurance undertaking which intends to exercise for the first time in one or more Member States activities under the freedom to provide services shall inform the Directorate-General for Insurance and Pension Funds of its project, stating:
(a) The Member State in whose territory it is intended to operate.
(b) The nature of the risks or commitments that the insurance undertaking intends to cover in the Member State of the freedom to provide services.
(c) If the entity intends to cover the risks of the civil liability class in motor vehicles, excluding the liability of the carrier, the entity's declaration that it has been associated with the national office and the national guarantee fund of the Member State of the freedom to provide services, as well as the name and address of the representative in charge of dealing with complaints by third parties with sufficient powers to represent the insurance undertaking and to defend it before the courts and authorities (a) the administrative burden of the State in respect of the claims.
(d) If the entity intends to cover the risks of the legal defence branch, the choice between the different management modalities provided for in the Annex to the Law 20/2015 of 14 July 2015.
The entity shall submit to the Directorate-General for Insurance and Pension Funds the documentation indicated accompanied by a sworn translation into the official language of the Member State in which the insurance undertaking intends to pursue the activity under the freedom to provide services.
2. If the Directorate-General for Insurance and Pension Funds does not object to the project, within one month of the receipt of all the documents referred to in paragraph 1, it shall forward to the supervisory authority of the Member State of the supply of services the sworn translation referred to in the previous paragraph, accompanied by a certificate in Spanish that the insurance institution has the Solvency Capital Requirement and the branches and risks in which it is authorised to operate, indicating the precise name and address of the registered office of the insurer, and shall inform the the same time, by registered post, to the insurance undertaking for the submission of this file.
3. The insurance undertaking may start its business from the date on which the Directorate-General for Insurance and Pension Funds notifies it that it has submitted the communication referred to in paragraph 2.
4. The Directorate-General for Insurance and Pension Funds may object to the activity under the freedom to provide services, giving the reasons for the reasoned decision, which shall be notified to the institution within the time limit laid down in paragraph 2.
5. Any draft amendment of the nature of the risks or commitments which the insurance undertaking intends to cover under the freedom to provide services shall be notified by the insurance undertaking to the Directorate-General for Insurance and Pension Funds.
The insurance institution shall submit all documents containing such amendments in the Directorate-General for Insurance and Pension Funds, accompanied by a sworn translation into the official language of the Member State of the provision of services.
Within one month of the full receipt of the draft amendment, and no objection has been made, the Directorate-General for Insurance and Pension Funds shall forward to the supervisory authority of the Member State of the provision the sworn translation referred to in the preceding paragraph, and shall inform the insurer.
The insurance undertaking may commence its activity under the freedom to provide services in accordance with the draft amendment from the date on which the Directorate-General for Insurance and Pension Funds notifies you that it has submitted the communication referred to in the preceding paragraph.
CHAPTER II
Access to the activity in Spain of insurance and reinsurance entities from other Member States of the European Union
Section 1. General Provisions for Insurance and Reinsurance Entities
Article 30. Management and supervision of authorised insurers.
1. The lack of presentation by insurance companies domiciled in another Member State of the European Economic Area operating in Spain under the right of establishment or under the freedom to provide services of the documents required by Article 51.2 of Law 20/2015 of 14 July 2015 shall be considered as an irregular situation as provided for in paragraph 3 of this Article, without prejudice, where appropriate, to the corresponding administrative penalty.
For these purposes, these insurance companies will be subject to inspection by the Directorate General of Insurance and Pension Funds in the terms of Article 109 of Law 20/2015, of July 14 and of Title IV of this royal decree, being of application the provisions of article 94 of the aforementioned law and articles 117 and following of this royal decree, in relation to the models of policies.
2. In the inspection referred to in Article 109 of Law 20/2015, of July 14 and Title IV of this royal decree, it will be possible to examine the documentation of these entities or to request that all the information deemed necessary for the exercise of the control of compliance with the applicable laws and regulations, as well as the conditions in which they exercise their activity in Spain, be presented or submitted.
3. If the Directorate-General for Insurance and Pension Funds finds that an insurance undertaking referred to in paragraph 1 does not comply with the laws and regulations referred to in that paragraph, it shall require it, within the time limit specified by that Directorate, to accommodate its action to those rules.
If the time limit is passed, the entity persists in its irregular situation, the Directorate-General for Insurance and Pension Funds shall inform the supervisory authority of the home Member State, in order to take the appropriate measures to ensure that the insurance institution terminates that irregular situation and notifies them to the Directorate-General for Insurance and Pension Funds.
If, due to a lack of adaptation of the relevant measures or because the adopted measures were inadequate, the infringement of the legal order would persist, the General Directorate of Insurance and Pension Funds may proceed in accordance with Article 52.2 of Law 20/2015 of 14 July.
In case of urgency, the measures referred to in the preceding paragraph may be adopted by the Directorate-General for Insurance and Pension Funds, without the need for the requirement and information required by the first paragraph of Article 52.2 of Law 20/2015 of 14 July, and shall immediately inform the supervisory authority of the home Member State of the insurance institution.
Section 2. Activity under the right of establishment of insurance and reinsurance undertakings domiciled in other Member States
Article 31. Determination of the conditions of exercise.
1. Where the supervisory authority of the home Member State of the insurance undertaking seeking to operate in Spain under the right of establishment communicates in the Directorate-General for Insurance and Pension Funds that intention, it shall accompany the documentation referred to in Article 28, as well as a certificate stating that the institution has the minimum capital requirement, the Solvency Capital Requirement and the classes or risks in which it is authorised to operate.
The documentation indicated, except for the solvency certificate, will be presented in Spanish.
The General Directorate of Insurance and Pension Funds within two months, counted from the moment it receives from the supervisory authority of the home Member State all the documentation indicated, may indicate to the aforementioned authority the conditions in which, for reasons of general interest, the activity in Spain must be exercised.
The branch will be able to establish itself and start its activity in Spain since the supervisory authority of the home Member State notifies you that the Directorate General of Insurance and Pension Funds gives its conformity or makes known the conditions, in which, for reasons of general interest, the activities in Spain must be exercised. In any event, the insurance undertaking may commence its business when the two-month period provided for in the preceding subparagraph is concluded without having received such notification.
2. Any draft amendment to the insurance business under the right of establishment affecting any of the aspects referred to in Article 28.1 (b) to (e) shall be notified by the insurance undertaking in the Directorate-General for Insurance and Pension Funds by means of an affidavit to Spanish.
The Directorate-General for Insurance and Pension Funds may, within one month of the notification referred to in the previous paragraph, communicate to the supervisory authority of the home Member State the conditions under which, for reasons of general interest, the insurance activity in Spain must be exercised.
The insurance institution may adjust its activity under the right of establishment according to the draft amendment since the General Directorate of Insurance and Pension Funds to know the general interest conditions referred to in the preceding paragraph or, failing that, over the period of one month from the notification of the institution to that Directorate-General for Insurance and Pension Funds and provided that the supervisory authority of the home Member State has referred the draft amendment to the management centre in that period.
3. Both the establishment of the branch and the modification of the activity are acts subject to registration in the administrative register provided for in Article 40 of Law 20/2015, of July 14.
Article 32. Supervision of branches in Spain by the authorities of the State of origin.
To the inspections carried out by the Directorate General of Insurance and Pension Funds to branches in Spain of insurance companies domiciled in another Member State of the European Economic Area, for the purposes of exercising on them the supervision that according to Article 115 of Law 20/2015, of July 14, it is up to him, will apply to them the provisions of articles 121 and 122 of the aforementioned law and in Title IV of this royal decree.
Article 33. Reinsurers domiciled in other Member States of the European Economic Area.
1. Reinsurers domiciled in European Economic Area countries other than Spain which have obtained the authorisation to operate in the Member State of origin may exercise their activities in Spain under the right of establishment or freedom to provide services, without the need for administrative authorisation or prior communication.
2. Reinsurers operating in Spain under the right of establishment or freedom to provide services shall comply with the provisions laid down for reasons of general interest and those of management and supervision which, where appropriate, are applicable. In order to verify this compliance, all documents required by the General Directorate of Insurance and Pension Funds must be presented on the same terms as the Spanish reinsurers. For these purposes, those reinsurers shall be subject to the inspection by the General Directorate of Insurance and Pension Funds in the terms laid down in Law 20/2015 of 14 July and in this royal decree.
3. The provisions of Article 52.2 of Law 20/2015 of 14 July 2015 shall apply, except for the reference to Article 120 thereof.
They will be able to advertise their services in Spain on the same terms as the Spanish insurance companies and subject to identical management and supervision.
4. Where the supervisory authority of a reinsurer entity domiciled in a Member State of the European Economic Area other than Spain, which operates under the right of establishment or under the freedom to provide services, revokes the administrative authorisation, the Directorate-General for Insurance and Pension Funds shall prohibit the reinsurance undertaking from contracting in both schemes. In this case, the Directorate-General for Insurance and Pension Funds may adopt, in collaboration with that authority, the special control measures provided for in Law 20/2015 of 14 July.
5. If the supervisory authority of that Member State has taken the measure of special control of the prohibition of disposal and request of the Directorate-General for Insurance and Pension Funds, which takes the same measure on the assets of the reinsurer entity situated in Spanish territory, with an indication of those who are to be subject to it, the supervisory authority of that Member State has adopted the measure of special control of the prohibition to dispose of and apply for the same measure.
6. The Directorate-General for Insurance and Pension Funds may require the supervisory authorities of other Member States of the European Economic Area to provide information on the status and development of settlement procedures to be carried out in respect of entities subject to the supervision of those authorities.
7. If a reinsurance institution domiciled in another Member State of the European Economic Area transfers its portfolio to a Spanish insurer or reinsurer, the Directorate-General for Insurance and Pension Funds shall certify, within three months of receipt of the request by the authority of the home Member State of the transferor reinsurer, that the transferee has, in view of the transfer, the necessary solvency margin. If, on the expiry of that period, the Directorate-General has not acted, the certification shall be understood. In this case, where the transfer is authorised by the Member State of origin of the transferor, the Directorate-General for Insurance and Pension Funds shall give it publicity.
8. It shall apply to branches in Spain of reinsurers domiciled in another Member State of the European Economic Area as provided for in Article 115.3 of Law 20/2015 of 14 July.
Section 3-Activity under the freedom to provide services of insurance and reinsurance entities domiciled in other Member States
Article 34. Start and change of activity.
1. Insurance companies domiciled in another Member State of the European Economic Area may initiate their activity in Spain under the freedom to provide services since they receive the notification that the supervisory authority of the home Member State of the insurance institution has referred to the Directorate-General for Insurance and Pension Funds, together with the communication referred to in Article 48.2 of Law 20/2015 of 14 July, the following information:
(a) The precise name and address of the registered office of the institution and, where appropriate, the address of the branch established in the European Economic Area from which it intends to operate under that scheme.
(b) The nature of the risks and commitments that the institution intends to guarantee in Spain, together, where appropriate, with ancillary and ancillary risks, in accordance with the Annex to Law 20/2015 of 14 July.
The documentation indicated, except the solvency certificate, will be presented in Spanish.
2. Any draft amendment to the insurance business under the freedom to provide services shall be communicated by the supervisory authority of the home Member State of the insurance undertaking to the Directorate-General for Insurance and Pension Funds.
The insurance undertaking may adjust its activity under the freedom to provide services to the draft amendment since it has been notified by the authorities of the home Member State of the insurance undertaking, the communication referred to in the previous paragraph.
3. Both the start of the activity under the freedom to provide services and the modification of the activity are acts subject to registration in the administrative register provided for in Article 40 of Law 20/2015 of 14 July.
Section 4. Subscription Agencies ' Regime
Article 35. Requirements and procedure for the authorisation of the subscription agencies.
1. They will be required to obtain and retain the administrative authority, the following:
(a) To be a commercial company whose statutes provide for the social object, the carrying out of activities as a subscription agency.
b) Present and abide by a program of activities in which the risks to be subscribed are indicated, for which insurance companies and in what terms, attaching the powers granted, their organizational structure and internal control procedures.
c) To indicate the contributions and participations in the share capital of the partners with significant participation, who shall be suitable in the terms of the provisions of Article 36 of Law 20/2015 of 14 July.
(d) Be effectively directed by persons who fulfil the necessary conditions of good repute and fitness laid down in Article 38 of Law 20/2015 of 14 July.
(e) To provide, for each of the insurance institutions that have signed a power, a separate account of the other economic resources of the company in which only economic resources are managed in the name and on behalf of each of them.
2. The extension of the administrative authorisation shall be subject to the condition that the subscription agency fulfils the requirement to present and comply with an activity programme indicating the risks to be subscribed to, for which insurance institutions and in what terms, attaching the powers granted.
3. The application to act as a subscription agency shall be submitted to the Directorate-General for Insurance and Pension Funds and shall be accompanied by the supporting documents relating to the fulfilment of the requirements referred to in paragraph 1. Such a request shall be settled within three months of the date of submission of the application for authorisation. The application for registration shall be refused where the fulfilment of the conditions required for granting it is not established.
CHAPTER III
Access to the activity in Spain of third-country insurance and reinsurance
Article 36. Authorisation of branches of insurance institutions in third countries.
1. The Minister for Economic Affairs and Competitiveness may grant administrative authorisation to insurance companies domiciled in third countries not members of the European Union to establish branches in Spain, in order to carry out the insurance business, provided that they meet the following requirements:
(a) That they are duly authorized in their country to operate in the classes in which they intend to do so in Spain. For such purposes, certification shall be provided by the authority exercising the control of the insurance activity in its country indicating the dates on which the institution was authorised to operate in each of the classes and the risks it effectively guarantees and which establishes that it is constituted and operates in its country of origin in accordance with the law of that country. If there is no authority in that country to exercise control over the insurance business, the certification shall be issued by another competent authority, with the annual audited accounts of the last three social exercises of the institution being provided with that authority. The risks to be guaranteed must always be located and their commitments assumed in Spain, without applying the rules concerning the activity under the right of establishment and freedom to provide services.
b) That they create a general branch whose object is limited to the insurance activity, with permanent domicile in Spain, where the accounting and documentation of the activity they develop are preserved.
The document establishing the branch, duly registered in the Trade Register, must be provided with evidence.
c) That they appoint a general manager, with domicile and residence in Spain, that meets the conditions required by Articles 38 of Law 20/2015, of 14 July and 18 of this royal decree and with the most extensive commercial powers to compel the insurance institution against third parties and represent it before the Spanish courts and administrative authorities.
If the general manager is a legal person, he must have his registered office in Spain and designate, in turn, to represent a natural person who meets the conditions mentioned above. Such a proxy must obtain prior acceptance from the General Directorate of Insurance and Pension Funds, which may refuse it or, if necessary, revoke it because it does not have the requirements that the Law 20/2015, of July 14, requires for the administration of insurance institutions. Those who are in the effective management must meet the conditions of good repute and qualifications required by the law and its implementing rules.
It shall be accompanied by a copy of the deed of seizure and information relating to the professional activity of the person proposed, as well as the activities carried out during the preceding ten years, indicating whether he has been sanctioned or has exercised administrative or managerial functions in entities which have been the subject of administrative or judicial liquidation.
(d) To provide and maintain in the branch in Spain assets of an amount equal to the absolute minimum provided for in Article 78.3 of Law 20/2015 of July 14, for the minimum capital requirement, and deposit the 25 per 100 of this absolute minimum with a guarantee of a guarantee to the General Directorate of Insurance and Pension Funds.
e) That they credit that the institution has in Spain a fund of amount not less than the paid-up social capital or minimum mutual fund required in Articles 33 and 34 of Law 20/2015, of July 14, to the Spanish insurance companies, according to the branches of insurance in which they operate, which will be called permanent fund of the central house.
A notarial testimony shall be provided for the seats in the accounting books that reflect the contribution of the permanent fund of the central house.
(f) Which undertakes to cover the Solvency Capital Requirement and the Minimum Capital Requirement provided for in Articles 74 and 78 of Law 20/2015 of 14 July 2015.
(g) If the entity intends to cover the risks of the civil liability class in motor vehicles, excluding the liability of the carrier, it shall communicate the name and address of the designated representative in each of the States of the European Union other than Spain, which is responsible for the processing and settlement of claims which have occurred in a State other than the State of residence of the injured party or in a country that is a signatory of the international car insurance certificate system (Green Charter).
h) That they present and comply with a program of activities adjusted to the provisions of article 32 of Law 20/2015, of July 14 and Articles 11 and 12 of this royal decree.
i) That it complies with the provisions laid down in article 65 of Law 20/2015, of July 14 and articles 44 to 47 of this royal decree, in relation to the system of government of the branch.
j) That they provide the statutes governing the entity, as well as the relationship of the directors, directors and those who under any title carry the effective management of the insurance institution, indicating name, address and nationality.
k) accompanying the certificate of the supervisory authority of their home country of credit that it has the Solvency Capital Requirement and the Minimum Capital Requirement required by that legislation, and that its technical provisions are duly calculated on the date of issue.
l) Commitment to submit to Spanish laws.
2. The application and documents accompanying it, as well as the accounts and supporting documents, shall be drawn up in Spanish. However, they may be presented in the official language of the country of the entity provided that the translation is accompanied by a sworn translation into Spanish.
3. The Directorate-General for Insurance and Pension Funds may require the communication of the technical bases used for the calculation of premiums and technical provisions, without such a requirement being a precondition for the exercise of the activity.
Article 37. Conditions for the exercise of the insurance business.
The branch will be able to carry out its insurance activity in Spain subject to the provisions relating to the activity of Spanish insurance companies, except those relating to the activity under the right of establishment or freedom to provide services, so that its risks must always be localized and its commitments assumed in Spain.
By way of derogation from the preceding paragraph, it shall be taken into account that:
(a) Assets that correspond to the Solvency Capital Requirement of the branches shall be located in Spain up to the amount of the Minimum Capital Requirement, and in any country of the European Economic Area.
b) Model policies, technical bases and premium rates will not require prior administrative approval.
The Directorate-General for Insurance and Pension Funds may require the presentation of the models of policies, technical bases and premium rates whenever they understand it, in order to monitor whether they respect the technical provisions and the insurance contract.
Article 38. Financial guarantees for branches of insurance companies and reinsurers domiciled in third countries.
In relation to financial guarantees payable to branches of insurers and reinsurers domiciled in third countries, the following requirements shall apply:
(a) For the purposes of the calculation of the Solvency Capital Requirement and the Minimum Capital Requirement, only the operations performed by the branch shall be taken into consideration.
(b) The amount of eligible own funds necessary to cover the minimum capital requirement and the absolute minimum of that minimum capital requirement shall be constituted in accordance with Articles 73 of the Law 20/2015 of 14 July and 62 of this royal decree.
(c) The amount of the eligible basic own funds may not be less than half of the absolute minimum provided for in Article 78.3. A security deposit in accordance with Article 36.1 (d) shall be deemed to be included in the basic own funds eligible for coverage of the minimum capital requirement.
Article 39. Advantages in the scheme of branches of entities domiciled in third countries authorised in several Member States.
For the purposes of Article 107 of Law 20/2015 of 14 July, undertakings authorised in several Member States may apply for the following benefits:
(a) The Solvency Capital Requirement provided for in Article 106 of Law 20/2015 of 14 July 2015 shall be calculated on the basis of all the overall activity carried out in all Member States and shall therefore take into account the operations carried out by the set of branches established in the European Union.
(b) The security referred to in Article 36 shall be deposited in the Member State of the supervisory authority which, in accordance with Article 107.2 of Law 20/2015 of 14 July, is responsible for verifying the solvency.
(c) The representative minimum capital assets shall be located in any of the Member States where a branch is established.
Article 40. Information to the European Commission and other Member States on subsidiaries of insurance and reinsurance entities in third countries.
The Directorate-General for Insurance and Pension Funds shall inform the European Commission, the European Insurance and Occupational Pensions Authority and the supervisory authorities of the other Member States:
(a) Any authorisation of a subsidiary, direct or indirect, where one or more of its parent companies are governed by the right of a third country. In such cases, the information shall specify the structure of the group of companies.
(b) Any acquisition by a company of a third country of holdings in a Spanish insurer or reinsurer which makes the latter a subsidiary of the undertaking of a third country.
Article 41. Special arrangements for the establishment of branches of Swiss insurance companies operating in the field of insurance other than life insurance.
1. In the area of insurance other than life insurance, the Minister for Economic Affairs and Competitiveness shall grant administrative authorisation to insurance companies domiciled in the Swiss Confederation for the opening in Spain of a branch, provided that they meet the following requirements:
(a) Communication of the statutes governing the entity, as well as the relationship of the directors, directors and those under any title, with the effective management of the insurance institution, indicating name, address and nationality.
(b) Presentation of a certificate issued by the supervisory authority of the country in which it is established:
1. The applicant entity takes the legal form of a public limited company or a cooperative society.
2. The entity limits its social object to the activity of insurance and to the operations defined in Article 3 of Law 20/2015, of July 14, excluding any other commercial activity, in the terms of Article 5 thereof.
3. The classes in which the company is authorized to operate.
4. That the company has own funds eligible for sufficient amount to cover the required minimum capital provided for in Article 78 of Law 20/2015 of 14 July or the Solvency Capital Requirement referred to in Article 74 of that Act, where the latter exceeds the absolute minimum amounts provided for in Article 78.3 of that Act.
5. The risks that it effectively covers.
6. The existence of the financial means referred to in Article 11.1.h) and, if the risks to be covered are classified in class 18 of paragraph A) (a) (a) of the Annex to Act 20/2015 of 14 July, the means available to the undertaking to provide the promised assistance.
c) Presentation of the program of activities adjusted to the provisions of Articles 32 of Law 20/2015, of 14 July and 11 and 12 of this royal decree, accompanied by the balance sheet and the profit and loss account of the company for each of the last three social exercises. However, where the company has operated for less than three social years, it shall only provide those accounts for the closed financial years if it is the creation of a new company resulting from the merger of existing companies, or the creation of a new company by one or more existing companies in order to operate in a particular insurance business, previously operated by one of the companies concerned.
d) Designation of a general manager under the terms and conditions of Article 36.1.c). Prior acceptance of the same by the General Directorate of Insurance and Pension Funds will not be necessary, but it will be necessary to comply with the requirements of good repute and fitness provided for in Articles 38 of Law 20/2015 of 14 July and 18 of this royal decree.
(e) If the entity intends to cover the risks of the civil liability class in motor vehicles, excluding the liability of the carrier, it shall communicate the name and address of the designated representative in each of the States of the European Union other than Spain, which is responsible for the processing and settlement of claims which have occurred in a State other than the State of residence of the injured party or in a country which is a signatory of the international car insurance certificate system (Green Charter).
Article 42. Procedure for the authorisation of branches of Swiss insurance companies operating in insurance other than life insurance.
1. The application for authorisation, together with the documentation referred to in the preceding article, shall be submitted to the Directorate-General for Insurance and Pension Funds.
2. The Directorate-General for Insurance and Pension Funds shall seek the opinion of the Swiss supervisory authority, referring to the latter, for that purpose, the programme of activities accompanied by any observations deemed appropriate, all within one month of receipt of the request. If the requested authority does not give a ruling within three months of the receipt of the documents, the opinion shall be deemed to be favourable.
3. The granting or refusal of approval shall be made by a reasoned ministerial order within a maximum of six months from the receipt of the application and the additional documentation. With that order, which shall be notified to the company concerned, the administrative route shall be deemed to be exhausted. In no case shall the branch be deemed to be authorised by virtue of acts alleged for the period referred to above.
4. The branch and its general manager shall be registered in the administrative register referred to in Article 40 of Law 20/2015 of 14 July.
Article 43. Third-country reinsurers entities.
1. Branches of reinsurer entities from third countries shall require the prior administrative authorisation of the Minister for Economic and Financial Affairs, which shall be granted in accordance with Article 36, for life reinsurance activities, reinsurance activities other than life, or for all types of reinsurance activities.
2. Branches of reinsurers domiciled in third countries shall be subject to the provisions of Articles 89 and 90 of Law 20/2015 of 14 July 2015. In the event of liquidation, the provisions of Chapter III of Title VII shall not apply to them.
TITLE III
Exercise of the activity
CHAPTER I
Insurance and Reinsurance Entity Governance System
Article 44. General requirements of the government system.
1. All insurers and reinsurers shall have an effective system of government which ensures the sound and prudent management of the activity and which is proportionate to its nature, the volume and the complexity of its operations. The governance system shall be subject to periodic internal review.
2. Insurance and reinsurance entities shall have written policies relating to at least risk management, internal audit and control, and, where appropriate, outsourcing of functions or activities, and shall ensure that they are implemented.
Written policies must be approved by the entity's management body, reviewed at least annually and will be adapted to significant changes in the system or area concerned.
3. Insurance and reinsurance entities shall take reasonable steps to ensure continuity and regularity in the execution of their activities, including the development of contingency plans. To this end, institutions shall employ appropriate and proportionate systems, resources and procedures.
Article 45. Risk management.
1. The risk management system, as provided for in Article 66 of Law 20/2015 of 14 July 2015, shall cover those taken into account in the calculation of the Solvency Capital Requirement, as well as those that are not taken into account or are taken into account only in part in that calculation.
The system will cover at least the following areas:
a) subscription and constitution of reserves;
b) asset and liability management;
(c) investments, in particular derivative instruments and similar commitments;
d) liquidity and concentration risk management;
e) operational risk management; and
f) reinsurance and other risk mitigation techniques.
Within the entity's governance system, policies written in the field of risk management shall include, at least, those relating to these areas.
2. Where insurance and reinsurance undertakings apply the matching adjustment referred to in Article 55 or the volatility adjustment referred to in Article 57, a cash flow plan shall be established to project the incoming and outgoing cash flows in relation to the assets and liabilities subject to these adjustments.
3. As regards the management of assets and liabilities, insurance and reinsurance undertakings shall regularly assess:
(a) The sensitivity of its technical provisions and eligible own funds for the assumptions on which the extrapolation of the relevant temporary structure of interest rates without risk referred to in Article 54 is based.
(b) In the case where the matching adjustment referred to in Article 55 applies:
1. The sensitivity of its technical provisions and eligible own funds for the assumptions on which the calculation of the adjustment by marriage is based, including the calculation of the fundamental spread referred to in Article 56.1 (b), and the possible effect of a forced sale of assets on its own eligible funds.
2. The sensitivity of its technical provisions and eligible own funds for changes in the composition of the assigned asset portfolio.
3. º The impact of the reduction from the matching adjustment to zero.
(c) in the case of the volatility adjustment referred to in Article 57:
1. The sensitivity of its technical provisions and eligible own funds for the assumptions on which the calculation of the volatility adjustment is based and the possible effect of a forced sale of assets in its own eligible funds.
2. º The impact of the reduction of the volatility adjustment to zero.
Insurance and reinsurance undertakings shall submit such assessments referred to in paragraph 3 (a), (b) and (c), annually to the supervisory authority as part of the information referred to in Article 159. Where the reduction to zero of the volatility adjustment of place to non-compliance with the Solvency Capital Requirement, the undertaking shall also present an analysis of the measures that it could apply in such a situation to restore the level of eligible own funds corresponding to the Solvency Capital Requirement or to reduce its risk profile in order to cover the Solvency Capital Requirement.
When the volatility adjustment referred to in Article 57 applies, the written policy on risk management referred to in Article 44 shall include a policy on the criteria for the application of the volatility adjustment.
With regard to the risk of investments, insurers and reinsurers must demonstrate that they comply with the provisions of Article 79 of Law 20/2015 of 14 July and their implementing rules on investments.
4. Where an external credit rating assessment is used in the calculation of the technical provisions and the Solvency Capital Requirement, insurers and reinsurers shall assess their suitability as part of their risk management, using additional assessments, where possible, to avoid any automatic reliance on such external evaluations.
5. In the case of insurers and reinsurers using a duly approved complete or partial internal model, the risk management function shall cover the following additional tasks:
a) Concepción and application of the internal model.
b) Test and validation of the internal model.
(c) Documentation of the internal model and any subsequent amendments thereto.
d) Analysis of internal model performance and short reporting.
e) Information to the management body on the performance of the internal model, indicating the aspects that should be improved, and on the progress made in correcting the deficiencies previously identified.
Article 46. Internal risk assessment and solvency.
The internal risk and solvency assessment to be performed by insurance and reinsurance entities as part of their risk management system shall cover at least the following:
(a) The global solvency needs taking into account the specific risk profile, the approved risk tolerance limits and the business strategy of the institution.
For these purposes, the entity shall implement processes that are proportionate to the nature, volume and complexity of the risks inherent in its business and that enable it to adequately determine and assess the risks to which it faces in the short and long term, and to which it may or may be exposed. The entity shall be in a position to explain the methods used in that assessment.
(b) Continuous compliance with capital requirements and requirements in respect of technical provisions.
(c) The analysis of whether the risk profile of the institution deviates and, to what extent, from the assumptions on which the calculation of the Solvency Capital Requirement is based by the standard formula, or by its full or partial internal model.
When the insurance or reinsurance undertaking applies the matching adjustment referred to in Article 55, the volatility adjustment referred to in Article 57 or the transitional measures referred to in the final provisions of the 10th to 12th of Law 20/2015 of 14 July 2015 shall also carry out the assessment of compliance with the capital requirements referred to in paragraph (b), taking into account these adjustments and transitional measures and without taking into account.
Article 47. Actuarial function.
Insurance and reinsurance entities will have an effective actuarial function that will be in charge of:
a) Coordinate the calculation of technical provisions.
b) Ensure that the methodologies and underlying models used are in line with the assumptions used in the calculation of the technical provisions.
c) Evaluate the adequacy and quality of data used in the calculation of technical provisions.
d) Coding the calculation of the best estimates with the previous experience.
e) Report to the administrative body on the reliability and adequacy of the calculation of technical provisions.
(f) Monitor the calculation of technical provisions in cases where, because insufficient and adequate data are not available, approximations, including case-by-case approaches, are used in relation to the calculation of the best estimate of technical provisions.
g) Opinion on the general subscription policy.
(h) to decide on the adequacy of the reinsurance arrangements.
i) Contribute to the effective implementation of the risk management system, in particular as regards the modelling of the risk on which the calculation of capital requirements is based, and the internal risk and solvency assessment.
CHAPTER II
Asset and liabilities valuation, financial collateral and investments
Section 1. Standards on technical provisions
Article 48. Calculation of technical provisions: general principles.
1. The value of the technical provisions referred to in Article 69 of Law 20/2015 of 14 July 2015 shall be equal to the sum of the best estimate and a margin of risk, both as provided for in paragraphs 2 and 3 below.
2. The best estimate shall be the average of the future cash flows weighted by their probability, taking into account the time value of the money by applying the relevant temporary structure of interest-free interest rates, i.e. the expected current value of future cash flows.
The calculation of best estimate shall be based on up-to-date and reliable information and on realistic assumptions and shall be carried out in accordance with actuarial and statistical methods that are sufficient, applicable and relevant.
The projection of cash flows used in the calculation of the best estimate shall take into account the totality of the cash inflows and outflows necessary to settle insurance and reinsurance obligations throughout their lifetime.
The best estimate shall be calculated in gross terms, without deducting the amounts recoverable from reinsurance contracts and, where applicable, from special purpose entities. These amounts shall be calculated separately in accordance with the provisions applicable to that effect.
3. The risk margin shall be such as to ensure that the value of the technical provisions is equivalent to the amount that insurance and reinsurance entities would be expected to require in order to be able to assume and fulfil the insurance and reinsurance obligations.
4. Insurance and reinsurance entities shall calculate the best estimate and the risk margin separately.
However, where future cash flows associated with insurance or reinsurance obligations can be reliably replicated using financial instruments for which there is a reliable market value, the value of the technical provisions associated with those future cash flows shall be determined from the market value of those financial instruments. In such a case, it shall not be necessary to calculate separately the best estimate and the margin of risk.
5. Where insurance and reinsurance institutions calculate the best estimate and the risk margin separately, the risk margin shall be equal to the cost of financing the Solvency Capital Requirement payable on the assumption of insurance and reinsurance obligations during its lifetime.
The rate used to determine the financial cost referred to in the preceding paragraph, the cost of capital, shall be equal to the additional rate, above the interest rate without any relevant risk, that an insurer or reinsurer would have to satisfy for maintaining an amount of eligible own funds, equal to the Solvency Capital Requirement required to assume the insurance and reinsurance obligations during its lifetime. This fee will be the same for all insurance and reinsurance entities and will be regularly reviewed in accordance with European Union rules of direct application.
Article 49. Other elements to be taken into account in the calculation of technical provisions.
1. When calculating technical provisions, insurance and reinsurance entities shall take into account:
(a) all expenses incurred to meet the insurance and reinsurance obligations;
(b) inflation, including inflation, including expenditure and claims;
(c) all future payments to policyholders and beneficiaries, including holdings in future discretionary benefits, which the insurer or reinsurer intends to carry out, irrespective of whether such payments are guaranteed by contract;
(d) the value of the financial guarantees and of the possible contractual options included in the insurance and reinsurance contracts. Any assumptions applied with respect to the likelihood of policyholders exercising contractual options, including those relating to resolution and redemption, should be realistic and be based on current and reliable information. Assumptions should be considered, either explicitly or implicitly, to the effect that future changes in financial or other conditions may have on the exercise of such options.
2. In those contracts where the redemption value has been established on the basis of the life insurance provision corresponding to those contracts, the amount of such life insurance shall be understood to be, for the purposes of determining the redemption value, the amount resulting from the application of the technical bases used for the calculation of the premium.
Article 50. Segmentation of obligations by homogeneous groups.
When calculating technical provisions, insurance and reinsurance entities shall segment their insurance and reinsurance obligations in homogeneous risk groups and, at least, by lines of business, in accordance with the provisions of European rules of direct application.
Article 51. Amounts recoverable from reinsurance contracts and special purpose entities.
1. The amounts recoverable on the basis of the transferred reinsurance may be counted among the assets of the insurance or reinsurance undertaking. Those amounts shall be valued in accordance with the provisions of the technical provisions for direct insurance and reinsurance accepted, with the following specific rules:
(a) Account shall be taken of the time difference between the recoveries and the direct payments.
(b) The result of the calculation shall be adjusted to take account of expected losses due to non-compliance of the counterparty. The adjustment shall be based on an assessment of both the probability of non-compliance of the counterparty and the resulting average loss.
2. The provisions of the preceding number shall apply to recoverable amounts arising from transactions which have similar effects to reinsurance, carried out by the insurance or reinsurance undertaking through special purpose entities. For this purpose, special task entities and operations shall be required to comply with the requirements to be established by circular.
Article 52. Quality of data used in the calculation of technical provisions.
Insurance and reinsurance entities shall apply the internal processes and procedures necessary to ensure the adequacy, completeness and accuracy of the data used in the calculation of technical provisions, and that the assumptions on which the calculation is based are compared periodically with the experience. Where the comparison shows a systematic deviation between the experience and the calculations carried out, the institution shall make the necessary adjustments to the actuarial methods or assumptions used.
Article 53. Use of approximations in the calculation of technical provisions.
Where in specific circumstances, insurance and reinsurance entities do not have sufficient data of adequate quality to apply a reliable actuarial method to a set or a subset of their insurance or reinsurance obligations, or to recoverable amounts from reinsurance contracts or special purpose entities, approximations, including case-to-case methods, may be used for the calculation of the best estimate.
The Directorate-General for Insurance and Pension Funds may specify by circulating the specific circumstances and the approximations referred to in the previous paragraph.
Article 54. A relevant temporary structure of interest rates without risk.
1. The relevant temporary structure of interest-free interest rates, referred to in Article 48.2, shall be the one to publish, for each currency, the European Insurance and Occupational Pensions Authority without prejudice to the implementing acts adopted by the European Commission for each relevant currency. Their determination shall be based on information from the relevant financial instruments and shall be consistent with the relevant financial instruments. The relevant financial instruments relating to maturities for which the markets for such financial instruments as well as bonds and bonds are deep, liquid and transparent shall be taken into account.
2. For maturities whose markets of relevant financial instruments or for bonds and bonds are not deep, liquid and transparent, the relevant temporary structure of interest rates shall be extrapolated.
The extrapolated share of the relevant temporary structure of interest-free interest rates shall be based on future interest rates that progressively converge from one or a number of future rates relative to the longer maturities for which the relevant financial instruments and bonds and bonds can be observed in a deep, liquid and transparent market up to a final future interest rate.
Article 55. Adjustment for cash flows from the relevant temporary structure of interest rates without risk.
1. Insurance and reinsurance undertakings may apply a matching adjustment to the relevant temporary structure of interest rates without risk for the calculation of the best estimate of a portfolio of life insurance or reinsurance obligations, including benefits in the form of income from insurance or reinsurance contracts other than life insurance conditional on prior approval by the General Directorate of Insurance and Pension Funds, where the following conditions are met:
(a) The insurance or reinsurance undertaking has allocated an asset portfolio, consisting of bonds and bonds and other assets with similar cash flow characteristics, to cover the best estimate of the insurance or reinsurance obligation portfolio, and maintains that allocation over the lifetime of the obligations, except to maintain the replication of the expected cash flows between assets and liabilities when these cash flows have changed substantially.
(b) The portfolio of insurance or reinsurance obligations to which the matching adjustment applies and the portfolio of assigned assets are identified, organised and managed separately from other business activities, and the assigned asset portfolio cannot be used to cover losses arising from other business activities.
(c) The expected cash flows of the assigned asset portfolio replicate each of the expected cash flows in the portfolio of insurance or reinsurance obligations in the same currency and no lack of correspondence gives rise to material risks in relation to the risks inherent in the insurance activities to which a matching adjustment applies.
(d) In the contracts on which the portfolio of insurance or reinsurance obligations is based, future premiums are not taken into account.
e) The only underwriting risks linked to the portfolio of insurance or reinsurance obligations are the risks of longevity, expense, review and mortality.
(f) If the risk of subscription linked to the portfolio of insurance or reinsurance obligations includes mortality, the best estimate of that portfolio does not increase by more than 5% in the case of an impact of the mortality risk assessed in accordance with the principles laid down in Article 63.
(g) Contracts on which insurance or reinsurance obligations are based do not include any option for the policyholder or include only the option of the insurance bailout where the value of such a rescue does not exceed the value of the assets, as determined in accordance with Article 68 of Law 20/2015 of 14 July, assigned to the insurance or reinsurance obligations at the time the rescue option is exercised.
h) Cash flows in the assigned asset portfolio are fixed and cannot be modified by the issuers of the assets or by third parties.
(i) The insurance or reinsurance obligations of an insurance or reinsurance contract are not divided into several parts when they form the portfolio of insurance or reinsurance obligations for the purposes of this paragraph.
However, as provided for in paragraph 1 (h), insurance or reinsurance undertakings may use assets whose cash flows are fixed, except for their reliance on inflation, provided that those assets replicate the cash flows in the portfolio of insurance or reinsurance obligations that are dependent on inflation.
Where issuers or third parties have the right to change the cash flows of an asset so that the investor receives sufficient compensation to enable it to obtain the same cash flows by reinvesting in assets of an equivalent or higher credit quality, the right to amend the cash flows shall not prevent the asset from being eligible in the portfolio allocated in accordance with paragraph 1. (h)
2. Insurance or reinsurance undertakings which apply the adjustment for cash flows to a portfolio of insurance or reinsurance obligations shall not be able to readopt the approach which does not include such an adjustment without knowledge of the supervisory authority. Where an insurance or reinsurance undertaking applying the adjustment for flows ceases to comply with the requirements laid down in paragraph 1, it shall immediately inform the supervisory authority and take the necessary measures to meet those requirements. Where that undertaking is not able to meet those requirements again within two months of the date of non-compliance, it shall no longer apply the adjustment for flows of flows to all its insurance or reinsurance obligations and shall not apply it again until 24 months have elapsed.
3. The adjustment for cash flows shall not apply in respect of insurance or reinsurance obligations where the relevant temporary structure of interest rate-free interest rates to calculate the best estimate on those obligations includes a volatility adjustment in accordance with Article 57 or a transitional measure on interest rates without risk in accordance with the 18th final provision of Law 20/2015 of 14 July 2015.
Article 56. Calculation of the adjustment for flows.
1. For each currency, the adjustment for cash flows referred to in Article 55 shall be calculated in accordance with the following principles:
a) The flow-matching adjustment will be equal to the difference between the following items:
1. º The annual cash rate, calculated as the single discount rate applied to the cash flows in the insurance or reinsurance portfolio, gives rise to a value equal to the value of the portfolio of assigned assets as determined in accordance with Article 68.1 of Law 20/2015 of 14 July.
2. º The annual cash rate, calculated as the single discount rate, applied to the cash flows in the insurance or reinsurance portfolio, gives rise to a value equal to the value of the best estimate of the insurance or reinsurance obligation portfolio taking into account the time value and using the basic temporary structure of interest rates without risk.
(b) The adjustment for cash flows shall not include the fundamental differential reflecting the risks retained by the insurance or reinsurance undertaking.
(c) Without prejudice to point (a), the fundamental credit differential shall be increased where necessary to ensure that the adjustment for cash flows of assets with a credit quality of less than BBB, or equivalent, does not exceed the cash flow rate adjustments of the same duration and class with a credit quality rated as BBB or equivalent.
(d) The use of external credit assessments in the calculation of the adjustment for cash flows shall be carried out in accordance with Community regulations.
e) In the event that the insurance or reinsurance contracts include future premiums, to determine the cash flows in the portfolio of bonds, all likely flows of benefits and expenses arising from those contracts, but not the cash flows, shall be included.
2. For the purposes of paragraph 1 (b), the fundamental differential shall be:
a) Equal to the sum of:
1. º The credit spread corresponding to the probability of default of the assets.
2. º The credit spread corresponding to the expected loss resulting from the downgrade of the assets.
(b) For exposures to the general government and central banks of the Member States, it shall not be less than 30% of the long-term average of the spread with respect to the interest rate without risk for the same duration, credit quality and class assets, as observed in the financial markets.
(c) For assets other than exposures to the general government and central banks of the Member States, it shall not be less than 35% of the long-term average of the spread with respect to the risk-free interest rate for the same duration, credit quality and class assets, as observed in the financial markets.
(d) The fundamental differential for each relevant duration, credit quality and asset class shall be that published by the European Insurance and Occupational Pensions Authority, for each relevant currency, without prejudice to any implementing acts adopted by the European Commission in respect of each relevant currency.
3. The probability of default referred to in paragraph 2.a) .1 shall be based on long-term default statistics that are relevant to the asset in question in relation to its duration, credit quality and class.
4. Where a reliable credit differential cannot be obtained from the default statistics referred to in paragraph 2.a), the fundamental spread shall be equal to the percentage of the long-term average of the spread with respect to the risk-free interest rate set out in paragraph 2.b) and c).
Article 57. Volatility adjustment of the relevant temporary structure of interest rates without risk.
1. Insurance and reinsurance entities may apply a volatility adjustment to the relevant temporary structure of interest rates without risk, with the characteristics described in the following paragraphs.
2. For each relevant currency, the volatility adjustment of the relevant temporary structure of interest-free interest rates shall be based on the spread between the interest rates that could be obtained from the assets included in a reference portfolio for that currency and the types of the relevant temporary structure of basic interest rates without risk for that currency. The volatility adjustment for the relevant temporary structure of interest rate-free interest rates for each relevant domestic market shall be that published by the European Insurance and Occupational Pensions Authority, without prejudice to any implementing acts adopted by the European Commission in respect of each relevant currency.
No volatility adjustment shall be applied to the relevant temporary structure of interest rates without risk for the calculation of the best estimate for currencies and domestic markets in which the volatility adjustment is not established in those implementing acts.
The reference portfolio for a currency shall be representative of the assets denominated in that currency and on which the insurance and reinsurance undertakings invest to cover the best estimate of the insurance and reinsurance obligations denominated in that currency.
3. The amount of the volatility adjustment for the risk-free interest rates shall be 65% of the spread for the risk-corrected currency.
The spread for the risk-corrected currency shall be the result of the subtraction between the spread referred to in the preceding paragraph and the portion of that spread attributable to a realistic assessment of expected losses, unforeseen credit risks or any other risk of the assets.
The volatility adjustment shall apply only to interest rates without any relevant risk of the temporary structure that are not obtained by extrapolation in accordance with Article 54. The extrapolation of the temporary structure of interest rates without any relevant risk shall be based on those interest rates without any adjusted risk.
4. For each relevant country, the volatility adjustment for the risk-free interest rates referred to in paragraph 3 for the currency of that country shall be increased, prior to the application of the 65% factor, by the result of subtracting the spread for the country corrected by the risk minus double the spread for the risk-corrected currency, provided that such a result is positive and the risk-adjusted spread for the country exceeds 100 basis points. The increased volatility adjustment shall apply to the calculation of the best estimate of the insurance and reinsurance obligations of products sold on the insurance market of that country. The differential for the risk-corrected country is calculated in the same way as the risk-adjusted currency spread for that country, but based on a representative reference portfolio of the assets in which the insurance and reinsurance undertakings have invested to cover the best estimate of the insurance and reinsurance obligations of products sold on the insurance market of that country and denominated in its currency.
5. The volatility adjustment shall not apply with respect to insurance obligations where the relevant time structure of interest rate-free interest rates to calculate the best estimate on those obligations includes an adjustment for flows under Article 55.
6. By way of derogation from Articles 74 of Law 20/2015 of 14 July and 63 of this royal decree, the Solvency Capital Requirement shall not cover the risk of loss of basic own funds arising from changes in the volatility adjustment.
Article 58. Technical provisions of death insurance.
1. The provision of death insurance shall be calculated in accordance with the provisions of this royal decree and the European Union legislation directly applicable to life insurance and taking into account the applicable contract limits.
2. The basis for calculating the death insurance provision will be the rate premium. The calculation shall be carried out by means of a prospective individual capitalization method, without meaning that there is a right of the taker to make such a provision, unless expressly granted in the contract. However, capitalization methods based on homogeneous risk groups may be used.
3. The future management decisions of the insurance undertaking shall be taken into account for the setting of the calculation assumptions previously detailed when they meet the requirements laid down in the European Union rules of direct application. The assumptions about future management decisions of the insurance institution, which are considered in the calculation, shall be established in accordance with the evolution of the rest of the assumptions, in such a way that a general estimate of the stable, prudent, objective and reliable provision is achieved, all in consideration of the nature and duration of the insurance.
Section 2
Article 59. Determination of own funds.
1. Core own funds will be integrated by:
(a) The surplus of assets with respect to liabilities valued in accordance with Articles 68 and 71 to 73 of Law 20/2015 of 14 July and its implementing rules. The excess shall be deducted from the amount of own shares held by the insurance or reinsurance undertaking.
In the case of insurance institutions authorized for the management of pension funds, the amount of computable amount shall be reduced in the amount of the paid-up share capital affected to this activity, as well as in the amount of the reserves, which correspond to the minimum own resources required by the regulatory regulation of pension plans and funds.
b) The subordinated liabilities.
2. Supplementary own funds shall consist of items which may be required to absorb losses, other than the basic own funds. Additional own funds may comprise the following items, in so far as they are not basic own funds:
(a) Unpaid or required mutual fund or mutual fund.
b) Letters of credit and guarantees.
(c) Any other legally binding commitments received by insurance and reinsurance undertakings.
In the case of mutual or mutual social security funds, supplementary own funds may also include any future rights which such an institution may require from its mutualists for the following 12 months.
Where an element of the complementary own funds has a fixed nominal value, the amount of that element shall be equal to its nominal value, provided that it adequately reflects its loss absorbing capacity.
In the event that an item of the supplementary own funds has been disbursed or required to be part of the asset, it shall be integrated into the basic own funds and shall cease to be part of the supplementary own funds.
3. The Directorate-General for Insurance and Pension Funds shall approve, as appropriate:
a) A monetary amount for each item of the complementary own funds; or
(b) A method for determining the amount of each element of the supplementary own funds, in which case the amount determined in accordance with this method shall be approved for a defined period.
4. For the authorisation of each of the elements of the supplementary own funds provided for in Article 71.1 of Law 20/2015 of 14 July, the Directorate-General for Insurance and Pension Funds shall base its approval on the assessment of the following:
(a) The consideration of the counterparties concerned, in terms of their ability to pay and their willingness to pay.
(b) The possibility of recovering the funds, taking into account the legal form of the item, as well as any conditions that might prevent them from being effectively disbursed or claimed their payment.
(c) All information on the outcome of the earlier requirements of such supplementary own funds made by insurance and reinsurance undertakings, to the extent that such information can be used reliably to assess the expected results of future requirements.
Article 60. Classification of own funds at levels.
1. The elements of own funds shall be classified in the three levels referred to in paragraph 4 of this Article, depending on whether they are core or complementary own fund items and to what extent they have the following characteristics:
a) Permanent availability: the item is fully available, or may be required, to absorb losses whether the entity is in operation or in the event of liquidation.
(b) Subordination: in the event of liquidation, the total amount of the item is available to absorb losses and the repayment of the item to its holder is not allowed until all other obligations, including obligations arising from insurance and reinsurance contracts, have been satisfied.
2. When assessing the extent to which the elements of own funds hold and maintain in time the characteristics referred to in paragraph 1, the duration of the item shall be appropriately considered, in particular whether the element has a defined duration or not. In the case of an item of own funds with a defined duration, account shall be taken of the adequacy of the duration of the item compared to the duration of the institution's insurance and reinsurance obligations.
3. In addition, consideration should be given to whether the item is free from:
(a) Obligations or incentives for repayment of the nominal amount.
b) Mandatory fixed expenses.
(c) Any other present or future commitments other than their contribution to the insurance or reinsurance undertaking.
4. The elements of own funds shall be classified in the following three
:(a) Tier 1: items of the basic own funds when they hold in substantial degree the characteristics referred to in paragraph 1, (a) and (b), taking into account the factors set out in paragraphs 2 and 3.
(b) Tier 2: items of the basic own funds where they hold in a substantial degree the characteristics referred to in paragraph 1, (b), and the elements of the supplementary own funds where they hold in substantial degree the characteristics referred to in paragraph 1, (a) and (b), taking into account, in both cases, the factors set out in paragraphs 2 and 3.
c) Level 3: All elements of the basic and complementary own funds that are not included in the previous two levels.
5. The authorisation procedure provided for in Article 72.3 of Law 20/2015 of 14 July 2015 for the inclusion of elements not incorporated in the list of elements of own funds regulated in the European Union rules of direct application shall be governed by the provisions of the fourth paragraph of Article 71.1 of that law.
Article 61. Classification of own funds specific to insurance.
1. The basic and complementary own funds shall be classified at the following levels:
(a) Surplus funds made up of accumulated profits that have not been allocated to be distributed to policyholders and insurance beneficiaries, and which meet the criteria set out in Article 60.4 (a), not considering obligations arising from insurance or reinsurance contracts, at level 1.
(b) Letters of credit and guarantees administered for the benefit of insurance creditors by an independent trustee and issued by credit institutions authorised in accordance with Directive 2013 /36/EU of the European Parliament and of the Council of 26 June 2013 on access to the business of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006 /48/EC and 2006 /49/EC at level 2.
2. Any future rights which the mutuals may require from their members by way of additional contributions over the following 12 months shall be classified in level 2 where the characteristics referred to in Article 60.1 (a) and (b) are in substantial degree in view of the provisions of paragraphs 2 and 3 of the same Article.
Article 62. Eligibility of own funds and limits applicable to levels 1, 2 and 3.
1. As regards the coverage of the Solvency Capital Requirement, the eligible amount of the items corresponding to Tier 2 and Tier 3 shall be subject to quantitative limits. These limits shall be set in such a way as to ensure at least compliance with the following conditions:
(a) The ratio of Tier 1 items to eligible own funds is greater than one third of the total amount of eligible own funds.
(b) The eligible amount of Tier 3 items represents less than one third of the total amount of eligible own funds.
2. As regards compliance with the requirement for the minimum capital requirement, the amount of the items of the basic own funds eligible for the minimum capital requirement classified in Tier 2 shall be subject to quantitative limits. These limits shall be set in such a way as to ensure that at least the proportion of Tier 1 items in eligible core own funds is more than half the total amount of eligible basic own funds.
3. The eligible amount of own funds for the coverage of the Solvency Capital Requirement set out in Article 74 of Law 20/2015 of 14 July 2015 shall be equal to the sum of the amount of Tier 1, the eligible amount of Tier 2 and the eligible amount of Tier 3.
Section 3. Compulsory Solvency Capital
Subsection 1. General Rules
Article 63. Calculation of the Solvency Capital Requirement.
1. The calculation of the Solvency Capital Requirement shall take into account all the quantifiable risks to which an insurance or reinsurance undertaking is exposed. It will cover existing activities and new activities expected to be carried out in the next 12 months. In relation to existing activities, it should cover only unexpected losses.
The Solvency Capital Requirement shall be equal to the at-risk value of the basic own funds of an insurance or reinsurance undertaking, with a confidence level of 99.5 per cent and a one-year time horizon.
2. The Solvency Capital Requirement shall cover at least the following risks:
a) Risk of underwriting in insurance other than life insurance.
b) Risk of underwriting in life insurance.
c) Risk of underwriting sickness insurance.
d) Market risk.
e) Risk of credit.
f) Operational risk.
3. The effect of risk mitigation techniques shall be taken into account when calculating the Solvency Capital Requirement provided that the credit risk and other risks arising from the use of such techniques are appropriately reflected in the Solvency Capital Requirement, and the development provisions to be established shall be complied with.
Article 64. Methods of calculation of the Solvency Capital Requirement.
1. The Solvency Capital Requirement may be calculated, taking into account the provisions of the European Union rules of direct application, in accordance with the following methods:
a) By using the standard formula, by applying the parameters to be determined in general.
b) By using the standard formula, applying the formula to the specific parameters of the entity. Those parameters may be used in the calculation of the risk modules for the subscription of life insurance, insurance other than life insurance and sickness insurance and shall be determined by means of standardised methods based on internal data of the institution concerned or data which are directly relevant to the operations of that institution.
c) By using the standard formula, but with certain simplifications at the points of the calculation in which this option is permitted in accordance with the rules of the European Union of direct application and provided that the nature, volume and complexity of the risks involved so justify. The use of simplifications in certain aspects of the calculation shall be compatible with the use of specific parameters of the entity in other respects.
d) By using the standard formula for certain aspects of the calculation combined with partial internal models, covering the calculation in other respects.
e) By the use of complete internal models covering all relevant aspects and with significant impact on the risk profile of the institution and therefore on its Solvency Capital Requirement.
2. The use of specific parameters or internal models shall require prior administrative approval, at the request of the institution, in the terms and conditions laid down in the European Union rules of direct application.
3. The Directorate-General for Insurance and Pension Funds may require, by means of a reasoned resolution, the calculation of the Solvency Capital Requirement with specific parameters of the institution or with internal models where the risk profile of the institution differs significantly from the assumptions applied in the calculation of the standard formula.
Article 65. Requirement for additional mandatory solvency capital.
1. The Directorate-General for Insurance and Pension Funds may require additional capital from the supervised insurance or reinsurance undertaking by means of a reasoned decision, after the supervision and on an exceptional basis, in the following cases:
(a) Where the risk profile of the insurer or reinsurer is significantly apart from the assumptions underlying the Solvency Capital Requirement calculated by the standard formula and the requirement of an internal model is inadequate or has not been effective, or a partial or complete internal model is being developed.
(b) Where the risk profile of the insurance or reinsurance undertaking differs significantly from the assumptions underlying the Solvency Capital Requirement calculated by a complete or partial internal model because certain quantifiable risks are not sufficiently taken into account, and the adaptation of the model, within an appropriate period, with a view to better reflecting the risk profile considered to have been impossible.
(c) Where the government system of the insurer or reinsurer is significantly apart from the provisions of Law 20/2015 of 14 July or in its implementing rules, and such deviations prevent the identification, measurement, control, management and proper reporting of the risks to which it is exposed or could be exposed, and the implementation of other measures, by themselves, it cannot sufficiently address the deficiencies within an appropriate period.
(d) Where the insurance or reinsurance undertaking applies the adjustment for marriage or the volatility adjustment referred to in Articles 55 and 57 or the first and second transitional provisions and the risk profile of that entity deviates considerably from the assumptions underlying these adjustments and transitional measures.
2. In the cases referred to in paragraph 1 (a) and (1) (b), the additional capital shall be calculated in such a way that the Solvency Capital Requirement of the institution complies with the provisions of Article 63.1.
In the cases referred to in paragraph 1 (c), the additional capital shall be proportionate to the significant risks arising from the deficiencies that led to the resolution of the Directorate-General for Insurance and Pension Funds to impose such additional capital.
In the circumstances set out in paragraph 1 (d), the additional capital shall be proportionate to the significant risks arising from the deviation referred to in that paragraph.
3. In the cases referred to in paragraph 1 (b) and (c), the Directorate-General for Insurance and Pension Funds shall verify that the insurance or reinsurance undertaking takes the necessary measures to remedy the deficiencies which have led to the requirement for additional capital.
4. The sum of the initial mandatory solvency capital and the additional capital imposed shall result in the new Solvency Capital Requirement.
However, the Solvency Capital Requirement shall not include the additional capital imposed in accordance with paragraph 1.c), for the purposes of determining the risk margin for the calculation of technical provisions.
Article 66. Procedure for the requirement of additional mandatory solvency capital.
1. The requirement for additional mandatory solvency capital shall be made in an administrative procedure carried out in accordance with the applicable common administrative procedure legislation, or the rules of the supervisory procedure by inspection, as appropriate.
Only one procedure shall be carried out for each insurance undertaking, so that if an additional Solvency Capital Requirement has already been required of an insurance institution and it is necessary, pursuant to subsequent revisions or inspections, to amend that additional capital requirement, the deletion of the additional capital previously required shall be incorporated in the resolution in which the new additional capital requirement is adopted.
2. The additional capital requirement shall be reviewed at least once a year and shall be deleted by resolution of the Directorate-General for Insurance and Pension Funds where the institution has remedied the deficiencies which, in accordance with Article 65, have determined its requirement.
Article 67. Information on the requirement for additional mandatory solvency capital.
1. The Directorate-General for Insurance and Pension Funds shall provide the European Insurance and Occupational Pensions Authority with information on the average additional capital required per entity and the distribution of the additional capital required during the preceding year, as a percentage of the Solvency Capital Requirement, in accordance with the following categories: insurance and reinsurance entities together; life insurance entities; insurance entities other than life insurance; insurance institutions carrying out life insurance and non-life insurance activities; and reinsurers.
2. For each of the above indications, the proportion of the additional capital required for each of the reasons set out in Article 65 shall be reported.
Subsection 2. Standard Formula
Article 68. Structure of the standard formula.
The Solvency Capital Requirement calculated according to the standard formula shall be equal to the sum of the following items:
(a) The basic Solvency Capital Requirement.
(b) The Solvency Capital Requirement for Operational Risk.
(c) The amount of the adjustment to take into account the loss absorbing capacity of technical provisions and deferred taxes.
Article 69. Configuration of the basic Solvency Capital Requirement.
1. The basic Solvency Capital Requirement shall be obtained by aggregation of risk modules, in terms and conditions laid down, including at least the following:
a) Risk of underwriting in insurance other than life insurance.
b) Risk of underwriting in life insurance.
c) Risk of underwriting sickness insurance.
d) Market risk.
e) Risk of non-compliance of the counterparty.
2. Where appropriate, the diversification effects shall be taken into account in the configuration of the different risk modules.
3. The configuration and specifications of the risk modules shall be identical for all insurance and reinsurance entities, as regards both the basic Solvency Capital Requirement and any simplified calculation carried out in accordance with the provisions of Article 64.1 (c).
4. In relation to the risks arising from disasters, geographical specifications may be used, where appropriate, for the calculation of the risk modules for the subscription of life insurance, for insurance other than life insurance and for sickness insurance.
5. Each of the risk modules referred to in paragraph 1 shall be calibrated on the basis of the value at risk, with a confidence level of 99.5 per cent, on a one-year time horizon.
6. Insurers and reinsurers shall take into account other risk modules additional to those set out in this Article depending on their risk profile. The Directorate-General for Insurance and Pension Funds may require those institutions to consider these additional risks for the calculation of the Solvency Capital Requirement.
Article 70. Calculation of the Solvency Capital Requirement using the standard formula.
1. For the calculation of the basic mandatory capital, individual risk modules shall be aggregated in accordance with the provisions of paragraph 1 of the Annex and in the European Union rules of direct application, taking into account the following:
(a) The risk of underwriting in insurance other than life insurance shall reflect the risk arising from insurance obligations other than life insurance, taking into account the events covered and the processes followed in the exercise of the activity. This module shall take into account the uncertainty of the results of the insurance and reinsurance entities in relation to the existing insurance and reinsurance obligations and the new activities expected to be carried out in the following 12 months.
b) The risk of underwriting in life insurance will reflect the risk arising from life insurance obligations, taking into account the events covered and the processes followed in the exercise of the activity.
(c) The risk of subscription to sickness insurance shall reflect the risk arising out of the obligations arising out of the subscription of such contracts, whether or not there are technical bases similar to those of life insurance, as a consequence of both the events covered, and of the processes followed in the exercise of the activity.
d) Market risk shall reveal the risk arising from the level or volatility of market prices of financial instruments that influence the value of the entity's assets and liabilities. It shall adequately reflect, where appropriate, the lack of structural correspondence between assets and liabilities, in particular as regards duration.
(e) The risk of non-compliance of the counterparty shall reflect any losses arising from the unexpected or deteriorating credit quality of the counterparties and the debtors of the insurance and reinsurance entities in the following 12 months.
2. The operational risk capital requirement shall reflect operational risks as long as they are not already included in the risk modules referred to in paragraph 1. It shall be calculated in accordance with the rules of the European Union of direct application.
Operational risk will include legal risks, but not risks arising from strategic decisions or reputational risks.
In life insurance contracts, where the investment risk is borne by the policyholders, the amount of the annual costs incurred by those insurance obligations shall be taken into account for the calculation of the mandatory operational risk capital.
In the insurance and reinsurance operations other than those referred to in the preceding subparagraph, the calculation of the mandatory operational risk capital shall take into account the volume of those operations, which shall be determined on the basis of the premiums written and the technical provisions constituted in relation to those insurance and reinsurance obligations. In this case, the capital requirement for operational risks shall not exceed 30% of the basic Solvency Capital Requirement for such insurance and reinsurance operations.
3. The adjustment to take into account the loss absorbing capacity of technical provisions and deferred taxes shall reflect the possible compensation of unexpected losses by a simultaneous decrease in technical provisions or deferred taxes, or a combination of both and shall be determined in accordance with the provisions of the European Union rules of direct application. The Directorate-General for Insurance and Pension Funds may regulate by circulating the requirements and conditions for the implementation of such adjustment.
The adjustment will take into account the risk reduction effect generated by future discretionary benefits of insurance contracts, in so far as insurance and reinsurance undertakings can demonstrate that a reduction in those benefits can be used to cover unexpected losses when they occur. The risk mitigation effect of future discretionary benefits shall not be greater than the sum of the technical provisions and deferred taxes corresponding to those future discretionary benefits.
For the purposes of the preceding paragraph, the value of future discretionary benefits in adverse circumstances shall be compared to the value of those same benefits according to a calculation based on the best estimate.
4. For social security mutual societies which do not operate for classes, because they have not obtained authorisation for the extension of benefits in accordance with Article 45 of Law 20/2015 of 14 July 2015, the Solvency Capital Requirement shall be three-quarters of the amount resulting from the application of paragraphs 1, 2 and 3.
For mutual societies which provide in their statutes for the possibility of carrying out quotas or of reducing the benefits and the annual amount of contributions due does not exceed EUR 5,000,000 for three consecutive years, the fraction of the Solvency Capital Requirement referred to in the preceding paragraph shall be reduced by half. If the quota figure is exceeded for three consecutive years, from the fourth financial year the ratio shall be three quarters.
Article 71. Insurance subscription risk module other than life insurance of basic compulsory capital.
The insurance subscription risk module other than life insurance shall be calculated, in accordance with paragraph 2 of the Annex, as a combination of the corresponding mandatory capital at least for the following sub-modules:
(a) Risk of loss or adverse change in the value of liabilities arising from insurance due to fluctuations in relation to the time of occurrence, frequency and severity of insured events, and at the time and amount of the settlement of claims (risk of premium and reserve in insurance other than life insurance).
(b) Risk of loss or adverse change in the value of liabilities arising from insurance due to significant uncertainty in the pricing assumptions and the provision of provisions corresponding to extreme or exceptional events (risk of catastrophe in insurance other than life insurance).
Article 72. Basic mandatory capital life insurance subscription risk module.
The life insurance subscription risk module shall be calculated, in accordance with paragraph 3 of the Annex, as a combination of the corresponding mandatory capital, at least for the following sub-modules:
(a) Risk of loss or adverse change in the value of commitments made under insurance due to changes in the level, trend or volatility of death rates, for cases where an increase in the mortality rate leads to an increase in the value of the commitments made under insurance (mortality risk).
(b) Risk of loss or adverse change in the value of commitments made under insurance due to changes in the level, trend or volatility of death rates, for cases where a decrease in the mortality rate leads to an increase in the value of the commitments made under insurance (longevity risk).
(c) Risk of loss or adverse change in the value of commitments made under insurance due to changes in the level, trend or volatility of the rates of invalidity, sickness and morbidity (risk of disability and morbidity).
(d) Risk of loss or adverse change in the value of commitments made under insurance due to changes in the level, trend or volatility of the costs of execution of insurance or reinsurance contracts (risk of life insurance expenses).
e) Risk of loss or adverse change in the value of commitments made under insurance due to changes in the level, trend or volatility of the review fees applicable to benefits in the form of income, due to changes in legislation or changes in the health status of the insured person (risk of review).
(f) Risk of loss or adverse change in the value of commitments made under insurance due to changes in the level or volatility of discontinuity, cancellation, renewal and redemption of policies (risk of reduction).
g) Risk of loss or adverse change in the value of the commitments made under insurance due to a significant uncertainty in the pricing assumptions and the provision of provisions corresponding to extreme or extraordinary events (risk of catastrophe in life insurance).
Article 73. Risk module for the subscription of the basic compulsory capital sickness insurance.
The disease insurance subscription risk module shall be calculated, in accordance with paragraphs 2 or 3 of the Annex, using non-similar or life-like techniques, as a combination of the corresponding mandatory capital, at least for the following sub-modules:
(a) Risk of loss or adverse change in the value of liabilities incurred under insurance due to changes in the level, trend or volatility of the execution costs of insurance or reinsurance contracts.
(b) Risk of loss or adverse change in the value of liabilities incurred under insurance due to fluctuations in relation to the time of occurrence, the frequency and severity of the insured facts, as well as the timing and amount of the settlement of claims on the date of the provision of the provisions.
(c) Risk of loss or adverse change in the value of liabilities incurred under insurance due to significant uncertainty in the pricing assumptions and provision of provisions corresponding to outbreaks of major epidemics, as well as the exceptional accumulation of risks in such extreme circumstances.
Article 74. Basic mandatory capital market risk module.
1. The market risk module shall be calculated, in accordance with paragraph 4 of the Annex, as a combination of the corresponding mandatory capital, at least for the following sub-modules:
(a) Sensitivity of the value of assets, liabilities and financial instruments against changes in the temporal structure of interest rates or the volatility of interest rates (interest rate risk).
(b) Sensitivity of the value of assets, liabilities and financial instruments against changes in the level or volatility of the market prices of shares (risk of shares).
(c) Sensitivity of the value of assets, liabilities and financial instruments against changes in the level or volatility of market prices of real estate property (real estate risk).
(d) Sensitivity of the value of assets, liabilities and financial instruments against changes in the level or volatility of credit spreads in relation to the temporary structure of interest rates without risk (differential risk).
e) Sensitivity of the value of assets, liabilities and financial instruments against changes in the level or volatility of foreign exchange rates (currency risk).
(f) additional risks to the exposure of an insurance or reinsurance undertaking as a result of either a lack of diversification of the portfolio of assets or of an important exposure to the risk of non-compliance with the same issuer of securities or a group of related issuers (market risk concentrations).
2. The equity risk sub-module calculated in accordance with the standard formula shall comprise a symmetric adjustment of the own capital requirement to cover the risk arising from changes in the level of share prices. This adjustment will be published by the European Insurance and Occupational Pensions Authority (EIOPA).
The symmetric adjustment will be based on a function of the current level of an index of the shares and a weighted average level of that index. The weighted average shall be calculated over an appropriate period, which shall be equal for all insurance and reinsurance entities.
The symmetric adjustment shall not result in the application of a capital charge that is lower or higher by 10 percentage points to the standard capital requirement.
Article 75. Variable income risk sub-module based on duration.
1. The Directorate-General for Insurance and Pension Funds may authorise the application of a sub-module for the variable income risk of the Solvency Capital Requirement, calibrated using the measure of the value at risk, for a period that is consistent with the maintenance period of the variable income investments of the institution concerned, with a level of confidence that provides policy holders and beneficiaries with a level of protection equivalent to that set out in Article 63.1. The maximum period for resolving this procedure shall be six months.
2. Insurance undertakings acting in the life field may be required by insurance undertakings to make pension commitments or to guarantee retirement benefits in respect of which the premiums paid for such benefits have an approved tax deduction for insurance policy holders, where:
(a) All assets and liabilities corresponding to these activities are delimited, managed and organised separately from other activities of the insurance institutions, without any possibility of transfer.
(b) The activities of the entity to which the approach set out in this paragraph applies are carried out only in Spain.
c) The average duration of the liabilities corresponding to this activity that the entity maintains exceeds the average of twelve years.
3. In the calculation of the Solvency Capital Requirement, these assets and liabilities shall be fully taken into account for the purposes of assessing the effects of diversification, without prejudice to the need to safeguard the interests of policyholders and beneficiaries in other Member States.
4. The solvency and liquidity situation, as well as the strategies, processes and reporting procedures of the entity concerned with respect to the management of assets and liabilities, shall ensure on a continuous basis that the institution is able to maintain variable income investments for a period consistent with the typical maintenance period for such investments in the case of the entity concerned.
5. Insurance and reinsurance undertakings may not re-apply the system of calculation laid down in Article 74, except in duly justified circumstances and subject to the authorisation of the Directorate-General for Insurance and Pension Funds.
Article 76. Details of the calculation of the solvency capital requirement for death insurance.
1. The Solvency Capital Requirement for the risk of underwriting and for the risk of interest rate in death insurance may be calculated under the general life insurance scheme or under the simplified scheme to be approved by ministerial order.
2. Where such a simplified scheme is applied, the amount resulting from each of the sub-modules of the death insurance subscription risk shall be calculated separately and each of those amounts shall be added to the relevant sub-module for the risk of subscription to life insurance.
3. Similarly, when such a simplified scheme is applied, for the purposes of determining whether to apply the scenario for raising or lowering the interest rate structure in the rules of interest rate risk capital requirements for the institution's total, it shall be calculated separately, for the death insurance and for the rest of the classes, the amounts, the lower and the higher, resulting from the application of the interest rate changes provided for in the European Union rules of direct application. The aforementioned amounts obtained at the lower and higher for the death class and for the rest of the classes will be added separately, resulting in a scenario added to the downside and an added scenario to the upside. It shall be taken as the amount of the interest rate sub-module the greater of the two.
The Directorate-General for Insurance and Pension Funds may, by means of a reasoned decision, require a company to cease the use of the simplified scheme, if it considers that it is not appropriate to the risk profile of the institution.
Article 77. Risk module for non-compliance with the basic mandatory capital counterparty.
1. The counterparty default risk module shall cover contracts intended to mitigate risks, such as reinsurance, securitisation and derivative contracts, as well as credit on intermediaries and other credit risks not included in the spread risk sub-module. The module shall take due account of guarantees or other bonds held by or on behalf of the insurance or reinsurance undertaking and the risks associated with such guarantees and guarantees.
2. The counterparty default risk module shall reflect, for each counterparty, the overall exposure of the insurance or reinsurance undertaking to that counterparty, regardless of the legal nature of its contractual obligations with respect to that counterparty.
Subsection 3. Internal Models
Article 78. Calculation of the Solvency Capital Requirement by internal models.
1. Insurance and reinsurance entities may calculate the Solvency Capital Requirement using an internal, complete or partial model, subject to the authorisation of the Minister for Economic and Competitiveness, and while maintaining compliance with both the requirements set out in this Subsection and those set out in the Administrative Authorisation itself. This authorisation shall be granted in the terms and conditions laid down in the rules of the European Union of direct application.
2. By resolution of the Directorate-General for Insurance and Pension Funds, insurance and reinsurance undertakings to which the use of an internal model has been authorised may be required to present an estimate of the Solvency Capital Requirement calculated in accordance with the standard formula.
3. Once the use of an internal model has been authorised, the Solvency Capital Requirement calculated using the internal model may only be recalculated according to the standard formula in duly justified circumstances and subject to the authorisation of the General Directorate of Insurance and Pension Funds.
Article 79. Authorization of internal models.
1. In any application for the authorisation of an internal model, insurance and reinsurance undertakings shall provide at least justification that the internal model satisfies the requirements laid down in Articles 83 to 88.
2. The application of a model or data obtained externally to the individual entity considered, shall not exempt from the justification and continued compliance with the requirements that on the internal model establish the aforementioned articles.
3. If the application for authorisation concerns a partial internal model, the above requirements shall be adapted to take account of the limited scope of the application of the model.
4. The Minister for Economic Affairs and Competitiveness shall authorise the use of the internal model where the systems available to the insurance or reinsurance undertaking for the identification, measurement, monitoring, management and risk information systems are sufficient, and in particular where the internal model complies with the requirements referred to in paragraph 1.
Article 80. Additional requirements for the authorisation of partial internal models.
1. Insurance and reinsurance undertakings may use partial internal models for the calculation of one or more of the elements referred to in Article 68.
A partial model may also be applied to the whole of the activity of the insurance or reinsurance entities, or only to one or more of the main segments of their business.
2. In the case of a partial internal model, the Minister for Economic Affairs and Competitiveness shall authorise it if it satisfies, in addition to the requirements laid down in Article 79, the following conditions:
(a) The entity shall justify the objective criteria underlying the scope of application chosen for the partial internal model which, unless sufficiently accredited, shall give priority to the main risk and business areas of the institution.
(b) The entity shall justify that, either from the start of the application of the partial internal model or at the end of the transition plan that is presented, the model shall cover the main risks or insurance operations within the specific risk module (s) concerned.
(c) The resulting mandatory solvency capital reflects better the risk profile of the institution and, in particular, is in line with the principles established for the calculation of the Solvency Capital Requirement.
(d) The conception of the partial internal model is consistent with the principles set out in the calculation of the Solvency Capital Requirement, so that it can be fully integrated into the standard formula for determining the Solvency Capital Requirement.
3. When examining an application for the authorisation of a partial internal model applicable only to certain sub-modules of a particular risk module, or to certain segments of activity of an insurance or reinsurance undertaking with respect to a particular risk module, or to parts of both, the Directorate-General for Insurance and Pension Funds may require the institution to submit a transportable transition plan with a high probability, which is intended to extend the scope of the model in order to comply with paragraph 2.b.
The transition plan will detail how insurers or reinsurers plan to extend the scope of the model to other sub-modules or segments of activity, in order to ensure that the model is applied to a predominant part of its insurance operations.
Article 81. Internal model modification policy.
1. The authorization of an internal model by the Minister of Economy and Competitiveness will include the approval of the policy that the entity must implement for future modifications of the model. This policy will identify the changes that are described as being of greater and lesser relevance.
2. The most important amendments to the internal model, as well as changes in the policy of amendments, will be subject to the prior authorisation of the Minister for Economic Affairs and Competitiveness, in the terms and conditions laid down in European Union rules of direct application.
3. The minor changes to the internal model will only be submitted to the Directorate-General for Insurance and Pension Funds, which must be accompanied by detailed documentation of the objective reasons for the change. The institutions shall notify those amendments together on a quarterly basis.
When a number of minor modifications can jointly have an effect similar to a major modification, these minor changes will be grouped and will have the consideration of major modification, being subject to prior authorization from the Minister of Economy and Competitiveness.
Article 82. Failure to comply with the internal model.
1. Insurance and reinsurance entities which, after having been authorised by the Minister for Economic and Competitiveness to implement an internal model, no longer meet the requirements laid down in their authorisation, shall comply with one of the following options:
(a) To present to the Directorate-General for Insurance and Pension Funds the supporting documentation stating that the non-compliance has no significant effect.
(b) Submit to the Directorate-General for Insurance and Pension Funds within one month of the failure to comply with a plan to restore the situation within a period of not more than six months.
2. If institutions that have opted for the option in paragraph 1.b) do not apply the plan referred to in that paragraph, the General Directorate of Insurance and Pension Funds may require them to recalculate the Solvency Capital Requirement in accordance with the standard formula.
Article 83. Use of the internal model in decision making and management activities.
1. Insurers and reinsurers shall credit that the internal model is used in all relevant areas and plays an important role in the governance system of the institution and in particular as regards:
a) The risk management system and decision making processes.
(b) The processes for the assessment and allocation of economic and solvency capital, including the internal risk and solvency assessment referred to in Article 66 of Law 20/2015 of 14 July and Article 46 of this royal decree.
2. Insurance and reinsurance undertakings shall provide proof that the frequency of calculation of the Solvency Capital Requirement through the internal model is in line with the frequency with which they apply that internal model to the other purposes referred to in the previous paragraph.
Article 84. Standards of statistical quality of the internal models.
1. The methods used to calculate the probability distribution on which the internal model is based shall be based on appropriate and relevant actuarial techniques and statistics, and shall be consistent with the methods used to calculate the technical provisions.
2. The methods applied for the calculation of the expected distribution of probability shall be based on up-to-date and reliable information, and on realistic assumptions.
Insurance and reinsurance entities should be in a position to justify to the General Directorate of Insurance and Pension Funds the assumptions applied in the internal model.
3. The data used in the internal model shall be accurate, complete and appropriate in such a way as to reflect the specific risk profile of the institution.
Insurance and reinsurance entities shall update at least annually the series of data used in the calculation of the expected distribution of probability.
4. No specific method shall be required for the calculation of the expected distribution of probability.
Whatever the method of calculation chosen, the internal model shall permit the classification of the risks in such a way that there is a guarantee that it will be applied extensively and will be a prominent place in the governance system of the insurance and reinsurance entities, in particular as regards its risk management system and its decision-making processes, as well as the allocation of capital, in accordance with Article 83.
5. The internal model shall cover all significant risks to which insurance and reinsurance entities are exposed. The internal models shall cover at least the risks referred to in Article 63.2.
6. Insurers and reinsurers may take into account in their internal model, in order to assess the effects of diversification, existing dependencies within the same risk category as well as among the different risk categories, provided that the General Directorate of Insurance and Pension Funds considers that the system used to assess the effects of diversification is appropriate.
7. Insurers and reinsurers may take full account of the effect of risk mitigation techniques on their internal model, provided that the credit risk and other risks arising from the use of risk mitigation techniques are adequately reflected in that model.
8. Insurers and reinsurers shall assess accurately in their internal model the risks specifically linked to financial guarantees and possible contractual options, provided that they are significant. They shall also assess the risks associated with the choice of the taker and his/her own contractual options. For these purposes, they should take into account the consequences that future changes in financial and other conditions may have on the exercise of such options.
9. In their internal model, insurance and reinsurance entities may take into account future management decisions in the event of certain circumstances, provided that there is objective evidence that such actions will be taken with a high degree of confidence and that their effects will be expected. In this case, the entity shall provide for the period of time required to implement such decisions.
10. In their internal model, insurance and reinsurance entities shall take into account all payments that they provide to the policyholders and beneficiaries, whether or not they are contractually guaranteed.
Article 85. Calibration standards for the internal models.
1. Insurers and reinsurers may apply, for the purposes of their internal model, a time horizon or a measure of risk other than those laid down in Article 74.1 of Law 20/2015 of 14 July, provided that the results of the internal model can be used by those institutions to calculate the Solvency Capital Requirement in such a way as to justify to the Directorate-General for Insurance and Pension Funds that such capital means for the beneficiaries, beneficiaries and third parties affected by an equivalent level of protection.
2. Where possible, insurance and reinsurance entities shall calculate the Solvency Capital Requirement directly from the expected distribution of probability generated by their internal model, using the measure of the value at risk set out in Article 74.1 of Law 20/2015 of 14 July 2015.
3. Where insurers and reinsurers are unable to find the Solvency Capital Requirement directly from the expected distribution of probability generated by the internal model, the General Directorate of Insurance and Pension Funds may authorise the use of approximations in the calculation of the Solvency Capital Requirement, provided that they can demonstrate to the aforementioned Directorate-General that the policyholders shall enjoy a level of protection equivalent to that arising from the application of Article 74.1 of Law 20/2015 of 14 July.
4. In order to check the calibration of the internal model and to verify that its specifications are in line with generally accepted market practices, the General Directorate of Insurance and Pension Funds may require insurance and reinsurance entities to apply their internal model to reference portfolios and to use assumptions based on external data rather than internal data.
Article 86. Allocation of profit and loss.
1. Insurers and reinsurers shall analyse, at least annually, the causes and origins of the losses and gains arising from each of the main segments of activity.
2. Insurers and reinsurers shall demonstrate how the categorisation of the risk chosen in the internal model explains the causes and sources of profit and loss.
3. The categorisation of risk and the allocation of profit and loss shall reflect the risk profile of insurance and reinsurance entities.
Article 87. Standards for validation of internal models.
1. Insurers and reinsurers shall provide for a periodic validation cycle for the models, aimed at verifying their performance, verifying that their specifications remain adequate and comparing their results with those obtained in reality.
2. The process of validation of the models shall be based on an effective statistical support enabling the insurance and reinsurance entities to justify to the Directorate-General for Insurance and Pension Funds that the resulting capital requirements are adequate.
3. The statistical methods applied shall serve to verify the validity of the expected distribution of probability both in view of the losses experienced and of any relevant new data and relevant information in that respect.
4. The validation process of the models shall include an analysis of the stability of the internal model and, in particular, the sensitivity of the results of the internal model to the modifications of the main applied scenarios. It shall also include the examination of the accuracy, completeness and adequacy of the data used by the internal model, in such a way as to reflect at all times the specific risk profile of the institution.
Article 88. Documentation of the internal models.
1. Insurers and reinsurers shall provide a complete justification for the structure and operational details of their internal model.
2. The content of the documentation shall include the justification for compliance with the provisions of Articles 83 to 87, a detailed description of the theory, the assumptions and the mathematical and empirical basis on which the internal model is based, any possible circumstances in which the internal model may not function effectively, any changes to its internal model as set out in Article 81, and any other relevant extreme for the purpose of ensuring that the requirements for the calculation of the Solvency Capital Requirement are met.
Section 4. Inversiones
Article 89. Rules on investments by insurers and reinsurers.
1. Insurance and reinsurance undertakings shall invest their resources in accordance with the principle of prudence. For these purposes they must comply with the following:
(a) They will invest only in assets and instruments whose risks they can determine, measure, monitor, manage and control properly in addition to adequately informing the Directorate General of Insurance and Pension Funds. These risks shall be taken into account in the assessment of the overall solvency requirements within the internal risk and solvency assessment.
(b) They shall be invested in such a way as to ensure the liquidity, security and profitability of the portfolio of the assets portfolio, in particular those covering the mandatory minimum capital and the Solvency Capital Requirement.
(c) Guarantee that the location of the assets allows at all times their availability by the insurance or reinsurance undertaking.
(d) The assets representing the technical provisions shall be invested in such a way as to be consistent with the nature and duration of the obligations arising from insurance and reinsurance contracts and seeking the general interest of all policy holders and beneficiaries. In case of conflict of interest, they should seek the greatest benefit of the takers and beneficiaries. The objectives of the investment entity should be taken into account.
(e) Investment in derivative instruments shall be supported to the extent that they contribute to the reduction of investment risks or to facilitate the efficient management of the portfolio.
f) Investment in non-traded assets on organised markets should be maintained at prudent levels.
(g) Assets shall be adequately diversified in order to avoid over-reliance on a single asset, issuer or group of companies, or a particular geographical area, as well as an excess of risk accumulation in the portfolio as a whole.
Investments in assets issued by the same issuer or by issuers belonging to the same group shall not expose the institution to an excessive concentration of risk.
2. The rules of the European Union of direct application must be respected in this respect.
3. Without prejudice to the foregoing, immovable property shall be subject to valuation by an approved valuation entity for the valuation of assets in the mortgage market in accordance with the rules for the valuation of real estate and certain rights for certain financial purposes approved by the Ministry of Economy and Competitiveness.
Article 90. Assets representing the technical provisions in those life insurance in which the taker assumes the risk of the investment.
1. For the assets that represent the technical provisions in those life insurance in which the policyholder assumes the risk of the investment, Article 89.1 (a), (b), (c) and (d) shall be respected.
2. The following rules shall be complied with:
(a) Where the benefits provided for in a contract are directly linked to the value of the shares and units of Collective Investment Institutions in transferable securities as defined in Law 35/2003 of 4 November of the Collective Investment Institutions, or to the value of the assets contained in an internal fund held by the insurance institution, generally divided into units, the technical provisions corresponding to those benefits shall be represented as closely as possible by those provisions. or, if they have not been determined, by such assets.
(b) Where the benefits provided for in a contract are directly linked to an index of shares or a reference value other than those referred to in paragraph (a), the technical provisions in respect of such benefits shall be reflected as closely as possible to the units deemed to represent the reference value or, in the case where the shares were not determined, by assets of a security and of a suitable negotiation that correspond as closely as possible to those in which the shares are held. base the reference value.
(c) Where the benefits referred to in paragraphs (a) and (b) include a guaranteed interest rate or other guaranteed benefit, the hedging assets of the corresponding additional technical provisions shall be subject to the provisions of Article 89.1 (e), (f) and (g).
CHAPTER III
Public information on the financial and solvency situation
Article 91. Form of the report on the financial and solvency situation.
1. The report on the financial and solvency situation may be drawn up in full or contained in references to information published under other legal or regulatory requirements and which is equivalent in nature and in its scope.
2. The report on the financial and solvency situation shall be reviewed. The Directorate-General for Insurance and Pension Funds shall determine by circulating the content of the special report on the review of the financial and solvency situation and the person responsible for drawing up the report.
Article 92. Content of the report on the financial and solvency situation.
1. The report on the financial and solvency situation shall include
following:a) Description of the entity's activity and results.
b) Description of the entity's governance system and assessment of its adequacy with respect to the institution's risk profile.
(c) Description, separately for each category of risk, of exposure, concentration, reduction and sensitivity to risk.
(d) Description, separately for the assets, technical provisions and other liabilities, of the bases and methods used for their valuation, together with an explanation of the existing significant differences, if any, on the basis and methods for valuation in the financial statements.
e) Description of the management of capital, including at least the following:
1. The structure and amount of own funds, as well as their quality.
2. The amount of the Solvency Capital Requirement and the Minimum Capital Requirement.
3. The option referred to in Article 75 for the calculation of the Solvency Capital Requirement.
4. The information to enable the main differences between the basic assumptions of the standard formula and those of the internal model used, where appropriate, by the institution to calculate its Solvency Capital Requirement.
5. º The amount of any possible deficit with respect to the Minimum Capital Requirement or any significant shortfall with respect to the Solvency Capital Requirement during the reference period, even if it has been subsequently corrected, together with an explanation of its origin and its consequences and the corrective measures taken.
(f) the insurance institutions which are eligible for the special solvency scheme shall expressly include the reference to the special scheme.
2. Where the matching adjustment provided for in Article 55 is applicable, the description referred to in point (1) (d) shall include a description of the adjustment by marriage, the portfolio of obligations and assets allocated, as well as a quantification of the effect of not applying the adjustment for marriage in the financial situation of the institution.
The description referred to in point (1) (d) shall also include a statement on whether the institution uses the volatility adjustment provided for in Article 57, as well as a quantification of the effect of a change to zero of that adjustment in the financial situation of the institution.
3. The description referred to in paragraph 1 (e). 1. shall include an analysis of any significant changes to the previous reference period and an explanation of the existing major differences, where appropriate, with respect to the value of such items in the financial statements, as well as a brief description of the transferability of the capital.
4. The indication of the Solvency Capital Requirement referred to in paragraph 1 (e). 2. º, specify separately, if applicable:
a) The amount calculated according to the standard formula or the internal models.
(b) Any additional mandatory solvency capital requirements imposed pursuant to Article 76 of Law 20/2015 of 14 July 2015.
(c) The impact of the specific parameters that the insurer or reinsurer should use in accordance with the provisions of Article 64.2.
(d) concise information on the reasons for the resolution of the Directorate-General for Insurance and Pension Funds to require both additional mandatory solvency capital and the use of the specific parameters.
The publication of the Solvency Capital Requirement shall be accompanied, where appropriate, by the indication that its final amount is subject to a supervisory assessment.
Article 93. Time limits for the disclosure of the report on the financial and solvency situation.
1. Insurance and reinsurance undertakings shall disclose their report on the financial and solvency situation within the time limit laid down in the rules of the European Union of direct application.
2. For the disclosure of the report on the financial and group solvency situation, the period laid down in the preceding paragraph shall be extended to that laid down in the rules of the European Union of direct application.
3. Insurance and reinsurance undertakings shall disclose and forward to the Directorate-General for Insurance and Pension Funds the special report on the review of the financial and solvency situation within the time limits set out in paragraphs 1 and 2.
Article 94. Updates to the report on the financial and solvency situation and additional voluntary information.
1. They are considered to be significant circumstances that significantly affect the information published in the report on the financial and solvency situation and which will entail the publication of timely information on its nature and its effects, at least the following:
(a) Where a deficit is observed with respect to the Minimum Capital Requirement and the General Directorate of Insurance and Pension Funds considers that the institution may not submit an appropriate short-term financing plan or that such plan is not presented within one month, on the basis of the finding of non-compliance.
(b) Where a significant deficit is observed with respect to the Solvency Capital Requirement and an adequate recovery plan is not presented to the Directorate-General for Insurance and Pension Funds within two months, on the basis of the finding of the non-compliance.
2. In the event of any of the circumstances set out in the previous paragraph, the Directorate-General for Insurance and Pension Funds shall require the institution to publish immediately the amount of the deficit, together with an explanation of its origin and its consequences and any corrective measures taken.
3. Where, in the case referred to in paragraph 1 (a), although the short-term financing plan was initially deemed appropriate, the deficit with respect to the minimum capital requirement would not have been corrected three months after it has been established or, in the case referred to in paragraph 1 (b), although the recovery plan would have been initially considered appropriate, the significant deficit with respect to the Solvency Capital Requirement would not have been corrected six months after it was established, and should be published at the end of those periods respectively, the the amount of the deficit, together with an explanation of its origin and its consequences and any corrective measures taken, as well as any further possible corrective measures.
CHAPTER IV
Accounting Obligations
Article 95. Accounting of insurance and reinsurance entities.
The accounting of the operations of the insurance and reinsurance entities shall be in accordance with the rules contained in the Accounting Plan of the insurance institutions approved by Royal Decree 1317/2008 of 24 July, and in the provisions that develop it. In their absence, the rules of the General Accounting Plan, the Trade Code and the other provisions of the commercial law on accounting matters shall apply.
Article 96. Books and accounting records of insurance and reinsurance entities.
1. Insurers and reinsurers shall bear the accounting records required by the Trade Code and other provisions applicable to them, including by compulsory means the ledger, which shall collect, for each of the accounts, the charges and fertilizers which are made, and must be agreed at all times with the entries made in the daily book.
You must also have the records listed below:
a) Of accounts. It shall collect the accounts used by the institution for the purpose of reflecting its transactions in the daily book, with breakdowns in sub-accounts, as well as the main accounting relationships relating to them as soon as they are not defined in the accounting plan of the insurance institutions.
b) Policies and supplements issued, and cancellations. This record shall contain the relevant data for each insurance policy or supplement in relation to its personal items, characteristics of the covered risk and economic conditions of the contract.
Policies must be issued with correlative numbering, and may comprise several series, according to the classification criteria used. The supplements issued, which will include those that correspond to extortions of premiums, must be related to the policy from which they come.
When the cancellation of a policy or supplement occurs, this circumstance and its date will be recorded in the affected records.
c) Of claims. Claims shall be recorded as soon as they are known to the institution and shall be assigned a correlative numbering, in chronological order, within each of the series to be established in accordance with the casualty classification criteria used by the institution.
The information that must contain at least this record shall relate to the policy of which each casualty proceeds; dates of occurrence and declaration; assigned initial valuation; subsequent payments or consignations, with separate indication of the recoveries that have occurred; the best estimate of the claims provision constituted at the beginning of the financial year; the best estimate of the provision of claims at the close of the period; the date of the last valuation of the claim; and the payments and recoverable amounts of reinsurance. It shall also be indicated whether there is a judicial, administrative complaint to the institution's insured person or of any other kind.
The obligation to carry out this registration will be understood even if the information mentioned in this section is contained in different computer files, provided that it is possible to establish an agile and simple correlation and integration between the content of the same.
In the case of classes or risks that require it, the entity may adapt the content of the casualty record to the characteristics of such insurance, communicating to the General Directorate of Insurance and Pension Funds its structure and form of management.
d) For the calculation of technical provisions. For each of the technical provisions, the records corresponding to the direct insurance, the accepted reinsurance and the transferred reinsurance shall be kept separately.
e) Investments. This inventory shall comprise all the data necessary for proper management of the investments in accordance with the characteristics of each asset. In any event and for each of the entity's investments, including treasury and derivative transactions, this record shall contain the description, status, allocation and valuation for accounting and solvency purposes at the reference date, as well as, where applicable, the inclusion of such assets as assets assigned for settlement purposes, as provided for in Article 179.3 of Law 20/2015 of 14 July. It shall also indicate the deposit of the financial assets and the concept in which the deposit is made.
In the event that there are conditions for classes or risks or for individual insurance contracts, the same and the goods concerned will be unequivocally identified.
In any case it will be necessary to identify the investments specifically assigned to:
1. The portfolios of insurance or reinsurance obligations to which the matching adjustment referred to in Article 55 applies.
2. Polices that recognize participation in benefits.
3. Polices in which the rescue value is referenced or linked to specific assets.
4. Asset hedging operations, liabilities and derivative instruments.
5. º Carberts in which the variable income submodule is used based on durations.
The investment register will, in any case, include a summary of the investment situation at the end of each quarter.
The allocation of assets for settlement purposes shall be kept up to date by the institutions at all times. Only the assets allocated initially may be modified where it is appropriate to carry out, by sale or maturity of the investment, the payment of the benefits which they guarantee or to be replaced by other assets which are better suited to their purpose.
In case of modification, you must be aware of your date, motive and replacement assets, if any.
The total value of the assigned assets, as assessed in accordance with this royal decree, shall not be at any time less than the accounting value of the technical provisions.
From the moment when the dissolution of an insurance institution is agreed, the allocation of the assets referred to in this paragraph may not be modified except for the correction of purely material errors, except prior authorisation from the General Directorate of Insurance and Pension Funds.
The General Directorate of Insurance and Pension Funds may roll back and leave without effect the modifications to the special register of assets for settlement purposes, made prior to the dissolution agreement, when it is verified that such changes have not responded to the criteria applied during the normal business operation period, do not respect the current regulations or lack sufficient justification.
Without prejudice to the above paragraphs, in relation to the insurance class in question, the liquidators shall add to the assets assigned to that class, those arising from the income earned and the premiums received after the dissolution agreement.
(f) Reinsurance contracts accepted and transferred. This record shall comprise the identifying data for each of the reinsurance contracts concluded by the institution, separating the accepted reinsurance contracts and the transferred reinsurance contracts and, within them, distinguishing in different sections the identifying data of the mandatory treaties and those of the optional disposals or acceptances.
For each contract the relevant data on the personal items, characteristics of the insured risks, conditions of the reinsurance cover and all the circumstances of the contract with economic impact shall be collected.
2. The records referred to in the previous paragraph shall be kept on computer media, provided that they have the necessary security guarantees to prevent their tampering.
3. In the case of entities authorised to operate simultaneously in the field of life and in classes other than life, the previous books and records shall be kept in separate sections.
4. The books and records referred to in this Article shall not be delayed for more than three months.
5. The Directorate-General for Insurance and Pension Funds may, by means of a circular, lay down rules on the conduct and technical specifications of the books and records referred to in this Article.
Article 97. Accounting obligations of insurance and reinsurance entities.
1. The financial year of all insurance institutions shall coincide with the calendar year.
2. Without prejudice to the above paragraph, insurance institutions shall, at least quarterly, draw up the balance sheet, the technical and non-profit-making accounts and a state of solvency including the Solvency Capital Requirement and the Minimum Capital Requirement.
In the state of solvency, the Solvency Capital Requirement to be considered shall be the last calculated solvency capital.
The technical results and the minimum capital requirement shall relate separately to both life and insurance activities other than life insurance.
3. The insurance institutions shall keep and keep the books, records, correspondence, documentation and supporting documents relating to their business, duly ordered, in the terms established by the commercial law. However, in the case of risks which may result in claims of deferred manifestation, the relevant documentation shall be kept for a period in accordance with the expected period of the event of claims.
4. An insurance institution shall send the annual accounts and the management report to the Directorate-General for Insurance and Pension Funds, as well as the audit report of the annual accounts before 10 July of the year following the year to which they relate, unless the institution carries out an exclusively reinsurer activity in which case the period shall end on 10 October.
Entities required to formulate consolidated accounts shall forward to the General Directorate of Insurance and Pension Funds the consolidated annual accounts and the management report, as well as the audit report of those annual accounts before 10 July of the year following that to which they relate, unless the required entity carries out an activity exclusively reinsurer or is part of the group a reinsurer entity, in which case the period shall end on 10 October.
Article 98. Audit of the annual accounts of insurance and reinsurance entities.
1. The individual annual accounts and the consolidated annual accounts of the insurance and reinsurance entities shall be reviewed by the auditors.
2. Whenever accounting irregularities which make it difficult to know the true assets of the institution or are subject to special control measures, the Directorate-General for Insurance and Pension Funds may require the insurance and reinsurance undertakings, by way of individualised requirements, to review the auditor's accounts of the institution or another auditor of specific questions, with the extent deemed necessary for the proper control of those entities, provided that they do not constitute a breach of the duty of the institution. the independence to which they are subject, in accordance with the regulatory rules of the audit of accounts.
CHAPTER V
Societal Operations
Section 1. th Portfolio Cession
Article 99. Transfer of portfolio between Spanish insurance companies.
1. A Spanish insurance institution may transfer insurance contracts which include the portfolio of one or more branches in which they operate, except for the social security funds which may only acquire the portfolios of institutions of the same class.
2. In accordance with Article 89.3 of Law 20/2015 of 14 July, partial transfers of a branch of a branch will be admissible in the following cases:
(a) When you understand all the policies of a part of the risks included in a class.
(b) When you understand all of the policies that, belonging to a class, correspond to a particular geographical area.
(c) When it comprises all the policies which, within a branch, can be grouped in the light of any other objective criterion, which shall be clearly determined in the transfer agreement.
In no case will the transfer of insurance policies governed by Royal Decree 1588/1999 of 15 October 1999, by which the regulation of the implementation of the pension commitments of companies with the workers and beneficiaries, corresponding to a company or groups of companies, be approved.
3. The portfolio assignment shall conform to the following rules:
(a) It shall not be the cause of termination of the insurance contracts provided that the transferee insurer is subrogated to all the rights and obligations incumbent upon the transferor in each of the contracts, except in the case of social security mutual funds.
(b) By way of derogation from the foregoing point, in the case of partial transfer of the portfolio of a class, the policyholders may terminate the insurance contracts, to which they shall be duly notified in accordance with the provisions of Article 100.
(c) The transferee shall have administrative authorisation to operate in the classes corresponding to the transferred portfolio.
(d) After the transfer, the transferee shall have sufficient technical provisions and sufficient eligible own funds to cover the Solvency Capital Requirement.
e) The labor relations existing at the time of the transfer shall be governed by the provisions of Article 44 of the recast text of the Law of the Workers ' Statute, approved by the Royal Legislative Decree 1/1995 of 24 March.
Article 100. Procedure for the authorisation of the transfer of the portfolio of Spanish insurance companies.
1. The transfer of the portfolio will require authorization from the Minister of Economy and Competitiveness, for which the following documentation must be provided to the General Directorate of Insurance and Pension Funds:
(a) Certification of the agreements adopted by the competent social bodies of the entities approving the agreement of cession and, where appropriate, the dissolution of the transferor or transferors, or the modification of the social object.
(b) the contract assignment agreement concluded by the representatives of the entities, in which it shall be specified:
1. A detailed inventory of assets and liabilities that are transferred.
2. º Date of effect of the cession.
3. Price of the cession.
4. ° Effect conditional on the administrative authorization of the cession.
(c) Balance sheets and profit and loss accounts of the entities concerned, closed within six months prior to the date of adoption of the portfolio transfer agreement by the competent social bodies, together with a report on significant property changes that may have taken place thereafter and also accompanying the reports issued by the auditors ' auditors.
(d) Estimate of the state of solvency that includes the Solvency Capital Requirement and the Minimum Capital Requirement of the Cessionary Entity for the purpose of the transfer, as well as of the transferor in the event that its insurance business continues.
2. Once the documentation specified together with the application for authorization has been submitted, the General Directorate of Insurance and Pension Funds will agree to the opening of the public information period, authorizing the interested entity to publish advertisements on its website, in one of the most circulation newspapers in the province where the transferor has its registered office, and in another national-wide journal, making known the project of cession and warning the takers of their right to communicate to the General Directorate of Insurance and Pension Funds, within one month from the end of the month. the last publication, the reasons which, if any, they may have in order to be disagreeable with the assignment. However, such public information may be dispensed with when the authorisation is refused because it does not meet the legally enforceable requirements for disposal.
3. After the expiry of the period referred to in the previous paragraph, the Minister for Economic and Competitiveness, having regard to the file opened for the purpose and examined the manifestations of disagreement which have been carried out, shall, after the report of the Directorate-General for Insurance and Pension Funds, give the ministerial order to the effect of the transfer of the portfolio. That order shall, where appropriate, declare the revocation of the administrative authorisation of the transferor and shall be published in the 'Official Gazette of the State'.
4. Once authorized, the cession will be formalized in public deed, which will have to collect the agreements of transfer, patrimonial transfer, and in its case of dissolution. The authorizing notary shall transmit the deed in which the agreements are collected in a telematic form to the Commercial Registry of the registered office of the entities participating in the transfer for registration, unless any of the parties involved in the grant does not authorize it. In this case, the notary will give an electronic copy of the public deed to the entities and will send another by means of telematic and electronic signature to the Mercantile Registry for registration. In the referred referral, the electronic copy of the writing and the supporting documents of the mandatory administrative authorization shall be incorporated. The Commercial Registrar shall transmit to the Directorate General of Insurance and Pension Funds by means of telematic means a certification authorized with his electronic signature, proof of the seat practiced, accompanied by an electronic copy of the public deed. If this is a cooperative partnership, it will be entered in the Register of Cooperative Societies.
5. The administrative authorisation granted to the transferor to carry out the insurance activity shall be revoked in respect of the branch or branches which are wholly transferred.
6. In cases where the policyholders are able to resolve the contracts, they must be notified individually. The right of decision may be exercised within one month from the date of publication in the "Official State Gazette" of the ministerial order, having the right, in addition, to the reimbursement of the part of the premium not consumed.
7. In the event that the transaction is communicated to the National Commission of the Markets and the Competition, as provided for in Law 15/2007 of 3 July of the Defense of Competition, the participants shall communicate the performance of that notification to the General Directorate of Insurance and Pension Funds, which shall suspend the procedure provided for in this Article up to the termination of the procedure initiated by the National Commission of the Markets and the Competition or, where appropriate, until the lifting of the suspension of the concentration agreed upon eventually by the Commission. Commission in accordance with article 9.6 of Law 15/2007 of 3 July.
Article 101. Transfer of a portfolio by a Spanish insurer of contracts entered into under the right of establishment or under the freedom to provide services, or which are to be subscribed to in any of those schemes.
1. The transfer of a portfolio by a Spanish insurance institution to contracts entered into under the right of establishment or under the freedom to provide services or which, by virtue of the transfer, are to be subscribed to in either scheme, to a transferee domiciled in the European Union, including Spain, or to branches of the transferee established in a Member State, shall specify the conformity of the supervisory authority of the Member State of the undertaking or the location of the risk, the certification that the transferee has, in view of the transfer, the funds sufficient eligible own to cover the Solvency Capital Requirement, issued by the supervisory authority of the Member State of origin of the transferee, and in the contracts entered into under the right of establishment, of the consultation of the supervisory authority of the transferring branch.
2. If the Member States do not reply to the requests for conformity, certification or consultation within three months of their receipt, the said conformity shall be deemed to have been granted, the certification issued and the consultation carried out, respectively.
3. Approved the disposal of the portfolio regulated in this article by ministerial order, and published in the "Official State Gazette", the Directorate General of Insurance and Pension Funds will communicate it to the supervisory authorities of the Member States of the commitment or location of the risk.
4. The policyholders shall have the right to terminate the insurance contracts affected by the transfer of the regulated portfolio in this precept. In the case of insurance policy holders in which Spain is the Member State of the risk undertaking or location, the period for exercising that right shall be one month from the publication referred to in the preceding paragraph.
5. In all other cases, such disposal shall be in accordance with the provisions of Article 100, taking into account that the opening of the public information period shall only take place when Spain is the State of the undertaking or the location of the risk.
Article 102. Transfer of portfolio of entities operating in Spain domiciled in another Member State.
1. The Directorate-General for Insurance and Pension Funds shall provide its conformity for the disposal of the insurance contracts of an insurance undertaking domiciled in another Member State where Spain is the Member State of the undertaking or location of the risk.
It should also be consulted when the transferor is a branch established in Spain of an insurance institution domiciled in another Member State.
Finally, when the transferee is a Spanish insurer, the General Directorate must certify that the transferee has, in view of the transfer, sufficient eligible own funds to cover the Solvency Capital Requirement.
2. The Directorate-General for Insurance and Pension Funds shall express its opinion within three months of receipt of the request for conformity, formulation of consultation or application for certification submitted by the Member State of origin of the transferor insurance institution. If, on the expiry of that period, the Directorate-General has not acted in this respect, the conformity, the consultation or the certification shall be deemed to have been granted.
Certification shall be refused where a recovery plan has been required of the insurance undertaking in accordance with Article 156 of Law 20/2015 of 14 July, or a financing plan, in accordance with Article 157 of that law, and as long as the rights of the policyholders are deemed not to be sufficiently guaranteed.
3. Where Spain is the Member State of the undertaking or the location of the risk, the transferor shall be required to notify the policyholders individually of the right to settle insurance contracts which, under the rule of law of establishment or freedom to provide services, are affected by the transfer or which, as a result of the transfer, pass on to any of these schemes, as well as the right to reimbursement of the part of the premium not consumed. Once the supervisory authority of the Member State of origin of the transferor has given its authorization to the transfer, communicating it to the General Directorate of Insurance and Pension Funds, with a specification of the date of effect, the latter will publish in the "Official State Gazette" the authorized cession, and the right to resolve the contracts can be exercised within one month from that publication.
Article 103. Transfer of portfolio of branches in Spain from insurance companies domiciled in third countries.
1. The transfer of a portfolio of branches in Spain from insurance companies domiciled in third countries shall be admissible only where the transferee is:
(a) A Spanish insurance institution or domiciled in another Member State.
(b) A branch established in Spain of an insurance institution domiciled in another Member State or in third countries.
(c) A branch established in the other Member States of a Spanish insurer or domiciled in any of the other Member States.
2. The transfer of portfolio shall be subject to the provisions of Article 100 and, where appropriate, shall require prior to the granting of the administrative authorisation the certification of the competent authority of the Member State of the transferee that the latter has, in view of the transfer, the eligible own funds necessary to cover the Solvency Capital Requirement. Such certification shall be issued within three months of receipt of the request made by the Directorate-General for Insurance and Pension Funds and shall be deemed to be extended in accordance with the non-issued certification if, on the expiry of that period.
3. If the transferee is an insurance institution domiciled in another Member State or a branch established in it, the policyholders shall have the right to terminate the insurance contracts affected by the transfer on the same terms as laid down in Article 101.4.
Article 104. Transfer of portfolio to a branch in Spain of insurance companies domiciled in third countries.
1. The transfer of a portfolio to a branch in Spain of insurance entities domiciled in third countries shall be admissible only if the transferor is:
a) A Spanish insurer.
(b) A branch established in Spain of insurance companies domiciled in other Member States or in third countries.
2. If the transferor is a Spanish insurer or a branch in Spain of insurance institutions domiciled in third countries, the transfer of the portfolio shall be in accordance with Article 100.
If the transferor is a branch in Spain of an insurance institution domiciled in any of the other Member States, the Directorate-General for Insurance and Pension Funds shall provide its conformity for the disposal and, in advance, certify whether the branch of the insurer domiciled in third countries has, in view of the transfer, the eligible own funds necessary to cover the Solvency Capital Requirement, in accordance with Article 102.
Article 105. Transfer of portfolio of reinsurers.
1. The transfer of the portfolio of the Spanish reinsurers shall be governed by the provisions of Article 100.
2. The transfer may be of the entire portfolio, of all life reinsurance contracts or of all reinsurance contracts other than life.
Partial disposals may also be made, which do not include all life reinsurance or reinsurance contracts other than life.
3. In the case of transfers of portfolios which comprise contracts entered into under the right of establishment or under the freedom to provide services or which, by virtue of the transfer, are to be subscribed in either of the two schemes, to a transferee domiciled in the European Union, it shall be specified that the transferee has, in the light of the transfer, sufficient eligible own funds to cover the Solvency Capital Requirement issued by the supervisory authority of the Member State of origin of the transferee.
4. Where the transferee is a Spanish reinsurer, the Directorate-General for Insurance and Pension Funds shall certify that the transferee has, where appropriate, and in the light of the transfer, sufficient eligible own funds to cover the Solvency Capital Requirement within the time limit referred to in Article 102 and with the same effects in the event of a failure to deliver an express statement by the Directorate-General for Insurance and Pension Funds.
5. The transfer of portfolio may result in the resolution of reinsurance contracts concluded by the insurance institutions with the transferor, if within one month of the transfer to the insurers concerned by the transaction, they expressly express their wish to terminate the contract.
6. Certification shall be refused where a recovery plan has been required of the reinsurer entity, in accordance with Article 156 of Law 20/2015 of 14 July, or a financing plan, in accordance with Article 157 of that law, and as long as the contractual obligations of the reinsurer entity are deemed not to be sufficiently guaranteed.
7. Where the supervisory authority of the Member State of origin of the transferor authorises the transfer, the Directorate-General for Insurance and Pension Funds shall give publicity to the operation on its website after receipt of the communication from the Supervisory Authority.
Section 2
Subsection 1. th Transformation
Article 106. Transformation of insurance entities.
1. The processing arrangements for insurance institutions shall be as follows:
(a) Anonymous insurance and reinsurance companies may be transformed into European limited liability insurance and reinsurance companies.
(b) Insurance mutuals may be transformed into anonymous insurance companies.
(c) Insurance cooperatives may be transformed into anonymous insurance companies and European insurance cooperative societies.
(d) Social security mutual societies may be transformed into mutual insurance and insurance companies.
2. Any conversion of an insurance undertaking into a company of a type other than those previously provided for, whether or not an insurance undertaking, shall be void.
3. The provisions of Article 99.3 shall apply to the processing of insurance undertakings. (d) and (e).
4. In the event of the transformation of mutual or mutual social security institutions, the mutualists who have not voted in favour of the agreement may be separated from the company which is transformed, in accordance with the terms of Article 15 of Law No 3/2009 of 3 April 2009 on structural changes in commercial companies.
In the valuation of the social units that correspond to the partner that is separated, account will be taken of the contributions made to the mutual fund and the reimbursement of the part of the premium not consumed in the insurance contracts that are resolved.
Article 107. Procedure for the authorisation of the processing of insurance institutions.
1. The conversion of an insurance undertaking into another entity of a legal or other kind shall require the authorisation of the Minister for Economic Affairs and Competitiveness, to which the following documentation shall be provided to the Directorate-General for Insurance and Pension Funds:
(a) Certification of the agreement adopted by the competent social body of the entity, approving the transformation project.
(b) Project of transformation subscribed by the legal representative of the entity, in which the causes of the transformation, the date of effect of the transformation, shall be specified, the statutory text by which the entity shall be governed, adapted to the legislation applicable to the resulting society, according to its nature, the system of settlement of insurance contracts for those who exercise the right of resolution, the social capital or the resulting mutual fund and, where appropriate, the program of activities adjusted to the provisions of this royal decree.
(c) Accreditation that, once the processing agreement has been adopted, it has been made public in accordance with the provisions of the trade rules.
(d) Balance sheet and profit and loss account of the entity concerned, closed within six months prior to the date of adoption of the transformation agreement by the competent social body, together with a report on significant property changes that may have taken place thereafter and also attaching the report issued by the auditor of the entity.
(e) Estimate of the state of solvency including the Solvency Capital Requirement and the Minimum Capital Requirement of the institution after it has been transformed.
2. Once the related documentation has been submitted together with the application for authorization, the General Directorate of Insurance and Pension Funds will agree to open the public information period, authorizing the entity to publish advertisements in one of the most circulation newspapers in the province where it has its registered office, and in another national-wide journal, making known the transformation project and warning the policyholders of their right to communicate to the General Directorate of Insurance and Pension Funds, within one month of the last publication, reasons which, if any, may have to be disagreeable to the transformation. However, such public information may be dispensed with when the authorisation is refused because it does not meet the legally enforceable requirements for processing.
3. After the period referred to in the previous paragraph, the Minister for Economic and Competitiveness, having regard to the file opened for the purpose and examined the manifestations of disagreement which have been carried out, shall, after reporting by the Directorate-General for Insurance and Pension Funds, give the ministerial order to the effect of the processing operation. Such order shall state, where appropriate, the provisional cancellation of the registration of the entity being transformed and the provisional registration of the resulting entity in the administrative register referred to in Article 40 of Law 20/2015 of 14 July, which shall be final on the same date as the date on which its mandatory registration is produced in the Commercial Registry and, where applicable, in the Register of Cooperative Societies. The order will be published in the "Official State Gazette."
4. The processing shall be completed in public writing, which shall include, in addition to the number of other particulars, the processing agreement, the settlements made to the partners, the final balance of the entity being processed and the corresponding statutory amendments. The authorizing notary shall transmit the deed in which the agreement is collected in a telematic form to the Commercial Registry of the entity's registered office for registration, unless it is not authorized to do so. In this case, the notary will give an electronic copy of the public deed to the entity, who must send it by telematic means with electronic signature to the Mercantile Registry for registration. In the referred referral, the electronic copy of the writing and the supporting documents of the mandatory administrative authorization shall be incorporated. The Commercial Registrar shall transmit to the Directorate General of Insurance and Pension Funds by means of telematic means a certification authorized with his electronic signature, proof of the seat practiced, accompanied by an electronic copy of the public deed. If this is a cooperative partnership, it will be entered in the Register of Cooperative Societies.
You must submit within a maximum period of one month, from the date of your granting, an authorized copy of that writing to the General Directorate of Insurance and Pension Funds, as well as justification for your registration in the Commercial Registry and, if applicable, in the corresponding Cooperative Societies Registry within one month of the time it has been produced.
5. The administrative authorisation for the exercise of the insurance activity granted to the entity which is transformed shall be in favour of the entity resulting from the transformation provided that it continues to meet the requirements necessary to maintain it.
6. The processing shall be sufficient to enable the policyholders to resolve the insurance contracts which they have concluded with the institution, and also, having the right to reimbursement of the part of the premium not consumed, the provisions of Article 100.6 being applicable.
Article 108. Transfer of the registered office abroad.
1. The transfer abroad of the registered office of an insurance or reinsurance undertaking domiciled in Spain shall require the authorisation of the Minister for Economic Affairs and Competitiveness, to which the following documentation shall be provided to the Directorate-General for Insurance and Pension Funds:
(a) Certification of the agreement adopted by the competent social body of the entity, approving the project of transfer.
(b) A transfer project signed by the legal representative of the entity, specifying the reasons for the transfer, the date of effect of the transfer and the settlement of insurance contracts for those policy holders exercising the right of resolution.
c) Accreditation that, once the transfer agreement has been adopted, it has been made public in accordance with the provisions of the trade rules.
(d) Balance sheet and profit and loss account of the institution, closed within six months prior to the date of adoption of the transfer agreement by the competent social body, together with a report on significant property changes that may have taken place thereafter and also attaching the report issued by the auditor of the entity.
(e) Estimate of the state of solvency including the Solvency Capital Requirement and the Minimum Capital Requirement of the institution for the purpose of the operation.
2. Once the related documentation has been submitted together with the application for authorization, the General Directorate of Insurance and Pension Funds will agree to open the public information period, authorizing the entity to publish advertisements on the entity's website, in one of the most circulation newspapers in the province where it has its registered office and in another national-wide journal, making known the project to transfer the registered office and warning the policyholders of their right to communicate to the General Directorate of Insurance and Pension Funds, within the time limit. of one month from the publication, the reasons which, where appropriate, may be in order to be in conformity with the transfer of the registered office. However, such public information may be dispensed with when the authorisation is refused because it does not meet the legally enforceable requirements for the shipment.
3. After the period referred to in the previous paragraph, the Minister for Economic Affairs and Competitiveness, having regard to the file opened for the purpose and examined the manifestations of disagreement which have been made, shall give the ministerial order which applies to the operation of the transfer of the registered office.
4. Authorized the transfer of the registered office abroad, will be formalized in public deed and will be entered in the Mercantile Register. The authorizing notary shall transmit the deed in which the agreement is collected in a telematic form to the Commercial Registry of the entity's registered office for registration, unless it is not authorized to do so. In this case, the notary will give an electronic copy of the public deed to the entity, who must send it by telematic means with electronic signature to the Mercantile Registry for registration. In the referred referral, the electronic copy of the writing and the supporting documents of the mandatory administrative authorization shall be incorporated. The Commercial Registrar shall transmit to the Directorate General of Insurance and Pension Funds by means of telematic means a certification authorized with his electronic signature, proof of the seat practiced, accompanied by an electronic copy of the public deed. If this is a cooperative partnership, it will be entered in the Register of Cooperative Societies.
You must submit within a maximum period of one month, from the date of your granting, the authorized copy of that writing to the General Directorate of Insurance and Pension Funds, as well as the justification for your registration in the Commercial Registry within one month of the time it has been produced.
5. The transfer of the registered office shall be sufficient to enable the policyholders to resolve the insurance contracts which they have concluded with the institution, and also, having the right to reimbursement of the part of the premium not consumed, the provisions of Article 100.6 being applicable.
Subsection 2
Article 109. Merger of insurance companies.
1. Any insurance institution may merge into an insurance company. Insurance companies may absorb insurance companies, whatever form they may be in the form of insurance companies.
2. Mutual and insurance cooperatives may, in addition, be merged into entities of the same nature and form, and may only absorb other insurance undertakings in a manner other than that of an anonymous insurance company. However, the latter limitation, mutual and cooperative, may absorb entities of any nature wholly owned by them.
3. Social security funds may be merged with entities of the same nature and form, and may only absorb entities of their own legal form.
4. Insurance institutions shall not be merged with non-insurance entities, nor shall they be absorbed or absorbed by non-insurance entities.
5. In the merger and absorption of insurance undertakings, the provisions of Article 99.1 shall apply. (a), (c), (d) and (e).
Article 110. Procedure for the authorisation of the merger of insurance companies.
1. The merger will require authorisation from the Minister for Economic Affairs and Competitiveness, to which the following documentation shall be provided to the Directorate-General for Insurance and Pension Funds:
(a) Certification of the agreements adopted by the competent bodies of the entities approving the draft terms of merger and, where appropriate, the dissolution of the acquired entities as well as the transfer of their assets to the absorber. Where appropriate, such agreements shall also include the creation of a new entity, which shall comply with the requirements laid down in Law 20/2015 of 14 July and in this royal decree for access to the insurance business.
(b) Causes of the merger and the draft terms of merger, specifying the date of taking effect of the merger and conditioning its effectiveness on the administrative authorization, as well as the draft statutes in the event of the creation of a new entity.
c) In the event that a new creation entity emerges from the merger, documentation of compliance with the requirements laid down in Law 20/2015 of 14 July and in this royal decree for access to the insurance activity.
(d) Accreditation that, once the merger agreement has been adopted, it has been made public in accordance with the provisions of the trade rules.
(e) Balance sheets and profit and loss accounts of the entities concerned, closed within six months prior to the date of adoption of the draft merger, together with a report on significant property changes that may have taken place thereafter and also attaching the reports issued by the auditors ' auditors.
(f) Consolidated balance sheet and estimate of the state of solvency which includes the Solvency Capital Requirement and the Minimum Capital Requirement of the Absorber or the New Entity for the purpose of taking the same.
2. This documentation, together with the application for authorization, will be provided by means of a resolution of the Directorate-General for Insurance and Pension Funds. The opening of the public information period will be agreed upon, authorizing the interested entities to publish advertisements in one of the most circulation newspapers in the provinces where they have their registered office, and in another national-wide journal, making the draft of the merger known and warning the holders of their right to communicate to the Directorate General of Insurance and Pension Funds within one month of the last publication, the reasons which, if any, they may have in order to be disagreeable to the merger. However, such public information may be dispensed with when the authorisation is refused because it does not meet the legally enforceable requirements for the merger.
3. After the period referred to in the previous paragraph, the Minister for Economic and Competitiveness, having regard to the file opened for the purpose and examined the statements of disagreement which have been made, shall, after reporting by the Directorate-General for Insurance and Pension Funds, give the ministerial order to the effect of the merger. That order shall declare the extinction and cancellation in the administrative register referred to in Article 40 of Law 20/2015 of 14 July of the entities to be extinguished. In this case, the order shall include the administrative authorization and provisional registration in the administrative register of the new entity that is constituted, which shall be definitive at the same date as the mandatory registration in the Commercial Registry and, where applicable, in the Register of Cooperative Societies. This order will be published in the "Official State Gazette".
4. The corresponding public deed will be granted for the merger. The authorizing notary shall transmit the deed in which the agreements are collected in a telematic form to the Commercial Registry of the registered office of the entities participating in the merger for registration, unless any of the parties involved in the grant does not authorize it. In this case, the notary will give an electronic copy of the public deed to the entities, who must send it by telematic means with electronic signature to the Mercantile Registry for their registration. In the referred referral, the electronic copy of the writing and the supporting documents of the mandatory administrative authorization shall be incorporated. The Commercial Registrar shall transmit to the Directorate General of Insurance and Pension Funds by means of telematic means a certification authorized with his electronic signature, proof of the seat practiced, accompanied by an electronic copy of the public deed. If this is a cooperative partnership, it will be entered in the Register of Cooperative Societies.
5. The administrative authorisation for the financial year of the insurance activity granted to the merging or absorbing entities shall be revoked. In the terms of paragraph 3, new authorisation shall be granted to the entity resulting from the merger, as appropriate, in place of the extinguished authorisations.
6. In cases where the policyholders are able to resolve the contracts, they shall be entitled to reimbursement of the part of the premium not consumed, the provisions of Article 100.6 being applicable.
7. In the event that the transaction is communicated to the National Commission of the Markets and the Competition, as provided for in Law 15/2007 of 3 July of the Defense of Competition, the participants shall communicate the performance of that notification to the General Directorate of Insurance and Pension Funds, which shall suspend the procedure provided for in this Article up to the termination of the procedure initiated by the National Commission of the Markets and the Competition or, where appropriate, until the lifting of the suspension of the concentration agreed upon eventually by the Commission. Commission in accordance with article 9.6 of Law 15/2007 of 3 July.
Article 111. Cross-border mergers.
1. The absorption of a Spanish insurance undertaking by another resident in another Member State shall require the conformity of the supervisory authority of the Member State of the undertaking or the location of the risk, of the certification that the absorber has, in view of the merger, sufficient eligible own funds to cover the Solvency Capital Requirement, issued by the supervisory authority of the Member State of origin of the absorber, and in the contracts entered into by the absorbed under the right of establishment, of the consultation of the supervisory authority of the Member State of the branch.
2. Where, as a result of a cross-border merger, the contracts entered into by a Spanish insurance undertaking become underwritten under the right of establishment or under the freedom to provide services, the provisions of Article 101 shall apply.
Subsection 3. Global Asset and Liabilities Transfer
Article 112. Global transfer of assets and liabilities.
In the overall disposal of assets and liabilities, the provisions relating to the merger shall apply.
Notwithstanding the limitation referred to in Article 109.2, mutual and cooperative insurance companies may be beneficiaries of the global sale of assets and liabilities, as provided for in Law 3/2009 of 3 April 2009 on structural modifications of commercial companies, carried out by any entity.
Subsection 4. ª.
Article 113. Division of insurance institutions.
1. The division must be made either by full insurance or by understanding all the policies which, belonging to one or more branches, correspond to a particular geographical area.
2. The division of insurance institutions shall be subject to the same limitations and must meet the same requirements as the merger of those entities.
In addition, it will not be possible to spin off a non-insurance entity part of its assets to be transferred as a block to an insurance institution, unless the Minister of Economy and Competitiveness has exceptionally authorized it, provided that the equity incorporation derived from the division allows an exercise of the most appropriate activity and the insurance entity receiving the division does not assume obligations under that entity, without prejudice to the joint and several liability provided for in Article 80 of Law No 3/2009 of 3 April 2009 on structural modifications of the commercial companies.
Article 114. Procedure for the authorisation of the division of insurance institutions.
1. The division will require the authorization of the Minister of Economy and Competitiveness, to whose effect the Directorate General of Insurance and Pension Funds will have to provide the documentation that is detailed in the following sections.
2. If the division is intended to merge the split parts of two or more entities, the absorption of these entities by another existing insurance undertaking or the combination of both situations, the documentation to be provided shall be that laid down for the merger cases provided for in Article 110.
3. If the split is intended to create new independent entities to pursue the insurance business, the following documentation shall be provided:
(a) Certification of the agreement adopted by the competent social organ of the same approving the draft division for the constitution of a new entity by the transfer of the split estate.
b) With respect to new entities resulting from the excision documentation of the compliance with the requirements laid down in Law 20/2015, of July 14 and in this royal decree for the access to the insurance activity.
(c) Causes of the division and the draft of the division, specifying the date of taking effect of the division and conditioning its effectiveness on the administrative authorization, as well as the draft statutes.
d) Detailed inventory of asset and liability assets that are transferred to the new entities.
(e) Balance sheet and profit and loss account, of the entities concerned, closed within six months prior to the date of adoption of the split agreement, together with a report on significant property changes that may have taken place thereafter and also attaching the reports issued by the auditors of the entities.
(f) Estimate of the state of solvency including the Solvency Capital Requirement and the Minimum Capital Requirement for the purpose of the split, both of the split entity and of the new ones that are created.
4. Presented the related documentation together with the application for authorization, by resolution of the Directorate General of Insurance and Pension Funds will agree the opening of the period of public information, authorizing the interested entity to publish advertisements on its website, in one of the most circulation newspapers of the province where it has its registered office and in another national newspaper, giving to know the draft of the division and warning the takers of their right to communicate to the Directorate General of Insurance and Pension Funds, within one month from the last publication, the reasons which, if any, they may have in order to be disagreeable to the division. However, such public information may be dispensed with when the authorisation is refused because it does not meet the legally enforceable requirements for the division.
5. After the period referred to in the previous paragraph, the Minister for Economic Affairs and Competitiveness, having regard to the file opened for the purpose and examined the manifestations of disagreement which have been made, shall decide on the ministerial order to be taken on the division operation. That order shall state, where appropriate, the extinction of the split entity and the cancellation of its registration in the administrative register referred to in Article 40 of Law 20/2015 of 14 July.
In your case, the order will include the administrative authorization and provisional registration in the administrative register referred to in article 40 of the Law 20/2015, of July 14 of the new entity that is constituted, that will be definitive to the same date in which the mandatory registration in the Commercial Registry or in the Register of Cooperative Societies is produced. This order will be published in the "Official State Gazette".
6. The division shall be authorized in writing, which shall include, in addition to any other particulars required, the division agreements, the establishment of a new entity, where appropriate, the transfer of assets and the initial balance sheet of the new entity. The authorizing notary shall transmit the deed in which the agreements are collected in a telematic form to the Commercial Registry of the registered office of the entities participating in the division for registration, unless any of the parties involved in the grant does not authorize it. In this case, the notary will give an electronic copy of the public deed to the entities, who must send it by telematic means with electronic signature to the Mercantile Registry for their registration. In the referred referral, the electronic copy of the writing and the supporting documents of the mandatory administrative authorization shall be incorporated. The Commercial Registrar shall transmit to the Directorate General of Insurance and Pension Funds by means of telematic means a certification authorized with his electronic signature, proof of the seat practiced, accompanied by an electronic copy of the public deed. In the case of cooperative societies, such public deed shall be entered in the corresponding Register of Cooperative Societies.
It must be submitted within a maximum of one month, from the date of its granting, the authorized copy of that writing to the General Directorate of Insurance and Pension Funds, also crediting its registration in the Commercial Registry within one month from the time it has been produced.
7. In cases where the policyholders are able to resolve the contracts, they shall be entitled to reimbursement of the part of the premium not consumed, the provisions of Article 100.6 being applicable.
In any case, when it comes to social welfare mutual societies, the policyholders will have the right to settle insurance contracts.
8. The administrative authorisation granted to the institution being divided shall be in favour of the same subject to the amendments which are to be made and the new authorisation shall be granted to the new entities which, if appropriate, are believed.
9. Where the division involves the transfer of the segregated party to an existing entity, the procedure laid down in Article 110.7 shall be understood to apply to the procedure laid down in this Article.
Section 3. First groupings and temporary unions of insurance or reinsurance entities
Article 115. Economic interest groups and temporary joint ventures.
1. The economic interest groups and temporary unions of undertakings which are constituted shall submit to the Directorate-General for Insurance and Pension Funds information on the entities that comprise them, the shareholders and the persons entrusted to them by the administration and management, as well as an authorized copy of the formalization document and the statutes for which they are to be governed.
2. The amendments which, in respect of the documentation initially provided, will be made subsequently, must be communicated to the Directorate-General for Insurance and Pension Funds. The communication must be carried out within 10 days of the adoption of the relevant agreements.
CHAPTER VI
Market Behaviors
Section 1. Statutes, policies and fees
Article 116. Statutes.
The statutes of the insurance institutions shall in any event contain the following:
(a) The name and registered office of the entity, adjusted to the provisions of Articles 29 and 30 of Law 20/2015, of 14 July and 9 and 10 of this royal decree.
b) The submission of the entity to the specific regulation on the management, supervision and solvency of insurance and reinsurance entities and supplementary provisions.
c) The object of the entity and the territorial scope in which its activity will be developed.
Article 117. Policies and premium rates.
1. The insurance policy models, the technical bases and the rates shall be available to the Directorate-General for Insurance and Pension Funds at the head office of the institution.
2. The insurance policy will be drafted in a way that is easy to understand. In case of loss of the policy, the insurer, at the request of the policyholder or, failing that, of the insured or beneficiary, will have an obligation to issue a copy or duplicate of the same, which will have the same effectiveness as the original. The request shall be made in writing in which the circumstances of the case are explained, the evidence of having been notified to those who are the holders of any right under the policy is provided and the applicant undertakes to return the original policy if it appears and to compensate the insurer for the damages that the claim of a third party irrogates.
3. In the case of collective life insurance, the incorporation of insured persons directly into the policy may be effected at the request of the policyholder. However, in addition to the policy, the subscription by the policyholders of accession bulletins will be required in the following cases:
(a) Those insurance in which the insured must contribute to the payment of premiums.
(b) Those who are certain in which the tax allocation of the business contributions exists, the same is not obligatory according to the legislation in force.
It will not be necessary to subscribe to the bulletin of adherence in the collective insurance that will serve for the insurance of pension plans and the plans of business social foresight, being able to proceed to the incorporation of the insured directly at the request of the taker in the mentioned terms.
Once you have subscribed to the membership bulletin or, if applicable, incorporated the insured person into the contract, the insurer will issue and deliver an individual certificate of insurance. In the case where the insured person has been insured directly to the policy at the request of the policyholder, the individual insurance certificate shall indicate a period of not less than one month during which the insured person may expressly object to his/her incorporation into the insured collective. In the case of temporary death or invalidity insurance, the insurer shall issue and deliver individual insurance certificates on the occasion of the renewal of the contract.
4. The fee premium shall be made up of the pure or risk premium, the security surcharge, where applicable, and the surcharges necessary to compensate the entity for the administrative and acquisition costs, including those of the maintenance of the business, as well as for the possible margin or surcharge of profit or excess. The costs of managing claims shall be included in any case in the pure premium.
5. The General Directorate of Insurance and Pension Funds may prohibit the use of policies and rates of premiums that do not comply with the provisions of Law 20/2015 of 14 July or in this royal decree. For these purposes, the corresponding administrative procedure in which the suspension of the use of the policies or the premium rates may be agreed as a provisional measure.
In the resolution ending the administrative procedure, an unextendable six-month period will be granted for the insurer to accommodate its policies and premium rates to the provisions of Law 20/2015 of 14 July and in this royal decree. Failure to comply with this deadline may be regarded as constituting a very serious infringement, in accordance with Article 194.6 of that law, or serious, in accordance with Article 195.5 thereof, and shall give rise to the initiation of the corresponding sanctioning procedure.
All of the above is without prejudice to the application of Law 15/2007, of 3 July, to the Defense of Competition, in the terms that are established in it, to practices contrary to the freedom of competition.
Article 118. General rules on technical bases.
1. The technical bases, which shall be subscribed by an insurance actuary, shall include, as appropriate in accordance with the administrative structure and business organisation of the institution, the following paragraphs:
a) Generic information. It shall provide an explanation of the insurable risk under the respective policy, the risk factors considered in the tariff and the charging systems used.
b) Statistical information on risk. Information shall be provided on the statistics used, indicating the size of the sample, the sources and method of obtaining the sample and the period to which it relates.
c) Security charge. It shall be used to cover the unfavourable random deviations from the expected claims, and shall be calculated on the pure premium. It shall be determined, in accordance with the characteristics of the statistical information used, on the basis of the type, composition and size of the portfolio, eligible own funds and the volume of transfers to reinsurance, as well as to the period considered for the solvency approach, which may not be less than three years, and the probability of insolvency which, in relation to that period, has been taken into account shall be specified.
d) Recargos for management fees. The amount, sufficiency and adequacy of the surcharges for administrative and acquisition costs, including those for the maintenance of the business, justified on the basis of the administrative and commercial organisation, current and expected in the entity concerned, shall be detailed taking into account whether individual or group insurance.
e) Recorder for profit or surplus. It shall be used to remunerate financial resources and to increase the institution's own funds.
f) Calculation of the premium. On the basis of the statistical and financial bases where appropriate, the actuarial equivalence shall be established to fix the pure premium corresponding to the risk to be covered and the costs of managing the claims. Based on the pure premium and the surcharges, the premium will be obtained from the tariff or commercial. If fractional and fractional premiums are allowed, the basis and the surcharge will be justified in order to calculate them, specifying that the latter are free of charge for the insurance period to which they correspond.
g) Calculation of technical provisions. The technical bases shall reflect the methodologies and underlying models used in the calculation of technical provisions as well as the assumptions used in their calculation.
2. If, in breach of the forecasts of the technical base, during two consecutive years the surcharges for management costs are insufficient to meet the actual administrative and acquisition costs defined in accordance with the Accounting Plan of the insurance institutions, the technical bases must be adapted.
3. The provisions of the previous paragraph shall not apply where the excess of expenditure is due to exceptional circumstances and which are likely to continue to be produced in the future and thus be credited to the Directorate-General for Insurance and Pension Funds.
Article 119. Peculiarities of the technical bases of life insurance.
1. The technical basis shall specify the methodology for the calculation of the life insurance provision, as well as the interest rate used in the calculation of the premium. In the event that any of the management surcharges do not exist to be implicit in the guaranteed interest rate, that circumstance shall be explained and quantified.
The use of interest rates for the calculation of premiums higher than those provided for in the rules for the calculation of the life insurance provision may not be systematic and permanent in nature.
Where the adjustments referred to in Articles 55 and 57 are used, the maximum technical interest to be used in the calculation of premiums shall be in accordance with the provisions of those Articles for the interest rate applicable to the calculation of the life assurance provision.
In any event, insurance institutions which do not have sufficient own funds eligible to cover both the mandatory minimum capital and the Solvency Capital Requirement or for which special control measures have been taken, may not apply to the calculation of the premiums for the new commitments a higher technical interest rate than the one regulated in Article 48.2 plus the volatility adjustment provided for in Article 57.
2. In addition, the technical bases of life insurance must contain:
(a) The risk selection criteria that each entity has decided to apply, determining, among others, the age of admission, periods of absence, assumptions of the requirement for prior medical recognition, minimum number of persons for the application of the rates of premiums for the collective or group insurance premiums and the capital-fixing modules insured in these insurances, if any.
b) The formulas for determining the guaranteed values for the cases of rescue, reduction of insured capital and advances. The resulting values must be consistent with those set out in the policies.
(c) The calculation system used and the criteria for imputation of the benefit to the insured, when granted, taking into account the following elements:
1. The insurance institutions may grant their insured persons the benefits obtained, by means of the system they wish, in relation to the technical results, the financial results or the combination of the two.
2. In the technical bases, the system will be detailed to decide and specify the model of the account and the criteria of imputation that allow the calculation and clear verification of these results.
Article 120. Peculiarities of the technical bases of death insurance.
1. The technical basis for death insurance must reflect the changes in the insurer's coverage of the cost of funeral services. Funeral services are considered to be services of funeral and any other, directly and intimately related to the death of the insured person, to be provided to those close to him and whose performance would not be subject if not on the occasion of the death of the insured person.
2. The technical bases shall ensure that the cost of the service concerned shall be sufficient at the time when the insurance cover starts. They shall also establish the mechanism to keep this cost up to date at all times according to the expected increases in the cost. They should also consider the adjustment of premiums to possible changes in the cost of services.
3. Taking into account the above, it will be used in the determination of the premium and the provision of the technical death insurance analogous to that of life insurance.
Article 121. Special features of the technical bases of sickness insurance.
1. Insurance institutions operating in the field of disease may use morbidity tables that define risk as a function of age. In this case, they must use, in the determination of the premium, a technique similar to that of life insurance, with the principles of collective capitalization being applied. This will also apply to the coverage of health care risks.
2. In no case shall the risks and costs related to pregnancy and childbirth be the result of differences in premiums or benefits.
Section 2. Information Duty
Article 122. General duty of information to be provided to policyholders or policyholders.
1. Prior to the conclusion of an insurance contract, other than the insurance contract for major risks, the insurance undertaking shall inform the taker, in writing or in electronic form, of the name of the Member State in which the registered office of the institution is established, its registered name, its legal form and its registered office or, where appropriate, the address of the branch with which the contract is to be concluded.
2. Before concluding an insurance contract other than life insurance, if the taker is a natural person, or in any life insurance contract, the insurer shall inform the taker, in writing or in electronic form, of the following:
(a) On the law applicable to the contract where the parties have no freedom of choice or, otherwise, on the proposal by the insurer.
b) On the different instances of claim, both internal and external, usable in case of conflict, as well as the procedure to follow.
3. The information referred to in the above two paragraphs shall be included in the policy or in the interim cover document in a clear and precise manner.
4. In group or group insurance, the insurer shall supply the information affecting the rights and obligations of the insured persons, prior to the signature of the notice of accession where such signature is made or, during the term of the contract otherwise, unless such obligation is assumed by the policyholder.
Information concerning the rights and obligations of insured persons must be included in the notices of accession and insurance certificates. The insurer shall inform in writing, or by means of durable electronic support, of any changes in the content of those documents.
5. The prior information shall contain a specific reference to the report on the financial and solvency situation of the insurer, as laid down in Article 80 of Law 20/2015 of 14 July, which allows the policyholder to access this information easily.
6. The provisions contained in this section shall apply without prejudice to the provisions of the insurance contract in the legislation on the distance marketing of financial services intended for consumers.
7. The Minister of Economy and Competitiveness, after a report from the Advisory Board of Insurance and Pension Funds, may issue development rules and establish additional reporting obligations and during the insurance period.
Article 123. Information in insurance contracts offered under the right of establishment or freedom to provide services.
1. Insurance companies domiciled in another Member State of the European Economic Area operating in Spain under the right of establishment or under the freedom to provide services shall be subject, in the case of contracts concluded in both schemes, to the same duty of information to the policyholder and, where appropriate, to the insured person, which the Spanish insurance institutions impose on Articles 96 of Law 20/2015, 14 July and 122 to 126 of this royal decree.
In particular, and prior to the conclusion of the insurance contract, the insurance undertaking shall inform the taker of the Member State in which its registered office is situated or, where appropriate, the branch from which the cover is provided. For these purposes, the insurance proposal and the policy of the insurance contract must include the address of the registered office or, where appropriate, the branch of the insurer providing the cover.
In addition, they should expressly mention the non-application of the Spanish law on the settlement of the entity.
2. In the case of insurance contracts for civil liability in motor vehicles, excluding the liability of the carrier, concluded under the freedom to provide services, the interim cover document and the policy, where appropriate, shall also include the name and address of the representative referred to in Article 58.1.a of the Law 20/2015 of 14 July.
Article 124. Special duty of information in life insurance.
1. Without prejudice to the provisions of the two preceding Articles, before the conclusion of a life insurance contract, the insurer shall provide the policyholder, in writing or on a durable electronic basis, in a clear and precise manner, with the following information:
a) Definition of the warranties and options offered.
b) Term of the contract.
c) Conditions for termination.
d) Conditions, periods and maturity of premiums.
e) Method of calculation and allocation of the units in profit.
(f) Indication of the redemption and reduction values and the nature of the corresponding guarantees; in the event that they cannot be established at the exact moment of the subscription, indication of the calculation mechanism as well as the minimum values.
(g) Primes relating to each guarantee, whether principal or complementary, where such information is appropriate.
h) In variable capital contracts, definition of the units of account to which the benefits and indication of the representative assets are subject.
(i) Modes and time limits for the exercise of the right of decision and, where appropriate, formalities necessary for the exercise of the unilateral right of withdrawal referred to in Article 83.a) of Law 50/1980 of 8 October of the insurance contract.
j) General indications concerning the applicable tax regime.
k) Specific information to enable an adequate understanding of the risks underlying the contract that the policyholder assumes.
2. During the life of the life insurance contract, the insurer shall provide the policyholder, in writing or on a durable electronic basis, in a clear and precise manner, with information on the changes to:
a) General and particular conditions.
(b) The name or social reason of the insurer, the legal form or the registered office and, where applicable, the address of the branch with which the contract was concluded.
3. If a policy supplement is issued or the law applicable to the contract is amended, the policyholder shall receive all the information contained in paragraph 1.
4. In the case of insurance in which the policyholder assumes the risk of the investment, it will be clearly and accurately reported that the amount to be collected will depend on fluctuations in the financial markets, beyond the control of the insurer and whose historical results are not indicators of future results. The amount, calculation basis and periodicity of all expenditure inherent in the operation shall also be specified.
5. In life insurance in which the taker does not assume the risk of the investment and must provide mathematical provision, the expected return of the operation will be reported, with the exclusions determined by the Minister of Economy and Competitiveness because there is a main component of biometric risk.
The expected return on the insurance operation is the annual interest rate that matches the current values of the expected benefits that can be perceived in the transaction for all the concepts and the expected premium payments.
The calculation mechanism of this expected return will be regulated by circular, considering at least the factors of the period to which the guarantee applies, the biometric tables, the payment of future premiums or the possible existence of participation in profits.
The policyholder may ask the insurance institution for details of the calculation of the expected return and must be delivered by the insurer within a maximum of ten days. The information provided must be complete and easily understandable to the policyholder.
The Directorate-General for Insurance and Pension Funds is enabled to make it possible through a resolution to specify life insurance operations that have a high degree of biometric component that are excluded from the obligation to provide information on the expected return.
6. In the case of insurance with profit participation, the insurer shall report in writing annually to the policyholder of the status of his or her rights, incorporating the participation in the benefits. In addition, if the insurer has provided figures on the potential evolution of profit participation, it should inform the policyholder of the deviations between the actual and the initial data.
7. If, in the insurance proposal or in the life insurance contract itself, the insurer provides figures relating to the amount of potential payments, apart from the payments agreed on by contract, it shall provide the policyholder with a calculation model for the potential payment at maturity, applying the basis of calculation of the premium and using three different interest rates. This will not apply to insurance and fixed-term contracts. The insurer must inform the policyholder in a clear and comprehensible manner that the calculation model is based on hypothetical assumptions and that the policyholder should not infer contractual obligations of the said calculation model.
8. With regard to the insurance to which Regulation No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on fundamental data relating to related retail investment products and insurance-based investment products is applicable, it shall not be necessary to provide the information set out in this Article to the extent that it is properly understood in accordance with the basic data document referred to in that Community legislation.
9. The social security funds which are recognised in their contributions and benefits regulations as a financial-actuarial system which establishes that the benefit to be obtained by the mutualist shall be in direct relation to the contributions actually made and charged and that the total results at the end of the financial year, positive or negative, once the legal and solvency obligations of the institution are covered, are transferred to the provisions of the active mutualists, they shall clearly explain in the prior information that the benefits to be received are not pre-established in a fixed manner, but may be lower or higher according to the negative or positive results obtained in each financial year.
Article 125. Special duty of information in death insurance.
In addition to the general reporting obligations set out in Article 96 of Law 20/2015 of 14 July and Article 122 of this royal decree, prior to the conclusion of the death insurance contract, the insurance undertaking shall provide the insurance taker, in any of the forms of insurance coverage, in writing or in durable electronic support, in a clear and precise manner, the following information:
(a) Identification of the mode being offered in accordance with the following classification: at a level, natural, semi-natural, mixed premium, combined with the above, or a single premium.
b) Definition of the mode being offered, characteristics and method of calculation of the initial premium and successive premiums.
(c) Identification of the objective risk factors to be considered in the premium rate to be applied in successive policy renewals: the age of the insured, changes in the insured capital or changes in the costs of funeral services.
(d) Estimated evolutionary table of annual trade premiums until the insured reaches the age of ninety years, drawn up in accordance with the following specifications:
1. th Detail of the foreseeable evolution of annual commercial premiums from the age of the insured at the time of the policy, expressed in rates on a thousand euros of initial insured capital.
2. Detail of the evolution of the insured capital.
(e) Information on the updates of insured capital or benefits and premiums to be applied in the renewals, as well as the period before the maturity and the manner in which they are to be communicated to the policyholder.
(f) Optional ancillary guarantees for the coverage of deaths on the same policy, with an indication of the amount of the premium corresponding to each of them when they correspond to another insurance class.
g) Contract resolution conditions.
h) Existence, or not, of the right of rehabilitation of the policy and rules governing, where appropriate.
i) Limits and conditions relating to the freedom of choice of the provider.
Article 126. Special duty of information in sickness insurance.
1. In addition to the general reporting obligations set out in Article 96 of Law 20/2015 of 14 July and Article 122 of this royal decree, before concluding a sickness insurance contract, the insurer shall inform the taker, in writing or on durable electronic support, of the following:
(a) Identification of the objective risk factors to be considered in the premium rate to be applied in the successive renewals of the policy, in any of the modalities of insurance coverage.
(b) optional ancillary guarantees to the sickness cover offered on the same policy, with an indication of the amount of the premium corresponding to each of them when they correspond to another insurance class.
(c) Conditions for the termination of the contract and, where appropriate, waiver of the opposition to the extension by the insurer of the renewals.
d) Existence, or not, of the right of rehabilitation of the policy and rules governing, where appropriate.
e) Limits and conditions relating to the freedom of choice of the provider.
2. Without prejudice to the foregoing, the insurance institutions shall inform, before each annuity of the term of the contract, the updates of the insured capital, benefits and medical conditions, if any. In the case of individual insurance or family insurance arrangements, the standard premium rates applicable for all age brackets or which are defined according to any other objective criteria for the insurance of insured persons must also be reported before the contract is contracted. This information shall be up to date and easily accessible on the entity's website and be made available to the insured in its offices. The institution shall inform the taker of the modification of the existing tranches structure at the time of the procurement.
Article 127. Advertising.
1. Any advertising involving the offer of private insurance shall be in general in accordance with the provisions of Law 34/1988 of 11 November 1988, General Advertising and Development Provisions.
2. The advertising carried out by the insurance undertaking shall transmit to its addressees a true, effective and sufficient information on the essential characteristics of the operation, service or insurance product and, at least, it shall have to comply with the following requirements:
(a) Identification of the insurance undertaking that assumes the coverage of the risks or commitments, which is sufficiently highlighted by trade names or trade marks, unless they are liable to mislead, in which case the name of the company shall be used.
b) Indication of the type of insurance contract that is offered.
3. Any form of communication offering insurance operations or divulging information on them, whatever the means used to do so, including circulars and personalised letters forming part of a dissemination campaign, shall be regarded as advertising.
4. The advertising of the insurance companies is not subject to administrative authorization, nor should it be subject to systematic remission prior to its use to the General Directorate of Insurance and Pension Funds, although the insurance companies that intend to carry out advertising campaigns of high cost or wide scope of dissemination will be able to formulate prior consultation to their start to the Directorate General of Insurance and Pension Funds.
To this end, a suitable reproduction will be transmitted, according to the means of diffusion to be used, of the texts, sketches, graphic composition or films to be used, with indication of sizes and duration of the campaign and, if necessary, times of exhibition.
The Directorate-General for Insurance and Pension Funds shall decide on such consultations within a maximum of 15 working days from the date of receipt of the application accompanied by the documentation provided for in the preceding paragraph.
5. In any event, advertising must be available at all times for supervision by the Directorate-General for Insurance and Pension Funds.
6. In the case of insurance companies domiciled in other European Economic Area countries that are active in Spain, they may advertise their services in Spain on the same terms as the Spanish insurance companies and subject to the same management and supervision.
CHAPTER VII
Special solvency regime
Section 1. Application Scope
Article 128. Scope of application.
1. Insurance institutions may benefit from the special solvency regime set out in this Chapter, subject to the authorisation of the Directorate-General for Insurance and Pension Funds, where they credit that, in accordance with Article 101.1 of Law 20/2015 of 14 July 2015, they have fulfilled all the following conditions:
(a) Gross annual income on written premiums does not exceed EUR 5 million.
(b) The total gross amount of technical provisions, without considering the amounts recoverable from the transferred reinsurance contracts and the special purpose entities, does not exceed EUR 25 million.
(c) If the insurance institution belongs to a group, the total gross amount of the technical provisions of the group, without considering the amounts recoverable from the transferred reinsurance contracts and the special purpose entities, does not exceed EUR 25 million;
(d) The insurance undertaking does not carry out insurance or reinsurance activities in the fields of credit, security or civil liability except in the case of ancillary risks, as provided for in point (b) of paragraph A of the Annex to Law 20/2015 of 14 July;
(e) Reinsurance operations carried out by the insurance undertaking do not generate gross annual income from accepted reinsurance premiums that exceed EUR 500,000 or ten per cent of their annual gross income on accrued premiums, or a gross amount of technical provisions of the accepted reinsurance exceeding EUR 2,5 million or ten per cent of its gross technical provisions, without considering the amounts recoverable from the transferred reinsurance contracts and the special purpose entities.
2. They may also benefit from the special solvency regime set out in this Chapter, subject to the authorisation of the Directorate-General for Insurance and Pension Funds, the insurance institutions that credit them in any of the situations provided for in Article 101.2 of Law 20/2015 of 14 July.
3. In the case of insurance companies belonging to a group subject to supervision as provided for in Article 132 of Law 20/2015 of 14 July, they shall also provide proof that all the entities in the group comply with the requirements to qualify for the scheme. Where the group consists only of entities covered by the special solvency regime, the obligations laid down in Title V of that law shall not apply to that group.
4. Institutions applying for administrative authorisation to carry out insurance and reinsurance activities shall not initially be eligible for the special solvency regime in accordance with Article 101.5 of Law 20/2015 of 14 July 2015. It shall also not be eligible for those which, being authorised to operate on 1 January 2016, have annual gross amounts of written premiums or technical provisions without considering the amounts recoverable from the transferred reinsurance contracts and the special purpose entities, in excess of those set out in paragraph 1 above, or which provide for any of those amounts to be exceeded in the following five years.
Section 2. Technical provisions assessment
Article 129. List of technical provisions.
1. The technical provisions to be considered are as follows:
a) Of premiums
b) Life insurance.
c) Participation in profits and for extortion.
d) Outstanding claims.
e) The death insurance.
f) Health insurance.
g) Deviations in capitalization operations by draw.
2. The technical provisions applicable to the accepted and transferred reinsurance shall be as set out in paragraphs (a) to (d).
The amount corresponding to the technical provisions of the accepted and transferred reinsurance shall be calculated in the form provided for in this royal decree, taking into account, where appropriate, the specific conditions of the reinsurance contracts entered into.
The calculation of the provisions for reinsurance operations accepted shall take as a basis the data provided by the transferring entity, increasing them as appropriate in accordance with the experience of the entity itself.
3. Insurance and reinsurance undertakings shall have an effective actuarial function within the meaning of Article 47.
Article 130. Provision of premiums.
1. The provision of premiums shall be constituted by the fraction of the premiums written in the financial year to be charged to the period between the closing date and the term of the reporting period.
2. The premium provision will be calculated on a policy basis.
The basis for calculating this provision will be the rate premiums written in the year deducted the surcharge for acquisition costs.
The temporary imputation of the premium will be made in accordance with the temporary distribution of the claims over the period of the contract's coverage.
3. The provision of premiums shall be subject to adjustment where there is insufficient premium in respect of future claims and expenses.
It is understood that there is insufficiency when the result of the technical account, for each class or commercial product, is negative in the last two years. If there is insufficient, the percentage representing the cumulative result of the technical account, for each class or commercial product, of the last two years in respect of the volume of net reinsurance premiums, excluding the adjustment referred to in this paragraph, accumulated over the last two years shall be calculated.
The amounts of the adjustments will be:
(a) the absolute value resulting from multiplying the percentage provided for in the preceding paragraph by the provision of direct insurance premiums for the calculation exercise.
(b) the absolute value resulting from multiplying the percentage provided for in the preceding paragraph by the provision of premiums for the transferred reinsurance corresponding to the calculation exercise.
The adjustment for reinsurance operations accepted shall be effected in accordance with the provisions of the preceding paragraphs.
4. Where, for two consecutive years, the adjustment is necessary in accordance with this Article, the institution shall submit to the Directorate-General for Insurance and Pension Funds actuarial report on the necessary revision of the technical bases to achieve the sufficiency of the premium in which, at least the causes of the failure are identified, the measures taken by the institution and the estimated time limit in which it takes effect.
Article 131. The provision of life insurance.
1. The provision of life insurance shall represent the value of the obligations of the net insurer of the undertaking's obligations by reason of life insurance to the date of the end of the financial year.
2. The provision of life insurance shall comprise:
(a) In insurance whose coverage period is equal to or less than the year, the provision of premiums.
b) In other insurances, mathematical provision.
3. The mathematical provision, which at no time may be negative, shall be calculated as the difference between the actuarial present value of the future obligations of the insurer and those of the policyholder or, where applicable, of the insured.
To calculate the current actuarial value of the insurer's future obligations, the following shall be taken into account:
(a) Future discretionary profit units may not be included among the future payment flows.
(b) No assumptions about the rescue exercise or other possible contractual options shall be taken into account.
c) The potential future actions of the entity's management will not be taken into account.
The basis for calculating this provision will be the rate premium accrued in the financial year. The calculation shall be made on a policy basis, by an individual capitalization system and by applying a prospective method, unless it is not possible for the characteristics of the contract in question or to demonstrate that the provisions obtained on the basis of a retrospective method are not lower than those that would result from the use of a prospective method. In collective policies, this calculation shall be carried out separately for each insured person.
4. The amount of mathematical provision to be included in the balance sheet may be determined by linear interpolation of the provisions corresponding to the previous and subsequent maturities to the closing date of the balance sheet, and shall include the payment of the premium, taking into account the release of the premium.
Article 132. Interest rate.
1. In the provision of life insurance, to calculate the actuarial current value of the future obligations of the insurer and those of the policyholder or, where applicable, of the policyholder, the relevant temporary structure of interest-free interest rates, as provided for in Article 54, shall be used, including the volatility adjustment component provided for in Article 57.
Without prejudice to the foregoing, insurance and reinsurance undertakings may apply the adjustment for marriage to the relevant temporary structure of interest rates without risk provided for in Article 55, subject to prior approval by the Directorate-General for Insurance and Pension Funds, provided that the conditions referred to in that Article are met. The procedure for their application shall be that laid down in the rules of the European Union of direct application.
2. In insurance with a profit share, this provision may not be calculated at a higher interest rate than that used for the calculation of the premium.
Article 133. Tables of mortality, survival, disability and morbidity.
1. The mortality, survival, invalidity and morbidity tables shall meet the following requirements:
a) Being based on national or foreign experience, adjusted to generally accepted state-actuarial treatments.
b) The mortality, survival, invalidity and morbidity reflected in the same should be found within the generally accepted confidence intervals for the Spanish experience.
(c) The end of the observation period considered for the drawing up of the tables may not be earlier in more than 20 years at the date of calculation of the provision.
(d) Where tables are used based on the experience of the insured collective, the statistical information on which they are based must meet the requirements of homogeneity and representativeness of the risk, including on the same information sufficient to allow for statistical inference and indicating the size of the sample, its method of obtaining and the period to which it refers, which shall be in line with the provisions of paragraph (c) above.
e) In survival insurance, they must incorporate the effect of the decrease in mortality, considering an unfavourable evolution of the mortality rate, except that it has already been taken into account in the calculation of the observation period referred to in paragraph (c) above.
However, in the calculation of the life insurance provision, more prudent tables may be used which, without meeting any of the above requirements, have a higher margin of safety than is the case for them.
2. If, on the date of calculation of the life assurance provision, the inadequacy of the tables initially used for the actual behaviour of the insured collective is found, provided that sufficient information is available on the actual risk evolution to allow for statistical inference, an over-allocation of the life insurance provision shall be made to reflect the new probabilities.
Article 134. Administration and acquisition expenses.
1. The provision of life insurance shall be calculated taking into account the management surcharges laid down in the technical bases.
2. If, in breach of the forecasts of the technical base, for two consecutive years the surcharges for administrative and acquisition costs are insufficient to meet the actual administrative and acquisition costs, as defined in the accounting plan of the insurance institutions, the provision of life insurance shall be calculated taking into account the new circumstance.
3. This will not apply to the previous number when the excess of expenditure is due to exceptional circumstances and is likely to continue to occur in the future and thus be credited to the Directorate-General for Insurance and Pension Funds.
Article 135. Rescues.
1. The amount of life insurance provisions for each contract shall be at all times and at least equal to the guaranteed redemption value.
2. In those contracts where the redemption value has been established on the basis of the life insurance provision corresponding to those contracts, it shall be understood that the amount of such life insurance shall be the result of applying the technical bases used for the calculation of the premium. This value may not be reduced in the amount of discounted fees to be amortised or similar items, in so far as they are not expressly provided for in the insurance contract.
Article 136. Provision of life insurance when the taker assumes the risk of the investment and assimilated.
1. The provision of life insurance in which it is contractually stipulated that the investment risk shall be borne entirely by the policyholder shall be determined on the basis of the assets specifically affected or of the indices or assets which have been set as a reference for determining the economic value of their rights. The provisions laid down in Article 132 shall not apply to the calculation of this provision.
2. The provision of life insurance shall be made to reflect the risks arising from such operations which are not actually borne by the taker. In particular, static or dynamic hedges may be considered under prudent scenarios of variation of the assumptions involved, in terms established by the General Directorate of Insurance and Pension Funds.
Article 137. Provision of participation in benefits and for extortionate.
1. This provision shall cover the amount of the benefits accruing to the policyholders, policyholders or beneficiaries and the amount of premiums to be returned to the policyholders or policyholders, where appropriate, by virtue of the behaviour experienced by the insured risk, as long as they have not been individually assigned to each of those persons.
2. Insurance other than life insurance which guarantees the reimbursement of premiums under certain conditions or equivalent benefits shall include in this provision the obligations corresponding to that guarantee, calculated in accordance with the following rules:
(a) All obligations under contracts which on the basis of the information existing at the end of the financial year are liable to give rise to the above benefits shall be included in the provision.
(b) The provision to be made shall include the amount of the premiums to be reimbursed or the benefits to be met by the period or periods of the contract that have already elapsed at the time of the end of the financial year.
Article 138. Provision of outstanding claims.
1. The provision of outstanding claims shall represent the total amount of the insurer's outstanding liabilities arising from claims occurring before the end of the financial year and shall be equal to the difference between its total estimated or certain cost and the sum of the amounts already paid on account of such claims.
This cost will include both external and internal costs of handling and processing the files, whatever their origin, produced and produced up to the total settlement and payment of the claim. The recovery or recovery of the shares corresponding to the insurer against the persons responsible for the claim shall not be deducted from the amount of the provision.
The provision should take into account all factors and circumstances that influence its final cost and will be sufficient at all times to address the outstanding obligations to the dates on which the payments are to be made.
2. To determine the amount of the provision, the claims shall be classified for years of occurrence, and their calculation shall be made at least by insurance classes.
3. Each casualty shall be subject to an individual assessment.
4. In classes 2, 17, 18 and 19 of those set out in paragraph (A) of the Annex to Law 20/2015 of 14 July, in which the insurance undertaking guarantees the provision of an assistance by the conclusion of a service reinsurance contract for which both the risk and the cost of the claims are transferred to the reinsurer, a single provision of outstanding claims of a global nature may be calculated for both the direct insurance and the reinsurance accepted on the one hand, and the reinsurance on the other hand, on the other hand, on the part of which the risk and claims are transferred.
For these same classes, the calculation of the provision of global outstanding claims for direct insurance and, where applicable, reinsurance accepted, in cases where there is insufficient information, may be based either on the information provided by the reinsurer or on the average sectoral costs or on the insurance institution's own methods.
5. Except as indicated in the preceding number, where the information on claims does not allow an adequate estimate of the amount of the provision, the provision shall, at least, and without prejudice to subsequent corrections, be provided by the difference between the risk premiums written in the financial year, the part attributable to the financial year, and the claims made during the financial year.
6. The provision of outstanding claims shall be made up of the provision of outstanding claims for settlement or payment, the provision of outstanding claims and the provision of internal claims for settlement of claims.
For the reinsurance transactions accepted, a single provision of outstanding claims of a global nature may be calculated.
Article 139. Provision of outstanding claims for settlement or payment.
1. It shall include the amount of all claims incurred and declared before the end of the financial year. It shall form part of the external costs inherent in the settlement of claims and, where appropriate, the interest on late payment and the legally established penalties in which the institution has incurred.
2. Where the compensation is payable in the form of income, the provision to be made shall be calculated in accordance with the rules laid down in this royal decree for the provision of life insurance.
3. The provision will include the stakes in profits and extortions that have been allocated to policyholders, policyholders or beneficiaries and which are pending payment.
Article 140. Provision of outstanding claims outstanding.
1. The provision of outstanding claims shall include the estimated amount of claims occurring before the end of the financial year and not declared at that date.
2. It shall be determined by applying a percentage of 15% to the provision of outstanding claims for the settlement or payment of direct insurance.
Article 141. Provision of internal claims settlement expenses.
1. This provision shall be provided in sufficient amount to cover the institution's internal expenses, which are necessary for the total termination of claims to be included in the provision of outstanding claims for both direct insurance and reinsurance accepted.
2. It shall be determined on the basis of the relationship between the internal costs attributable to the benefits, resulting from the reclassification of expenditure by destination laid down in the accounting plan of the insurance institutions and the amount of claims. The resulting percentage shall be multiplied, at least, by 50% of the amount of the provision for outstanding payments or payment plus one hundred per cent of the amount of outstanding claims outstanding.
Article 142. Provision of death insurance.
The entities operating in the death class shall constitute the provision of death insurance on the basis of the actuarial approach of the transaction, using the relevant temporary structure of interest-free interest rates provided for in Article 54, including, where appropriate, the volatility adjustment component provided for in Article 57.
Article 143. Provision of sickness insurance.
Where, in sickness insurance, including health care coverage, technical bases made in accordance with Article 121 are used, this provision, which shall represent the value of the insurer's obligations by reason of such insurance to the closing date of the net year of the holder, shall be calculated using the same technique as life insurance.
Article 144. Provision of deviations in capitalization operations by lot.
This provision, which shall be cumulative, shall be made in order to deal with deviations from their origin in the sweepstakes with which the awards or early amortisation systems adopted by the institutions are related, and shall be integrated by the part of the quotas intended to cover those deviations which have not been consumed during the financial year. Any deviations that may occur between the actual depreciation and the actual depreciation in the respective bases of calculation shall be affected by this provision, without the amount of such deviations being negative.
Section 3. Investment valuation
Article 145. Rules on investments by insurance companies.
1. Insurance institutions subject to the special solvency regime shall apply Article 79 of Law 20/2015 of 14 July and Article 89 of this Regulation, except as provided for in paragraph 1 (e).
2. Insurance institutions subject to the special solvency regime shall not be able to invest in derivatives and structured derivatives, except where applicable, those admitted for the determination of the adjustment by marriage, or in any other asset to be determined by ministerial order.
Section 4. Own Funds. Valuation of assets and liabilities
Article 146. Determination of own funds.
Own funds shall be determined, classified and calculated for the coverage of the Solvency Capital Requirement and the Minimum Capital Requirement, as referred to in Articles 59 to 62 with the particularities provided for in the following Article.
Article 147. Asset valuation.
1. For the purposes of the determination of own funds by difference between assets and liabilities, the insurance institutions subject to the special solvency regime shall assess the assets listed in this paragraph in accordance with the rules laid down in Article 68 of Law 20/2015 of 14 July, by deducting, in any case, those assessments how many indirect charges and charges which, predictably and in accordance with a prudent valuation of their amount, could arise from the transmission or realisation. This value system will apply to the following assets:
a) Financial instruments that meet any of the following features:
1. º are admitted to trading on regulated markets within the scope of the Organisation for Economic Cooperation and Development (OECD) and are susceptible to widespread and impersonal traffic in a financial market and which have not been issued by the insurer itself or entity of its own group.
2. º Esten issued or guaranteed sufficiently by international bodies belonging to a Member State of the European Economic Area or by a credit institution or insurer authorised to operate by means of establishment in a Member State of the European Economic Area or by an entity whose shares are traded on a regulated market. Deposits in credit institutions authorised to operate by means of establishment in a Member State of the European Economic Area are understood to be included in this paragraph.
3. Any financing granted to the State, Autonomous Communities, local corporations, State-owned companies or public entities in the European Economic Area, whether or not financing granted by the insurance or credit institution acquired by the insurance institution after the grant of such financing, provided that they offer guarantees for their safety, either for the quality of the borrower or for the guarantees provided.
4. No. It is deposits in companies that are ceding by reinsurance transactions accepted or credits against the reinsurers for their participation in the provision of benefits.
5. "5." are nominative shares and units of companies whose exclusive activity consists in the management of assets on behalf of insurance institutions and pension funds, when at least 90 per 100 of the capital belongs to one or more of these entities.
6. Other participations as provided for in Article 9.4 of Law 20/2015 of 14 July.
7. º. This is a credit claim, provided that the object of the guarantee is one of the assets listed in this paragraph.
8. No. It is credit to mediators and insurance policyholders with age not exceeding three months.
(b) Real estate, real estate rights and mortgage loans, provided that the first mortgage is constituted on buildings that meet the requirements set out below:
Real estate and real estate rights must meet the following requirements:
1. Be registered in the Property Registry in the name of the insurance institution.
2. Be insured against the risk of fire and other damage to the continent, by entity other than the owner of the building and by amount not less than the construction value fixed in the last valuation that had been carried out.
3. To be the subject of valuation by an authorized valuation entity for the valuation of assets in the mortgage market in accordance with the rules of valuation of real estate and certain rights for certain financial purposes approved by the Ministry of Economy and Competitiveness.
c) Collective investment institutions:
1. Established in the European Economic Area and subject to coordination in accordance with Directive 2009 /65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS).
2. No. Of a financial nature that, not being included in the previous paragraph, are regulated in Law 35/2003, of November 4, of Collective Investment Institutions, and other provisions of development.
3. Real Estate established in the European Economic Area, provided that they are subject to the authorisation and supervision of a supervisory authority of any Member State of the European Economic Area.
(d) Cash in cash, banknotes or coins to be traded on foreign exchange markets of the Organisation for Economic Cooperation and Development (OECD).
e) Other assets not listed above when they meet the conditions that the Minister of Economy and Competitiveness establishes.
2. All goods and rights listed in the preceding letters, except for claims against reinsurers, shall be located in the Member States of the European Economic Area. However, in cases where, by their nature, it is necessary, the Directorate-General for Insurance and Pension Funds may, in a reasoned manner, authorise their situation outside the territorial scope mentioned above.
In any event, the marketable securities in which the investment of the technical provisions materializes must be deposited with financial intermediaries authorised to operate by means of establishment in a Member State of the European Economic Area or, if the securities are represented by means of account entries, their specific rules shall be respected. In the case of entries in the accounts with accounting records outside the European Economic Area and within the Organisation for Economic Cooperation and Development (OECD), they shall be sufficiently guaranteed by a credit institution authorised to operate by means of establishment in a Member State of the European Economic Area.
3. The shares referred to in paragraph 1.a) .6. shall be valued in any case for the accounting value.
4. The appropriations provided for in paragraph 1 (a) .8. shall be assessed in any case for the accounting value, in view of the deterioration in the accounts.
5. The provisions of this Article and the development circular which may be issued by the Directorate-General for Insurance and Pension Funds in respect of assets and liabilities may in no case determine the existence of a closed list of assets eligible for investments in technical provisions.
6. The valuation of assets other than those referred to in paragraphs 1, 3 and 4 above shall not be taken into account for the purposes of the calculation of own funds by difference between assets and liabilities. They shall not be taken into account for the purposes of calculating the Solvency Capital Requirement.
Section 5. Compulsory Solvency Capital and Minimum Capital Requirement
Article 148. Calculation of the Solvency Capital Requirement and the Minimum Capital Requirement in the special solvency regime.
1. Insurance institutions shall at all times cover the Solvency Capital Requirement with the eligible own funds.
2. The Solvency Capital Requirement shall be equal to the sum of the following items:
(a) The basic Solvency Capital Requirement.
(b) The Solvency Capital Requirement for Operational Risk.
(c) The amount of the adjustment to take into account the loss absorbing capacity of technical provisions and deferred taxes.
3. The basic Solvency Capital Requirement shall be obtained by aggregation of risk modules, in accordance with the correlation matrix provided for in Article 70, comprising at least the following:
a) Risk of underwriting in insurance other than life insurance.
b) Risk of underwriting in life insurance.
c) Risk of underwriting sickness insurance.
d) Market risk.
e) Risk of non-compliance of the counterparty.
4. The solvency capital for operational risk shall be that provided for in Article 70 of the general scheme.
5. The adjustment to take account of the loss absorption capacity of deferred taxes shall be determined in accordance with the provisions of the general scheme in Article 70.3.
6. For the social security funds included in this special solvency regime, the Solvency Capital Requirement shall be three-quarters of the solvency capital referred to in paragraphs 3, 4 and 5.
For mutual societies which provide in their statutes for the possibility of carrying out quotas or of reducing the benefits and the annual amount of contributions due does not exceed EUR 5,000,000 for three consecutive years, the amount of the Solvency Capital Requirement referred to in the preceding paragraph shall be reduced by half. If the number of quotas indicated is exceeded for three consecutive years, the ratio shall be three quarters of the fourth year.
For social security funds whose sole purpose is to provide benefits or allowances for teaching or education, the required solvency capital shall be one quarter.
7. The insurance institutions authorised to apply the adjustment for flows of the relevant temporary structure of interest rate-free interest rates, as provided for in Article 57, shall calculate a notional Solvency Capital Requirement for each portfolio subject to matching, as well as for the remaining part of the institution, as if those portfolios subject to matching and the remaining part of the undertaking were separate undertakings.
The insurance institutions shall calculate their Solvency Capital Requirement as the sum of the notional required solvency capital for each portfolio subject to matching and to the remaining part of the institution.
The notional solvency capital for each portfolio subject to matching adjustment shall be determined by adding the relevant capital requirements for each sub-module and risk module of the basic Solvency Capital Requirement.
Insurance institutions shall assume that there is no risk diversification between each of the portfolios subject to matching and the remaining part of the institution.
8. The mandatory minimum capital, as provided for in Article 78 of Law 20/2015 of 14 July 2015, shall be one third of the Solvency Capital Requirement for institutions covered by this special scheme, without prejudice to the absolute minimum requirements for the same scheme set out in that Article.
Article 149. Risk module for the subscription of insurance other than the life insurance of basic compulsory capital in the special solvency scheme.
1. The solvency capital for the risk of underwriting in insurance other than life insurance shall be determined either on the basis of the annual amount of the premiums or on the basis of claims. The solvency capital shall be equal to that which is higher than those obtained by the abovementioned procedures.
However, where the amount obtained is lower than the amount of the previous year, the solvency capital shall be determined by multiplying that of the previous year by the coefficient resulting from dividing the technical provision of outstanding net reinsurance outstanding and the one constituted at the beginning of the financial year, without the calculated coefficient being, in any case, higher than 1.
2. The solvency capital according to the premiums shall be determined as follows:
(a) The premium concept shall include the accruals for direct insurance in the financial year provided for, net of their cancellations and extortions, plus premiums accepted for reinsurance in the same financial year, or, if higher, that of premiums charged for direct insurance in the financial year covered, net of their cancellations and extortions, plus premiums accepted in reinsurance in the same financial year.
b) Up to 61,300,000 euros of premiums will be applied 34 percent, and the excess, if any, will be applied 30 percent, adding both results.
(c) The amount obtained as referred to in the preceding subparagraph shall be multiplied by the ratio existing in the last three financial years, between the amount of the net claim of reinsurance transferred and the reverse, and the gross amount of such claims.
3. The solvency capital according to the claims shall be determined as follows:
(a) The amount of claims shall include those paid by direct business in the financial year referred to and in the two preceding financial year, without deduction for any given reinsurance or regressed; claims paid for reinsurance acceptances and outstanding claims for direct insurance and reinsurance accepted shall also be included at the close of the financial year referred to.
(b) The sum obtained pursuant to subparagraph (a) shall be deducted from the amount of claims for claims incurred during the periods referred to in paragraph (a), plus that of outstanding claims arising at the end of the financial year preceding the period covered by both direct insurance and reinsurance accepted.
c) One third of the figure resulting from paragraph (b), with the limit of EUR 42,900,000, will be applied by 49%, and the excess, if any, will be applied by 44%, with both results added.
(d) The amount obtained in accordance with the preceding paragraph shall be multiplied by the ratio existing in the last three financial years, between the amount of the net claims for reinsurance transferred and the amount of the gross amount of the claims.
Article 150. Risk module for the subscription of the life insurance of the basic compulsory capital in the special solvency scheme.
1. The solvency capital for the risk of underwriting in life insurance shall be determined as the sum of the amounts resulting from the calculations of the following paragraphs:
(a) 4.2% of the amount of the life insurance provisions shall be multiplied by direct insurance, without deducting the transferred reinsurance, and by reinsurance accepted, by the relationship that exists, in the financial year that is contemplated, between the amount of life insurance provisions, deducted those corresponding to the transferred reinsurance and regressed, and the gross amount thereof.
Dealing with life insurance linked to the development of specifically affected assets or indices or assets that have been set as a reference, and for the management of retirement fund management operations, in so far as the institution does not assume an investment risk, 1,05 per cent of the provision shall apply where the amount intended to cover the management costs is set for a period exceeding five years, or, failing that, 26 per cent of the net administrative expenditure of that activity for the last financial year.
For capitalization operations that do not imply the coverage of any risk inherent in human life, 4.2 percent of the amount of the life insurance provisions constituted shall apply.
For tontin operations, as defined in section B. 4 of the Annex of Law 20/2015, of July 14, 1.05 percent of the assets of the associations will be applied.
(b) For contracts where the risk capital is positive, 0,315% of the capital at risk shall be multiplied, without deducting any given reinsurance or receding, from the existing relationship, in the financial year covered, between the risk capital deducted from the transferred reinsurance and the gross amount of such capital.
0,105 per cent shall be applied in temporary insurance for the case of death with a maximum residual duration of three years and 0,158 per cent, where the residual duration is greater than three years and does not exceed five years.
2. For mutual societies operating in the risks referred to in Article 15.1.b) of the Social Welfare Mutual Regulation approved by Royal Decree 1430/2002 of 27 December 2002, which provide in their statutes the possibility of carrying out quotas or of reducing benefits or having protective partners who undertake to assume, where necessary, the commitments of mutual funds with their insured persons, and the annual amount of accrued contributions does not exceed EUR 60 000 for three consecutive years, the solvency capital for the risk of subscription shall be determined for 10% of the net contributions or contributions of cancellations and reinsurance. If the number of quotas referred to above is exceeded for three consecutive years from the fourth financial year, these mutualities shall apply the provisions of paragraph 1.
Article 151. Risk module for the subscription of the basic compulsory capital sickness insurance scheme under the special solvency scheme.
The solvency capital for the risk of underwriting sickness insurance shall be determined as provided for in Articles 150 or 149, according to whether or not similar to life-like techniques are used.
Article 152. The market risk module of the core mandatory capital in the special solvency regime.
1. The solvency capital by market risk shall be determined by the aggregation of the capital requirement for the risks of interest, shares and institutions of collective investment, real estate, differential, concentration and currency according to the correlation matrix provided for the general scheme in Article 74.
2. The solvency capital for the interest rate risk shall be determined as the 3,6 per cent of the value of the assets exposed to that risk.
3. The solvency capital for the risk of shares and collective investment institutions shall be determined as 30 percent of their value.
4. The risk of real estate will be determined as 25 percent of its value.
5. The solvency capital for the risk of spread shall be determined as 3% of the value of the assets exposed to that risk.
6. The solvency capital for the risk of concentration shall be:
(a) For each real estate or real estate right, 12 percent of the value of the real estate that exceeds 10 percent of the total value of the assets for the purposes of determining own funds.
The indicated limit will also be applicable in the case of real estate and real estate rights close enough and of a similar nature to be considered as a single investment.
(b) For each issuer, borrower or guarantor of securities or transferable securities, 12% of the amount of the value of the securities or securities that exceeds 11% of the total value of the assets for the purposes of determining own funds.
(c) In the case of investment in shares or units in companies that are dependent on insurance companies that manage assets on behalf of insurance institutions, for the purposes of calculating the above limits, the value of each asset category of which the entity is directly holder shall be accumulated, which shall be the result of computing the assets corresponding to the dependent companies according to their percentage of participation.
(d) No solvency capital shall be considered as a concentration risk capital for shares and units in collective investment institutions.
(e) No solvency capital shall be considered as a concentration risk capital for the financial assets issued or guaranteed sufficiently by international organisations to which the Member States of the European Economic Area belong, or in this same area, those issued by States, as well as the claims against those counterparties.
7. The solvency capital for the currency risk shall be determined by the excess of non-congruent assets on certain limits. Non-congruent assets are those in which the currency in which they are realisable does not correspond to the currency in which the obligations arising from the fulfilment of the subscribed insurance and reinsurance contracts are payable. The limits are as follows:
a) 7 percent of assets expressed or realisable in other currencies.
b) 20 percent of the commitments expressed in the corresponding currency.
Article 153. Risk module for non-compliance with the basic mandatory capital counterparty in the special solvency regime.
1. In the event that the annual accounts of the reinsurer institution providing protection are motivated by reason that the current or future solvency of the reinsurer may be affected, the solvency capital by counterparty risk shall be determined as the reduction in the solvency capital by subscription risk in the amount corresponding to the total transfer to the reinsurance.
Reinsurance is presumed to be of sufficient quality when the reinsurer entity has at least a BBB or equivalent rating awarded by a recognised rating agency and, in any case, where the reinsurer is subject to supervision by the supervisory authority of another Member State of the European Economic Area.
2. In another case, the solvency capital by counterparty risk shall be determined as the sum of:
(a) The reduction of the solvency capital by risk of underwriting in insurance other than life insurance in the amount corresponding to a reinsurance assignment exceeding 50% of the amount of solvency capital by risk of underwriting in insurance other than life insurance.
(b) The reduction of the solvency capital by risk of underwriting in life insurance in the amount corresponding to a reinsurance transfer exceeding 15% of the share of the solvency capital by risk of underwriting in life insurance that is calculated on the basis of the life insurance provisions or 50% of the part that is calculated on the basis of the risk capital.
(c) The reduction of the solvency capital by risk of underwriting of the sickness insurance, as provided for in points (a) and (b).
Section 6. System of Governance
Article 154. Requirements of the System of Government under the special solvency regime.
The entities that are engaged in this special scheme are subject to the general system requirements set out in general, except as regards the internal risk and solvency assessment provided for in Article 66.2 of Law 20/2015 of 14 July 2015, which shall comprise at least the provisions of Article 46. a) of this royal decree.
CHAPTER VIII
Concurrent exercise of life and insurance activity other than life
Article 155. Insurance entities authorized to operate simultaneously in life insurance and in insurance other than life insurance.
1. Insurance institutions authorised in accordance with Article 31 (2) and (3) of Law 20/2015 of 14 July 2015 for the purpose of carrying out life insurance and insurance operations other than life shall be managed separately from both activities.
2. Insurance undertakings which, under existing schemes, are authorised to carry out life insurance operations and insurance operations other than life insurance at the same time as the entry into force of this royal decree, may continue to do so, provided that they are managed separately from both activities.
Article 156. Separate management of life insurance and insurance operations other than life insurance.
Separate management of life insurance and life insurance operations will be organized so that both activities are independent.
The respective interests of life insurance policyholders and policyholders other than life insurance may not be impaired and, in particular, the benefits from life insurance shall take advantage of life insurance policy holders as if the insurance undertaking is only engaged in the business of life insurance.
Article 157. Obligations arising from the separate management of life insurance and insurance operations other than life insurance.
1. Insurance institutions authorised to operate simultaneously in life insurance and in insurance other than life insurance shall:
a) Take separate accounting for each type of operation.
(b) To provide, at least, a social capital or mutual fund equal to the sum, on the one hand, of the sum required for the class of life and, on the other, of the amount required for the class other than the one in which they operate, or for the class other than the one of life in which the highest amount is required, in the case of operating in several.
(c) Calculate, on the basis of separate accounts, a notional mandatory minimum capital in relation to its life insurance business, determined as if the entity only exercised that activity, and a notional mandatory minimum capital in relation to its non-life insurance business, determined as if the entity only exercised that activity.
(d) to cover, for an equivalent amount of elements of the eligible basic own funds, a notional compulsory minimum capital referred to the life insurance business, and a notional minimum capital requirement relating to the non-life insurance business.
Minimum financial obligations relating to life insurance activity and non-life insurance activity may not be supported by the other activity.
e) Once the minimum financial obligations have been met, and provided that the General Directorate of Insurance and Pension Funds is informed, the institution may use the explicit elements of the eligible own funds still available for one or another activity for the purposes of the coverage of the Solvency Capital Requirement.
(f) Accounting data shall be established in such a way as to show the sources of the results for life assurance and for non-life insurance. All revenue and expenditure shall be broken down according to its origin. The elements common to the two activities shall be accounted for according to a distribution key to be approved by the Directorate-General for Insurance and Pension Funds.
(g) Insurance institutions shall establish, on the basis of the accounting data, a document showing clearly the elements corresponding to the basic own funds eligible for each of the notional mandatory minimum capital referred to in paragraph (c).
2. In the event of the inadequacy of the elements of the basic own funds eligible for one of the activities to cover the minimum financial obligations referred to in paragraph 1 (c), the Directorate-General for Insurance and Pension Funds shall apply the measures provided for in Law 20/2015 of 14 July 2015, irrespective of the results obtained in the other activity.
By way of derogation from the second subparagraph of paragraph (1) (d), such measures may involve the authorisation of a transfer of explicit elements of the eligible basic own funds from one activity to another.
3. Failure to comply with the obligations referred to in this Article shall determine the administrative dissolution of the insurance undertaking, unless the administrative winding up of the insurance undertaking chooses to carry out exclusively life insurance operations or direct insurance operations other than life insurance.
TITLE IV
Supervision of insurance and reinsurance entities
CHAPTER I
General principles
Article 158. Transparency of supervisory action.
1. The Directorate-General for Insurance and Pension Funds, with a view to ensuring transparency in supervision, will disclose the following information:
(a) The text of the laws, regulations and administrative provisions, and the general guidelines in the field of insurance regulation.
(b) The general criteria and methods, including the necessary quantitative tools in the monitoring process.
c) The aggregated statistical data on the fundamental aspects of the application of prudential rules.
(d) The decision on how to exercise the options provided for in Community legislation. This decision shall take the form of a resolution or a circular and shall contain the option applicable at national level.
e) The objectives of monitoring and the main functions and monitoring actions.
(f) The technical guidelines, as set out in Article 111 of Law 20/2015 of 14 July.
2. The disclosure of this information should make it possible to compare the supervisory approaches applied in Spain with those adopted by the supervisory authorities of the different Member States.
3. The information will be disseminated through the website of the Directorate General for Insurance and Pension Funds.
4. The Directorate-General for Insurance and Pension Funds may require the supervised entities and groups to provide an explanation of the reasons why they would have been separated from the technical guides.
Article 159. Information to be provided for supervisory, statistical and accounting purposes.
1. The information that insurance and reinsurance entities and their groups shall provide to the Directorate-General for Insurance and Pension Funds for the purposes of Article 114 of Law 20/2015 of 14 July 2015 shall include the necessary to carry out the following actions:
(a) To assess the governance system of the entities, the activity they develop, the valuation principles applied for the purposes of solvency, the risks assumed and the risk management systems, as well as the structure of their capital, their capital needs and their management.
b) To take the relevant decisions in the exercise of supervisory powers.
c) To meet statistical needs and to track accounting information.
2. This information shall conform to the following principles:
(a) It shall reflect the nature, size and complexity of the activity of the institution and in particular the risks inherent in such activity.
b) It should be accessible, comparable and consistent in time and be complete in all its significant aspects.
c) It shall be relevant, reliable and understandable.
3. Quantitative information for supervisory, statistical and accounting purposes shall be in accordance with the models approved by the Minister for Economic Affairs and Competitiveness by order.
4. The Directorate-General for Insurance and Pension Funds may seek clarification on the documentation received in order to obtain the information provided for in this Article.
Article 160. Time limits for the submission of information for monitoring, statistical and accounting purposes.
1. Insurance and reinsurance institutions shall forward to the Directorate-General for Insurance and Pension Funds within the time limits laid down in Article 312 of Commission Delegated Regulation (EU) 2015/35 of 10 October:
(a) Annual information for supervisory, statistical and accounting purposes, as well as the regular monitoring report.
b) Quarterly information for supervisory, statistical and accounting purposes.
2. For the purposes of reporting for supervisory, statistical and group accounting purposes, the time-limits provided for in paragraph 1 shall be extended by six weeks in accordance with Article 373 of Commission Delegated Regulation (EU) 2015/35 of 10 October, except as regards the report on the internal risk assessment and the solvency provided for in paragraph 4.
3. By way of derogation from paragraph 1, institutions covered by the special solvency regime as set out in Chapter VII of Title III are only obliged to forward quarterly information for supervisory, statistical and accounting purposes on a quarterly basis when they are in one of the following circumstances:
(a) The premiums written in the exercise by direct insurance plus reinsurance accepted exceed the figure of 1,200,000 euros. The obligation shall cease when the said limit is no longer met for two consecutive years.
b) Operating in the life insurance class.
(c) that they are subject to administrative procedure for the adoption of special control measures, where this is required by the Directorate-General for Insurance and Pension Funds, dissolution, or revocation of the administrative authorization, or are in liquidation period not assumed by the Insurance Compensation Consortium.
In any event, institutions under the special scheme that are not required to forward quarterly information for supervisory, statistical and accounting purposes shall report on this periodicity the balance sheets, the profit and loss account and a solvency statement that includes the Solvency Capital Requirement and the Minimum Capital Requirement.
In the state of solvency, the Solvency Capital Requirement to be considered shall be the last calculated solvency capital.
4. Insurers and reinsurers and their groups shall report to the Directorate-General for Insurance and Pension Funds the report on the internal risk assessment and their solvency within the time limit laid down in the European Union rules of direct application.
Article 161. Limitation of the submission of periodic reporting for supervisory, statistical and accounting purposes.
1. Without prejudice to Article 78.6 of Law 20/2015 of 14 July 2015, where information is required for the purposes of supervision, statistics and accounting purposes at a frequency lower than the year, the Directorate-General for Insurance and Pension Funds may limit the submission of periodic information, where:
(a) The information is excessively burdensome according to the nature, size and complexity of the risks inherent in the entity's activity.
b) The information is provided at least annually.
2. This limitation shall be granted only to institutions which, as a whole, do not account for more than 20% of the national life and non-life insurance and reinsurance market, respectively.
The life market share shall be calculated on the basis of gross technical provisions and the market share of non-life insurance shall be calculated on the basis of the gross premiums issued.
By granting this limitation, the General Directorate of Insurance and Pension Funds should give preference to smaller entities.
3. This limitation shall not apply in the event that the institution is part of a group within the meaning of Article 132 of Law 20/2015 of 14 July, unless the institution can demonstrate that the information is unduly burdensome in accordance with the nature, size and complexity of the risks inherent in the group's business.
4. In order to determine whether the presentation of information is unduly burdensome, in relation to the nature, size and complexity of the risks inherent in the activity of the institution, the following aspects shall be taken into account:
(a) The volume of premiums, technical provisions and assets of the institution.
(b) The volatility of claims and benefits covered by the institution.
(c) The market risks arising from the investments of the institution.
d) The level of concentration of risks.
e) The total number of life insurance and insurance classes other than life insurance for which the authorisation is granted.
f) The possible effects of the entity's asset management on financial stability.
g) The systems and structures of the entity to provide the information for supervisory purposes and the written policy provided for in Article 114.4 of Law 20/2015 of 14 July.
h) The suitability of the entity's governance system.
i) The level of own funds covered by the Solvency Capital Requirement and the Minimum Capital Requirement.
(j) If the insurance undertaking is captive, in the terms provided for in Article 6.2 of Law 20/2015 of 14 July, it shall cover only the risks associated with the industrial or commercial group to which it belongs.
Article 162. Exemption or limitation of the submission of detailed information for supervisory, statistical and accounting purposes.
1. The Directorate-General for Insurance and Pension Funds may exempt or limit, in accordance with the delimitation of each concept laid down in European Union rules of direct application, the presentation of information detailing all elements, one by one, when:
(a) The information is excessively burdensome according to the nature, size and complexity of the risks inherent in the entity's activity.
b) The presentation of the information is not necessary for the effective supervision of the entity.
c) The exemption does not undermine the stability of the affected systems of the European Union.
d) The entity is able to provide the information at the request of the supervisor.
2. In such cases, the provisions of Article 161 (2), (3) and (4) shall apply.
Article 163. Information on the limitation or exemption in the submission of information for supervisory, statistical and accounting purposes.
The Directorate-General for Insurance and Pension Funds shall provide the European Insurance and Occupational Pensions Authority with information on the number of insurance and reinsurance entities that benefit from the limitation of the reporting of periodic information and the number of insurance and reinsurance entities benefiting from the exemption or limitation of reporting detailing all elements, together with their volume of capital requirements, premiums, technical provisions and assets, as measured respectively in the form of percentages of the total volume of capital requirements, premiums, technical provisions and assets of Spanish insurance companies and reinsurers.
Article 164. Monitoring of outsourced functions and activities.
1. Where insurance or reinsurance entities outsource a function or an insurance or reinsurance activity, the outsourced service shall collaborate with the Directorate-General for Insurance and Pension Funds in relation to the supervision of the outsourced function or activity and shall provide the information required to it relating to such functions or activities to that Directorate-General as well as to the insurance or reinsurance entities themselves and their auditors.
Insurance and reinsurance entities that outsource functions or activities shall take the necessary measures to ensure that the reporting and access obligations of the outsourced service are met.
2. Where the premises of those who provide the outsourced service are located in another Member State, the Directorate-General for Insurance and Pension Funds shall carry out the monitoring activities in those premises, either by itself or by persons designated for that purpose, after reporting to the competent authorities of that Member State. Where the person providing the service is not subject to a specific supervisory regime, the insurance supervisory authorities of that State shall be informed.
The Directorate-General for Insurance and Pension Funds may delegate the performance of such actions to the supervisory authorities of the Member State in which the service provider is located, if this is agreed between the two authorities.
When the Directorate-General for Insurance and Pension Funds communicates to the supervisory authorities of the host Member State that it intends to carry out an inspection under this paragraph, and where it is prohibited in practice to exercise its right to carry out such an inspection, the Directorate-General for Insurance and Pension Funds may refer the matter to the European Insurance and Occupational Pensions Authority and request its assistance. This authority shall have the right to participate in the inspections when they are jointly carried out by two or more supervisory authorities.
Article 165. Inspection activities on the permanent presence of the insurance companies.
The Directorate-General for Insurance and Pension Funds may carry out inspections in the places where an insurance undertaking develops activity in Spain under the freedom to provide services, in order to verify whether the structure of the organisation of which the institution has in Spain is equivalent to a permanent presence and, therefore, to the system of right of establishment.
CHAPTER II
Financial Supervision
Article 166. Content of the financial supervision.
In the development of financial supervision as set out in Article 117 of Law 20/2015 of July 14, compliance with the following aspects will be reviewed and evaluated:
(a) The entity's governance system, including internal risk and solvency assessment.
(b) Technical provisions.
c) Capital requirements.
d) The investment rules.
e) The qualitative and quantitative characteristics of the own funds
f) The requirements applied to complete and partial internal models, when the entity uses them.
CHAPTER III
Monitoring by Inspection
Article 167. Inspector staff.
1. The insurance inspection performances shall be carried out by the officials of the Higher Body of State Insurance Inspectors.
2. Officials belonging to technical bodies of the General Administration of the State and higher and technical bodies of systems and information technology of the General Administration of the State may cooperate with the inspector or acting inspectors provided that they perform posts in the Directorate-General for Insurance and Pension Funds and are designated in the agreement referred to in Article 168.
3. The signature of the inspection report referred to in Article 172, either prior or final, shall be the responsibility of the officials of the Higher Body of State Insurance Inspectors.
Article 168. Initiation of the monitoring procedure by inspection.
1. The administrative oversight procedure shall be initiated by agreement of the Directorate-General for Insurance and Pension Funds, which shall be notified to the entity or to the person inspected.
2. The agreement shall identify those who are responsible for the inspection and the purpose of the checks to be carried out.
Article 169. Development of the inspection activities.
1. Where the inspection activities are carried out at the registered office, agencies, branches, offices, offices, premises, or elsewhere where the activity of the entity or person is carried out inspected or the required documentation is found, the latter shall make available to the inspection the physical space and the auxiliary means necessary to facilitate the performance of the said actions.
2. The inspection may require the entity or person inspected to send communications to third parties requesting clarifications or information in order to confirm balances or to determine the veracity of the facts manifested by the entity or person inspected, the authenticity of the documents displayed for inspection, or the scope and consequences of certain operations.
The inspection may require that the text of the communication be authorized and that, if necessary, the reply to it is sent directly to the General Directorate of Insurance and Pension Funds.
3. The authorities, those responsible for public offices or agencies and those who in general exercise public functions shall be required to provide the inspection, at the request of the latter or of the Directorate-General for Insurance and Pension Funds, with the support, assistance, assistance and protection that are necessary.
Article 170. Excuse, refusal or resistance to the inspector's performance.
1. Any action or omission by the entity or persons with whom the proceedings are understood shall be considered as an excuse, refusal or resistance to the action, which tends to unduly dilate, hinder or prevent them.
2. In particular, an excuse, refusal or resistance to an inspector shall be considered:
(a) Actions that tend to make it more difficult for the representative of the entity or the person to be inspected, or his agents or employees, of the initiation agreement of the supervision procedure for inspection, of the measures extended during the inspection, of the previous or final acts, or of any written communication of the Directorate General of Insurance and of the Pension Funds or of the officials to whom the actions of verification are entrusted.
(b) The appearance of the person required by the inspection, in accordance with the laws in force, at the place, day and time that he has been appointed in time and form for the initiation, development or termination of the proceedings, unless he mediates sufficient cause to be duly justified.
c) The refusal to display mandatory books, records, and documents of keeping and conservation.
d) The omission or refusal to provide the data, reports, supporting documents and records required by the inspection, as well as the alteration or manipulation thereof.
(e) unduly deny or hinder the access or permanence of the inspection at the registered office, agencies, branches, premises and offices where the activity of the entity or person inspected is carried out or the required documentation is found, as well as hindering the location of such places.
(f) Attitudes that pose threats or coercion to the inspection, or unduly dilate the inspection checks.
Article 171. Proceedings.
1. The inspection may extend due diligence to record the facts or circumstances that are revealed during the course of the inspection activities, the manifestations of the persons with whom these actions are understood, as well as the formulation of requirements to the entity or person inspected.
2. A copy of the inspection shall be given to the person with whom the proceedings are to be understood. If the latter refuses to receive it, it shall be referred to it by any of the means admitted to it, and if it refuses to sign the due diligence, or cannot, this circumstance shall be entered in the same circumstance, without prejudice to the delivery to that person of the corresponding duplicate.
When the nature of the inspection actions whose result is reflected in a diligence does not require the presence of a person with whom such actions are understood, or that person is absent, the diligence shall be signed only by the inspection, and a copy of the inspection shall be sent to the person concerned in accordance with the law.
Article 172. Formalisation of the inspection report.
1. The minutes shall reflect their prior or final character, shall be extended in duplicate and shall be signed by the legal representative of the inspected entity or by a person with sufficient power to do so, or, where appropriate, by the person inspected, and by the officials referred to in Article 167.2, designated in the agreement, with both parties having to sign all the sheets of the two copies of the main body of the inspection report.
The signing of the act by the entity or person inspected, unless otherwise stated by the person, does not correspond to its conformity with the facts, nor to its assessment and conclusions contained therein.
2. One of the copies of the minutes shall be delivered to the signatory thereof. In the event of refusal to sign the minutes or the receipt thereof, the inspectors shall record it in writing and the Directorate-General for Insurance and Pension Funds shall notify the minutes at the address of the institution or person inspected. If the notification is rejected, it shall be entered in the file and the procedure shall be carried out after the procedure.
3. The inspection report shall include a list of the annexes forming part of it, and the inspection shall, together with the main body of the inspection report, provide a copy thereof, except in the case where the Annex includes only documentation provided in the course of the inspection by the entity or person inspected, in which case that circumstance shall be recorded in the list of annexes.
Article 173. Completion of the inspection activities.
Inspecting performances will conclude:
a) With the lifting of the final inspection report.
(b) For the course of 6 months without any inspector, for reasons not attributable to the entity or person inspected.
(c) By agreement of the General Directorate of Insurance and Pension Funds notified to the entity or person inspected under which the inspection checks are not deemed necessary.
Article 174. Duty of communication.
The legal representatives of the inspected entities shall account for the inspection report and the resolution of the Directorate-General for Insurance and Pension Funds to the administrative body at the first meeting it holds after those. They shall also be required to give such documents to the General Meeting or General Assembly at the time of the said resolution.
TITLE V
Monitoring of insurance and reinsurance entity groups
CHAPTER I
Exercise group monitoring
Article 175. Assumption of the role of group supervisor by the Directorate General of Insurance and Pension Funds in special cases.
1. Even if the circumstances referred to in Article 134.2 of Law 20/2015 of 14 July 2015 are not given, the supervisory authorities concerned may, upon request of any of them, jointly decide that the Directorate-General for Insurance and Pension Funds shall assume the functions of group supervisor, where such allocation is appropriate, taking into account the structure of the group and the relative importance of the activities carried out by insurance and reinsurance entities in different countries.
For these purposes, any of the supervisory authorities concerned may request that a debate be opened to decide whether the application of the criteria set out in Article 134.2 of Law 20/2015 of 14 July is appropriate. This debate can only be held once a year.
The assumption of group supervisor duties by the Directorate-General for Insurance and Pension Funds, outside the cases referred to in Article 134.2 of Law 20/2015 of 14 July, will require a joint decision of the college of supervisors adopted within three months of the request for the debate. Before taking a decision, the supervisory authorities concerned shall give the group the opportunity to express their views.
In case of a designated group supervisor, the General Directorate of Insurance and Pension Funds shall, by resolution, notify the group of the fully reasoned joint decision.
If, within this period of three months, any of those authorities have referred the matter to the European Insurance and Occupational Pensions Authority, the joint decision shall be deferred until the decision is made, which shall take its decision within one month of the referral. The subsequent joint decision shall be final, shall be taken on a reasoned basis in accordance with the statement of the European Insurance and Occupational Pensions Authority and shall be notified to the group and the college of supervisors by the Directorate-General for Insurance and Pension Funds, in the event that it has been designated as group supervisor.
The case will not be referred to the European Insurance and Occupational Pensions Authority after the end of the three-month period or after a joint decision has been taken.
2. If a joint decision has not been reached between all supervisory authorities, this function shall be exercised by the supervisory authority determined in accordance with the provisions of Article 134.2 of Law 20/2015 of 14 July 2015.
Article 176. Exceptions to the assumption of the role of group supervisor by the Directorate-General for Insurance and Pension Funds.
1. Even if the circumstances referred to in Article 134.2 of Law 20/2015 of 14 July 2015 are met, the supervisory authorities concerned may, upon request of any of them, take a joint decision to ensure that the Directorate-General for Insurance and Pension Funds does not assume the functions of group supervisor, when their assumption is inadequate, taking into account the structure of the group and the relative importance of the activities carried out by insurance and reinsurance entities in different countries.
For these purposes, any of the supervisory authorities concerned may request that a debate be opened to decide whether the application of the criteria set out in Article 134.2 of Law 20/2015 of 14 July is appropriate. This debate can only be held once a year.
The non-assumption of the group supervisor functions will require a joint decision by the supervisory authorities concerned, adopted within three months of the debate being raised by any of the authorities. Before taking a decision, the supervisory authorities concerned shall give the group the opportunity to express their views.
The designated group supervisor will notify the group of the fully motivated joint decision.
If, within this period of three months, any of those authorities have referred the matter to the European Insurance and Occupational Pensions Authority, the joint decision shall be deferred until the decision is made, which shall take its decision within one month of the referral. The subsequent joint decision shall be final, shall be taken on a reasoned basis in accordance with the statement of the European Insurance and Occupational Pensions Authority and shall be notified to the group and the college of supervisors by the designated group supervisor.
The case will not be referred to the European Insurance and Occupational Pensions Authority after the end of the three-month period or after a joint decision has been taken.
2. If a joint decision had not finally been reached between all the supervisory authorities concerned in order to derogate from the criteria set out in Article 134.2 of Law 20/2015 of 14 July, the Directorate-General for Insurance and Pension Funds shall exercise the function of group supervisor.
Article 177. Colleges of Supervisors.
1. In order to facilitate the exercise of group supervision tasks, a college of supervisors shall be established.
The members of the college of supervisors shall include the group supervisor, the supervisory authorities of all Member States in which the head office of all the subsidiary institutions and the European Insurance and Occupational Pensions Authority is situated. It will be chaired by the Directorate-General for Insurance and Pension Funds when it is the group supervisor.
The supervisory authorities of the relevant branches and related entities will also be allowed to participate in the college of supervisors. However, their participation will be limited only to achieving the objective of an effective exchange of information.
The effective functioning of the college of supervisors may require a reduced number of supervisory authorities within the college to carry out certain activities.
The college of supervisors shall ensure that the processes of cooperation, exchange of information and consultation between the supervisory authorities of the college of supervisors are implemented in accordance with Title V of Law 20/2015 of 14 July, with a view to promoting the convergence of their respective decisions and activities.
2. Where the group supervisor does not perform the tasks referred to in Article 135.1 of Law 20/2015 of 14 July, or where the members of the college of supervisors do not cooperate to the extent required by that paragraph, any of the supervisory authorities concerned may refer the matter to the European Insurance and Occupational Pensions Authority and request their assistance.
3. Without prejudice to other measures which may be adopted in accordance with the applicable rules, the Directorate-General for Insurance and Pension Funds shall base the establishment and operation of colleges of supervisors in which it participates in coordination agreements concluded with the other supervisory authorities concerned by the supervision of a group of insurance or reinsurance entities. In the event of a divergence of views on the coordination arrangements, any member of the college of supervisors may refer the matter to the European Insurance and Occupational Pensions Authority and request their assistance. The Directorate-General for Insurance and Pension Funds, where the group supervisor is the group supervisor, shall take its final decision in accordance with the decision of the European Insurance and Occupational Pensions Authority and shall forward it to the other supervisory authorities concerned.
4. Without prejudice to other measures arising from the implementation of European Community legislation, the coordination arrangements shall specify the procedures for the adoption of decisions regarding the approval of internal group models, the requirement for additional capital and the exercise of the duties of group supervisors, the consultation of the European Insurance and Occupational Pensions Authority, where appropriate, and the consultation between authorities and cooperation between them.
5. Without prejudice to the rights and obligations assigned by Law 20/2015 of 14 July, its implementing rules and the rules of the European Union of direct application, to the group supervisor and to other supervisory authorities, the coordination arrangements may entrust additional tasks to the group supervisor, to the other supervisory authorities or to the European Insurance and Occupational Pensions Authority, if this results in a more efficient supervision of the group and the supervisory actions of the Directorate-General for Insurance and Pension Funds are not hindered in respect of the functions entrusted to it by the aforementioned rules individually.
6. In the event that the Directorate-General for Insurance and Pension Funds is a group supervisor, it shall transmit to the European Insurance and Occupational Pensions Authority the information on the operation of the college of supervisors and any other difficulties encountered in it which are relevant to the revisions made by the European Insurance and Occupational Pensions Authority on the functioning of the colleges of supervisors. Where the Directorate-General for Insurance and Pension Funds is not a group supervisor, it shall ensure that the group supervisor sends the previous information to the European Insurance and Occupational Pensions Authority.
Article 178. Access to information and verification.
1. The Directorate-General for Insurance and Pension Funds, where the group supervisor is the group supervisor, may limit the information required for supervisory purposes at a group level with a frequency lower than the year, where all insurance and reinsurance entities in the group enjoy the limitation in accordance with Article 161, taking into account the nature, size and complexity of the risks inherent in the group's business.
The Directorate-General for Insurance and Pension Funds, where the group supervisor may be exempt from the submission of information detailing all elements, one by one, at the group level, when all insurance and reinsurance entities in the group, enjoy the exemption in accordance with Article 162, taking into account the nature, size and complexity of the risks inherent in the group's activity and the objective of financial stability.
The Directorate-General for Insurance and Pension Funds shall provide the European Insurance and Occupational Pensions Authority with information annually on the number of groups benefiting from the limitation of the submission of periodic reporting for supervisory purposes and the number of groups benefiting from the reporting exemption detailing all elements, one by one referred to in this paragraph, together with its volume of capital requirements, premiums, technical provisions and assets, as measured respectively in the form of a percentage of the total volume of capital requirements, premiums, technical provisions and assets of all groups.
2. If the Directorate-General for Insurance and Pension Funds considers it appropriate to verify the information referred to an entity that is part of a group, whether or not regulated, and is domiciled in another Member State, it shall request the supervisory authorities of that Member State to carry out the verification.
The Directorate-General for Insurance and Pension Funds may directly carry out the verification of that entity in the Member State in which it is domiciled, subject to the authorisation of the supervisory authority of that State. In any case, it may participate in the verification where it does not proceed directly to it.
Where the application submitted to another supervisory authority for verification under this paragraph has not been completed within two weeks, or where in practice the Directorate-General for Insurance and Pension Funds is prohibited from exercising its right to participate in accordance with the preceding paragraph, the Directorate-General for Insurance and Pension Funds may refer the matter to the European Insurance and Occupational Pensions Authority and request its assistance.
3. Where the supervisory authority of another Member State considers it appropriate to verify the information referred to an entity, whether or not regulated, which is part of a group and is domiciled in Spain, it shall apply to the Directorate-General for Insurance and Pension Funds.
The Directorate-General for Insurance and Pension Funds, within its powers, shall carry out the verification directly or authorise the supervisory authority which requested the verification to carry out the verification itself, which may, in any case, participate in the verification where it does not proceed to do so directly. The Directorate-General for Insurance and Pension Funds shall inform the group supervisor of the decision taken.
The European Insurance and Occupational Pensions Authority is entitled to participate in the verifications when they are jointly carried out by two or more supervisory authorities.
Article 179. Cooperation and exchange of information between supervisory authorities.
The Directorate-General for Insurance and Pension Funds will collaborate with the supervisory authorities of individual insurers and reinsurers within a group and with the group supervisor, in particular in cases where an insurance or reinsurance group in the group faces financial difficulties.
The Directorate-General for Insurance and Pension Funds shall, without delay, provide the other supervisory authorities concerned with, and demand from, any relevant information as soon as it is available or exchange information, upon request, to enable and facilitate the exercise of the respective supervisory tasks. The information to be communicated shall include at least the information concerning the actions of the group and the supervisory authorities, and the information provided by the group.
Where a supervisory authority has not communicated the relevant information or where a request for cooperation, and in particular for the exchange of relevant information, has been refused or has not been completed within two weeks, the Directorate-General for Insurance and Pension Funds may refer the matter to the European Insurance and Occupational Pensions Authority (EIOPA).
CHAPTER II
Group Financial Situation
Section 1. Group Solvency
Subsection 1. General Principles
Article 180. Supervision of group solvency
1. The calculation of the group's solvency shall be carried out at least annually and the information on the group shall be submitted, with the periodicity to be determined in the implementing rules, to the Directorate-General for Insurance and Pension Funds where the group supervisor is the participating entity or, if the group is not headed by an insurance or reinsurance undertaking, by the insurance holding company or mixed financial holding company or by the group entity determined by the Directorate-General for Insurance and Pension Funds after consulting the other authorities. of the supervisory authorities concerned and the group itself.
2. Institutions required under the previous paragraph shall maintain a permanent check on the group's Solvency Capital Requirement.
If the risk profile of the group is significantly apart from the assumptions on which the last calculation of the notified group Solvency Capital is based, a new calculation of the Solvency Capital Requirement and its submission to the General Directorate of Insurance and Pension Funds shall be made immediately, where the group supervisor is the group supervisor.
When there are indications that the risk profile of the group has varied significantly since the last information submitted on the group's Solvency Capital Requirement, the General Directorate of Insurance and Pension Funds, as a group supervisor, will require that the Solvency Capital Requirement be recalculated.
3. In the case of insufficient eligible own funds to cover the Solvency Capital Requirement or where there is a risk of insufficiency within the following three months, the provisions of Articles 156, 160 and 166 of Law 20/2015 of 14 July 2015 shall apply. The participating entity shall, as soon as possible, communicate this circumstance to the Directorate-General for Insurance and Pension Funds when it is a group supervisor, who shall inform the other supervisory authorities concerned.
Article 181. Report on the financial and solvency situation at the group level.
1. Before giving its authorisation for the preparation of a single report comprising the information on the financial and solvency situation at the group level and at the level of any of the subsidiary members of the group, which should be individually identifiable, the Directorate-General for Insurance and Pension Funds shall consult the other supervisory authorities concerned and shall take into account their comments and reservations. The maximum period for resolving shall be six months.
2. If the single report referred to in paragraph 1 does not include information that the Directorate-General for Insurance and Pension Funds, or other supervisory authority that has authorised the subsidiary within the group, requires comparable entities, and if that omission is considered to be significant, the Directorate-General for Insurance and Pension Funds or the other supervisory authority may require the subsidiary concerned to disclose the necessary additional information.
3. The report on the financial and solvency situation at the group level will be reviewed. The Directorate-General for Insurance and Pension Funds shall determine by circulating the content of the special report on the review of the financial and solvency situation and the person responsible for drawing up the report.
Article 182. Advertising of the group structure.
Insurance and reinsurance entities, insurance holding companies and mixed financial holding companies shall publish on their websites at annual intervals, at the group level, the legal structure and the governance and organisational structure, including a description of all subsidiaries, material related companies and significant branches belonging to the group.
If you do not have a website, the above entities will have to send an electronic copy of this information to the person who requests it, within a maximum period of ten days. The application may be referred to in the information for the last five years at the latest.
Subsection 2. Calculation Methods
Article 183. Method based on accounting consolidation.
1. The calculation of the group solvency of the participating insurer or reinsurer shall be calculated on the basis of the consolidated accounts.
The group solvency of the participating insurer or reinsurer will result from the difference between the following measures:
(a) Eligible own funds to cover the Solvency Capital Requirement, calculated from the consolidated data; and
(b) The Solvency Capital Requirement at the group level, calculated on the basis of consolidated data (consolidated consolidated group solvency capital).
In the calculation of the eligible own funds to cover the Solvency Capital Requirement and the Solvency Capital Requirement at the group level based on consolidated data, the provisions of Sections 2 and 3 of Chapter II of Title III of Law 20/2015 of 14 July 2015 shall apply.
2. The consolidated group Solvency Capital Requirement shall be calculated according to either the standard formula or an approved internal model.
3. The consolidated group Solvency Capital Requirement is composed of at least the sum of the following:
(a) The mandatory minimum capital of the participating insurer or reinsurer; and
(b) The proportional share of the minimum capital requirement of related insurance undertakings or reinsurers.
This minimum must be covered by basic own funds eligible under the terms of Article 78.1 of Law 20/2015 of 14 July.
In order to determine whether the eligible own funds may be considered eligible to cover the minimum consolidated group Solvency Capital Requirement, the principles set out in Articles 187 to 196 shall apply with the necessary adaptations. It shall also apply, with the necessary adaptations, the provisions of Article 157 of Law 20/2015 of 14 July 2015.
Article 184. Internal model of the consolidated group and of the insurance and reinsurance entities of the group.
1. The Directorate-General for Insurance and Pension Funds shall, in its role as a group supervisor, inform the other supervisory authorities of the college of supervisors concerned of the application for authorisation of an internal group model and forward the full application as soon as it is submitted. It shall cooperate with them to adopt a joint position on whether or not to grant such authorisation and to determine the conditions, where appropriate, to which it is subject, within a period not exceeding six months from the date on which it received the full application.
If, within the six-month period referred to in the preceding paragraph, any of the supervisory authorities concerned has referred the matter to the European Insurance and Occupational Pensions Authority, the Minister for Economic Affairs and Competitiveness, shall defer its decision pending the adoption and decision of the European Insurance and Occupational Pensions Authority in accordance with the decision of the European Insurance and Occupational Pensions Authority. This decision shall be deemed final and shall be applied by the Directorate-General for Insurance and Pension Funds and by the other supervisory authorities concerned.
The European Insurance and Occupational Pensions Authority will take its decision within one month.
However, if the Board of Supervisors of the European Insurance and Occupational Pensions Authority rejected the decision proposed by the independent panel, set up by the Board of Supervisors to facilitate an impartial solution to the differences between the supervisory authorities concerned, the Minister for Economic Affairs and Competitiveness will adopt the final decision. This decision shall be deemed final and shall be applied by the supervisory authorities concerned.
The case will not be referred to the European Insurance and Occupational Pensions Authority after the end of the six-month period or after a joint decision has been taken.
When all the supervisory authorities concerned have adopted the joint position referred to in the second subparagraph of this paragraph, the Directorate-General for Insurance and Pension Funds, as group supervisor, shall communicate this to the applicant.
2. In the absence of a joint position of the supervisory authorities concerned within six months of the date on which the Directorate-General for Insurance and Pension Funds received the full application, the Minister for Economic Affairs and Competitiveness shall decide on the request, taking into account any comments or reservations expressed by the other supervisory authorities concerned during the period laid down in paragraph 1.
The Directorate-General for Insurance and Pension Funds shall inform the applicant and the other supervisory authorities concerned of the decision taken. This decision shall be deemed final and shall be applied by the supervisory authorities concerned.
3. Where the Directorate-General for Insurance and Pension Funds considers that the risk profile of an insurance or reinsurance undertaking, for which it is responsible for supervision, is significantly removed from the assumptions underlying the internal model which has been authorised at the group level, and as long as the entity concerned has not adequately responded to the requirements that have been made, it may, in accordance with Article 65, require that insurance or reinsurance undertaking an additional capital to the Solvency Capital Requirement to be derived from the application of the said institution. internal model.
In exceptional circumstances where the requirement for additional capital is inappropriate, the Directorate-General for Insurance and Pension Funds may require the institution concerned to calculate its Solvency Capital Requirement in accordance with the standard formula. In accordance with Article 65, the Directorate-General for Insurance and Pension Funds may require the insurance or reinsurance undertaking to provide additional capital to the Solvency Capital Requirement which is derived from the application of the standard formula.
The General Directorate of Insurance and Pension Funds shall communicate the reasoned decision containing its decision to the insurance or reinsurance undertaking as well as to the rest of the group supervisors.
Article 185. Requirement for additional consolidated group Solvency Capital Requirement.
To determine whether the consolidated group Solvency Capital Requirement adequately reflects the risk profile of the group, the General Directorate of Insurance and Pension Funds, where the group supervisor is the group supervisor, shall monitor the possibility of the situations referred to in Article 65 being raised at a group level, in particular where:
(a) any specific risk at group level is not sufficiently covered by the standard formula or the internal model used, because it is difficult to quantify;
(b) an additional capital on the Solvency Capital Requirement of related insurers or reinsurers is required by the supervisory authorities concerned.
In such cases, the provisions of Article 76 of Law 20/2015 of 14 July 2015 will apply, with the necessary adaptations.
Article 186. Method of deduction and aggregation.
1. Where the deduction and aggregation method is used, the group solvency of the participating insurer or reinsurer shall be the difference between the following measures:
(a) The eligible own funds of aggregate group, as provided for in paragraph 2; and
(b) The value, in the participating insurer or reinsurer, of the related insurance or reinsurance entities and the aggregated group Solvency Capital Requirement, as calculated in accordance with paragraph 3.
2. The aggregated group eligible own funds shall be the sum of the following:
(a) Eligible own funds to cover the Solvency Capital Requirement of the participating insurer or reinsurer; and
(b) The proportional share of the participating insurer or reinsurer in the eligible own funds to cover the Solvency Capital Requirement of the related insurance or reinsurance entities.
3. The aggregated group Solvency Capital Requirement shall be the sum of the following:
(a) The Solvency Capital Requirement of the participating insurer or reinsurer; and
(b) The proportional share of the Solvency Capital Requirement of related insurance or reinsurance entities.
4. Where participation in related insurance or reinsurance undertakings consists, in whole or in part, in an indirect property, the value in the participating insurance or reinsurance undertaking of the related insurance or reinsurance undertakings shall incorporate the value of such indirect ownership, taking into account the relevant successive holdings, and the elements referred to in point (b) of paragraph 2 and point (b) of paragraph 3 shall include, respectively, the corresponding proportional parts of the eligible own funds to cover the solvency capital. (a) compulsory insurance or related reinsurance undertakings and the Solvency Capital Requirement of the related insurance or reinsurance undertakings.
5. Where authorisation is sought for the calculation of the Solvency Capital Requirement of the insurance and reinsurance undertakings of the group, in accordance with an internal model submitted, either by an insurance or reinsurance undertaking and its related undertakings, or jointly by undertakings linked to an insurance holding company or a mixed financial holding company, it shall apply with the necessary adaptations to Article 147 of Law 20/2015 of 14 July and Article 184 of this royal decree.
6. When determining whether the aggregated group Solvency Capital Requirement, calculated in accordance with paragraph 3, adequately reflects the risk profile of the group, the supervisory authorities concerned shall pay particular attention to any specific risk existing at group level that is not sufficiently covered due to their difficult quantification.
If the risk profile of the group is significantly apart from the assumptions on which the aggregated group Solvency Capital Requirement is based, an increase in the aggregate group Solvency Capital Requirement may be imposed.
In these cases, the provisions of Article 65 of Law 20/2015 of 14 July 2015 will apply with the necessary adaptations.
Article 187. Inclusion of proportional participation.
1. In the calculation of group solvency, account shall be taken of the proportional share held by the participating entity in its related entities.
This proportional participation will be:
(a) If the accounting consolidation method is used, the percentages used to make the consolidated accounts; or
(b) If the method of deduction and aggregation is used, the proportion of subscribed capital held directly or indirectly by the participating entity.
However, and regardless of the method applied, where the related entity is a subsidiary entity and does not have sufficient eligible own funds to cover the Solvency Capital Requirement, the total solvency deficit of the subsidiary shall be computed.
When in the view of the supervisory authorities, the liability of the parent holding a share in the capital is strictly limited to that holding, the group supervisor may allow the solvency deficit of the subsidiary to be taken into account in a proportional manner.
2. The Directorate-General for Insurance and Pension Funds, where the group supervisor is the group supervisor, shall, after consulting the other supervisory authorities and the group itself, determine the proportional participation to be taken into account in the following cases:
a) When there are no capital links between some of the entities in a group;
(b) Where the supervisory authorities have determined that the holding, direct or indirect, of voting rights or capital of an entity should be treated as a holding, to be exercised effectively on that entity, in its view, a notable influence;
(c) Where the supervisory authorities have determined that one entity is the parent entity of another entity because, in its view, the first entity effectively exercises a dominant influence on that other entity.
Article 188. Abolition of double counting of eligible own funds.
1. Double counting of eligible own funds shall not be permitted to cover the Solvency Capital Requirement between the various insurance or reinsurance entities that have been taken into account in that calculation.
For this purpose, in the calculation of group solvency and in the event that the methods provided for in Articles 183 and 186 are not provided for, the following amounts shall be excluded:
(a) The value of any asset of the participating insurer or reinsurer representing the financing of eligible own funds to cover the Solvency Capital Requirement of one of its related insurance or reinsurance entities;
(b) The value of any asset of an insurance or reinsurance entity linked to the participating insurer or reinsurer representing the financing of eligible own funds to cover the Solvency Capital Requirement of that participating insurer or reinsurer;
(c) The value of any asset of an insurance or reinsurance entity linked to the participating insurer or reinsurer representing the financing of eligible own funds to cover the Solvency Capital Requirement of any other insurance or reinsurance entity linked to that participating insurer or reinsurer.
2. Without prejudice to the provisions of paragraph 1, the following elements may be computed only to the extent that they are eligible to cover the Solvency Capital Requirement of the related entity concerned:
(a) The surplus funds of an insurance undertaking or life reinsurer, linked to the participating insurer or reinsurer, in respect of which the group solvency is calculated, in accordance with Article 72.2 of Law 20/2015 of 14 July and 59 of this royal decree;
(b) All subscribed and undisbursed capital of an insurance or reinsurance entity linked to the participating insurer or reinsurer in respect of which the group solvency is calculated.
However, the following items are excluded in any case from the calculation:
(a) All subscribed and undisbursed capital that represents a potential obligation for the participating entity;
(b) All subscribed and undisbursed capital of the participating insurer or reinsurer that represents a potential obligation for the related insurer or reinsurer;
(c) All subscribed and undisbursed capital of a related insurance or reinsurance entity that represents a potential obligation for another insurance or reinsurance entity linked to the same participating insurer or reinsurer.
3. Where supervisory authorities consider that certain eligible own funds to cover the Solvency Capital Requirement of a related insurer or reinsurer, other than those referred to in paragraph 2, cannot be actually available to cover the Solvency Capital Requirement of the participating insurer or reinsurer in respect of which the group solvency is calculated, those own funds may be computed only to the extent that they are eligible to cover the Solvency Capital Requirement of the related entity.
4. The sum of own funds referred to in paragraphs 2 and 3 shall not exceed the Solvency Capital Requirement of the related insurer or reinsurer.
5. The eligible own funds of an insurance or reinsurance undertaking linked to the participating insurer or reinsurer in respect of which the group solvency is calculated, which are subject to the prior authorisation of the supervisory authorities in accordance with Articles 71.1 and 72.3 of Law 20/2015 of 14 July, may only be taken into account in so far as they have been duly authorised by the authorities responsible for the supervision of that related entity.
Article 189. Abolition of the creation of intra-group capital.
1. In the calculation of group solvency, no consideration shall be given to those own funds eligible to cover the Solvency Capital Requirement that come from a reciprocal financing between the participating insurer or reinsurer and any of the following:
a) A linked company;
b) A participating company;
c) Another company linked to any of its participating companies
2. The calculation of group solvency shall not take into account the eligible own funds to cover the Solvency Capital Requirement of an insurance or reinsurance undertaking linked to the participating insurer or reinsurer in respect of which the solvency of the group is calculated, where the own funds concerned come from reciprocal financing with any other entity linked to that participating insurance or reinsurance entity.
3. Reciprocal financing shall be deemed to exist at least where an insurance or reinsurance undertaking, or any of its related entities, has holdings in another entity which, directly or indirectly, has own funds eligible to cover the Solvency Capital Requirement of the first entity, or grants loans to this other entity.
Article 190. Valuation.
Assets and liabilities shall be valued in accordance with the provisions of Article 68 of Law 20/2015 of 14 July 2015.
Subsection 3. Calculation Of Group Solvency according to the type of related entity
Article 191. Related insurance companies and reinsurers.
The calculation of the group solvency shall be made by integrating the corresponding amounts for each of the related insurance or reinsurance entities.
Where a related insurer or reinsurer has its registered office in another Member State, in the calculation of the group solvency, it shall be taken into consideration, in respect of the related entity, the Solvency Capital Requirement and the own funds eligible to be covered by that other Member State.
Article 192. Equivalence with respect to insurance institutions and related reinsurers from third countries.
1. For the purposes of calculating the group solvency by the deduction-aggregation method of a participating insurer or reinsurer in a third-country insurer or reinsurer, the latter shall be treated as a related entity.
However, where the third country in which it has its registered office is subject to prior administrative authorisation and to a solvency regime equivalent to at least that established for the insurance and reinsurance entities of the European Union, the solvency capital requirement shall be taken into account in respect of that institution, the Solvency Capital Requirement and the own funds eligible to be covered by the third country concerned.
2. The equivalence of the prudential regime shall be verified in accordance with the following paragraphs:
(a) This equivalence shall be determined by the European Commission on the basis of the criteria it specifies, with the assistance of the European Insurance and Occupational Pensions Authority.
The list of equivalent prudential regimes will be published by the European Insurance and Occupational Pensions Authority on its website and will be kept up to date. The decisions of the Commission shall be reviewed regularly in order to be updated in order to take account of any substantial changes to the supervisory arrangements of the European Union and the third-country supervisory regime.
(b) Where all the criteria set out in subparagraph (a) are not met, the equivalence may be determined on a temporary basis by the European Commission, with the assistance of the European Insurance and Occupational Pensions Authority in accordance with the criteria laid down in the European Union rules of direct application.
The list of third countries for which a temporary solvency regime has been established will be published by the European Insurance and Occupational Pensions Authority on its website and will be kept up to date. Commission decisions will be reviewed on a regular basis in order to keep up to date with reports of progress made by the third country, which will be submitted to the Commission annually for evaluation with the help of the European Insurance and Occupational Pensions Authority.
The temporary equivalence regime shall be ten years or shall end when that decision is revoked or on the date on which, in accordance with paragraph (a), the prudential regime of that third country is considered equivalent, if the latter date is earlier. The temporary equivalence scheme shall be subject to renewals for additional periods of 10 years where the European Commission determines this with the assistance of the European Insurance and Occupational Pensions Authority.
(c) Where no decision has been taken pursuant to paragraphs (a) and (b), it shall be for the General Directorate of Insurance and Pension Funds, where the group supervisor is to verify, ex officio or at the request of the participating entity, the equivalence of the solvency regime of the third country.
When carrying out such verification, the Directorate-General for Insurance and Pension Funds shall, with the assistance of the European Insurance and Occupational Pensions Authority, consult the other supervisory authorities concerned before taking a decision on equivalence. This decision shall be taken in accordance with the criteria adopted by the European Commission in accordance with paragraph (a), as well as with previous decisions made bilaterally with respect to that third country, except where it is necessary to take account of substantial amendments made to the Spanish supervisory regime or to the supervisory regime of that third country.
In the event of disagreement between supervisory authorities regarding the decision on the equivalence adopted, the matter may be referred to the European Insurance and Occupational Pensions Authority and request its assistance within three months of the notification of the decision of the Directorate-General for Insurance and Pension Funds, when acting as a group supervisor.
Article 193. Determination of the temporary equivalence with respect to insurance institutions and related reinsurers from third countries.
As provided for in paragraph 2.b) of the previous Article, where all the criteria set out in paragraph 2.a) of that Article are not met, the equivalence of a third country may be determined on a temporary basis by the European Commission, with the assistance of the European Insurance and Occupational Pensions Authority in accordance with the following criteria:
(a) that third country can demonstrate that a solvency regime currently in force can be considered equivalent or, where appropriate, that it can be adopted and applied by that third country
(b) the third country has a risk-based solvency regime and establishes quantitative and qualitative solvency requirements, as well as requirements in relation to information presented for the purposes of supervision and transparency
(c) the existing legislation of the third country allows, in principle, the cooperation and exchange of confidential supervisory information with the European Insurance and Occupational Pensions Authority (EIOPA) and with the supervisory authorities as defined in Article 7 of Law 20/2015 of 14 July 2015;
d) the third country has an independent monitoring system;
(e) the third country has established an obligation of professional secrecy for all persons acting on behalf of its supervisory authorities.
Article 194. Intermediate insurance holding companies and intermediate mixed financial holding companies.
1. When calculating the group solvency of an insurance or reinsurance undertaking which holds, through an insurance holding company or a mixed financial holding company, a holding in a related insurance or reinsurance undertaking or an insurance or reinsurance undertaking in a third country, the situation of that insurance holding company or mixed financial holding company shall be taken into account.
For the sole purpose of this calculation, the intermediate insurance holding company or intermediate mixed financial holding company shall have the same consideration as an insurance or reinsurance undertaking, so that for the determination of the Solvency Capital Requirement and the eligible funds to cover the same, the provisions of Sections 2 and 3 of Chapter II of Title III of Law 20/2015 of 14 July 2015 shall apply to it.
2. Where an intermediate insurance holding company or intermediate mixed financial holding company has subordinated debt or other eligible own funds subject to limitations as provided for in Article 62, such funds shall be recognised as own funds eligible for the amounts which the application of the limits laid down in Article 62 provides for the total eligible own funds at group level in relation to the Solvency Capital Requirement at the group level.
Those eligible own funds of an intermediate insurance holding company or intermediate mixed financial holding company which, if held by an insurance or reinsurance undertaking, would require, in accordance with the provisions of Article 71.1 of Law 20/2015 of 14 July, prior authorisation by the supervisory authorities, that they may be included in the calculation of group solvency only if they have been duly authorised by the Directorate-General for Insurance and Pension Funds when it is the group supervisor. This authorisation procedure shall be governed by the provisions of the fourth paragraph of Article 71.1 of that law.
Article 195. Credit institutions, investment firms and related financial institutions.
When calculating the group solvency of an insurance or reinsurance undertaking which is a participating institution in a credit institution, investment firm or financial institution as defined in Article 6 of Law 20/2015 of 14 July, the Directorate-General for Insurance and Pension Funds, where the group supervisor is the group supervisor, may authorise the application of the accounting consolidation method (Method 1) or the method of deduction and aggregation (Method 2) set out in the Annex to Royal Decree 1332/2005 of 11 November 2005 Law 5/2005, of 22 April, of supervision of financial conglomerates and amending other laws of the financial sector. However, method 1 provided for in that Annex shall be authorised only if the Directorate-General for Insurance and Pension Funds, where the group supervisor is the group supervisor, considers the level of integrated management and internal control of the entities that would be included in the consolidation to be appropriate. The method chosen must be applied in a consistent manner over time.
However, the Directorate-General for Insurance and Pension Funds, where the group supervisor is the group supervisor, may, on its own initiative or at the request of the participating entity, agree that they should be deducted from the eligible own funds for the purposes of group solvency, any participation in a credit institution, investment firm or financial institution.
Article 196. Lack of information on related entities.
If the Directorate-General for Insurance and Pension Funds, where the group supervisor is the group supervisor, is unable to provide the information necessary for the calculation of the group solvency of an insurance or reinsurance undertaking, relating to a related entity having its registered office in another Member State or in a third country, the accounting value of that entity in the participating insurer or reinsurer shall be deducted from the eligible own funds for the purposes of group solvency. In such a case, no latent capital gains associated with such participation shall be accepted as eligible own funds for the purposes of group solvency.
Subsection 4. Group with centralized risk management
Article 197. Group scheme with centralised risk management.
For the purposes of the calculation of the group's Solvency Capital Requirement, the group scheme with centralised risk management may be authorised to the insurance or reinsurance undertaking subsidiaries of an insurance or reinsurance undertaking or an insurance holding company or a parent mixed financial holding company, where the following conditions are met:
(a) that the subsidiary has not been excluded from group supervision in accordance with Article 133.2 of Law 20/2015 of 14 July and is included in group supervision by the group supervisor at the parent institution level;
(b) the risk management processes and internal control mechanisms of the parent entity comprise the subsidiary, and the parent institution demonstrates to the satisfaction of the supervisory authorities concerned that it performs prudent management of the subsidiary;
(c) the parent institution has obtained the authorisation of the group supervisor to carry out the internal risk assessment and solvency at the group level and at the level of the subsidiary at the same time and to produce a single document covering such assessments;
(d) the parent entity has obtained the authorisation of the group supervisor to produce a single report on the financial and solvency situation at the group level and at the level of the subsidiary;
e) that the parent institution has obtained authorisation to benefit from the group scheme with centralised risk management.
Article 198. Authorisation to benefit from the system of groups with centralised risk management.
1. The Directorate-General for Insurance and Pension Funds shall cooperate with the other supervisory authorities concerned in order to grant or not to grant authorisation to use the group scheme with centralised risk management and to determine, where appropriate, the conditions to which the authorisation should be subject.
2. The application shall be submitted exclusively to the Directorate-General for Insurance and Pension Funds in the case of subsidiaries authorised in Spain. The Directorate-General for Insurance and Pension Funds shall inform and transmit the complete application to the other supervisory authorities concerned.
3. The supervisory authorities concerned shall ensure that they are subject to a joint decision on the application, within a period of not more than three months, from the date on which the full application has been received by all supervisory authorities at the college of supervisors.
If, within the three-month period referred to in the preceding paragraph, any of the supervisory authorities concerned have referred the matter to the European Insurance and Occupational Pensions Authority, the group supervisor shall defer its decision pending the decision of the European Insurance and Occupational Pensions Authority in accordance with the decision of the European Insurance and Occupational Pensions Authority. This decision shall be deemed final and shall be applied by the supervisory authorities concerned.
The European Insurance and Occupational Pensions Authority will take its decision within one month.
However, if the Board of Supervisors of the European Insurance and Occupational Pensions Authority rejected the decision proposed by the independent panel, set up by the Board of Supervisors to facilitate an impartial settlement of the differences between the supervisory authorities concerned, the group supervisor shall take the final decision. This decision shall be deemed final and shall be applied by the supervisory authorities concerned.
The case will not be referred to the European Insurance and Occupational Pensions Authority after the end of the three-month period or after a joint decision has been taken.
4. The centralised risk management system shall apply under the same conditions, with the necessary adaptations, to insurance and reinsurance undertakings which are subsidiaries of an insurance holding company or a mixed financial holding company.
5. Where the supervisory authorities concerned have taken the joint decision referred to in paragraph 3, the supervisory authority which has authorised the subsidiary shall notify the applicant of the decision, which shall be fully reasoned. The joint decision shall be considered to be decisive and shall be respected by the supervisory authorities concerned.
6. In the absence of a joint decision of the supervisory authorities concerned within the three-month period laid down in paragraph 3, the group supervisor shall take its own decision on the application.
During that period, the group monitor will take due account of the following:
(a) possible observations or reservations expressed by the supervisory authorities concerned;
b) any reservations expressed by the other supervisory authorities at the college.
The decision shall be fully reasoned and shall include an explanation of any significant deviation from the reservations expressed by the other supervisory authorities concerned. The group supervisor shall provide the applicant and the other supervisory authorities concerned with a copy of the decision. The decision shall be considered to be decisive and shall be respected by the supervisory authorities concerned.
Article 199. Determination of the Solvency Capital Requirement of the subsidiary.
1. By way of derogation from the internal group model in Article 147 of Law 20/2015 of 14 July 2015, the Solvency Capital Requirement of the subsidiary shall be calculated in accordance with paragraphs 2 and 3 of this Article.
2. Where the Solvency Capital Requirement of the subsidiary is calculated on the basis of an internal model approved at the group level and the General Directorate of Insurance and Pension Funds considers that the risk profile of the subsidiary, of which it is responsible for supervision, is significantly removed from that internal model, and as long as the entity concerned does not adequately respond to the requirements set out in that Directorate-General, the latter may propose that additional mandatory solvency capital be required from the application of the said model or, in circumstances where such additional capital is inappropriate, require the institution to calculate its Solvency Capital Requirement in accordance with the standard formula.
3. Where the Solvency Capital Requirement of the subsidiary is calculated in accordance with the standard formula and the General Directorate of Insurance and Pension Funds considers that the risk profile of the subsidiary, of whose supervision is responsible, deviates significantly from the assumptions on which that formula is based, and as long as the entity concerned does not adequately respond to the requirements set forth by that Directorate-General, the latter may propose, in exceptional cases, that the entity be required to replace a subset of the parameters used in the method of calculation by parameters. specific to that entity when the risk modules for the subscription of life insurance, other than life insurance and sickness insurance, or in the cases referred to in Article 65 are calculated to require additional mandatory solvency capital of that subsidiary.
4. Where one of the assumptions referred to in paragraphs 2 and 3 is provided, the Directorate-General for Insurance and Pension Funds shall discuss its proposal at the college of supervisors and shall communicate the reasons for such a proposal to both the subsidiary and the college of supervisors.
The Directorate-General for Insurance and Pension Funds will do all it can to reach agreement on its proposal or on any other possible measures within the college of supervisors.
This agreement will be considered final and will be applied by the supervisory authorities concerned.
In case of disagreement between the General Directorate of Insurance and Pension Funds and the group supervisor and within one month from the proposal of the General Directorate of Insurance and Pension Funds, any of them may refer the matter to the European Insurance and Occupational Pensions Authority and request their assistance. In this case, the Directorate-General for Insurance and Pension Funds shall defer its decision to the statement of the Authority, which shall be taken within one month of the referral and shall decide in accordance with the decision of the Authority. This decision shall be deemed to be final and shall be fully reasoned, notified to the subsidiary and to the college of supervisors and shall be applied by the supervisory authorities concerned.
Article 200. Non-compliance with respect to the Solvency Capital Requirement and the Minimum Capital Requirement of the subsidiary.
1. In the event of non-compliance with a subsidiary with respect to the Solvency Capital Requirement, the Directorate-General for Insurance and Pension Funds, where it is responsible for its supervision, shall forward to the college of supervisors the recovery plan submitted by the subsidiary in order to achieve, within six months of the first verification of the non-compliance with the Solvency Capital Requirement, the re-establishment of the level of eligible own funds or the reduction of its risk profile in such a way as to cover the Solvency Capital Requirement.
The college of supervisors will do all it can to reach an agreement on the proposal of the Directorate-General for Insurance and Pension Funds regarding the approval of the recovery plan within four months of the first time the non-compliance with the Solvency Capital Requirement was first observed.
In the absence of an agreement, the Directorate-General for Insurance and Pension Funds will decide on the approval of the recovery plan, taking into account the observations and reservations of the other supervisory authorities at the college of supervisors.
2. In the event of non-compliance by a subsidiary with respect to the Minimum Capital Requirement, the Directorate-General for Insurance and Pension Funds, where it is responsible for its supervision, shall forward to the college of supervisors the short-term financing plan submitted by the subsidiary in order to achieve, within three months of the first verification of the non-compliance with the Minimum Capital Requirement, the re-establishment of the eligible own funds level covering the Minimum Capital Requirement or the reduction of its risk profile in such a way that the minimum capital is met. mandatory. In addition, the Directorate-General for Insurance and Pension Funds shall inform the college of supervisors of any measure taken to strengthen the minimum capital requirement in the subsidiary.
3. Where the Directorate-General for Insurance and Pension Funds detects the deterioration of the financial situation of a subsidiary subject to its supervision and is in any of the circumstances likely to result in the adoption of special control measures, it shall notify the college of supervisors without delay. With the exception of emergency situations, the college of supervisors shall examine the measures to be taken.
The college of supervisors will do everything possible to reach an agreement on the proposed measures within one month of the date of the communication.
In the absence of an agreement, the Directorate-General for Insurance and Pension Funds will decide whether the proposed measures should be taken, taking due account of the observations and reservations of the other supervisory authorities at the college of supervisors.
4. In the case of disagreement between the Directorate-General for Insurance and Pension Funds and the group supervisor as regards the approval of the recovery plan, including the extension of the recovery period, within the four-month period referred to in paragraph 1 or as regards the approval of the proposed measures within the period of one month referred to in paragraph 3, any supervisor may refer the matter to the European Insurance and Occupational Pensions Authority and request its assistance. In such cases, that authority shall take its decision within one month of the referral.
The referral to the European Insurance and Occupational Pensions Authority if there is disagreement can only be made within four months or one month respectively, as set out in the previous paragraph, and only if these are not emergency situations in the case of non-compliance with the mandatory minimum capital.
The Directorate-General for Insurance and Pension Funds will defer its decision pending the adoption of the European Insurance and Occupational Pensions Authority and will resolve in accordance with the decision of the European Insurance and Occupational Pensions Authority. This decision shall be deemed to be final and shall be fully reasoned, notified to the subsidiary and to the college of supervisors and shall be applied by the supervisory authorities concerned.
Article 201. Termination of the application of the group scheme with centralised risk management.
1. The system of groups with centralised risk management shall cease to apply to a subsidiary in the following cases:
a) When the group supervisor has decided not to include the subsidiary in group supervision.
(b) Where the risk management processes and the internal control mechanisms of the parent entity do not cover the subsidiary or the parent institution, the parent institution has ceased to carry out a prudent management of the subsidiary, and the group does not restore the situation of compliance with this condition within an appropriate period.
(c) Where the parent institution does not already have the authorisation of the group supervisor to carry out the internal assessment of the risks and solvency at the group level and at the level of the subsidiary at the same time, as well as where the parent institution does not already have the authorisation of the group supervisor to produce a single report on the financial and solvency situation at the group level and at the level of the subsidiary.
2. In the case referred to in paragraph 1 (a), where the Directorate-General for Insurance and Pension Funds, in its role as group supervisor, after consulting the other supervisory authorities concerned, decides to stop including the subsidiary in the group supervision it carries out, it shall immediately inform the supervisory authorities concerned and the parent institution.
3. In the cases referred to in paragraph 1 (b) and (c), it shall be for the parent institution to ensure that the conditions are met on a permanent basis. In the event of non-compliance, it shall inform the Directorate-General for Insurance and Pension Funds without delay either in its capacity as a group supervisor or a supervisor of the subsidiary concerned. The parent institution shall submit a plan to restore the compliance situation within an appropriate time limit.
4. Without prejudice to paragraph 3, the Directorate-General for Insurance and Pension Funds shall, where the group supervisor is the group supervisor, check at least once a year, ex officio, that the conditions referred to in Article 197 (b), (c) and (d) continue to be fulfilled. The Directorate-General for Insurance and Pension Funds shall also carry out such verification at the request of the relevant supervisory authorities.
When the verification carried out shows deficiencies, the Directorate-General for Insurance and Pension Funds, as a group supervisor, shall require the parent institution to submit a plan to restore the compliance situation within a reasonable period.
If the Directorate-General for Insurance and Pension Funds, in its role as group supervisor, and after consulting the other supervisory authorities concerned, finds that the plan referred to in the preceding paragraphs is insufficient or not being implemented within the agreed period, it shall consider that the conditions referred to in Article 197 (b), (c) and (d) have ceased to be met and shall immediately inform the supervisory authorities concerned.
5. Once the application of the system of centralised risk management groups has been completed, it may be re-applied if the parent institution submits a new application and obtains a favourable decision in accordance with the procedure laid down in Article 198.
Section 2. Risk Concentration and Intragroup Operations
Article 202. Supervision of the risk concentration.
1. Insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies are required to notify the General Directorate of Insurance and Pension Funds, where the group supervisor is quarterly, of any possible concentration of significant risk at group level.
The information must be provided by the insurance or reinsurance entity that appears at the head of the group. Where the group is not headed by an insurance or reinsurance undertaking, this obligation shall be the responsibility of the insurance holding company or mixed financial holding company or the insurance or reinsurance undertaking of the group to be determined by the Directorate-General for Insurance and Pension Funds in its role as group supervisor, after consultation with the other supervisory authorities concerned and with the group.
2. The risk concentrations shall be subject to the supervisory procedure by the Directorate-General for Insurance and Pension Funds when it is the group supervisor.
By monitoring risk concentrations, the risk of contagion within the group, the risk of conflict of interest and the level or volume of risks shall be verified in particular.
3. The Directorate-General for Insurance and Pension Funds, where the group supervisor is in consultation with the other supervisory authorities concerned and with the group, shall decide:
(a) The category of risks on which the insurance and reinsurance entities of the group are required to report in all circumstances, taking into account the characteristics of the specific group concerned and its risk management structure.
(b) The appropriate thresholds based on the Solvency Capital Requirement or the technical provisions, or both, in order to determine the significant risk concentrations subject to notification.
Article 203. Supervision of intra-group transactions.
1. Insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies are required to notify the General Directorate of Insurance and Pension Funds, where the group supervisor is quarterly, of all significant transactions within the group, including those carried out with a natural person linked to any entity in the group through close links.
In any case, intra-group transactions considered very significant will be reported as soon as they are known.
The necessary information must be provided by the insurance or reinsurance entity that appears at the head of the group. Where the group is not headed by an insurance or reinsurance undertaking, this obligation shall be the responsibility of the insurance holding company or mixed financial holding company or the insurance or reinsurance undertaking of the group to be determined by the Directorate-General for Insurance and Pension Funds after consultation with the other supervisory authorities concerned and with the group.
2. Intra-group transactions shall be subject to the supervisory procedure by the Directorate-General for Insurance and Pension Funds when it is a group supervisor.
3. The Directorate-General for Insurance and Pension Funds, where the group supervisor is in consultation with the other supervisory authorities concerned and with the group, shall decide on the category of intra-group transactions to be notified, in all circumstances, by the insurance and reinsurance entities of a particular group. Article 202.3 shall apply with the necessary adaptations.
Article 204. Exclusions for the supervision of the concentration of risk and intra-group transactions.
1. Where the insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company, the ultimate parent with registered office in the European Union, referred to in Article 140.1 of Law 20/2015 of 14 July, is a subsidiary of an institution subject to supplementary supervision in accordance with Article 3 of Law 5/2005 of 22 April of the supervision of financial conglomerates and amending other laws of the financial sector, the Directorate-General for Insurance and Pension Funds, where the group supervisor is the supervisor, after consulting the other the supervisory authorities concerned may decide not to exercise the supervision of the risk concentration, intra-group transactions or both, on that ultimate parent institution.
2. In those groups where the participating insurer or reinsurer, or the insurance holding company or mixed financial holding company with registered office in the European Union, is either a company linked to a regulated entity or a regulated entity or a mixed financial holding company subject to supplementary supervision in accordance with Article 3 of Law 5/2005 of 22 April of the supervision of financial conglomerates and amending other laws of the financial sector, the Directorate-General for Insurance and Pension Funds, where applicable the group supervisor, after consultation with the other supervisory authorities concerned, may decide not to exercise, at the level of that participating insurer or reinsurer or of that insurance holding company or mixed financial holding company, the supervision of the risk concentration, intra-group transactions or both.
Section 3. Risk Management and Internal Control
Article 205. Monitoring of the group's governance system.
1. The internal control system of the group shall comprise at least the following:
(a) appropriate mechanisms, with respect to the group's solvency, to identify and measure all significant risks in existence, and to adequately cover those risks with eligible own funds;
(b) reliable reporting and accounting procedures for the surveillance and management of intra-group transactions and the concentration of risk.
2. The mechanisms and procedures referred to in paragraph 1 shall be subject to the supervisory procedure by the Directorate-General for Insurance and Pension Funds where the latter is a group supervisor.
3. Where the group-level solvency calculation is carried out in accordance with the method based on the accounting consolidation, the participating insurance or reinsurance undertaking or the insurance holding company or the mixed financial holding company shall provide the General Directorate of Insurance and Pension Funds, in its group supervisor role, with sufficient explanation of the difference between the sum of the Solvency Capital Requirement of all the related insurance or reinsurance entities of the group and the consolidated group Solvency Capital Requirement.
4. The participating insurance or reinsurance undertaking or the insurance holding company or the mixed financial holding company, subject to the authorisation of the Directorate-General for Insurance and Pension Funds when it is a group supervisor, may carry out the internal risk and solvency assessment, or any of its parts, at the group level and at the level of any subsidiary at the same time; in such cases, it shall draw up a single document covering all evaluations. The maximum period for resolving shall be six months.
Before authorising, the Directorate-General for Insurance and Pension Funds shall consult the members of the college of supervisors and shall take due account of their observations or reservations.
When the group exercises the option provided in the preceding paragraph, it shall submit the document to all supervisory authorities concerned at the same time. The exercise of this power shall not exempt the subsidiaries concerned from the obligation to ensure compliance with all the requirements set out in relation to their internal risk and solvency assessment in accordance with Article 66 of the Law 20/2015 of 14 July 2015.
CHAPTER III
Specific provisions for certain groups of groups
Section 1. Groups with matrices in the European Union other than insurance and reinsurance entities
Article 206. Insurance holding companies. Mixed financial holding companies. Mixed insurance holding companies.
1. Where insurance and reinsurance undertakings are subsidiaries of an insurance holding company or a mixed financial holding company, the calculation of group solvency shall be carried out at the level of the insurance holding company or the mixed financial holding company.
For the purposes of that calculation, the parent entity shall have the same consideration as an insurance or reinsurance undertaking in respect of the Solvency Capital Requirement and the eligible own funds to cover the Solvency Capital Requirement.
2. All persons who run an insurance holding company or a mixed financial holding company in an effective manner shall comply with the requirements of fitness and good repute in accordance with Article 38 of the Law 20/2015 of 14 July 2015 for insurance and reinsurance undertakings.
3. Where the parent institution of one or more insurance or reinsurance entities is a mixed insurance holding company, the General Directorate of Insurance and Pension Funds shall exercise the general supervision of the operations carried out between those insurance or reinsurance undertakings and the joint insurance holding company and its related entities. Articles 136 to 139 and 153 of Law 20/2015 of 14 July 2015 and Article 178 shall apply, with the necessary adaptations.
Section 2. Group with parent entities outside the European Union
Article 207. Equivalent monitoring.
In the event that group supervision in the third country is considered equivalent, the Directorate-General for Insurance and Pension Funds shall use the equivalent supervision exercised by the supervisory authorities of the third country, as provided for in Sections 1 and 2 of Chapter II of Title V and Articles 144 and 153 of Law 20/2015 of 14 July and Chapter I of Title V and Articles 182 and 194.2 of this royal decree.
Article 208. Determination by the European Commission of the temporary equivalence of third countries in which the group's parent insurers and reinsurers are domiciled.
As provided for in Article 154.1 (b) of Law 20/2015 of 14 July 2015, where all the criteria laid down in paragraph (a) of that Article are not met, equivalence may be determined on a temporary basis by the European Commission, with the assistance of the European Insurance and Occupational Pensions Authority, if that third country meets at least the following criteria:
(a) The third country has undertaken in writing with the European Union to adopt and implement a prudential regime that can be considered equivalent, before the end of the temporary period and to initiate the process of assessment of the equivalence regime.
b) You have established a work programme to meet the commitment referred to in point (a).
c) Has allocated sufficient resources to the fulfilment of the commitment referred to in point (a).
d) It has a risk-based prudential regime and establishes quantitative and qualitative solvency requirements, as well as requirements in relation to information presented for the purposes of supervision and transparency and with group supervision.
e) The European Insurance and Occupational Pensions Authority and the supervisory authorities as defined in Article 7 of Law 20/2015 of 14 July 2015 have assumed written agreements on cooperation and exchange of confidential supervisory information.
f) You have a separate monitoring system.
g) has established an obligation of professional secrecy for all persons acting on behalf of their supervisory authorities, in particular on the exchange of information with the European Insurance and Occupational Pensions Authority and with the supervisory authorities as defined in Article 7 of Law 20/2015 of 14 July 2015.
Article 209. Lack of equivalence of supervision of groups from third countries.
1. Where the supervision of groups in the third country is not considered equivalent, or where a Member State does not apply the temporary equivalence where there is an insurance or reinsurance undertaking situated in a Member State whose total balance is higher than the total balance of the parent undertaking located in a third country, it shall apply to those insurance and reinsurance entities, Chapter II, Sections 1 and 2 and Chapter III of Title V of Law 20/2015 of 14 July, with the exception of Article 150, or one of the methods provided for in paragraph 2. The provisions of Chapter I of Title V of this royal decree shall also apply.
The general principles and methods set out in Sections 1 and 2 of Chapter II and Chapter III of Title V of Law 20/2015 of 14 July 2015 shall apply in relation to the insurance holding company, the mixed financial holding company and the insurance or reinsurance entities of third countries.
For the sole purpose of calculating the group's solvency, the parent institution shall be treated as an insurance or reinsurance undertaking with its registered office in Spain in respect of the own funds eligible for the Solvency Capital Requirement and the requirement for a Solvency Capital Requirement, which shall be determined in accordance with the principles laid down in Article 194 in the case of a holding company or mixed financial holding company, and in accordance with the principles laid down in Article 192, in the case of an institution. insurer or reinsurer of a third country.
2. The Directorate-General for Insurance and Pension Funds may apply other methods which ensure adequate supervision of the insurance and reinsurance entities of a group. These methods should be approved after consultation with the other supervisory authorities concerned and notified to them and to the European Commission once agreed.
In particular, the Directorate-General for Insurance and Pension Funds may require the establishment of an insurance holding company or mixed financial holding company having its registered office in the European Union, and apply the provisions of this Title to the insurance and reinsurance entities of the group to whose head the insurance holding company or mixed financial holding company is listed.
Article 210. Parent entities outside the European Union: levels.
Where the parent institution in a third country is, in turn, a subsidiary of an insurance holding company or mixed financial holding company whose registered office is also outside the European Union, or of an insurance or reinsurance undertaking in a third country, the verification of equivalence shall be carried out only at the level of the ultimate parent institution which is a third-country insurance holding company, a mixed financial holding company in a third country or an insurance or reinsurance undertaking in a third country.
However, where there is no equivalent supervision, the Directorate-General for Insurance and Pension Funds may carry out a new verification at a lower level where there is a parent institution of an insurance or reinsurance undertaking, whether it is a third-country insurance holding company or a mixed financial holding company in a third country or an insurance or reinsurance undertaking in a third country. In this case, the Directorate-General for Insurance and Pension Funds will explain its decision to the group and the provisions of Article 143 of Law 20/2015 of 14 July 2015 will apply.
CHAPTER IV
Mutual Groups
Article 211. Mutual groups.
1. Insurance mutuals may constitute mutual groups by setting up a mutual group company, which shall be an anonymous company involved in all of them. This entity shall be considered the parent entity for the purposes of the rules of management, supervision and solvency and shall be responsible for the management of the financial and operating policies of all entities. Its exclusive social object will be the establishment and administration of solid and sustainable financial solidarity links between entities that are part of the group, as well as the design and execution of strategic and commercial policies of the group and the provision of common services. Social welfare mutual societies may also form mutual groups between them or with mutual insurance.
2. Each mutual or mutual social security fund may only be part of a mutual group.
3. The mutual group company shall not be considered as an insurance undertaking, but it shall be subject to the provisions of Law 20/2015 of 14 July and its implementing provisions.
4. It shall be for the General Directorate of Insurance and Pension Funds, when it is the group supervisor, the authorization of the constitution, modification and dissolution of the mutual group, to which effect the corresponding administrative file shall be processed, which shall be resolved within a maximum period of 6 months. After that time limit, the application shall be deemed to be rejected without any express resolution.
5. The mutual group company shall be governed by the provisions of its statutes and the agreements of accession with each of the entities belonging to the group. These accession agreements should include the rights and obligations, both political and financial, of each of the entities of the group, towards the other entities of the group and towards the parent company itself, as well as aspects relating to the group's commercial and operational strategies. The duration of these agreements shall be at least ten years and shall include a system of penalties for a reduction that reinforces the permanence and stability of the entities in the group. The accession agreements shall be entered into public deed and deposited in the Trade Register.
6. The general assembly of mutualists in each of the entities belonging to the mutual group shall approve the initial accession agreement and its subsequent amendments. These accession agreements must also be authorised by the Directorate-General for Insurance and Pension Funds, when it is the group supervisor.
7. The abandonment of a mutual group by any of its member entities shall require a notice to the other entities of the two-year-old group and shall be the subject of prior communication to the General Directorate of Insurance and Pension Funds, where the group supervisor may object to the group supervisor when it assumes a breach of the financial obligations assumed in the mutual group contract.
8. Where a social security mutual or mutual insurance company, whose registered office is in Spain, intends to join or intends to leave a mutual group whose parent has its registered office in another European Union country, it shall inform the Directorate-General for Insurance and Pension Funds in advance.
9. The mutual groups shall be subject to group supervision in accordance with the same rules as apply to groups established on the basis of capital links. Also, the mutual commitment of solvency and liquidity among the entities of the mutual group, will in no case be able to jeopardize the solvency at the individual level of the entities belonging to the group, nor the commitments that they have assumed with their policyholders.
10. Corporate transactions affecting any of the group's members shall be the change of the mutual group.
TITLE VI
Financial deterioration situations. Special control measures
CHAPTER I
Financial Impairment Situations
Article 212. Exceptional adverse situations and content of the recovery plan and the short-term financing plan.
1. The Directorate-General for Insurance and Pension Funds may request the European Insurance and Occupational Pensions Authority to declare the concurrence of exceptional adverse situations affecting insurance or reinsurance entities representing an important market share or the affected business line where, in the financial situation of such entities, the following circumstances would be or would have a negative impact on one or more of the following:
a) A sharp and sharp fall in financial markets.
b) A persistent environment of low interest rates.
c) An event of catastrophic consequences.
Where an exceptional adverse situation declared by the European Insurance and Occupational Pensions Authority is present, the Directorate-General for Insurance and Pension Funds may extend the period provided for in Article 156.2 of the Act for a maximum period of up to seven years taking into account all relevant factors, including the average duration of technical provisions.
The insurance or reinsurance undertaking to which the extension of the period referred to in the preceding paragraph has been granted shall provide the Directorate-General for Insurance and Pension Funds every three months with a report on progress made in which it shall set out the measures taken and the progress made to restore the level of eligible own funds corresponding to the coverage of the Solvency Capital Requirement or to reduce its risk profile in such a way as to cover the Solvency Capital Requirement.
The Directorate-General for Insurance and Pension Funds shall revoke the extension granted if the progress report shows that there has been insufficient progress, between the date on which the non-compliance was found with respect to the Solvency Capital Requirement and the date of submission of the progress report, in order to restore the level of eligible own funds corresponding to the Solvency Capital Requirement or to reduce the risk profile in order to cover the solvency capital. mandatory.
2. The recovery plan and the short-term financing plan to be submitted by an insurance or reinsurance undertaking in accordance with Articles 156 and 157 of Law 20/2015 of 14 July 2015 shall contain at least indications and justifications for the following:
(a) The estimates of the management costs, in particular the current general fees and charges.
(b) Estimates of revenue and expenditure relating to direct insurance operations, to reinsurance acceptances and to reinsurance disposals.
c) A forecast of the situation balances.
(d) The estimates of financial resources related to technical provisions and those covering the Solvency Capital Requirement and the Minimum Capital Requirement.
e) The overall reinsurance policy.
(f) The causes which have caused the non-compliance, the measures to be taken by the entity and the estimated time limit on which they are to be adopted and implemented, which may not exceed the time limits laid down in Articles 156 and 157 of Law 20/2015 of 14 July, except that in the case of portfolio disposals or structural modifications the Directorate-General for Insurance and Pension Funds agrees to extend the deadline upon application by the institution.
CHAPTER II
Procedure
Article 213. Procedure for the adoption of special control measures.
1. The adoption of special control measures shall be carried out in an administrative procedure carried out in accordance with the rules of the inspection supervision procedure, with the following peculiarities:
(a) The procedure for special control measures shall be initiated by a decision of the Directorate-General for Insurance and Pension Funds, issued after the carrying out of inspections or other checks.
(b) A procedure shall only be carried out for each entity in such a way that, if special control measures have been taken on an entity and are necessary, by virtue of subsequent checks or inspections, to agree on new measures, to replace or to leave without effect, in whole or in part, those already adopted, the ratification or cessation of the latter, as appropriate, shall be incorporated in the resolution in which the new special control measures are adopted.
(c) Initiate the procedure, the Directorate-General for Insurance and Pension Funds may adopt, as interim measures, those referred to in Article 160 of Law 20/2015 of 14 July.
(d) Exceptionally, the hearing of the insurer or reinsurer concerned may be dispensed with where such a delay causes a delay in such a way as to seriously jeopardise the effectiveness of the measure taken, the rights of the insured persons or the economic interests concerned. In this case, the decision adopting the special control measure must express the reasons for the urgency of its adoption and that measure must be ratified or left without the interested party's hearing.
2. The special control measures shall be terminated without effect by resolution of the Directorate-General for Insurance and Pension Funds when the situations which have been adopted have ceased and the rights of the holders, insured, beneficiaries and injured parties are also duly guaranteed.
3. In cases of non-compliance with special control measures and where the rights of insured persons or economic interests so warrant, the Directorate-General for Insurance and Pension Funds may give publicity to the measures taken after hearing the institution concerned.
In addition, to the acts of the insurance undertaking in violation of the special control measures provided for in Article 161 (c) and (d) of Law 20/2015, the provisions of Article 24 of Law 20/2015 of 14 July 2015 shall apply to the acts of the insurance institution for the operations carried out without administrative authorization.
4. The procedure for special control measures shall be terminated by a decision of the Directorate-General for Insurance and Pension Funds or, in the case in which none of the special control measures provided for in this Regulation have been adopted or have been left without effect, for six months without any action for reasons not attributable to the institution, in which case the decision to be taken shall declare the expiry of the period.
Article 214. Collaboration functions of the Insurance Compensation Consortium in relation to the special control measures adopted.
The General Directorate of Insurance and Pension Funds may request the collaboration of the Insurance Compensation Consortium, in a reasoned manner, so that, in relation to the special control measures adopted, it shall carry out:
(a) The monitoring of the financing or recovery plans referred to in paragraphs (a) and (b) of Article 160.1 of Law 20/2015 of 14 July 2015.
(b) The issuance of a non-binding report on the proposals for authorisation for the conduct of prohibited or limited acts of management or provision of Article 160.1 (c) and (d) and (d) of Law 20/2015 of 14 July 2015.
(c) Reports on the implementation and degree of compliance with the measures referred to in Article 161.f of Law 20/2015 of 14 July 2015.
(d) The functions to be determined in relation to the reviews of specific issues by the auditor of the entity or by another auditor referred to in Article 161.j of the Law 20/2015 of 14 July.
e) Support for the performance of the functions assigned by the appointed controllers.
CHAPTER III
Administrative intervention
Article 215. Administrative intervention of the insurance institutions.
1. In accordance with Articles 163 and 178.2.a of the Law 20/2015 of 14 July 2015, the Directorate-General for Insurance and Pension Funds may agree:
(a) The intervention of the liquidation of the entity to safeguard the interests of the policyholders and policyholders, beneficiaries and injured persons or other insurers.
(b) The intervention of the insurance undertaking to ensure the proper enforcement of the special control measures which, where appropriate, have been adopted.
2. The intervention tasks will be performed by officials of the Higher Corps of State Insurance Inspectors. They shall be appointed by the Director-General of Insurance and Pension Funds, and shall in no case hold the representation of the institution.
Article 216. Intervention to ensure the correct implementation of the special control measures.
1. Special control measures for an insurance company, the Directorate-General for Insurance and Pension Funds may agree on the intervention to ensure compliance with those measures, determining the functions which it can perform from the following:
(a) Authorize the provision of goods on which the measure provided for in Articles 160.1.c) and the Law 20/2015 of 14 July 2015 have been adopted, provided that the amount obtained is entered into account opened in a credit institution, subject to the same special control measure.
(b) Authorise the acquisition, by way of funds subject to the special control measure referred to in the preceding subparagraph, of goods which are automatically subject to the same special control measure. For these purposes, the authorisation shall specify that end and be entered in the relevant public registers.
(c) Authorize that, from funds arising from the provision of goods in accordance with point (a) above, payments may be made to satisfy the rights of the policyholders, insured persons, beneficiaries and injured parties.
d) Authorize the conduct of the management and disposition acts, the hiring of new insurance or the admission of new partners.
e) Any other deemed necessary.
2. The action of the intervention shall be in accordance with the following rules:
(a) Extend diligence in which it states its taking of possession, the persons attending, the incidents and possible difficulties for the development of its functions of intervention.
(b) You may credit your actions and checks in reports, proceedings, authorizations or denials, from which you will submit a copy to the legal representative of the entity.
(c) You may extend due diligence to document the requirements and warnings that, if any, may be issued to the entity. The statements to be made by the institution shall be stated in a separate document.
Article 217. Intervention in the liquidation.
1. In the exercise of his duties, the intervention in the liquidation shall have the following powers:
a) Fiscalize the administration and accounting of the entities involved.
b) To guarantee the interests of the policyholders, insured persons, beneficiaries and injured parties, as well as for the conservation and the proper destination of the social goods.
c) To control the work of liquidators so that the liquidators are strictly in accordance with the provisions of Law 20/2015 of July 14, in this royal decree and other applicable provisions.
(d) Elevate report to the Directorate-General for Insurance and Pension Funds on the memory referred to in Article 224.2.b). To this end, the financial controller may request the liquidators to provide the information, clarifications and documentation necessary to assess the information contained therein.
(e) To urge the liquidators to exercise the actions they carry out for the reintegration or reconstitution of the estate.
f) Intervening the movements of funds, assets or liabilities and, in general, all social operations.
g) Propose to the General Directorate of Insurance and Pension Funds the replacement of the liquidators when they fail to comply with the rules that for the protection of the policyholders, insured, beneficiaries and harmed third parties are established in Law 20/2015, of July 14, in the present royal decree or those that govern the liquidation, or the difficulty or the delay.
(h) Propose to the Directorate-General for Insurance and Pension Funds the referral to the Prosecutor's Office of the precise background where there are actions which may be of a criminal nature, and to show that Directorate-General the facts which could lead to the imposition of administrative sanctions.
i) Propose to the General Directorate of Insurance and Pension Funds, when the budgets provided for in Law 20/2015, of July 14 and in this royal decree, are met, the adoption of the special control measures that are deemed necessary.
j) All powers expressly assigned to them in the resolution providing for the administrative intervention of the institution or in which the financial controller is appointed.
2. All payments and asset provisions shall require prior authorisation from the financial controller, except for those previously authorised by the Directorate-General for Insurance and Pension Funds.
For the purposes of speeding up the payment authorisation procedure, the intervention may fix the periodicity with which the liquidators are required to forward the detailed ratio of the payments to be made in the respective period.
3. The depositors of goods of the institution concerned shall not be able to provide for the same or their returns without authorization of the intervention, from the moment when the existence of the administrative intervention of the institution has been notified to them.
4. The creditors of the institution shall maintain and be able to exercise all their rights and actions against it, without prejudice to the powers that correspond to the intervention.
5. The intervention will adjust its action to the following rules:
(a) Extend due diligence in the registered office of the entity, in which it shall record its taking of possession, the persons attending, the incidents and possible difficulties for the liquidation and for the development of its functions of intervention, and if there is any cause by which the liquidation is carried out by the Consortium of Insurance Compensation referred to in Article 183 of Law 20/2015, of July 14.
(b) You may credit your actions and checks in reports, proceedings, authorizations or denials, from which you will submit a copy to the legal representative of the entity.
(c) You may extend due diligence to document the requirements and warnings that, if any, may be issued to the entity. The statements to be made by the institution shall be stated in a separate document.
(d) Require liquidators or administrators to provide, as soon as possible, all necessary documentation to ascertain the actual assets and liabilities in order to determine the true status of the entity and to verify whether the entity is in a position to fulfil its obligations.
e) Adopt the necessary measures for the most effective control of the variations in the entity's patrimony, making annotations in the records that come, making the necessary notifications to the depositaries of goods and values owned by the same and to the credit institutions in which there are accounts of the institution, communicating to them that they will not be able to make provisions without their express authorization.
(f) It shall order the liquidators and the administrative and commercial organisation of the institution to refrain from making payments without their intervention, unless they are adapted to the instructions given to them, and that the revenue is made solely and exclusively in the entities and accounts indicated by the intervention itself.
g) Will urge the liquidators to conclude the settlement as soon as possible, particularly in respect of the payment of claims, extortion, taxes, staff remuneration, and the execution of court judgments.
6. The intervention shall cease when the causes for which it was established have disappeared; where a judicial declaration of competition has occurred; where, in accordance with Article 183 of Law 20/2015, of 14 July, the Minister of Economy and Competitiveness agrees that the liquidation shall be taken over by the Insurance Compensation Consortium; or when the settlement is concluded.
7. The intervention agreements and the cessation of the intervention shall be notified to the supervisory authorities of the other Member States, shall be entered in the Trade Register, and published on the entity's website, in the "Official Journal of the State" and in the "Official Journal of the European Union".
TITLE VII
Revocation, dissolution and liquidation
CHAPTER I
Revoking administrative authority
Article 218. Lack of effective activity and abandonment of the registered office.
1. For the purposes of Article 169.3.b) of Law 20/2015 of 14 July, it shall be understood that there is a lack of effective activity in a class where the annual turnover of the insurance undertaking in respect of the class is less than the following amounts for two consecutive social years:
(a) EUR 60,000 per year in the classes referred to in Article 33 (1) (a) of Law 20/2015 of 14 July 2015.
(b) EUR 18,000 per year in the classes referred to in Article 33 (1) (b) of Law 20/2015 of 14 July 2015.
In the case of insurance companies that only practice health care insurance and limit their activity to a territorial area with less than 2,000,000 inhabitants, it will be halved.
(c) EUR 30,000 per year in the classes referred to in paragraph 1 (c) of Article 33 of Law 20/2015 of 14 July 2015.
2. The provisions of the preceding paragraph shall not apply to those insurance undertakings which, during the period provided for therein, provide the General Directorate of Insurance and Pension Funds with such a lack of activity and possible remedy.
3. For the purposes of Article 169.4.b) of Law 20/2015, of July 14, the abandonment by the entity of the registered office, which would have been notified to the General Directorate of Insurance and Pension Funds, is considered a cause of revocation, ignoring its whereabouts, and not appearing without justified cause before it within 15 days since it was placed to do so by means of a notice published in the "Official Gazette of the State".
CHAPTER II
Dissolution and liquidation of insurance and reinsurance entities
Section 1. Dissolution
Article 219. Calculation of the net worth for the purpose of dissolution.
For the purposes of dissolution causes, the following definitions shall apply:
(a) Net worth, net worth as defined in Article 36.1 (c) of the Trade Code plus the subordinated liabilities actually paid out within the definition of basic own funds of Tier 1, Tier 2 and Tier 3, as provided for in Articles 59 and 60.
b) Social capital, the subscribed capital.
Article 220. Communication of the existence of the cause of dissolution.
Known as the existence of a cause of dissolution, it shall be communicated to the General Directorate of Insurance and Pension Funds within a maximum of 15 days, in writing stating the cause in question, the period or day at which the meeting or general assembly shall meet for the adoption of the agreement, as well as any other circumstances deemed appropriate. Similarly, once the dissolution agreement has been adopted, the General Directorate of Insurance and Pension Funds will be informed, within the maximum period of three days, in writing detailing the extremes and measures adopted.
Article 221. Procedure for administrative dissolution.
1. The administrative procedure for dissolution shall be initiated on its own initiative or at the request of the administrators and shall be notified to the entity concerned, which shall be granted a period of 15 days ' claims. Having received the arguments or after the period granted without having been received, the Minister for Economic Affairs and Competitiveness, following a report by the Directorate-General for Insurance and Pension Funds, shall, if appropriate, agree to the dissolution of the institution, without the need for such effects, the convening of its board or general assembly. The dissolution agreement shall contain the revocation of the administrative authorisation of the entity for all the classes in which the insurance undertaking operates and shall terminate the administrative route.
2. In everything that is not expressly regulated in the previous articles and as soon as they do not object to them, the rules contained in articles 360 to 370 of the recast text of the Law of Capital Societies, approved by the Royal Legislative Decree 1/2010 of 2 July, will apply. However, insurance cooperatives shall be governed by the rules of dissolution contained in the legislation of cooperatives.
Section 2
Article 222. The anticipated maturity of the insurance contracts.
1. During the settlement period, the General Directorate of Insurance and Pension Funds, on its own initiative or at the request of the liquidators or administrators of the institution or the financial controller, may determine the date of the anticipated maturity of the whole or part of the insurance contracts.
2. The decision that the General Directorate of Insurance and Pension Funds will give to the entity shall be notified to the entity and shall be published in the "Official Gazette of the State" at least 15 calendar days before the date on which the contracts are due to expire in advance, during which time the liquidators must notify the policyholders individually to the policyholders or policyholders, if any. It will also be published on the entity's website.
3. In cases where exceptional circumstances are present which advise not to delay the due date, the Directorate-General for Insurance and Pension Funds may declare the date of the anticipated expiry of the insurance contracts without the time limit laid down in the previous paragraph and require the liquidators to make public the agreement on the website of the institution and in two newspapers of the highest circulation within the territorial scope of the insurance institution within 10 calendar days, without prejudice to the need for individual communication to be made to the the policyholders, within a period of 15 calendar days from the notification of the decision.
Article 223. Assignment of trade in the insurance portfolio in the liquidation.
1. If the Directorate-General for Insurance and Pension Funds considers it appropriate to proceed from its own initiative to the disposal of the portfolio, in accordance with Article 185.5 of Law 20/2015 of 14 July, it may publish in the "Official Journal of the State" and in the "Official Journal of the European Union" the resolution establishing that intention, and shall require the transferor entity to make available to the insurance institutions concerned, at the place and within the time limit specified in the publication, the documentation relating to the portfolio to be transferred. This obligation excludes information which enables the insurance companies concerned to contact the policyholders, policyholders or insurance intermediaries directly.
After the deadline for examining the documentation of the transferor entity, it is within the maximum period of 15 days, it shall forward to the Directorate-General for Insurance and Pension Funds the tenders received, indicating, where appropriate, the order of preference duly justifying the proposal.
The General Directorate of Insurance and Pension Funds will dictate resolution by pointing out the cessionary entity, for which, together with the order of preference mentioned above, it will consider especially the patrimonial situation, the administrative and accounting organization, and the experience of the interested entities.
2. Once the transferee entity is determined, the procedure for the assignment of the insurance portfolio from the insurance portfolio shall be in accordance with the provisions of Law 20/2015 of 14 July, and of this royal decree, in so far as they are in conformity with their nature.
Article 224. Documentation to be sent to the Directorate-General for Insurance and Pension Funds by the administrators and the liquidators.
1. Once the dissolution has been agreed, the directors or liquidators of the entity shall forward to the General Directorate of Insurance and Pension Funds the following documentation:
(a) Certification of the dissolution agreement adopted by the competent social bodies of the institution, which shall be transmitted within three days of the date of its adoption.
(b) Certification of the agreement adopted by the competent bodies of the entity appointing liquidators, which shall be transmitted within three days of the date on which they were appointed and at least the following shall be stated:
1. Designated Liquidators, including data to be entered in the Register of High Charges of Insurance and Reinsurance Entities provided for in Article 40 of Law 20/2015 of 14 July.
2. Office of the liquidator's office.
3. Remuneration to be assigned to them, unless they are made free of charge, in which case it shall be expressly stated.
c) Justification of having published the dissolution agreement and the appeal to the unknown creditors within three days of the publication and the appeal.
2. In addition, the liquidators of the institution shall forward to the General Directorate of Insurance and Pension Funds, or to the financial controller if the settlement is brought, the following information:
(a) Within one month from the date of your appointment:
1. Description of the structure of the organization to be maintained in the course of the liquidation period and of the own or foreign media that is proposed to be used to guarantee the attention to the creditors of the entity during that period.
2. The situation balance with reference to the date of the dissolution agreement.
3. º Inventory of the assets and rights of the entity and a relationship of the known creditors of the entity, referring to the date of commencement of the liquidation, specifying the nature, amount and justification of their claims.
4. Estimated number of items for the performance of the different classes of assets, for the payment of the debts of the institution, with special mention to the payment deadlines of the contracted by the entity by reason of insurance contracts, and for the completion of the liquidation. The liquidators shall include the explanations necessary to justify the time limits proposed.
5. Measures to be taken, where appropriate, for the partial or total transfer of the insurance contract portfolio or the rescue or early termination thereof.
6. No other extremes that may have an impact on the liquidation of the entity.
b) On a half-yearly basis: Memory on the progress of settlement, observed deviations and corrective measures to be taken. However, the Directorate-General for Insurance and Pension Funds, or the Financial Controller if the settlement is brought, may require this information on a quarterly basis.
3. If, at the end of the liquidation, debts of the entity recognized by the entity are not collected by its creditors, the liquidators shall proceed to the deposit in the form provided for in Article 394.2 of the consolidated text of the Capital Companies Act, approved by the Royal Legislative Decree 1/2010 of 2 July.
Article 225. Duty of collaboration of the former administrators and managers.
Those who, under any title, had taken the effective direction of the entity at the time of its dissolution and those who would have done so in the five years prior to the date of its dissolution, shall be obliged to cooperate with the liquidators in the settlement acts that relate to the operations of the period in which they held such positions and to inform the General Directorate of Insurance and Pension Funds, at their request, of the events that occurred during the performance of their duties.
The same obligation will be for those who have held positions as liquidators of the entity.
Article 226. Information to creditors.
1. Liquidators shall inform creditors about:
(a) The situation of the institution, in particular, if the anticipated maturity of the duration of the insurance contracts has been determined to integrate the institution's portfolio into liquidation and on its date.
(b) The way in which they are to apply for the recognition of their claims, by means of individual communication to the known or through advertisements, approved in their case by the financial controller, to be published on the website of the institution, in the "Official Gazette of the Commercial Register" and in two newspapers, at least, of those of the highest circulation in the scope of the institution in liquidation, when they are unknown or their domicile is ignored.
The notice shall refer to the time-limits to be complied with, to the consequences arising from the failure to comply with those deadlines, to the body responsible for accepting the submission of the appropriations or the observations relating thereto and to any other measures. It shall also be indicated whether or not creditors whose claims are preferred or have a real guarantee are required to submit their claims.
In the case of claims for insurance contract reasons, the communication shall also indicate the general impact of the winding-up procedure on insurance contracts, as well as the rights and obligations of the insured in respect of such contracts.
The communication may be carried out by telematic, computer or electronic means, which allow to be satisfied with its receipt, when the necessary data are available to be used by these means.
2. Where the known creditor has his registered office in another Member State, the information above shall be provided in Spanish, but in all the official languages of the European Union the document shall bear the heading ' Convocation for the submission of claims. Applicable time limits "or" Call for submission of comments on appropriations. Applicable time limits ', as appropriate. However, where the creditor is on an insurance contract, the information shall be provided in the official language or in one of the official languages of the Member State in which he is domiciled.
3. Creditors who are domiciled in a Member State may submit written claims for claims or observations on claims in the official language or in one of the official languages of the State in which they address their domicile, although the document must bear the heading 'Presentation of appropriations' or, where appropriate, 'Presentation of observations on the appropriations' in Spanish.
Article 227. Completion of settlement operations.
1. Once the liquidation operations have been completed, and for the purposes of the fact that the Minister of Economy and Competitiveness declares the entity extinguished as provided for in Article 181.6 of Law 20/2015 of 14 July 2015, the liquidators shall forward to the General Directorate of Insurance and Pension Funds an authorized copy of the public deed provided for in Article 247.2 of the Regulation of the Commercial Registry.
2. In cases where, pursuant to Article 181.6 of Law 20/2015, of July 14, it is necessary, by exception, to cancel the seats in the Administrative Registry without the declaration of extinction of the entity, the General Directorate of Insurance and Pension Funds, shall inform the Commercial Registry of its trade, and the Register of Cooperatives in its case, where the company is registered, this assumption and the administrators shall forward to the General Directorate of Insurance and Pension Funds, together with the application, the following documentation:
(a) Explanatory note to the process of settlement of insurance operations.
b) Balance sheet of the entity after the completion of the clearance of the insurance operations.
CHAPTER III
Settlement by the Insurance Compensation Consortium
Article 228. Purchase of credits from resources of the Insurance Compensation Consortium.
Before the end of the nine-month period since the settlement of its settlement functions, the Consortium shall have agreed on the percentage to be offered to the creditors on an insurance contract once applied, where applicable, to the settlement benefits. Only on justified grounds, duly accredited to the Directorate-General for Insurance and Pension Funds, may the aforementioned period be exceeded.
Article 229. Liquidation of solvent entities.
1. In the event that the solvency of the insurance undertaking in liquidation by the Consortium is established, the Consortium may choose to carry out the liquidation process as provided for in Chapter II of Title VII, and may pay its claims to creditors under the institution's own funds as they are liquid and enforceable, without the need to convene a Board of Creditors. In this case, once satisfied all the credits and the derivatives of liquidation expenses, the final balance will be approved, which must be ratified by the General Directorate of Insurance and Pension Funds before proceeding to the distribution of the social having between shareholders or mutualists according to the provisions of the articles 391 to 394 of the recast text of the Law of Capital Societies, approved by the Royal Decree Legislative 1/2010, of July 2. The deposit of the unclaimed fees or of the credits that could not be satisfied will take place in the Consortium itself at the disposal of its legitimate owners for a period of twenty years, after which, without having been claimed, they will be admitted to the Treasury, to which the consignment will be informed.
2. Although the liquidation of a solvent entity is carried out in the manner provided for in paragraph 1, the Consortium may, for reasons of lack of liquidity of the entity or other circumstances advising it, apply the settlement benefits provided for in Article 186.1 of Law 20/2015 of 14 July. In such a case, the Consortium may be able to resend the acquired claims as the institution has the necessary liquidity.
In the case referred to in this paragraph, and in so far as it does not object to its forecasts, the other articles of this chapter will also apply. Likewise, it will be, if necessary, the provisions of article 59.2, last indent, of Law 22/2003, of July 9, Bankruptcy.
3. In relation to assets and liabilities over the period after the liquidation, the provisions of Articles 398, 399 and 400 of the recast of the Law on Capital Companies approved by the Royal Decree of Law 1/2010 of 2 July 2010 will apply.
Article 230. Liquidation of insolvent entities.
1. In the event of insolvency of the institution in liquidation, the Consortium shall not be required to apply for the judicial declaration of competition unless the settlement plan formulated is not approved by the creditors ' meeting. The same application may be made at any time during the settlement period before the creditors 'meeting when it considers that, given the circumstances in the insurance undertaking whose liquidation is entrusted to it, the creditors' claims will be seriously affected if the court declaration of competition does not take place.
2. Until ratification of the settlement plan, the Consortium may not make the payment of its claims to the creditors of the insurance institution, except as provided for in Articles 186 and 187 of Law 20/2015 of 14 July.
3. The costs that are necessary for the settlement, including those relating to the units in other entities, may be satisfied by the Consortium's own resources. Recovery, in the event that the settlement plan has been approved by the Board of Creditors, is conditional on the other claims recognised in the liquidation being fully satisfied.
4. The settlement plan shall include information on the measures taken pursuant to Article 186 of Law 20/2015 of 14 July, the balance sheet and the provisional list of creditors. The assets of the balance sheet must be liquid, unless the disposal of any good has not been considered to have been or has been impossible and, in the case of claims, it is presumed that the actual recovery would be significantly delayed. The provisional list of creditors shall be drawn up in accordance with the order of precedence of Article 179 of Law 20/2015 of 14 July 2015 and the amount corresponding to each of them.
Finally, the settlement plan shall contain the proposal in respect of the amount which, in accordance with the assets and liabilities of the balance sheet and the order of credit ranking, is to be satisfied for each of the creditors.
Additional disposition first. Register of compulsory insurance.
1. The compulsory insurance register referred to in paragraph 3 of the second provision of Law 20/2015 of 14 July 2015 shall contain all the updated information relating to compulsory insurance. The content of the information and the specifications on the referral procedure shall be established by means of a decision of the Directorate-General for Insurance and Pension Funds.
2. Access to the mandatory Insurance Register data will be public, through the Insurance Compensation Consortium's website.
3. The management of the Register corresponds to the Insurance Compensation Consortium. All operations requiring this management shall be carried out by electronic means.
4. The Insurance Compensation Consortium shall draw up annually, on the basis of the data available at 31 December, a report on the contents of the register, which shall be made available to the Directorate-General for Insurance and Pension Funds and, through it, to the bodies of the Autonomous Communities responsible for the matter.
Additional provision second. Procedure for the authorisation of special purpose entities.
The application for administrative authorisation to operate as a special purpose vehicle shall be submitted to the General Directorate of Insurance and Pension Funds and shall be accompanied by the following documents and information:
a) Authorized copy of the write-up.
b) Statutes.
c) Scope of authorization.
In all other matters these entities shall be governed by the provisions of the European Union rules of direct application.
Additional provision third. Maximum amount of liability coverage as an ancillary risk.
The limit of EUR 61,000, which is set as the maximum amount of civil liability coverage, may be updated by ministerial order when it is considered an ancillary risk as set out in Annex A (b) to Law 20/2015 of 14 July, provided that this amount does not exceed the insured value in respect of the principal risk.
Additional provision fourth. Enquiries, complaints and complaints relating to credit and security insurance.
The Claims Service of the General Directorate of Insurance and Pension Funds shall be competent to deal with and resolve the consultations, complaints and claims relating to credit and security insurance when the policyholder or the insured does not exercise in a professional capacity, an industrial, commercial or liberal activity, or the risk relates to such activity.
Additional provision fifth. Arrangements for the calculation of technical provisions for accounting purposes.
1. In the development of the provisions of the additional 18th of Law 20/2015 of 14 July, for the calculation of technical provisions for accounting purposes, the following Articles of the Regulation on the Management and Supervision of Private Insurance, approved by Royal Decree 2486/1998 of 20 November 1998, shall apply:
Article 29. Concept and enumeration of technical provisions.
Article 30. Provision of unconsumed premiums.
Article 31. Provision of ongoing risks.
Article 32. Provision of life insurance.
Article 33. Interest rate applicable for the calculation of the life insurance provision.
Article 34. Tables of mortality, survival, disability and morbidity.
Article 35. Administration costs.
Article 36. Rescues.
Article 37. Provision of life insurance when the taker assumes the risk of the investment and assimilated.
Article 38. Provision of participation in benefits and for extortionate.
Article 39. Provision of benefits.
Article 40. Provision of pending settlement or payment benefits.
Article 41. Provision of outstanding claims outstanding.
Article 42. Provision of internal claims settlement expenses.
Article 43. Statistical methods of calculation of the provision of benefits.
Article 44. Provision of outstanding claims for the risk of deferred events.
Article 45. Reserve for stabilisation.
Article 46. Provision of death insurance.
Article 47. Provision of sickness insurance.
Article 48. Provision of deviations in capitalization operations by lot.
Article 48a. Provision of risk management arising from the internationalisation insured by the State.
Additional provision fourth. Combined agricultural insurance.
Additional provision 10th. Adaptation to the terminology of the accounting plan of the insurance institutions.
First transient disposition. Provision of ongoing risks.
Second transient disposition. Life insurance.
Transient disposition eleventh. Provision for the provision of death insurance.
2. As regards the interest rate to be used in the calculation of the life insurance provision for contracts concluded before 1 January 2016, insurance and reinsurance entities shall apply Article 33 of the Regulation on the Management and Supervision of Private Insurance. However, institutions using the same calculation as provided for in paragraphs 1.a) .1 and 1.b) .1. of Article 33 of the Regulation on the Management and Supervision of Private Insurance may choose not to apply that interest rate and to adapt to the relevant temporary structure of interest rates without risk provided for in Article 54 of this Royal Decree, including, where appropriate, the volatility adjustment component provided for in Article 57 of this Royal Decree, provided that, in such a case, the additional allocations are made annually following a linear calculation method. The maximum period for adaptation shall be 10 years from 31 December 2015.
Entities that choose to adapt to the relevant temporary structure of interest rates without risk may not subsequently apply the interest rate provided for in paragraphs 1.a) .1 and 1.b) .1. of Article 33 of the Regulation on the Management and Supervision of Private Insurance.
3. For life insurance contracts concluded as of 1 January 2016, subject to paragraphs 1.a) .1. and 1.b) .1. of Article 33 of the Regulation on the Management and Supervision of Private Insurance, insurance and reinsurance entities shall use as the maximum interest rate the resulting of the relevant temporary structure of interest rate-free interest rates provided for in Article 54, including the volatility adjustment component provided for in Article 57. For the remainder of life insurance contracts concluded on or after 1 January 2016, institutions shall continue to use as an interest rate for the calculation of the life insurance provision any of the paragraphs of Article 33 of the Private Insurance Management and Supervision Regulation, with the exception of points 1.a) .1 and 1.b) .1.
4. In the development of the provisions of the additional 18th of Law 20/2015 of 14 July 2015 for the calculation of technical provisions for accounting purposes, the provisions of Order EHA/339/2007 of 16 February laying down certain provisions of the rules governing private insurance shall apply.
5. In the life class, the acquisition costs activated for accounting purposes shall not exceed for each policy the value of the mathematical provision at the inventory premium for the first financial year accounted for on the liabilities side of the balance sheet.
6. For the calculation of the accounting provision of death insurance, the option provided for in paragraph 2 above shall also apply for contracts concluded before 1 January 2016, without prejudice to the applicability of the provisions of the transitional provision of the 11th of the Private Insurance Management and Supervision Regulation, approved by Royal Decree 2486/1998 of 20 November 1998. For death insurance contracts concluded from 1 January 2016, insurance and reinsurance entities shall use as the maximum rate the resulting from the temporary risk-free structure provided for in Article 54, including the volatility adjustment component provided for in Article 57.
7. In order to carry out the calculations referred to in the preceding paragraphs in accordance with the aforementioned regulations, their corresponding technical bases shall be kept up to date in accordance with Articles 77, 78, 79 and 80 of the Regulation on the Management and Supervision of Private Insurance, approved by Royal Decree 2486/1998 of 20 November.
8. For the calculation of technical provisions for the accounting purposes of social security mutual societies and of insurance institutions covered by the special solvency regime, the provisions set out in the preceding paragraphs shall apply.
Additional provision sixth. Allocation of technical provisions. Minimum amount.
1. The allocations to be made to technical provisions in accordance with the methods provided for and permitted for accounting purposes, as well as the additional ones which, where appropriate, are carried out in order to adapt to the provisions of this royal decree for such purposes, shall have for all purposes the consideration of minimum amounts for the formation of the said technical provisions.
2. Notwithstanding the foregoing, the technical provision of benefits estimated by statistical methods, as referred to in Article 43 of the Regulation on the Management and Supervision of Private Insurance approved by Royal Decree 2486/1998, shall be regarded as a minimum amount in the amount less than the following amounts:
(a) The provision resulting from the application of the statistical method of the financial year.
(b) The technical provision of benefits at the end of the current year "x" estimated by statistical methods weighted by the ratio between: in the numerator, the part of the technical provision of benefits at the end of the current financial year "x" estimated by statistical methods, and corresponding to the claims that occurred prior to the "x" year, plus the payments in the "X-2", "X-1" and "x" periods of claims occurring in the "X-3" and earlier periods, plus the payments in "X-1" and "x" of claims occurring in "X-2" plus the payments in "x" of the claims 'X-1', and the denominator, the sum of the technical provisions of performance estimated by statistical methods of the financial year 'X-3', plus the provision of the 'X-2' exercise corresponding only to the claims of 'X-2', plus the provision of the 'X-1' exercise corresponding only to the claims of 'X-1'.
Where:
X and X-i: are the current exercise and each of the respective previous X-i exercises.
PTPx: is the PTP of the exercise x estimated by statistical methods.
PTPxx-1: is the PTP in exercise x corresponding to the claims occurring in the exercise x-1 and in previous exercises estimated by statistical methods.
PTPx-3x-n: is the PTP in the x-3 exercise corresponding to the claims occurring in the x-3 exercise and in the "n" previous exercises estimated by statistical methods.
PTPx-2x-2: is the PTP in the x-2 exercise corresponding to the claims occurring in the x-2 exercise estimated by statistical methods.
PTPx-1x-1: is the PTP in the x-1 exercise corresponding to the claims occurring in the x-1 exercise estimated by statistical methods.
Pagosx-ix-3: are the payments corresponding to the claims occurring in the exercise x-3 and previous exercises, but performed in the exercises x-2, x-1 and x.
Pagosx-ix-2: are the payments corresponding to the claims that occurred in the x-2 exercise, but performed in the x-1 and x exercises.
Pagosxx-1: are the payments corresponding to the claims occurring in the year x-1, and performed in the year x.
3. Without prejudice to the preceding paragraph, in the first three financial years in which a statistical method as referred to in Article 43 of the Regulation on the Management and Supervision of Private Insurance is applied by the date of closure of the accounting statements, the amount shall be taken into account for the minimum amount of the technical provision of benefits, which shall not exceed the result of applying to the amount of the period of the financial year, the percentage determined by the proportion of the claims incurred by the financial year. five years immediately prior to the tax period, in relation to the period premiums paid in the five financial years concerned.
For the calculation mentioned, no account will be taken of data that would have been excluded in the application of the statistical method.
Additional provision seventh. Programme of activities of the insurance brokers.
The programme of activities to be submitted by insurance brokers as a necessary requirement to obtain and maintain registration in the Special Administrative Register of insurance intermediaries, reinsurance brokers and their senior positions shall include the structure of the organisation, including the marketing systems.
In addition, for the first three social exercises, it shall contain a plan indicating in detail the estimates of revenue and expenditure, in particular current general expenses, and the forecasts for insurance premiums to be intermediated, with the justification of the forecasts provided for and the adequacy of the resources and resources available to them.
Additional disposition octave. Special administrative register of insurance intermediaries, reinsurance brokers and their senior officials.
1. In the special administrative register of insurance intermediaries, reinsurance brokers and their senior officials, insurance intermediaries and reinsurance brokers must be registered, indicating the name and the name or the social name, if any, the sex, nationality, number of national identity or tax identification document, the address of the registered office or registered office, the scope of action, the registration number, as well as the amendments to the articles of association which must be recorded in the administrative register, the name of the domain or the address of the The internet, the significant holdings, the economic interest groups and the temporary joint ventures, the cancellation of the registration and the disqualification for the performance of the mediation activity, as well as the penalties that would have been imposed, except for the private one. Acts relating to the exercise of the right of establishment or freedom to provide services in each of the Member States of the European Economic Area shall also be entered in the register
Additionally, in the case of legal persons, and with respect to the administrative and management positions responsible for the mediation activities, the date of the appointment, suspension, revocation or cessation of the mediation activities shall be entered for any reason, the disablement and the penalties which, if any, would have been imposed on them, except for the private one. The name or social name, if any, of the sex, domicile, nationality, number of the national identity or tax identification document, and in the case of foreign nationals, where applicable, of the residence permit or passport in force, shall be entered. Where such charges are carried out by legal persons, the data relating to their appointed representatives shall be entered.
2. Without prejudice to the provisions of the preceding paragraph, the following shall also be
:(a) In relation to insurance intermediaries, the designation of the holder of the department or customer service and, if applicable, of the client defender.
b) In relation to insurance and reinsurance brokers, the situation of inactivity.
(c) In relation to insurance agents, exclusive or linked, the insurance companies with which they are a member of the insurance agency contract shall be mentioned; and, in the case of the exclusive insurance agents, the authorizations they obtain for the exercise of their insurance mediation activity with another insurance undertaking shall be mentioned, indicating the insurance products in which they may mediate for the insurance, as well as the dates of commencement and termination of such authorization.
(d) In the case of a bank-insurance operator, the network or networks of credit institutions or credit institutions through which the operator of the intermediary insurance intermediary shall be insured shall also be entered.
3. Where registration in the register brings cause in agreements of the Administration, the seat shall be carried out on its own initiative on the basis of the relevant administrative act. Where appropriate, a written statement signed by the person concerned or by the legal representative of the company shall be submitted within 10 days of the date of adoption of the agreements, presenting the authentic supporting documentation or, where appropriate, the public deed within one month of its registration in the Commercial Registry.
4. The entries relating to the penalties imposed shall be cancelled ex officio or at the request of the person concerned.
The cancellation of trade will proceed when there has been a resolution or a firm judgment of the action brought against the sanction.
The person concerned shall have the right to request from the Directorate-General for Insurance and Pension Funds the cancellation of the registration of the penalty imposed on him, provided that no new offence has been committed, within two years of the date of the finality of the penalty for the case of the minor offences, five years in the case of the serious and eight years in the case of the very serious ones.
The initiation of an administrative penalty file shall interrupt the time limits provided for in the preceding paragraph. If the procedure concludes with the imposition of a new penalty, the pending entries shall be cancelled if the period of cancellation applicable to the penalty is passed, except that the one which subtracted from the previous one is higher, in which case it shall be treated as the date of its expiry.
Produced the cancellation, the General Directorate of Insurance and Pension Funds will not be able to take into consideration the penalties whose registration would have been cancelled in order to assess the requirements of commercial and professional honorability in the terms provided for in Law 26/2006, of July 17, of mediation in private insurance and reinsurance.
Additional provision ninth. Abusive practices.
It shall be deemed to be included within the abusive practices referred to in paragraphs 2.o and 3.g) of Article 55 of Law 26/2006 of 17 July, of private insurance and reinsurance mediation, any conduct aimed at the transfer to another insurance undertaking, with new commission charge discounted, of policies on which the commission has previously been charged discounted commission of another insurer and has not been returned, in the proportional portion of the period not elapsed.
Additional provision 10th. Value of the euro.
Provided that reference to the euro, the equivalent in the national currency to be taken into account as from 31 December of each year, shall be the last day of the preceding October for which the value of the euro is available in all currencies of the European Economic Area.
Additional provision eleventh. Insurance experts, Commissioners of Averages and Liquidators of breakdowns.
Insurance experts, breakdown commissioners and breakdown liquidators who are involved in the adversarial assessment procedure shall have sufficient knowledge of the insurance technique. The Directorate-General for Insurance and Pension Funds may develop by circulating the mechanisms for the accreditation of knowledge required of insurance experts, breakdown commissioners and breakdown liquidators.
Additional disposition twelfth. External collaborators of insurance intermediaries.
The Directorate-General for Insurance and Pension Funds may develop by circulating the training and other aspects of the scheme applicable to external partners covered by Article 8 of Law 26/2006 of 17 July on private insurance and reinsurance mediation.
Additional disposition thirteenth. Regulatory referrals.
The normative references made in other provisions to Royal Decree 2486/1998, of 20 November, for which the Regulation and Supervision of Private Insurance are approved, will be understood to be made to the corresponding precepts of this royal decree.
Additional disposition fourteenth. Control of personnel expenses.
The measures included in this rule may not result in an increase in appropriations or other personnel costs.
Additional provision 15th. Distribution of competences.
References to the General Directorate of Insurance and Pension Funds shall be construed as being made to the competent authority of the Autonomous Community where appropriate in accordance with the distribution of powers provided for in Article 19 of Law 20/2015 of 14 July.
Additional provision sixteenth. Electronic access to the services of the General Directorate of Insurance and Pension Funds.
Citizens will be able to interact with the Directorate General of Insurance and Pension Funds to exercise their rights by electronic, computer or telematic means in the terms provided for each procedure.
Additional 17th disposition. Coverage of the civil liability of the subscription agencies.
Subscription agencies shall have professional liability insurance or any other financial guarantee covering throughout the territory of the European Economic Area the responsibilities which may arise from professional negligence with the amount of at least one and a half million euros per claim and, in sum, two million euro for all claims relating to a given year.
First transient disposition. Transitional measure on interest rates without risk.
1. Subject to the approval of the Directorate-General for Insurance and Pension Funds, insurance and reinsurance undertakings may apply a transitional adjustment to the relevant temporary structure of interest rates without risk. The maximum period for resolving shall be six months.
2. The adjustment will be calculated, for each currency, as a percentage of a difference taking into account:
a) The percentage will be linearly reduced at the end of each year, from 100 percent during the year beginning January 1, 2016 to 0 percent on January 1, 2032.
b) The difference will be calculated by subtracting the following amounts:
1. The interest rate determined by the insurer and reinsurer in accordance with Article 33 and the second transitional provision of the Private Insurance Management and Supervision Regulation, approved by Royal Decree 2486/1998.
2. The annual effective rate, calculated as the single discount rate applied to cash flows in the portfolio of eligible insurance or reinsurance obligations, gives rise to a value equal to the value of the best estimate of the portfolio of eligible insurance or reinsurance obligations taking into account the time value and using the relevant temporary structure of interest-free interest rates referred to in Article 54 for this purpose.
Where insurance and reinsurance entities apply the volatility adjustment of Article 57, the relevant time structure of interest rate-free interest rates shall be that which incorporates the corresponding adjustment.
3. The adjustment shall be eligible only for insurance and reinsurance obligations that meet the following requirements:
(a) They are derived from contracts concluded before the entry into force of Law 20/2015 of 14 July, excluding renewals of contracts on or after that date.
(b) The corresponding technical provisions, prior to the entry into force of Law 20/2015 of 14 July, are calculated in accordance with the Regulation on the Management and Supervision of Private Insurance.
(c) Article 55 shall not apply to those obligations.
4. Insurance and reinsurance entities applying paragraph 1 shall comply with the following requirements:
(a) They shall not include the eligible insurance and reinsurance obligations in the calculation of the volatility adjustment provided for in Article 57.
(b) They may not apply the second transitional provision (transitional measure on technical provisions).
(c) They shall publish, as part of their report on the financial and solvency situation referred to in Article 80 of Law 20/2015 of 14 July, the application of this temporary structure of interest rates without transitional risk and the quantification of the impact of not applying this transitional measure in their financial situation.
(d) a policy of the institution in relation to the application of the transitional measure, including, in particular, the rules established to coordinate the application of this measure with any operation involving the reduction of own funds.
e) It shall have a plan for the projection of the financial and solvency situation during the transitional period in such a way as to ensure that:
1. During the transitional period, it is expected that the eligible own funds will be sufficient to cover the Solvency Capital Requirement and the Minimum Capital Requirement, taking into account the application of this transitional measure and the other transitional arrangements it is intended to apply, as well as the possible policy for the distribution of the entity's results.
2. At the end of the transitional arrangements, the eligible own funds are expected to be sufficient to cover the Solvency Capital Requirement and the Minimum Capital Requirement.
5. This transitional measure may, where appropriate, be applied at the level of a group prior to the authorisation of the Directorate-General for Insurance and Pension Funds.
6. Institutions included in the special solvency regime may also benefit from this transitional provision.
Second transient disposition. Transitional measure on technical provisions.
1. Subject to the approval of the Directorate-General for Insurance and Pension Funds, insurance and reinsurance undertakings may apply a transitional deduction to technical provisions. The maximum period for resolving shall be six months.
2. The deduction may be applied at the level of the homogeneous risk groups in Article 50.
3. The transient deduction will be calculated as a maximum percentage of a difference taking into account that:
a) The maximum percentage will be linearly reduced at the end of each year, from 100 percent during the year beginning January 1, 2016 to 0 percent on January 1, 2032.
b) The difference will be calculated by subtracting the following amounts:
1. The technical provisions after deduction of the amounts recoverable from reinsurance contracts and special purpose entities, calculated in accordance with Article 51 on the date of the entry into force of Law 20/2015 of 14 July. Where insurance and reinsurance undertakings apply, on the date of entry into force of the law, Article 57, the relevant temporary structure of interest-free interest rates shall be that which incorporates the corresponding adjustment to that date.
2. º The technical provisions after deduction of the amounts recoverable from the calculated reinsurance contracts, in accordance with the Regulation on the Management and Supervision of Private Insurance approved by Royal Decree 2486/1998, as at 31 December 2015.
4. At the request of the acquirer or ex officio, the Directorate-General for Insurance and Pension Funds may approve that the amounts of technical provisions, including, where applicable, the amount corresponding to the volatility adjustment, to be used to calculate the transitional deduction, shall be recalculated every 24 months or more frequently when the risk profile of the institution has materially varied.
5. The Directorate-General for Insurance and Pension Funds may limit this transitional deduction where it considers that its application may result in a reduction of the financial resources required of the institution in respect of those calculated in accordance with the rules in force before the entry into force of Law 20/2015 of 14 July 2015 at 31 December 2015.
6. Insurers and reinsurers who intend to apply the provisions of paragraph 1 shall comply with the following requirements:
(a) They shall not apply the transitional provision first.
b) They shall publish, as part of their report on the financial and solvency situation referred to in Article 80 of Law 20/2015 of 14 July, the application of this transitional deduction, and the quantification of the impact of not applying this transitional measure in their financial situation.
(c) A policy of the institution shall be required in relation to the application of the transitional measure, including, in particular, the rules established to coordinate the application of this measure with any operation involving the reduction of own funds.
(d) a plan for the projection of the financial and solvency situation should be available during the transitional period in such a way as to ensure that:
1. During the transitional period, it is expected that the eligible own funds will be sufficient to cover the Solvency Capital Requirement and the Minimum Capital Requirement, taking into account the application of this transitional measure and the other transitional arrangements it is intended to apply, as well as the possible policy for the distribution of the entity's results.
2. At the end of the transitional arrangements, the eligible own funds are expected to be sufficient to cover the Solvency Capital Requirement and the Minimum Capital Requirement.
7. This transitional measure may, where appropriate, be applied at the level of a group prior to the authorisation of the Directorate-General for Insurance and Pension Funds.
8. Institutions included in the special solvency regime may also benefit from this transitional provision.
Transitional provision third. Non-compliance with the Solvency Capital Requirement without the application of the transitional measure on interest rates without risk or on technical provisions.
1. Insurers and reinsurers applying the transitional measure provided for in the first transitional provision or in the second transitional provision shall inform the General Directorate of Insurance and Pension Funds as soon as they observe that they are not going to comply with the Solvency Capital Requirement without the application of those transitional measures.
The General Directorate of Insurance and Pension Funds shall require the insurance or reinsurance undertaking to take the necessary measures to ensure compliance with the Solvency Capital Requirement at the end of the transitional period.
2. Within two months of the observation of the non-compliance with the Solvency Capital Requirement without the application of those transitional measures, the insurance or reinsurance undertaking shall submit to the Directorate-General for Insurance and Pension Funds a progressive introduction plan in which it sets out the planned measures to establish the level of eligible own funds corresponding to the coverage of the Solvency Capital Requirement or to reduce its risk profile in order to ensure compliance with the Solvency Capital Requirement at the end of the transitional period.
The insurance or reinsurance entity may update the plan during the transitional period.
3. Insurance and reinsurance undertakings which do not comply with the Solvency Capital Requirement without the application of those transitional measures shall submit annually to the Directorate-General for Insurance and Pension Funds a report on the progress made in implementing the measures taken and the progress made to ensure compliance with the Solvency Capital Requirement at the end of the transitional period.
The Directorate-General for Insurance and Pension Funds will revoke the approval of the application of the transitional measures when the progress report indicates that compliance with the Solvency Capital Requirement at the end of the transitional period is not realistic.
Transitional disposition fourth. Transitional measure for the classification of own funds.
1. By way of derogation from Article 60, basic own funds of Tier 1 shall be included for a maximum period of 10 years after 1 January 2016, the items of the basic own funds meeting the following requirements:
a) Have been issued prior to January 18, 2015.
(b) As at 31 December 2015, they could have been used to cover at most 50% of the solvency margin, calculated in accordance with the rules in force on that date.
c) That without the application of this transitional measure, they could not be classified at level 1 or level 2 in accordance with Article 60.
2. By way of derogation from Article 60, basic own funds of Tier 2 shall be included for a maximum period of 10 years after 1 January 2016, the items of the basic own funds meeting the following requirements:
a) Have been issued prior to January 18, 2015.
(b) As at 31 December 2015, they could have been used to cover up to a maximum of 25% of the solvency margin, calculated in accordance with the rules in force on that date.
3. This transitional measure may, where appropriate, be applied at the group level.
4. Institutions included in the special solvency regime may also benefit from this transitional provision.
Transient disposition fifth. Transitional measure on the concentration and differential sub-modules of the market risk.
1. By way of derogation from Article 74.1 of Law 20/2015 of 14 July and in Article 63.1 of this Royal Decree, when calculating the concentration risk sub-module and the differential risk sub-module in accordance with the standard formula for exposures to central governments or central banks of Member States denominated and financed in the national currency of any other Member State, the following general parameters shall be used:
(a) Until 31 December 2017, the general parameters shall be the same as those applying to such exposures denominated and financed in their national currency.
b) In 2018, the overall parameters that it would correspond to be reduced by 80 percent.
c) In 2019, the overall parameters that it would correspond to be reduced by 50 percent.
d) As of January 1, 2020, the general parameters will not be reduced.
2. This transitional measure may, where appropriate, be applied at the group level.
Transitional disposition sixth. Transitional measure on the stock market risk sub-module.
By way of derogation from Article 74.1 of Law 20/2015 of 14 July and in Article 63.1 of this Royal Decree, when calculating the risk sub-module for shares in accordance with the standard formula without the option set out in Article 75, for shares acquired by the institution before 1 January 2016 or on that same date, the general parameters resulting from the weighted average of the following values shall be used:
(a) The general parameter to be used when calculating the variable income risk sub-module in accordance with Article 75.
(b) The general parameter to be used when calculating the variable income risk sub-module in accordance with the standard formula without the option set out in Article 75.
The weighting of the parameter in paragraph (b) shall be increased at least linearly at the end of each year, from 0% during the year starting from 1 January 2016 to 100% on 1 January 2023.
Transitional disposition seventh. A transitional measure on investment in marketable securities or other financial instruments based on packaged loans.
1. Insurance or reinsurance undertakings which invest in marketable securities or other financial instruments based on packaged loans issued before 1 January 2011 shall apply only the requirements for investment in this class of securities or instruments in the European Union rules of direct application, in cases where new underlying exposures are added or existing exposures are replaced as of 31 December 2014.
2. This transitional measure may, where appropriate, be applied at the group level.
Transient disposition octave. A transient measure for requesting approval of an internal group model applicable to a part of the group.
An insurance or reinsurance undertaking which is the ultimate parent may apply to the Directorate-General for Insurance and Pension Funds until 31 March 2022 for the approval of an internal group model applicable to a part of the group where the institution to which it applies and the ultimate parent is located in Spain and that part constitutes a differentiated fraction with a risk profile substantially different from that of the rest of the group.
transient disposition ninth. Report on the financial and solvency situation.
Without prejudice to the information that is required to be published under any other legal or regulatory requirements, until 31 December 2020, it shall not be mandatory for insurance or reinsurance entities to include, in the description of the management of the capital contained in the report on the financial and solvency situation referred to in Article 92, the separate indication of the additional mandatory solvency capital requirement or the impact of the specific parameters that the insurer or reinsurer should use. significant deviations from the baseline assumptions of the calculation of the standard formula.
Transient disposition tenth. Time limits for the disclosure of the report on the financial and solvency situation.
1. The time limits for insurance and reinsurance institutions to disclose the report on the financial and solvency situation, as provided for in Article 93, shall be for the financial years ending on 31 December 2016, 2017 and 2018 of 20, 18 and 16 weeks respectively.
2. For the disclosure of the report on the financial situation and group solvency, the time limits provided for in the previous paragraph shall be extended by six weeks.
3. Insurance and reinsurance undertakings shall disclose and forward to the Directorate-General for Insurance and Pension Funds the special report on the review of the financial and solvency situation within the time limits set out in paragraphs 1 and 2.
Transient disposition eleventh. Time limits for the submission of information for monitoring, statistical and accounting purposes.
1. The time limits for insurance and reinsurance institutions to submit annual information for supervisory, statistical and accounting purposes, as well as the regular monitoring report referred to in Article 160, shall be for economic years ending on 31 December 2016, 2017 and 2018 of 20, 18 and 16 weeks respectively.
2. The time limits for the reporting of quarterly information for the purposes of supervision, statistics and accounting, as provided for in Article 160, by the insurance and reinsurance entities shall be for the financial years 2016, 2017 and 2018 of eight, seven and six weeks respectively.
3. For the purposes of reporting for supervisory, statistical and group accounting purposes, the time limits provided for in the preceding paragraphs shall be extended by six weeks.
Transient Disposition twelfth. Adaptation of pre-existing pension schemes to the provisions of the fourth final provision, amending the Regulation on pension schemes and funds, approved by Royal Decree 304/2004 of 20 February 2004.
The specifications of the pension plans, the bulletins of adherence to the pension plans and the documents with the data essential for the participation of the individual plans, must be adapted to the established final disposition of this royal decree within six months from its entry into force.
transient disposition thirteenth. Insurance companies and reinsurers who, as of 1 January 2016, do not subscribe to new contracts.
For the purposes of complying with the requirement laid down in the transitional provision undecided.3 (b) of Law 20/2015 of 14 July 2015, the annual progress report shall have at least the following content:
(a) Contracts in force at 31 December of each year, in detail of the guarantees associated with each of them, as well as of reinsurance contracts or other risk mitigation measures affecting them.
b) Prstations paid over the course of the year and outstanding claims for processing at December 31, comparing the entity's forecast in its estimates with the experience of the exercise and valuing, where applicable, the effect of the deviations observed in the termination of the company's activities before January 1, 2019
c) Calculation of technical provisions and state of coverage, taking into account the regulatory requirements in force until 31 December 2015
d) The entity's operational structure in relation to the organizational units, personnel, and means to ensure the development of outstanding operations.
e) Any other circumstances that may affect the completion of the initial commitment to terminate the activities of the company before January 1, 2019.
Without prejudice to the above, the General Directorate of Insurance and Pension Funds may require the entities in this regime to provide any additional information necessary to verify the proper compliance with the requirements set out in the 11th Transitional Provision of Law 20/2015 of 14 July
.Transitional disposition fourteenth. Reporting by insurance companies and reinsurers in respect of the financial year 2015 to be submitted in 2016.
All insurers and reinsurers, as well as their groups, must submit the information for the financial year 2015, as referred to in Article 66 of the Regulation on the Management and Supervision of Private Insurance, approved by Royal Decree 2486/1998 of 20 November, within the time limits laid down in that Article.
15th transient disposition. Transitional arrangements for the Solvency Capital Requirement.
By way of derogation from Article 156 of Law 20/2015 of 14 July 2015, the insurance and reinsurance undertakings which, on the day before the entry into force of this royal decree, have the minimum amount of the required solvency margin as referred to in Articles 61 and 62 of the Regulation on the Management and Supervision of Private Insurance, approved by Royal Decree 2486/1998 of 20 November 1998, but do not have, in the first year of application of this royal decree, sufficient eligible own funds to cover the Solvency Capital Requirement shall take the necessary measures to establish the level of eligible own funds corresponding to the coverage of the Solvency Capital Requirement or the reduction of its risk profile to ensure that it has the Solvency Capital Requirement at the latest by 31 December 2017 at the latest.
The insurance or reinsurance entity that is in this situation will inform the General Directorate of Insurance and Pension Funds within 15 days of the fact that you know it, informing you of the measures it intends to take to ensure compliance with your capital requirement at the deadline. It shall also present a quarterly report setting out the measures taken and the progress made to restore the level of eligible own funds corresponding to the coverage of its capital requirement or to reduce its risk profile. This report shall be submitted during the month following the end of the quarter to which it corresponds.
The provisions of the preceding paragraph shall also apply to entities that are in the circumstances provided for in paragraph 1 of the transitional provision novena of Law 20/2015 of 14 July.
The extension provided for in the first subparagraph shall be revoked if the submitted report shows that there has been insufficient progress to achieve the re-establishment of the eligible own funds level for the Solvency Capital Requirement or to reduce the risk profile in order to cover the Solvency Capital Requirement between the date on which the non-compliance was found with respect to the Solvency Capital Requirement and the date of the submission of the report.
This will not prevent the application of the special control measures resulting from them, if any.
The provisions of this transitional provision, as well as the transitional provision in the ninth of Law 20/2015 of 14 July 2015, will also apply to the entities covered by the special solvency regime. It shall also apply, with the necessary adaptations, at group level.
Transient disposition sixteenth. Distribution of dividends or branches.
Entities authorised to apply the transitional measures on interest rates without risk or on technical provisions may not, unless prior authorisation, distribute dividends or derbranches, where without the application of the above measures a required solvency capital or minimum capital deficit is present, or they may be presented as a result of the distribution of dividends or derbranches.
transient disposition seventeenth. Simplified sanctioning procedure.
Until the entry into force of Law 39/2015 of 1 October of the Common Administrative Procedure of Public Administrations, the simplified procedure referred to in Article 210 of Law 20/2015 of 14 July 2015 will be governed by the provisions of Article 10 of Royal Decree 2119/1993 of 3 December on the sanctioning procedure applicable to the subjects acting on the financial markets.
Single repeal provision. Regulatory repeal.
As many provisions of equal or lower rank are repealed, they oppose the provisions of this royal decree, and in particular the following:
(a) Royal Decree 2486/1998 of 20 November approving the Regulation on the Management and Supervision of Private Insurance, with the exception of:
(i) Article 11, in so far as it does not object to Article 41.3 of Law 20/2015, of July 14;
(ii) Articles 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 23;
iii) the fifth and sixth additional provisions;
(iv) and the articles governing the calculation of technical provisions for accounting purposes collected in the fifth additional provision of this royal decree.
The references contained in these precepts to the recast text of the Law on the Management and Supervision of Private Insurance, approved by Royal Decree-Law 6/2004 of 29 October, will be understood to be made to the corresponding articles of Law 20/2015 of 14 July.
(b) Articles 7, 11, 12, 13, 14, 20, 21, 22, 23, 24, 25, 26, 27, 29.1, and 29.2 of the Social Welfare Mutual Regulation, approved by Royal Decree 1430/2002 of 27 December, shall be maintained in force for the remainder of the articles in so far as they do not object to the provisions of the law.
(c) Articles 85, 86 and 87 of Order ECO/805/2003 of 27 March 2003 on rules for the valuation of immovable property and certain rights for certain financial purposes.
d) The fifth transitional provision, "rules for the formulation of the accounts of the consolidated groups of insurance entities" of Royal Decree 1317/2008 of 24 July, approving the Accounting Plan of the insurance institutions.
(e) The third paragraph of the Resolution of 20 October 2008, of the Directorate-General for Insurance and Pension Funds, on the reporting obligations of insurance companies that market insured forecast plans.
Final disposition first. Amendment of Royal Decree 1588/1999 of 15 October 1999 approving the Regulation on the implementation of the pension commitments of companies with workers and beneficiaries.
The Regulation on the implementation of the pension commitments of companies with workers and beneficiaries, approved by Royal Decree 1588/1999 of 15 October, is amended in the following terms:
One. Article 29 (2) is worded as follows:
" 2. For the purposes of quantifying the right to rescue contracts covered by this Chapter, the following rules shall apply:
(a) Where for a given contract, the technical interest applied does not include the component relating to the adjustment for flows of the relevant temporary structure of interest rates without risk provided for in Article 55 of Royal Decree 1060/2015 of 20 November 2015 for the management, supervision and solvency of insurance and reinsurance entities, the amount of the right of redemption may not be less than the value of the life insurance provisions for the policy.
However, in the event that the taker exercises the right of redemption provided for in paragraph 1.a) or 1.b) of this Article, it may be expressly agreed in the insurance contract that it instructs pension commitments that the redemption value cannot be less than the value of the carrying out of the assets representing the investment of the relevant life insurance provisions. To this end, those assets must be identified, collected in the investment register and reported to the taker.
(b) Where for a given contract, the technical interest applied includes the component relating to the adjustment for flows of the relevant temporary structure of interest rates without risk provided for in Article 55 of Royal Decree 1060/2015 of 20 November 2015 for the management, supervision and solvency of insurance and reinsurance entities, the amount of the right of redemption shall be equal to the value of the carrying out of the assets representing the investment of the relevant life insurance provisions.
(c) If there is a deficit in the coverage of the corresponding provisions, such a deficit shall not be passed on to the redemption right.
(d) The amount of the right to ransom may not be applied to any penalty or discounts.
In the case of the insured worker's right of rescue, where the contractual terms refer to the value of the redemption value of the assets corresponding to the policy, the right to remain in the collective insurance contract must be provided for in the contract in the event of termination of the employment relationship with the policyholder.
(e) For the purposes of this paragraph, the value of the assets is defined as the market value of the assets, defined as such in the accounting plan of the insurance institutions. "
Two. Article 33 (2) is hereby worded as
:" 2. The technical interest rate applicable to the insurance covered in this Chapter shall be that resulting from the application of the rules contained in Royal Decree 1060/2015 of 20 November of the management, supervision and solvency of insurance and reinsurance undertakings.
The Minister of Economy and Competitiveness will be able to establish the information to be submitted by the insurance companies on the insurance contracts regulated in this chapter to the General Directorate of Insurance and Pension Funds. "
Three. Article 34 (2) is amended and read as follows:
" 2. At least annually, the insured worker and the beneficiaries who already receive their benefits under the insurance contract must receive the following information:
(a) Certification of the insurance institution indicating the policy number, the contingencies covered and the benefits individually guaranteed.
If the contract provides for the existence of economic rights in the event of termination or termination of the employment relationship, the annual certification shall refer to the existence of such rights as well as, where appropriate, to expressly warn of the possible difference between the market value of the corresponding assets and the amount of the life insurance provision.
b) Value of premiums paid by the taker in the previous year.
c) Value of the life insurance provision at 31 December of the previous financial year. The part of the life insurance provision corresponding to premiums paid before 1 January 2007, if any, shall be distinguished.
The information provided for in this section will be of a minimum nature and can be extended by collective agreement in the company. "
Four. Paragraph 4 (b) of the single additional provision is amended, which is worded as follows:
" (b) At least annually, the insurance undertaking shall forward to each insured person in the business social security plan:
1. Individual insurance certificate stating your membership of the business social security plan, indicating the policy number, your personal data, the contingencies covered and the individual benefits guaranteed by the insurer.
2. Certification for tax purposes of the value of the premiums charged that, in compliance with the plan, was satisfied by the taker in the previous year.
3. The value of the mathematical provision at 31 December of the preceding financial year, distinguishing the share of premiums paid before 1 January 2007, if any.
4. Value of rescue in case of cessation of the employment relationship and conditions in which the mobilization is permitted to another instrument of social foresight. "
Five. Paragraph 5 of the single additional provision is amended, which is worded as follows:
" 5. The holder of a business social security plan may only exercise the right of rescue to integrate all the commitments made in the business social security plan into another business social security plan or pension plan promoted by the company. In both cases, the new insurer or pension scheme will take full coverage of the pension commitments transferred. The amount of the redemption right must be paid directly to the new insurer of the new business social security plan or to the pension fund in which the pension scheme is integrated.
It shall be permissible for the payment of the redemption value to be made by the transfer of the assets, net of the necessary expenses to effect the corresponding changes of ownership.
When partial charges of economic rights are made for contingencies or for exceptional liquidity assumptions regulated in the recast of the Pension Plans and Funds Act, or partial mobilizations of these rights are made, the insured's application shall include indication as to whether the economic rights to be collected or to be mobilised correspond to premiums prior to or after 1 January 2007, if any.
In the case of partial mobilizations, the economic rights to be mobilised shall be calculated in a proportional manner according to premiums prior to and after that date, when these exist, and the insured person has not made the indication indicated in the preceding paragraph. "
Six. A single transitional provision is added which is worded as follows:
" Single transient provision. Insurance contracts which allocate investments pursuant to Article 33 (2) of the Regulation on the Management and Supervision of Private Insurance, approved by Royal Decree 2486/1998 of 20 November 1998.
In insurance contracts, which, at the entry into force of Royal Decree 1060/2015 of 20 November 2015 on the management, supervision and solvency of insurance and reinsurance entities, will have investments allocated in accordance with Article 33 (2) of the Private Insurance Management and Supervision Regulation, approved by Royal Decree 2486/1998 of 20 November 1998, and do not include the component relating to the adjustment for flows of the relevant temporary structure of interest rates without risk provided for in Article 55 of Royal Decree 1060/2015, 20 November, for the management, supervision and solvency of insurance and reinsurance undertakings, the amount of the right of redemption shall be equal to the value of the performance of the assets representing the investment of the relevant life insurance provisions. '
Final disposition second. Amendment of the Royal Decree 1430/2002 of 27 December on the adoption of the Social Welfare Mutual Funds Regulation.
The Social Welfare Mutual Regulation, approved by Royal Decree 1430/2002 of 27 December, is amended as follows:
One. Article 10 (1) (g) is amended as follows:
"(g) Indication of the protective partners and obligations they assume in relation to the mutual benefit, detailing, in particular, the arrangements for entry and exit of such partners in the field of mutual insurance as well as the nature of the contributions and their articulation in the economic and accounting performance of the entity."
Two. The first subparagraph of Article 39 (2) is amended, which is read as follows:
" 2. The members of the board of directors shall be at least two-thirds of the members of the board; however, in the case of a protective entity or persons, the social statutes may determine that the protectors or their representatives are part of the board of directors. The participation of the protector on the board of directors in no case may assume the effective control of this societarium organ. "
Final disposition third. Amendment of Royal Decree 300/2004 of 20 February approving the Regulation on the insurance of extraordinary risks.
The Extraordinary Risk Insurance Regulation, approved by Royal Decree 300/2004 of 20 February, is amended as follows:
One. Article 4 (1) (a) is amended to read as follows:
" 1. The extraordinary risk insurance will be provided, as legally determined, to the policyholders of the following policies, in which the surcharge in favour of the Insurance Compensation Consortium is mandatory:
(a) In the case of damage insurance: land vehicle, railway, fire and nature events, other damage to property (theft, breakage of glass, damage to machinery, electronic equipment and computers), civil liability in motor vehicles and miscellaneous financial losses, covering the coverage of those referred to in Article 3.2 or the coverage of uninhabitability or forced eviction of dwellings, or loss of rental housing, as well as the combined arrangements of such vehicles or when they are contracted out of complementary form.
However, in any event, the combined agricultural insurance policies, whatever the object of the insurance, are excluded, as well as any other agricultural production which may be covered by the system of agricultural insurance combined to be covered by the plans approved annually by the Government, whatever the delimitation of the hedges provided for by the said system, as well as the policies covering the risks arising from the transport of goods, and the construction and assembly, including the (a) the law 38/1999, of 5 November, of the Ordination of the Edification.
Policies that cover agricultural production not included in an annual plan of agricultural insurance combined, are in force at the time of the inclusion of such productions in a new plan, shall be deemed to be excluded from the obligation to pay the surcharge in favor of the Insurance Compensation Consortium and, consequently, the coverage granted by it, by application of the preceding paragraph, from its expiration or renewal, and at the latest within one year of the approval by the Government of the annual plan in which the productions are included. "
Two. Article 5 (1) and (4) are amended to read as follows:
" 1. The coverage of the extraordinary risks shall reach the same goods or persons, as well as the same insured sums as have been established in insurance policies for the purposes of the coverage of the ordinary risks, without prejudice to paragraphs 3 and 4 of this Article. '
" 4. By way of derogation from paragraph 1
(a) In policies that cover damage to motor vehicles, the insurance coverage of the Insurance Compensation Consortium shall guarantee the entire insurable interest even if the ordinary policy does so only partially.
(b) Where vehicles are only provided with a civil liability policy in motor vehicles, the coverage of extraordinary risks by the Insurance Compensation Consortium shall ensure the value of the vehicle in the state in which it is at the moment immediately preceding the occurrence of the claim according to the general purchase price acceptance on the market. '
Three. Article 9 is amended to read as follows:
" Article 9. Franchise.
1. In the case of insurance against damage to property and civil liability in land vehicles, the franchise shall be applied which, where appropriate, shall be set by the Minister for Economic Affairs and Competitiveness on the proposal of the Insurance Compensation Consortium.
2. In the case of persons insurance, no allowance shall be made. '
Final disposition fourth. Amendment of Royal Decree 304/2004 of 20 February 2004 approving the Regulation on pension schemes and funds.
The Regulation on pension plans and funds, approved by Royal Decree 304/2004 of 20 February 2004, is amended as follows:
One. Article 10 (4) and (5) are amended as follows:
" 4. Recognition of the right to benefit must be notified to the beneficiary in writing signed by the managing body, within a maximum of fifteen working days from the presentation of the corresponding documentation, indicating the form, modality and value of the benefit, periodicity and maturities, forms of revaluation, possible reversions, and degree of assurance or guarantee, informing in their case of the risk in charge of the beneficiary, and other defining elements of the benefit, as provided for in the specifications or according to the option indicated by that.
If it is an immediate capital, it must be paid to the beneficiary within a maximum of 7 working days after the receipt of the corresponding documentation. However, the specifications of the employment plans and associates in which retirement is operating under defined benefit mode may extend that period to a maximum of 30 working days where this is justified for reasons of the necessary intervention by third parties or entities in the quantification of the consolidated duty.
5. In the exceptional cases of liquidity of serious illness and long-term unemployment provided for in Article 9 of this Regulation, as provided for in the specifications, and subject to the conditions or limitations laid down by them, the consolidated rights may be made effective by payment or in successive payments, as long as such duly accredited situations are maintained.
The requested rights must be paid within the maximum period of 7 working days after the participant submits the appropriate supporting documentation. However, the specifications of the employment plans and associates in which retirement is operating under defined benefit mode may extend that period to a maximum of 30 working days where this is justified for reasons of the necessary intervention of third persons or entities in the quantification of the consolidated right. "
Two. A new Article 10a is inserted, with the following wording:
" Article 10a. Seniority of contributions in case of recovery or partial mobilisation of consolidated rights.
When partial payment of consolidated rights for contingencies or exceptional liquidity assumptions are made in the recused text of the Law on the Regulation of Pension Plans and Funds, approved by Royal Legislative Decree 1/2002 of 29 November, and in this regulation, or partial mobilizations of the said rights are made, the request of the participant shall include an indication concerning whether the consolidated rights that it wishes to receive or to mobilize correspond to contributions prior to or after 1 January 2007, if the there.
In the case of partial mobilizations, the consolidated rights to be mobilised shall be calculated in a proportional manner according to contributions prior to and after that date, when they exist, and the participant has not made the indication indicated in the preceding paragraph. "
Three. The last paragraph of Article 16 (a) is read as follows:
"The above is without prejudice to the possibility for financial institutions to make commitments to the revaluation of consolidated rights at a given date, in accordance with Article 77 of this Regulation."
Four. A point (k) is added to Article 18 with the following wording:
"k) Criteria for selecting the contributions from which the consolidated or economic rights derive in the case of partial or partial mobilizations."
Five. Article 34 (2) is amended and read as follows:
" 2. At least annually, the managing body of the pension fund in which the plan is integrated shall forward to each participant in the employment plans a certificate on the total of the contributions, direct or imputed, made in the calendar year and the value, at the end of the calendar year, of the total of their rights consolidated in the plan, distinguishing the part corresponding to contributions made before 1 January 2007, if any.
The specifications may provide for shorter time limits than previously indicated for the submission of such information.
The certification referred to in this paragraph shall contain a summary of the determination of the contingencies covered, the purpose of the contributions and the rules of incompatibility on those contingencies.
Where appropriate, the certification shall indicate the amount of the excess contribution of the participant warned against the established maximums and the duty to communicate the means for the refund of the refund. "
Six. The third subparagraph of Article 35 (3) is amended, which is read as follows:
" To this end, the participant must submit the request for mobilization that must include the identification of the plan and the pension fund of origin from which the mobilization will be carried out, as well as, where appropriate, the amount to be mobilized and an authorization of the participant to the managing entity or insurer of destination so that, in its name, it can request the management of the fund of origin to mobilize the consolidated rights, as well as all the financial and fiscal information necessary to realize it. In the event of a partial mobilisation of consolidated rights, the request of the participant shall include indication as to whether the consolidated rights that it wishes to mobilise correspond to contributions prior to or after 1 January 2007, if any. The consolidated rights to be mobilised shall be calculated on a proportional basis according to contributions prior to and after that date, where they exist, and the participant has not made the above indication. '
Seven. Article 48 (1) (h) is amended, which is worded as follows:
" (h) Absence of a guarantee of return with a warning of the possibility of incurring losses and reference, where appropriate, to the existence of an external financial guarantee, granted by a financial institution directly to the pension scheme or to the unit-holders individually.
In case the guarantee has been directly awarded to the plan, reference shall be made to the plan with indication of the aspects referred to in the third paragraph of Article 77, noting further that the guarantee is payable to the guarantor entity, which is obliged to satisfy it directly to the pension plan in which it will be integrated as the largest value of the consolidated rights of the unit-holders. "
Eight. Article 48 (1) (k) and (m) shall be amended as follows:
" k) Forms of recovery and procedure for the application of the benefits by the beneficiary, with special reference to the date of valuation of the consolidated rights, as well as, in the case of partial charges, the criterion for selecting the contributions from which the consolidated or economic rights are derived, without prejudice to the provisions of Article 10a of this regulation, and, where appropriate, the possibility of securing the benefits with the identification of the name and address of the insurance institution.
m) Mobility of the consolidated rights and indications on the calculation of the consolidated right, conditions, procedures and time limits for the mobilisation of consolidated or economic rights, indicating the date of valuation of the rights to these effects, as well as, in the case of partial mobilizations, the criterion for selecting the contributions from which the consolidated or economic rights are derived, without prejudice to the provisions of Article 10a of this regulation. "
Nine. Article 48 (4), which is worded as follows, is amended as follows:
" 4. On an annual basis, the managing body of the pension fund shall forward to each participant in the individual plans a certificate on the total of the contributions made in the calendar year and the value, at the end of the calendar year, of the total of its consolidated rights, distinguishing the part corresponding to contributions made before 1 January 2007, if any.
The certification referred to in this paragraph shall contain a summary of the determination of the contingencies covered, the purpose of the contributions and the rules of incompatibility on those contingencies.
Where appropriate, the certification shall indicate the amount of the excess of the contribution and the duty to communicate the means for the payment of the refund. "
Ten. Article 48 (9) is read as follows:
" 9. The specifications of the pension plans of the individual system may be modified by agreement of the sponsor, after communication by the sponsor or by the relevant managing body or depositary, with at least one month in advance of the date of effect, to the members and beneficiaries.
Changes in the investment policy of the fund in which the plan is integrated and the management and deposit fees applied, the establishment and modification of the guarantees provided for in Article 77, as well as the arrangements for the replacement of the pension fund manager or depository and the changes of those entities by merger or division, shall be notified to the members and beneficiaries at least one month in advance of the date of effect. "
Once. The second subparagraph of Article 50 (4) is amended, which is read as follows:
" To this end, the participant must submit the request for mobilization that must include the identification of the plan and the pension fund of origin from which the mobilization will be carried out, as well as, where appropriate, the amount to be mobilized and an authorization of the participant to the managing entity or insurer of destination so that, in its name, it can request the management of the fund of origin to mobilize the consolidated rights, as well as all the financial and fiscal information necessary to realize it. In the event of a partial mobilisation of consolidated rights, the request of the participant shall include indication as to whether the consolidated rights that it wishes to mobilise correspond to contributions prior to or after 1 January 2007, if any. The consolidated rights to be mobilised shall be calculated on a proportional basis according to contributions prior to and after that date, where they exist, and the participant has not made the above indication. '
Twelve. Article 65 is amended as follows:
" The control commission of an employment pension scheme attached to a fund may agree to channel resources from its position account to other employment pension funds authorised to operate as open, under the following conditions:
(a) The investor employment pension scheme shall maintain a holding account in the open employment fund which may be mobilised to another open, or reintegrable, employment fund in the fund in which the investment plan is integrated.
It is up to the control committee of the open fund to accept the opening of such a participation account, and may delegate such a faculty to one of its members, a subcommittee or its manager.
(b) The plan's participation account in the open fund shall be considered an asset of the employment fund to which the investor plan is assigned, individually assigned to the investor's position account.
In the asset of the fund to which the investor plan is attached, the plan's participation account shall not be applicable to the investment diversification limits provided for in this regulation. As regards the management and deposit fees attributable to that account, the effect of Article 84 shall be as laid down in Article 84.
The open employment fund will not be able to guarantee a minimum return on the participation of an investor plan.
c) Instrumentation of the collection of contributions and payment of benefits of the plan will be carried out in the fund to which it is attached, corresponding to its management the certification and mobilization of the consolidated rights, the recognition and payment of the benefits and the quantification of the account of the position of the plan.
(d) The management of the open fund shall inform the control committee of the investor employment plan of the changes in the rules of operation and the investment policy of the open fund, and with the frequency to be agreed, which shall be at least annually, it shall inform the committee on the state and movements of the holding account and on the investments of the open pension fund. In addition, the management of the open pension fund shall provide the information to the manager of the fund to which the investor plan is attached on a daily basis. '
Thirteen. A new Article 68a is inserted, with the following wording:
" Article 68a. Channelling of resources from an individual or associate pension plan attached to a fund to other open pension funds.
The promoter of an individual pension plan or the control commission of an associated pension scheme attached to a fund may agree to channel resources from its position account to other personal pension funds authorised to operate as open, under the following conditions:
(a) The individual or associated investor pension plan shall maintain an account of participation in the open personal fund which may be mobilised to another open, or reintegrable, personal fund in the fund in which the investment plan is integrated.
It is up to the control committee of the open fund to accept the opening of such a participation account, and may delegate such a faculty to one of its members, a subcommittee or its manager. In the absence of an open-fund control commission, that power is for the managing body.
(b) The plan's participation account in the open fund shall be considered an asset of the personal fund to which the investor plan is assigned, individually assigned to the investor's position account.
In the asset of the fund to which the investor plan is attached, the plan's participation account shall not be applicable to the investment diversification limits provided for in this regulation. As regards the management and deposit fees attributable to that account, the effect of Article 84 shall be as laid down in Article 84.
The open personal fund will not be able to guarantee a minimum return on the participation of an investor plan.
c) Instrumentation of the collection of contributions and payment of benefits of the plan will be carried out in the fund to which it is attached, corresponding to its management the certification and mobilization of the consolidated rights, the recognition and payment of the benefits and the quantification of the account of the position of the plan.
The management of the open fund shall inform the sponsor of the individual pension plan or the control committee of the associated investor plan of the changes in the operating rules and the investment policy of the open fund, and with the frequency agreed upon, which shall be at least annually, inform the sponsor or commission of control of the plan on the state and movements of the holding account and on the investments of the open pension fund. In addition, the management of the open pension fund shall provide the information to the manager of the fund to which the investor plan is attached on a daily basis. '
Fourteen. The last paragraph of Article 69 (4) is read as follows:
"In the case of pension schemes for which a financial institution has offered an external guarantee under the terms set out in Article 77 of this Regulation, this circumstance shall be expressly collected in the comprehensive statement of the principles of the investment policy."
Fifteen. Article 71 (3) is amended as follows:
" 3. Pension funds shall be valued on a daily basis at market prices for their derivatives transactions. However, in those pension schemes where there is a guarantee granted by a financial institution whose investment policy is intended to achieve a specific objective of profitability in which derivative financial instruments are used, it shall be allowed during the initial marketing period, which shall not be more than three months, to be allowed not to value positions in derivative financial instruments, provided that the investment policy statement of the pension fund in which the pension plan is integrated is provided. '
Sixteen. Article 76 is amended as follows:
" The control commission of an employment or personal pension fund may agree to investment in pension funds, of the same category, authorised to operate as open under the following conditions:
(a) The investor pension fund shall maintain a holding account in the open fund which may be mobilised to another open pension fund. The same fund may maintain a holding account in more than one open fund.
It is up to the control committee of the open fund to accept the opening of that account, and may delegate such faculty to a subcommittee or the manager of the fund. In the absence of an open-fund control commission, that power is for the managing body.
(b) The participation in the open fund may not be allocated to a plan or plans determined by those assigned to the investor fund, but shall be considered as an asset of the collective investor pension fund and in proportion to all the plans attached to that fund.
In the asset of the investor pension fund, the account of participation in an open fund will not apply to the investment diversification limits of the pension funds provided for in this regulation, in relation to the equity of the investor fund. As regards the management and deposit fees charged to that account, the provisions of Article 84 shall apply.
The open fund will not be able to guarantee a minimum return on the participation of investor pension funds.
c) In the investor fund, the collection of contributions and payment of benefits from the plans attached to the fund will be used, corresponding to the management of the certification and mobilization of the consolidated rights, the recognition and payment of the benefits and the quantification of the position accounts of the plans attached.
(d) The management of the open fund shall inform the supervisory committee of the investor fund of the changes in the rules of operation and the investment policy of the open fund, and at the same time as it is agreed, which shall be at least annually, it shall inform that committee on the state and movements of the holding account and on the investments of the open pension fund. In addition, the management of the open fund will provide information to the investor fund manager on a daily basis. '
seventeen. Article 77 is amended as follows:
" Financial institutions, in the terms permitted by their specific rules, may provide guarantees, including those agreed upon by insurance contracts, relating to the acquisition of a certain liquidative value or of the consolidated right at a specified date in the individual pension plans or defined contribution partners.
The aforementioned guarantees may be granted to the pension plan directly through a guarantee document subscribed by the guarantor entity with the plan, or to the individual members in a guarantee document subscribed by the guarantor entity with the participant. Where the guarantee is instructed by insurance contract, the relevant life insurance policy shall be formalised by the insurer with the plan in the case of a guarantee granted to the pension scheme directly or, where appropriate, by an individual insurance policy subscribed by the insurer with the participant if it is a guarantee granted to the unit-holders individually.
In such a guarantee document or insurance policy, the identity of the guarantor entity, the object of the guarantee and the profitability or parameter of reference, the plan to which it relates, the duration, conditions of maintenance and possible causes of suspension or termination of the guarantee, the compensation to be given to the plan or, where appropriate, to members and beneficiaries to whom it is granted individually in the event of suspension or unilateral termination of the same, the circumstances, time and form in which its execution may be required, shall be specified clearly and in detail. the amount to be compensated or paid by the financial institution and, where applicable, quantitative limits of the guarantee. If the information refers to a theoretical return implicit in the transaction, it shall be informed of its calculated equivalent on an annual basis.
In the case of guarantees granted to the participants individually, in the guarantee document, from which a copy will be submitted to the participant, or in the individual insurance policy, it will be expressly stated that the guarantee is payable to the guarantor entity, which is obliged to satisfy it directly to the user, without being able to be required or considered as the provision of the pension plan, contribution to the plan or increase of the rights consolidated in the plan, being that guarantee that is foreign and independent of the rights and obligations arising from the membership of the pension plan.
In the case of guarantees granted to the pension plan directly, in the guarantee document or the corresponding insurance policy, it will be expressly stated that the guarantee is payable to the guarantor entity, which is obliged to satisfy it directly to the pension plan in which it will be integrated as greater value of the consolidated rights of the members. In accordance with Articles 48.1 and 101.2, where there is an external guarantee granted to the plan directly, the key data document for the participant in the case of individual plans, or the accession bulletin in the case of the associated plans, shall include indications on the aspects referred to in the third paragraph of this Article.
With respect to the same pension plan, the guarantees provided for in this article may be granted by the same or different financial institutions.
The aforementioned guarantees, both those established between the guarantor entity and the plan, and those granted directly to the unit-holders, will not be subject to the investment actions of the control commissions or the manager of the fund or of third entities with whom the management of the pension fund's investments has been contracted, without prejudice to the concerts on the part between the guarantor and those.
Pension fund management entities will not be able to assume the guarantees referred to in this article. The managing bodies which, in accordance with the provisions of Article 80, have the nature of insurance undertakings, which may assume such guarantees, are exempted.
Pension plans or funds in respect of which the guarantor entity offers its guarantee may only contain in its name the term "guarantee", "guaranteed", "safe", "insured" or other equivalent when the amount of the guarantee covers the due date of the guarantee, at least the full amount of the guarantee. In no case shall the guarantees provided for in this Article assume the risk-taking or guarantee of benefits determined by the pension scheme or the corresponding pension fund.
All of the above is without prejudice to the provisions of Law 34/1988 of 11 November, General of Advertising, and provisions of development. "
Eighteen. Article 80 (2) is amended and read as follows:
" 2. For the purposes of paragraph (a) of Article 78.1, for the coverage of the initial minimum of EUR 600,000 and additional resources required in the light of the assets of the funds managed, the insurers may compute the capital or mutual fund disbursed, the legal reserve, the revaluation reserves of assets by application of legal standard, the share issue premium, the voluntary reserves and the part of the credit balance of the profit and loss account which is intended to increase voluntary reserves.
In any case, the demand for own resources for the activity as a pension fund manager is considered to be in addition to the basic own funds requirements required for the exercise of the insurance activity.
However, it will not be necessary to increase the amount of the insurance institution's share capital above the amount required in its specific rules provided that it has additional basic own funds to those required for its insurance activity in sufficient amount to cover the requirements of Article 78.1 of this Regulation. "
nineteen. Article 85a is amended as follows:
" 1. The managing entities, the depository entities, the pension plan marketing entities, the management and management positions in all of them, their employees, agents and proxies, as well as the members of the control commissions of the plans and the pension funds will be subject to the rules of conduct provided for in this regulation and in its development regulations.
2. The managing entities, the depository institutions, the different entities of a managing body that manage the assets of a pension fund and the trading entities shall draw up an internal rules of conduct, which shall be enforced, which shall regulate the performance of their administrative bodies, employees and representatives.
When the entities referred to in the previous paragraph already have, in application of other regulations, the obligation to draw up an internal rules of conduct, they will be able to integrate in this the specific rules regarding their activity in the field of the plans and pension funds.
3. The internal rules of conduct must be inspired by the rules of conduct of the securities markets. The Minister of Economy and Competitiveness is enabled to develop and adapt the provisions of these rules to the specific specialties of the activity in the area of pension plans and funds, on a proposal from the Directorate-General for Insurance and Pension Funds.
Specifically, the internal rules of conduct shall establish internal control procedures that demonstrate that investment decisions in favour of a particular pension or client fund are taken prior to the transfer of the order to the intermediary. It shall also have criteria, objectives and pre-established criteria for the distribution or breakdown of transactions involving various pension funds or clients, which ensure equity and non-discrimination between them.
4. The internal rules of conduct of the managing body and the depository institution as provided for in this Regulation shall be sent to the Directorate-General for Insurance and Pension Funds together with the application for administrative authorisation in the case of the managing body and, at the time of the application for registration in the special register of depositary entities, in the case of depository entities. Such internal rules of conduct shall be made available to the control committees of the pension funds managed or in respect of which the deposit service is provided.
5. Failure to comply with the provisions of the internal rules of conduct may result in the imposition of the corresponding administrative penalties, in the terms provided for in the recast of the Law on the Regulation of Pension Plans and Funds. "
Twenty. Article 101 (2) (f) is amended, which is worded as follows:
" (f) Benefits scheme, potential beneficiaries, forms of recovery and degree of insurance or guarantee of benefits, with the identification, where appropriate, of the name and registered office of the insurance or guarantor entity.
Procedure for the application of the benefits by the beneficiary, with particular reference to the date of valuation of the consolidated rights for the purpose of payment of benefits, as well as, in the case of partial charges, the criterion for selecting the contributions from which the consolidated or economic rights are derived, without prejudice to the provisions of Article 10a of this Regulation. "
Twenty-one. Article 101 (2) (i) is amended as follows:
"(i) Indications on the calculation of the consolidated right, conditions, procedures and time limits for the mobilisation of consolidated or economic rights, indicating the date of valuation of the rights for these purposes, as well as, in the case of partial mobilizations, the criterion for selecting the contributions from which the consolidated or economic rights are derived, without prejudice to the provisions of Article 10a of this Regulation."
Twenty-two. A new point 4. in point (m) of Article 101 (2) is added, with the following wording:
" 4. In the case of the defined contribution pension plans it will be expressly highlighted that they do not guarantee profitability, warning of the possibility of incurring losses. However, where the associated pension scheme has an external financial guarantee as provided for in Article 77, which is awarded to the pension scheme directly, the accession bulletin shall contain a reference to the pension plan indicating the aspects referred to in the third paragraph of that Article 77 and indicating that the guarantee is payable to the guarantor entity, which is obliged to satisfy it directly to the pension scheme in which it is integrated as the largest value of the consolidated rights of the unit-holders. In the case of a guarantee given to the unit-holders, the notice of accession may contain a reference to it, indicating that the details and conditions of the guarantee are set out in separate individual contracts. "
Twenty-three. Article 101 (3) (3) (h) is amended as
:" 3. It is expressly highlighted that the individual pension plans do not guarantee profitability, warning of the possibility of incurring losses. However, where the pension scheme has an external financial guarantee as provided for in Article 77, which is awarded to the pension scheme directly, the accession bulletin shall include reference to the pension plan without prejudice to the information on that guarantee in the document with the data essential for the participant in accordance with the provisions of Article 48. In the case of a guarantee given to the unit-holders, the notice of accession may refer to it, indicating that the details and conditions of the guarantee are set out in separate individual contracts. "
Twenty-four. The third paragraph of the fifth additional provision is amended, which is read as follows:
" To this end, the insured person shall submit the application for mobilisation which shall include the identification of the insured plan of origin from which the mobilisation and the insurance institution of origin shall be carried out, as well as, where appropriate, the amount to be mobilised and an authorisation from the taker or beneficiary to the insurance undertaking or the managing body of destination so that, on its behalf, it can request the insurance institution of origin to mobilise the mathematical provision, as well as all the financial and tax information necessary to carry out the same. In the event of a partial mobilisation of economic rights, the insured person's application shall include an indication of whether the economic rights to be mobilised correspond to premiums prior to or after 1 January 2007, if any. The economic rights to be mobilised shall be calculated on a proportional basis according to premiums prior to and after that date, where they exist, and the insured person has not made the indication indicated above. '
Twenty-five. The third paragraph of the sixth additional provision, which is worded as follows, is amended:
" To this end, the insured person must accompany his application with the identification of the business social security plan and the insurance institution of origin from which the mobilization will be carried out, as well as, where appropriate, the amount to be mobilized and an authorization from the insured to the insurer or managing entity of destination so that, on his behalf, he can request the insurance company of the business social security plan of origin to mobilize the economic rights, as well as all the financial and fiscal information necessary to carry it out. In the event of a partial mobilisation of economic rights, the insured person's application shall include an indication of whether the economic rights to be mobilised correspond to premiums prior to or after 1 January 2007, if any. The economic rights to be mobilised shall be calculated on a proportional basis according to premiums prior to and after that date, where they exist, and the insured person has not made the indication indicated above. '
Twenty-six. The additional seventh provision is worded as follows:
" Additional provision seventh. Homogenisation of reporting obligations.
1. For the purpose of improving and homogenising information prior to recruitment, as well as periodic information, the Minister for Economic Affairs and Competitiveness shall establish the reporting obligations for members, policyholders and mutualists in supplementary social security instruments which reduce the general tax base of the Income Tax on the Physical Persons, according to Article 51 of Law 35/2006 of 28 November of the Income Tax on the Physical Persons and the partial modification of the laws of the Tax on Societies, on the Income of non-residents and on the Heritage, in so far as it is not regulated in higher-ranking rules or the European Union of direct application.
2. Without prejudice to the provisions of the preceding paragraph, the insurance institutions shall, on an annual basis, transmit to each taker of the insured forecast plans a certificate on the total premiums paid in each calendar year and the value, at the end of the calendar year, of the profit contribution assigned to it, where appropriate, and of its mathematical provision distinguishing the share of premiums paid before 1 January 2007, if any.
If the contract has affected investments it must be expressly and prominently advised that there may be a possible difference between the market value of the corresponding assets and the amount of the mathematical provision for the case of mobilisation or early provision.
When applicable, the certification shall indicate the amount of excess premiums warned over the legally established financial limit and the duty to communicate the medium for the refund of the refund.
3. The social security mutual societies shall also, on an annual basis, send each mutualist a certificate containing the content of the insurance contracts referred to in Article 51.2 of Law 35/2006 of 28 November.
However, the annual information to the mutualists concerning insurance contracts which implement pension commitments, as referred to in point 3 (a) of that Article 51.2, shall be governed by the provisions of the Regulation on the implementation of the pension commitments of undertakings with the workers and beneficiaries, approved by Royal Decree 1588/1999 of 15 October 1999. "
Twenty-seven. A new eighth additional provision is added, with the following wording:
" Additional disposal octave. Seniority of contributions in the event of recovery or partial mobilisation and inembargability in pension schemes and in supplementary social provision schemes similar to pension schemes.
1. Where partial recovery of economic rights by contingencies or by the liquidity assumptions regulated in the recast of the Law on the Regulation of Pension Plans and Funds and in this Regulation is made, or partial mobilizations of the said rights are carried out, the application of the insured person shall include an indication as to whether the economic rights that he wishes to receive or to mobilize correspond to premiums prior to or after 1 January 2007, if any. The economic rights to be mobilised shall be calculated on a proportional basis according to premiums prior to and after that date, where they exist, and the insured person has not made the indication indicated above.
In the event that the insured, mutualist or beneficiary is the holder of rights that are susceptible to an embargo on several pension plans, insured pension plans and business social security plans, the rights in pension plans of the individual and associated system and insured pension plans will first be embargoed, and the rights in employment pension plans, plans of business social security plans. "
Twenty-eight. A new transitional provision is introduced, seventh, with the following wording:
" Transient disposition seventh. Mobilizations of consolidated rights corresponding to contributions made to pension plans and similar supplementary social welfare systems before 1 January 2016.
In the information to be sent by the entities of origin to the entities of destination in the mobilizations of consolidated or economic rights that are requested by the members or policyholders, it will not be necessary to include details of the amounts and dates of each of the contributions made or premiums paid before 1 January 2016, although, it must be reported the amount of the consolidated or economic rights object of transfer corresponding to them, as well as of the part of the same that corresponds to contributions made before 1 January 2007. "
Final disposition fifth. Amendment of Royal Decree 1317/2008 of 24 July approving the Accounting Plan of the insurance institutions.
Royal Decree 1317/2008 of July 24, approving the Accounting Plan for insurance and reinsurance entities, is amended in the following terms:
One. The title of the rule is worded as follows:
"Royal Decree 1317/2008, of July 24, approving the Accounting Plan of the insurance and reinsurance entities and rules on the formulation of the consolidated annual accounts of the groups of insurance and reinsurance entities."
Two. Article 2 is worded as follows:
" The first five parts of the accounting plan of insurance and reinsurance entities shall be mandatory for all Spanish insurance and reinsurance entities covered by Chapter I of Title II of Law 20/2015 of 14 July 2015 on the management, supervision and solvency of insurance institutions and, whatever form they adopt in accordance with Article 27, as well as for branches of insurance institutions and reinsurers domiciled in third countries, not members of the Economic Area. European, established in Spain.
By way of derogation from the preceding paragraph, the fourth and fifth part shall be binding only in relation to the development of groups, sub-groups and three-digit accounts, as well as their definitions and accounting relationships.
In the event that the entity needs to use three-digit accounts not provided for in this Plan, they will be used, if any, in the General Accounting Plan. Social welfare insurance funds which grant social benefits must enable the necessary accounts and sub-accounts within the 65 sub-group to record the movement of the operations to which these social benefits are to be paid. Both the costs incurred in the granting of these social benefits, which will not be reclassified, as well as the income, must be charged to the non-technical account.
The sixth part of the Plan shall apply to the groups of insurance and reinsurance entities defined in Article 84.3 of the Law on the Management, Supervision and Solvency of Insurance Entities and Reinsurers, when in accordance with the provisions of Article 43a of the Trade Code, they do not apply the international financial information standards adopted by the European Union regulations. "
Three. The second paragraph of Article 4 is read as follows:
"For these purposes, the contingencies provided for in Article 44 of Law 20/2015 of 14 July 2015 for the management, supervision and solvency of insurance and reinsurance undertakings, for social security mutual societies, shall be treated as the activities referred to in the preceding paragraph, in accordance with Articles 15, 16 and 19 of the Social Welfare Mutual Regulation, approved by Royal Decree 1430/2002 of 27 December."
Four. The fifth transitional provision is deleted. Rules for the formulation of accounts of the consolidable groups of insurance institutions.
Five. Paragraph 4 of the second part of the Plan of registration and assessment of the second part of the plan is worded as follows:
" 4. Fair value of the buildings.
For the purposes of this and subsequent rules, the fair value of the property shall be the value of the valuation granted by an approved valuation entity for the valuation of assets in the mortgage market, in accordance with the rules for the valuation of real estate and certain rights for certain financial purposes approved by the Ministry of Economy and Competitiveness. "
Six. The eighth subparagraph of paragraph 2.7 of the Standard of Registration and Eighth Assessment of Part Two of the Plan is worded as follows:
" An isolated event is understood to be outside the control of the entity, among others, the following events:
a) A significant deterioration in the issuer's creditworthiness.
b) Changes in the requirements of economic capital.
(c) Policy rescues that exceed the estimates of bailouts made by the institution based on projections that take into account their experience in the last 5 financial years and the reality of observable financial variables in the markets. "
Seven. Paragraphs 1 and 2 of the Standard of Registration and Valuation 9. Part Two of the Plan are worded as follows:
" 1. General framework for insurance contracts.
Any contract qualified as a insurance contract under the Law on the Management, Supervision and Solvency of Insurance and Reinsurance Entities, the Insurance Contract Law and other development provisions shall be accounted for in accordance with the provisions of the fifth part of this Plan for insurance contracts.
2. Technical provisions.
The valuation of the technical provisions shall be made in accordance with the provisions of the fifth additional provision of Royal Decree 1060/2015 of 20 November of the management, supervision and solvency of insurance and reinsurance entities. The resulting amount shall not be modified by the different valuation criteria applicable to financial instruments.
Taking into account the fifth part of this Plan, the stabilization reserve will be recognized in the net worth. The amount shall be increased annually, in the amount required by the rules for the management and supervision of private insurance, from the net worth. Its amount may be provided only to compensate for deviations from the claims of the exercise of its own retention. The security surcharge shall not be the subject of an accounting period. '
Eight. Rule 1 of Part Three of the Plan is worded as follows:
" 1. Documents that make up the annual accounts.
Annual accounts comprise the balance sheet, profit and loss account, changes in net worth, cash flow and memory status. These documents form a unit and must be drawn up in accordance with the provisions of Article 83 of Law 20/2015 of 14 July 2015 on the supervision and solvency of insurance and reinsurance entities and in this Plan, in order to show the true image of the assets, the financial situation and the results of the institution. "
Nine. Paragraph 5 of Rule 2 (2) of Part Three of the Plan is worded as follows:
" 5. Entities operating simultaneously in the life class and in the different classes of life shall keep separate accounts for both types of activity, with reference to the following concepts:
a) Technical accounts of profit and loss.
(b) Eligible own funds for the coverage of the Minimum Capital Requirement.
(c) Technical provisions and their investment. "
Ten. The first paragraph of Rule 9 (9) of Part Three of the Plan is worded as follows:
" Memory, complete, comprehensive and comments on the information contained in the other documents that make up the annual accounts. It shall be made taking into account that: "
Once. Paragraph V). A. 24.7 of the Annual Accounts Models of Part Three of the Plan is worded as follows:
" 7. In the event that the institution belongs to a group of insurance and reinsurance entities, as provided for in Article 84.3 of Law 20/2015 of 14 July 2015, for the supervision and solvency of insurance and reinsurance entities, the name of the group and that of the entity required to present the information for statistical and accounting purposes in the Directorate-General for Insurance and Pension Funds shall be indicated, the description of the companies included for these purposes within the scope of the consolidation, the social object and the consolidation methods applied to each of these companies.
In addition, in the event that the entity belongs to a group subject to supervision, as provided for in Article 132 of Law 20/2015 of 14 July, the name of the group and the entity required to present the information for supervisory purposes in the General Directorate of Insurance and Pension Funds, the scope of the group supervision, the social object of the entities included therein, the method of calculation of the group's solvency and the valuation method applied to each entity in the group shall be indicated.
Also, information on the subjection of the group to the provisions of Law 5/2005, of 22 April, of supervision of financial conglomerates and amending other laws of the financial sector and in Royal Decree 1332/2005, of 11 November, which develops the previous one, will be provided, as the circumstances provided for in the aforementioned rules are in the same way as financial conglomerate or mixed group non-consolidated. "
Twelve. Paragraphs (V). A. 27 of the Annual Accounts Models of Part Three of the Plan, referred to the State of Coverage of Technical Provisions and V) A. 28 of the Annual Accounts Models of Part Three of the Plan referred to the State of the solvency margin and the guarantee fund are deleted.
Thirteen. The first subparagraph of point (V). B of the Annual Accounts Models of Part Three of the Plan is worded as follows:
" In abbreviated memory, the information breakdowns required in the sections below are included in the normal memory content:
" 1. Activity of the entity.
2. Basis for the presentation of the annual accounts.
3. Application of results.
4. Rules for registration and valuation.
8. Commissions activated and other acquisition expenses activated.
11. Foreign Currency.
13. Revenue and expenditure.
14. Provisions and contingencies.
15. Information on the environment.
16. Long-term remuneration to staff.
17. Transactions with payments based on equity instruments.
18. Grants, donations and legacies.
19. Business combinations.
20. Joint ventures.
21. Assets for sale and discontinued operations.
22. Post-closure events.
23. Transactions with related parties.
24. Other information.
25. Segmented information. ""
Fourteen. A sixth part is added to the Plan with the title Rules on the formulation of the consolidated annual accounts of insurance and reinsurance group groups, with the following content:
" SIXTH PART
Rules on the formulation of the consolidated annual accounts of insurance and reinsurance group groups
The formulation of the consolidated annual accounts of the insurance and reinsurance groups, as defined in Article 84.3 of Law 20/2015 of 14 July 2015, of the supervision and solvency of insurance and reinsurance entities, where the international financial reporting standards adopted by the European Union regulations are not applied, shall be governed by the rules contained in the Code of Commerce, in Royal Decree 1159/2010 of 17 September 2010, by the European Union. the rules for the formulation of consolidated annual accounts are approved, and in the provisions that develop it, with the specific features listed below:
1. References to the rules for the registration and valuation of the PGC have to be understood as being equivalent to the equivalent registration and valuation rules of the PCEA.
2. Value homogenisation.
When non-insurance entities are integrated subject to different accounting rules, they will be maintained without the need for their homogenisation. In the case of subsidiaries not belonging to the European Economic Area, it shall not be necessary to harmonise in advance the items corresponding to the technical provisions of those companies.
3. Eliminations.
Eliminations that correspond to reciprocal revenue and expenses and credits and debits from internal insurance operations will be performed.
4. Structure of the consolidated annual accounts.
The structure of the consolidated annual accounts shall be adjusted as set out in the Annex.
5. Consolidated memory will also collect the following information:
a) Reinsurance and co-insurance operations.
The reinsurance and co-insurance operations of the group of insurance and reinsurance entities shall be reported, specifying the results that have occurred. In particular, information will be provided on:
-Revenue and technical expenses for accepted reinsurance and reinsurance transactions.
-Other non-technical income and expenses.
-Salts for accepted and ceded reinsurance operations.
-Balance by coinsurance operations.
-Repositories constituted by accepted reinsurance and deposits received by ceded reinsurance and regressed.
-Technical Provisions for Reinsurance Accepted or Transferred.
b) Information on the consolidated balance sheet.
When the consolidated balance sheet companies to which the method of global integration has been applied on whose individual balance sheets are listed as assets and liabilities other than those on the balance sheets of the insurance and reinsurance entities, shall be recorded, as appropriate, in the items "other assets" or "other liabilities" of the consolidated balance sheet of the group and on those accounts, the appropriate breakdown, as well as the information that is required under the Rules for the Form of Accounts, shall be provided in the memory. Consolidated Annual Reports approved by Royal Decree 1159/2010 of 17 September 2010.
c) Information on the consolidated profit and loss account.
Reclassifications in the consolidated profit and loss account.
When non-insurance entities or reinsurers are involved in the consolidation that are consolidated by global integration with the other insurance and reinsurance entities of the group, the reclassifications of income and expenses that are necessary for their inclusion in the profit and loss account under the name corresponding to their true nature from the point of view of the insurance activity shall be made. In respect of these reclassifications, the composition of the revenue and expenditure which has been affected by the reclassifications and the criteria followed for their performance, detailed information will be provided in the memory.
d) Other information:
The information required of the individual insurers in paragraphs 25 and 26 of the individual memory of this plan to the extent that it is applicable at the group level.
MODELS OF CONSOLIDATED ANNUAL ACCOUNTS OF INSURANCE AND REINSURANCE GROUP GROUPS
Consolidated Asset
A-1) Cash and other equivalent liquid media
A-2) Negotiating Portfolio
I. Equity instruments
II. Representative debt securities
III. Derivatives
IV. Other
3) Other financial assets at fair value with changes in profit and loss
I. Equity instruments
II. Representative debt securities
III. Hybrid instruments
IV. Investments on behalf of life insurance policyholders who take the risk of investment
V. Other
A. 4) Financial assets available for sale
I. Equity instruments
II. Representative debt securities
III. Investments on behalf of life insurance policyholders who take the risk of investment
IV. Other
A-5) Loans and receivables
I. Representative debt securities
II. Loans
1. Advances on policies
2. Loans to group entities and associates
a) Associated Entities
b) Multigroup entities
c) Other
3. Loans to other related parties
III. Deposits with credit institutions
IV. Deposits consisting of reinsurance accepted
V. Credit for direct insurance operations
1. Policyholders
2. Mediators
VI. Credit for reinsurance operations
VII. Credits for co-insurance operations
VIII. Required disbursements
IX. Other credits
1. Appropriations with the Public Administrations
2. Other credits
A-6) Investment to maturity portfolio
A-7) Coverage Derivatives
A-8) Participation of reinsurance in technical provisions
I. Provision for unconsumed premiums
II. Provision of life insurance
III. Provision for benefits
IV. Other technical provisions
A-9) Property and real estate investments
I. Tangible fixed assets
II. Real estate investments
A-10) Intangible fixed assets
I. Goodwill
1. Consolidation Trading Fund
2. Other
II. Economic rights derived from portfolios of policies acquired from mediators
III. Other intangible asset
A-11) Participations in societies placed in equivalence
I. Associated entities
II. Multi-group entities
A-12) Tax assets
I. Current tax assets
II. Deferred tax assets
A-13) Other assets
I. Assets and allowances for long-term remuneration to staff
II. Advance fees and other acquisition costs
III Periods
IV. Other assets
A-14) Assets and groups of assets for sale
TOTAL ACTIVE
Liabilities and consolidated net worth
A) STEP
A-1) Financial liabilities held for trading
A-2) Other financial liabilities at fair value with changes in profit and loss
3) Debits and items to be paid
I. Subordinated liabilities
II. Deposits received by transferred reinsurance
III. Debts for insurance operations
1. Debts with policyholders
2. Debt to mediators
3. Conditional debts
IV. Liabilities for reinsurance transactions
V. Claims for co-insurance operations
VI. Obligations and other marketable securities
VII. Debt to credit institutions
VIII. Debt for the preparatory operations of insurance contracts
IX. Other debts:
1. Debts to public administrations
2. Other debts to group entities and associates
a) Associated Entities
b) Multigroup entities
c) Other
3. Other debts
A-4) Coverage Derivatives
A-5) Technical Provisions
I. Provision for unconsumed premiums
II. Provision for ongoing risks
III. Provision of life insurance
1. Provision for unconsumed premiums
2. Provision for ongoing risks
3. Mathematical provision
4. Provision of life insurance when the risk of investment is assumed by the taker
IV. Provision for benefits
V. Provision for participation in benefits and for extortionate
VI. Other technical provisions
A-6) Non-technical visions
I. Provisions for taxes and other legal contingencies
II. Provision for pensions and similar obligations
III. Provision for payments for settlement agreements
IV. Other non-technical provisions
A-7) Tax liabilities
I. Current tax liabilities
II. Deferred tax liabilities
A-8) Rest of liabilities
I. Periods
II. Liabilities for accounting asymmetries
III. Fees and other costs of acquisition of the transferred reinsurance
IV. Other liabilities
A-9) Liabilities linked to assets held for sale
TOTAL PASO
B) NET EQUITY
B-1) Own funds
I. Capital or mutual fund
1. Written capital or mutual fund
2. (Capital not required)
II. Emission premium
III. Reserves
1. Legal and statutory
2. Reserve of stabilisation
3. Reserves in consolidated companies
4. Reserves in companies placed in equivalence
5. Other reservations
IV. (Own shares and the dominant company)
V. Results of previous exercises attributed to the dominant company
1. Remaining
2. (Negative results from previous exercises attributed to the dominant company)
VI. Other contributions from partners and mutualists
VII. Result of the exercise attributed to the dominant company
1. Consolidated profit and loss
2. (External partner gains and losses)
VIII. (Dividend to account and stabilization reserve to account)
IX. Other net worth instruments
B-2) Adjustments for value changes:
I. Financial assets available for sale
II. Hedging operations
III. Change and conversion differences
IV. Correction of accounting asymmetries
V. Companies placed in equivalence
VI. Other adjustments
B-3) Grants, donations, and legacies received
B-4) External partners
TOTAL NET EQUITY
TOTAL LIABILITIES AND EQUITY
Consolidated Profit and Loss Account
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I. NON-LIFE TECHNICAL ACCOUNT |
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I. 1 Premiums Charged to Exercise, Reinsurance Nets |
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) Accrued premiums |
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a1) Insurance direct |
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a2) Accepted Reinsurance |
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a3) Variation of Impairment Correction of Premiums Pending Collection (+ or-) |
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b) Primas |
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c) Change of provision for unconsumed premiums and for ongoing risks (+ or-) |
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c1) Direct insurance |
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) Variation of the provision for unconsumed premiums, ceded reinsurance (+ or-) |
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I. 2 Income from the material and investments fixed assets |
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) Income from real estate investments |
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b) Revenue from financial investments |
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c) Applications for impairment of material and investment assets impairment |
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c1) Of property and real estate assets and investments |
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c2) Of financial investments |
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d1) Property and investment property assets |
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d2) Financial investments |
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) Revenue from entities included in the consolidation |
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1) Participation in benefits from entities placed in equivalence |
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and2) Benefits for the disposal of holdings in societies placed in equivalence |
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3) Benefits for the disposal of holdings in consolidated societies |
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I. 3 Other Technical Income |
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4 Exercise Siniestrality, Reinsurance Neta |
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) Benefits and expenses paid |
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) Direct insurance |
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| a2) Reassured accepted |
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a3) Reassured (-) |
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b) Variation of provision for capabilities (+ or-) |
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| b1) Direct Secure |
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b2) Reassured accepted |
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b3) Reassured (-) |
|
| |||||||||||||||||
c) Imputable expenses to benefits |
|
| |||||||||||||||||
5 Variation of other Technical Provisions, Reinsurance nettes (+ or-) |
|
| |||||||||||||||||
I. 6 Participation in Benefits and Extornos |
|
| |||||||||||||||||
) Benefits and expenses for participation in benefits and extortions. |
|
| |||||||||||||||||
b) Variation of provision for participation in benefits and extortions (+ or-) |
|
| |||||||||||||||||
I. 7 Net Operating Expenses |
|
| |||||||||||||||||
| ) Expenses acquisition |
|
| ||||||||||||||||
b) Administration expenses |
|
| |||||||||||||||||
c) Commissions and participations in the transferred reinsurance and regressed |
|
| |||||||||||||||||
I. 8 Other Technical Expenses (+ or-) |
|
| |||||||||||||||||
) Variation of impairment by insolvencies (+ or-) |
|
| |||||||||||||||||
b) Variation of impairment of immobilized (+ or-) |
|
| |||||||||||||||||
c) Variation of claims by claims settlement agreements (+ or-) |
|
| |||||||||||||||||
) Other |
|
| |||||||||||||||||
I. 9 Expenditure on material and investment assets |
|
| |||||||||||||||||
|
| ||||||||||||||||||
|
|
|
| ||||||||||||||||
a2 Investment and financial account expenses |
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
| ||||||||||||||||||
b1) Depreciation of material and property assets and real estate investments |
|
| |||||||||||||||||
b2 Impairment of tangible fixed assets and of real estate investments |
|
| |||||||||||||||||
| b3) Impairment of financial investments |
|
| ||||||||||||||||
c) Losses from material and investment assets |
|
| |||||||||||||||||
|
| ||||||||||||||||||
| |||||||||||||||||||
) Costs of entities included in the consolidation |
|
|
|
| |||||||||||||||
1) Involvement in losses of entities placed in equivalence |
|
| |||||||||||||||||
2) Lost by the disposal of shareholdings in societies placed in equivalence |
|
| |||||||||||||||||
3) Lost by the Disposal of shareholdings in consolidated societies |
|
| |||||||||||||||||
10 Subtotal (Result of the Non-Life Insurance Technical Account) |
|
| |||||||||||||||||
II. LIFE INSURANCE TECHNICAL ACCOUNT |
|
| |||||||||||||||||
II.1 Premiums Charged to Exercise, Reinsurance Nets |
|
| |||||||||||||||||
) Accrued premiums |
|
| |||||||||||||||||
1) Direct insurance |
|
| |||||||||||||||||
2) Reassured accepted |
|
| |||||||||||||||||
3) Variation of the impairment correction of premiums pending collection (+ or-) |
|
| |||||||||||||||||
| |||||||||||||||||||
|
) Change of provision for unconsumed premiums and for ongoing risks (+ or-) |
|
| ||||||||||||||||
1) Direct insurance |
|
| |||||||||||||||||
2) Reassured accepted |
|
| |||||||||||||||||
d) Variation of provision for unconsumed premiums, ceded reinsurance (+ or-) |
|
| |||||||||||||||||
II.2 Income of the material and investments immobilized |
|
| |||||||||||||||||
) Income from real estate investments |
|
| |||||||||||||||||
b) Revenue from financial investments |
|
| |||||||||||||||||
) Applications for impairment of the |
|
| |||||||||||||||||
|
| ||||||||||||||||||
2) Financial investments |
|
| |||||||||||||||||
|
| ||||||||||||||||||
|
|
|
|
| |||||||||||||||
2) Financial investments |
|
|
|
|
| d | |||||||||||||
|
|
| |||||||||||||||||
1) Participation in benefits of entities placed in equivalence |
|
| |||||||||||||||||
2) Benefits of the disposal of holdings in societies placed in equivalence |
|
| |||||||||||||||||
3) Benefits for the disposal of holdings in consolidated societies |
|
| |||||||||||||||||
II.3 Income from secure investments in which the taker assumes the risk of the investment |
| ||||||||||||||||||
II.4 Other Technical Revenue |
|
| |||||||||||||||||
II.5 Exercise Siniestrality, Neta de Reassure |
|
| |||||||||||||||||
) Benefits and expenses paid |
|
| |||||||||||||||||
|
| ||||||||||||||||||
2) Reassured accepted |
|
| |||||||||||||||||
3) Reassured (-) |
| ||||||||||||||||||
) Variation of provision for capabilities (+ or-) |
|
| |||||||||||||||||
1) Direct insurance |
|
| |||||||||||||||||
2) Reassured accepted |
| ||||||||||||||||||
3) Reassured (-) |
|
| |||||||||||||||||
c) Imputable expenses to capabilities |
|
| |||||||||||||||||
| II.6 Variation of Other Net Technical Provisions of Reinsurance (+ or -) |
|
| ||||||||||||||||
) Life Insurance Provisions |
|
| |||||||||||||||||
1) Direct insurance |
|
| |||||||||||||||||
2) Reassured accepted |
|
| |||||||||||||||||
3) Reassured (-) |
|
| |||||||||||||||||
b) Provisions for life insurance when the investment risk is assumed by the insurance takers |
|
| |||||||||||||||||
c) Other technical provisions |
|
| |||||||||||||||||
II.7 Participation in Benefits and Extornos. |
|
| |||||||||||||||||
) Benefits and expenses for participation in benefits and extortions |
|
| |||||||||||||||||
b) Variation of the provision for participation in benefits and extortions (+ or-) |
|
| |||||||||||||||||
II.8 Net Operating Expenses |
|
| |||||||||||||||||
) Acquisition expenses |
|
| |||||||||||||||||
b) Administration expenses |
|
| |||||||||||||||||
c) Ceded and regressed reinsurance commissions and units |
|
| |||||||||||||||||
II.9 Other Technical Expenses. |
|
| |||||||||||||||||
) Variation of impairment by insolvencies (+ or-) |
|
| |||||||||||||||||
b) Variation of impairment of immobilized (+ or-) |
|
| |||||||||||||||||
c) Other |
|
| |||||||||||||||||
II.10 Material and investment assets expense |
|
| |||||||||||||||||
) Material and investment management expenses |
|
| |||||||||||||||||
1) Expenses of property and real estate assets |
|
| |||||||||||||||||
2) Investment and financial account expenses |
|
| |||||||||||||||||
b) Corrections of value of tangible and investment assets |
|
| |||||||||||||||||
|
| ||||||||||||||||||
2) Impairment of property and real estate assets |
|
| |||||||||||||||||
3) Impairment of financial investments |
|
| |||||||||||||||||
c) Losses from material and investment assets |
|
| |||||||||||||||||
1) Property and investment property assets |
|
|
| ||||||||||||||||
|
|
|
|
| |||||||||||||||
1) | |||||||||||||||||||
|
| ||||||||||||||||||
2) Losses from the disposal of equity stakes in societies placed in equivalence |
|
| |||||||||||||||||
3) Losses from the disposal of shares in consolidated societies |
|
| |||||||||||||||||
II.11 Insurance-affected investment expenses in which the taker assumes the risk of the investment |
|
| |||||||||||||||||
II.12 Subtotal. (Life Insurance Technical Account Result) |
|
| |||||||||||||||||
III. NON-TECHNICAL ACCOUNT |
|
| |||||||||||||||||
III.1 Income from tangible fixed assets and investments |
|
| |||||||||||||||||
) Income from real estate investments |
|
| |||||||||||||||||
|
| ||||||||||||||||||
c) Applications for impairment of material and investments impairment |
|
| |||||||||||||||||
1) | c1 | c) | |||||||||||||||||
2) |
|
|
| ||||||||||||||||
| d) Benefits in performing the material and investment assets |
|
| ||||||||||||||||
1) |
|
| |||||||||||||||||
2) Financial investments |
|
| |||||||||||||||||
) Revenue of entities included in the consolidation |
|
|
| ||||||||||||||||
and1) Participation in benefits of entities placed in equivalence |
|
| |||||||||||||||||
2) Benefits for the disposal of equity holdings in societies placed in equivalence |
|
| |||||||||||||||||
3) Benefits of the disposal of Consolidated partnerships |
|
| |||||||||||||||||
f) Negative consolidation differences |
|
| |||||||||||||||||
1) Consolidated Societies |
|
| |||||||||||||||||
|
|
| |||||||||||||||||
|
|
|
) Investment management expenses |
|
| ||||||||||||||
1) Investment and financial account expenses |
|
| |||||||||||||||||
2) Material investment expenses |
|
| |||||||||||||||||
b) Corrections of value of tangible and investment assets |
|
| |||||||||||||||||
1) Amortization of material and property assets |
|
| |||||||||||||||||
2) Impairment of property and real estate assets |
|
|
|
|
|
|
| ||||||||||||
3) Impairment of financial investments |
|
| |||||||||||||||||
c) Losses from material and investment assets |
|
| |||||||||||||||||
1) Property and investment property assets |
|
| |||||||||||||||||
2) Financial investments |
|
| |||||||||||||||||
) Expenditure of entities included in the consolidation |
|
| |||||||||||||||||
1) Participation in Entity losses placed on equivalence |
|
| |||||||||||||||||
2) Losses from the disposal of equity holdings in societies placed in equivalence |
|
| |||||||||||||||||
3) Losses from the disposal of shares in consolidated societies |
|
| |||||||||||||||||
|
| ||||||||||||||||||
) Revenue from pension fund management |
|
| |||||||||||||||||
b) Revenue Rest |
| ||||||||||||||||||
III.4 Other Expenses |
|
| |||||||||||||||||
) Pension fund administration expenses |
|
| |||||||||||||||||
b) Spending Rest |
|
| |||||||||||||||||
III.5 Subtotal. (Non-Technical Account Result) |
|
| |||||||||||||||||
III.6 Result before tax (I. 10 + II.12 + III.5) |
|
| |||||||||||||||||
III.7 Benefits Tax |
|
| |||||||||||||||||
III.8 Result from continued operations (III .6 + III.7) |
|
| |||||||||||||||||
III.9 Result from net tax interrupted operations (+ or-) |
|
| |||||||||||||||||
III.10 Consolidated Exercise Result (III.8 + III.9) |
|
| |||||||||||||||||
| ) Result attributed to the dominant society |
|
| ||||||||||||||||
b) Result attributed to external partners |
|
|
recognized consolidated revenue and expense status
| 20XX | 20XX-1 | ||||
---|---|---|---|---|---|---|
I) CONSOLIDATED EXERCISE RESULT |
|
| ||||
II) OTHER RECOGNIZED CONSOLIDATED REVENUE AND EXPENSES |
|
| ||||
II.1 Financial assets available for sale |
|
| ||||
Earnings and losses by valuation |
|
| ||||
Imports transferred to the profit and loss account |
| |||||
|
| |||||
II.2 Cash flow hedges |
|
| ||||
and losses by valuation |
|
| ||||
|
| |||||
Imports transferred to the initial value of the covered items |
|
| ||||
Other reclassifications |
|
| ||||
II.3 Net investment coverage on foreign business |
|
| ||||
Earnings and losses by valuation |
|
| ||||
|
| reclassifications |
| |||
II.4 Change and conversion differences |
|
|
|
| ||
| ||||||
|
|
| ||||
|
|
|
| |||
Other reclassifications |
|
| Other reclassifications | |||
| ||||||
|
| |||||
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other reclassifications |
|
| ||||
II.6 Assets held for sale |
|
| ||||
Earnings and losses by valuation |
|
| ||||
|
reclassifications |
| ||||
II.7 Earnings/(losses) actuarial by long-term payoffs to staff |
|
| ||||
| II.8 Equivalency Valued Entities |
|
| |||
and Loss by Valuation |
|
| ||||
Imports transferred to the profit and loss account |
| |||||
|
| |||||
II.9 Other recognized revenue and expenses |
|
| ||||
II.10 Benefits Tax |
|
| ||||
| III) TOTAL RECOGNIZED CONSOLIDATED REVENUE AND EXPENSE |
|
| |||
III.1 Attributed in the dominant entity |
|
| ||||
III.2 Attributed to external partners |
|
|
Total state of changes in consolidated net worth for the year ended ... of 20XX
| Capital | Issue Prima | Reservations and results from previous exercises (*) | (Own actions and the dominant company) | Other contributions from partners or mutualists | Result of the exercise attributed to the dominant company | (Dividend to Account) | Other Heritage Instruments | Adjustments to Value Changes | Donations and Legacy Grants Received | External Partners | TOTAL | |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
A. BALANCE, END OF YEAR 200X-2 |
|
|
|
|
|
|
|
|
|
|
|
| |
Adjustments for changes of criteria 200X-2 and earlier. |
|
|
|
|
|
|
|
|
|
|
|
| |
. Adjustments for 200X-2 and earlier errors. |
|
|
|
|
|
|
|
|
|
|
|
| |
ADJUSTED BALANCE, START OF YEAR 200X-1 |
|
|
|
|
|
|
|
|
|
|
|
| |
I. Total recognised consolidated revenue and expenditure. |
|
|
|
|
|
|
|
|
|
|
|
| |
. Operations with partners or mutualists |
|
|
|
|
|
|
|
|
|
|
|
| |
1. Increases (reductions) of capital or mutual fund |
|
|
|
|
|
|
|
|
|
|
|
| |
2. Debt waivers. |
|
|
|
|
|
|
|
|
|
|
|
| |
. (-) Distribution of dividends or active derbranches |
|
|
|
|
|
|
|
|
|
|
|
| |
. Transactions in shares/units of own and of the dominant company (net). |
|
|
|
|
|
|
|
|
|
|
|
| |
. Increase (reduction) of net worth resulting from a business combination. |
|
|
|
|
|
|
|
|
|
|
|
| |
. Acquisitions (sales) of external partner units |
|
|
|
|
|
|
|
|
|
|
|
| |
. Other operations with partners or mutualists |
|
|
|
|
|
|
|
|
|
|
|
| |
III. Other changes in net worth. |
|
|
|
|
|
|
|
|
|
|
|
| |
BALANCE, END OF YEAR 200X-1 |
|
|
|
|
|
|
|
|
|
|
|
| |
Adjustments for 200X-1 criteria changes. |
|
|
|
|
|
|
|
|
|
|
|
| |
. Adjustments for 200X-1 errors. |
|
|
|
|
|
|
|
|
|
|
|
| |
ADJUSTED BALANCE, START OF YEAR 200X |
|
|
|
|
|
|
|
|
|
|
|
| |
I. Total recognised consolidated revenue and expenditure. |
|
|
|
|
|
|
|
|
|
|
|
| |
. Operations with partners or mutualists |
|
|
|
|
|
|
|
|
|
|
|
| |
1. Increases (reductions) of capital or mutual fund |
|
|
|
|
|
|
|
|
|
|
|
| |
2. Debt waivers. |
|
|
|
|
|
|
|
|
|
|
|
| |
. (-) Distribution of dividends or active derbranches |
|
|
|
|
|
|
|
|
|
|
|
| |
. Transactions in shares/units of own and of the dominant company (net). |
|
|
|
|
|
|
|
|
|
|
|
| |
. Increase (reduction) of net worth resulting from a business combination. |
|
|
|
|
|
|
|
|
|
|
|
| |
. Acquisitions (sales) of external partner units |
|
|
|
|
|
|
|
|
|
|
|
| |
. Other operations with partners or mutualists |
|
|
|
|
|
|
|
|
|
|
|
| |
III. Other changes in net worth. |
|
|
|
|
|
|
|
|
|
|
|
| |
BALANCE, END OF YEAR 200X |
|
|
|
|
|
|
|
|
|
|
|
|
(*) Includes reserves in consolidated companies and reserves in companies placed in equivalence.
Consolidated Cash Flow Status
| Notes in memory | Total | |||
---|---|---|---|---|---|
20XX | 20XX-1 | ||||
A) CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
| ||
A. 1) Insurance Activity |
|
|
| ||
1. Secure direct, coinsurance, and reinsurance charges accepted |
|
|
| ||
2. Secure, coinsurance, and reinsurance accepted payments |
|
|
| ||
3. Ceded Reinsurance Charges |
|
|
| ||
4. Ceded Reinsurance Payments |
|
|
| ||
5. Benefit Recro |
|
|
| ||
6. Retributions to mediators |
|
|
| ||
7. Other operating charges |
|
|
| ||
8. Other operating payments |
|
|
| ||
9. Total cash collections of insurance activity (1 + 3 + 5 + 7) = I |
|
|
| ||
10. Total cash payments from the insurance activity (2 + 4 + 6 + 8) = II |
|
|
| ||
2) Other operating activities |
|
|
| ||
1. Collection of pension fund management activities |
|
|
| ||
2. Pension fund management activities payments |
|
|
| ||
3. Collection of other activities |
|
|
| ||
4. Payments from other activities |
|
|
| ||
5. Total cash collections from other operating activities (1 + 3) = III |
|
|
| ||
6. Total cash payments from other operating activities (2 + 4) = IV |
|
|
| ||
7. Benefits and benefits tax payments (V) |
|
|
| ||
A. 3) Total net cash flows from operating activities (I-II + III-IV +-V) |
|
|
| ||
B) CASH FLOWS FROM ACTIVITIES INVERSION |
|
|
| ||
B. 1) Investment Activity Items |
|
|
| ||
1. Immobilized material |
|
|
| ||
2. Real Estate Investments |
|
|
| ||
3. Intangible assets |
|
|
| ||
4. Financial Instruments |
|
|
| ||
5. Group, multigroup, and associated entities |
|
|
| ||
6. Interest charged |
|
|
| ||
7. Dividends collected |
|
|
| ||
8. Business Unit |
|
|
| ||
9. Other charges related to investment activities |
|
|
| ||
10. Total cash collections of investment activities (1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 + 9) = VI |
|
|
| ||
2) Payments of investment activities |
|
|
| ||
1. Immobilized material |
|
|
| ||
2. Real Estate Investments |
|
|
| ||
3. Intangible assets |
|
|
| ||
4. Financial Instruments |
|
|
| ||
5. Group, multigroup, and associated entities |
|
|
| ||
6. Business Unit |
|
|
| ||
7. Other payments related to investment activities |
|
|
| ||
8. Total cash payments from investment activities (1 + 2 + 3 + 4 + 5 + 6 + 7) = VII |
|
|
| ||
3) Total cash flows from investment activities (VI-VII) |
|
|
| ||
) CASH FLOWS FINANCING ACTIVITIES |
|
|
| ||
1) Financing activity items |
|
|
| ||
1. Subordinate liabilities |
|
|
| ||
2. Capital increase and equity instrument issuance |
|
|
| ||
3. Active derbranches and contributions from partners or mutualists |
|
|
| ||
4. Alienation of own values and the dominant society |
|
|
| ||
5. Other collections related to financing activities |
|
|
| ||
6. Selling shareholdings to external partners |
|
|
| ||
7. Total cash collections of funding activities (1 + 2 + 3 + 4 + 5 + 6) = VIII |
|
|
| ||
2) Financing activity payments |
|
|
| ||
1. Dividends to shareholders |
|
|
| ||
2. Interest paid |
|
|
| ||
3. Subordinate liabilities |
|
|
| ||
4. Shareholder return payments to shareholders |
|
|
| ||
5. Passive derbranches and return of contributions to the mutualists |
|
|
| ||
6. Acquiring own values and the dominant society |
|
|
| ||
7. Other payments related to funding activities |
|
|
| ||
8. Acquiring shareholdings to external partners |
|
|
| ||
8. Total cash payments from financing activities (1 + 2 + 3 + 4 + 5 + 6 + 7 + 8) = IX |
|
|
| ||
3) Total net cash flows from financing activities (VIII-IX) |
|
|
| ||
Effect of the variations of exchange rates (X) |
|
|
| ||
Total increase/decreases in cash and equivalents (A. 3 + B. 3 + C. 3 +-X) |
|
|
| ||
Cash and equivalents at the beginning of the period |
|
|
| ||
|
|
| |||
components and equivalent at the end of the period |
|
|
| ||
. Box and Banks |
|
|
| ||
2. Other financial assets |
|
|
| ||
3. |
|
|
| ||
Cash and Equivalent at End of Period (1 + 2-3) |
|
|
|
|
|
|
|
|
|
|
|
Final disposition sixth. Amendment of Order ECO/805/2003 of 27 March 2003 on rules for the valuation of immovable property and certain rights for certain financial purposes.
One. Article 2 (b) is amended as follows:
"(b) Determination of fair value for the purposes of paragraph 4 of the second part of the accounting plan of the insurance and reinsurance entities, approved by Royal Decree 1317/2008 of 24 July, and the determination of the valuation of assets within the meaning of Article 68 of Law 20/2015 of 14 July on the management, supervision and solvency of insurance and reinsurance entities."
Two. The title of Chapter I of Title IV, which is worded as follows: "Valuation of buildings of insurance institutions for the purposes of determining their fair value" is hereby amended.
Three. Article 82 (1) and (2) are amended, which is worded as follows:
" 1. Insurance institutions shall report to the Directorate-General for Insurance and Pension Funds of any impact that may result in a significant alteration in the value of the real estate and real estate rights, or in circumstances that may affect them. "
" 2. The General Directorate of Insurance and Pension Funds may require both the owner and the property owner of the real estate and the authorised task force to issue the report, the necessary clarifications and the presentation of documents other than those expressly mentioned in this Order if necessary to verify or revise the circumstances, calculations and values incorporated in the report. "
Four Article 83 is amended, which is worded as follows:
" When the Directorate-General for Insurance and Pension Funds agrees to verify the valuation made by authorised valuation entities, it shall inform the insurance undertaking in writing of the property or the real estate right. Both entities must provide the documentation requested and provide the maximum facilities to carry out the aforementioned verification; otherwise, the technical officer shall act to carry out a thorough investigation of the facts. "
Five. Article 84 (1), which is worded as follows, is amended as follows:
" 1. The insurance institutions shall request from an approved valuation entity the review of the valuations of the property of their property and of the real estate rights entered in their favour, before two years have elapsed since the previous valuation and, irrespective of the age of the previous valuation, provided that a relevant alteration in the value of the property could have occurred. Exceptionally, the Directorate-General for Insurance and Pension Funds may reduce the time limit of two years, in general or for a particular type of real estate and real estate rights, when, due to the special circumstances affecting the property market, it is necessary to avoid overvaluations of the buildings. "
Final disposition seventh. Amendment of the Order of 25 February 2000 establishing and regulating the National Defunctions Index.
One. The second paragraph is amended, which is worded as follows:
" Second. Its purpose and use shall be to provide data on the state of life of persons to the information systems used for the management of patients, for the management and control of health, for the maintenance of disease records, for surveillance in public health, for the collection of statistics and for the execution of epidemiological or health research studies; to verify the survival of the beneficiaries of temporary or temporary income derived from insurance operations, and to expedite the payment of benefits to the beneficiaries of insurance in the event of death of the insured. '
Two amendments to paragraph 6, which are worded as follows:
" Sixth. Personal data contained in the National Defunctions Index may be transferred for the purposes and uses provided for in the second paragraph only to entities, bodies or institutions belonging to one of the following groups:
(a) Public or private health centers or establishments, intended for the diagnosis and/or medical and/or surgical treatment of patients admitted or treated in an outpatient manner.
b) Public health administrations.
c) Public research centres.
(d) The insurance companies authorized to operate in Spain in the classes of life or accidents.
To do so, they must make a corresponding reasoned request, which must be resolved within a maximum period of one month from their receipt, expressly warning the transferee of their obligation to dedicate them exclusively to the purpose for which they are transferred.
The health centers or establishments that are privately owned shall, in addition, be authorized by the corresponding autonomous community for the purposes indicated, and shall be included in the General Register of centers, services and health facilities of the Ministry of Health, Social Services and Equality. "
Final disposition octave. Safeguarding the regulatory range.
The modifications introduced, by the final provision sixth and the final disposition seventh, in Order ECO/805/2003, of 27 March, on rules of valuation of real estate and of certain rights for certain financial purposes; and in the Order of 25 February 2000 for which the National Index of Defunctions is created and regulated, respectively, will maintain the normative range of ministerial order.
Final disposition ninth. Competence title.
According to the provisions of the final provision of the 14th of the Law 20/2015 of July 14, of the ordination, supervision and solvency of insurance and reinsurance entities, the provisions contained in this royal decree are dictated by the provisions of Article 149.1.11. and the 13th of the Constitution, which attributes to the State the powers to establish the basis for the management of the insurance and the bases and coordination of the general planning of economic activity, respectively. The items are excepted from the above:
a) 3, 19 to 24, 40,166, 167 and additional provision eighth, which shall not have a basic character.
(b) 44, Chapter II, Chapter IV and Chapter V of Title III, 122 to 126, 127 paragraphs 1 to 3, 219, 222, 225 and 226, which are issued under the Constitution of 149.1.6, which confers exclusive jurisdiction on the State in matters of commercial law.
Final disposition tenth. Incorporation of European Union law.
By this royal decree the transposition into Spanish law of Directive 2009 /138/EC of the European Parliament and of the Council of 25 November 2009 on access to and exercise of the business of insurance and reinsurance (Solvency II), as amended by Directive 2014 /51/EU of the European Parliament and of the Council of 16 April 2014 amending Directives 2003 /71/EC and 2009 /138/EC and Regulations (EC) No 1060/2009, (EU) No 1094/2010 and (EU) No 1095/2010 as regards the powers of the European Supervisory Authority (European Supervisory Authority), is completed. Insurance and Occupational Pensions) and the European Supervisory Authority (European Securities and Markets Authority) (Omnibus II).
It is also incorporated in Directive 2011 /89/EU of the European Parliament and of the Council of 16 December 2011 amending Directives 98 /78/EC, 2002 /67/EC, 2006 /48/EC and 2009 /138/EC as regards the supplementary supervision of financial institutions which are part of a financial conglomerate.
Final disposition eleventh. Regulatory enablement.
The Minister of Economy and Competitiveness, on a proposal from the General Directorate of Insurance and Pension Funds, and prior report of the Advisory Board of Insurance and Pension Funds, is empowered to carry out the normative development of the provisions contained in this royal decree as soon as it is necessary and for better execution and development of the same.
Final disposition twelfth. Entry into force.
This royal decree will take effect on January 1, 2016.
However, paragraph two of the fourth final provision shall enter into force on 1 July 2016; and the additional 17th provision, on the day following that of its publication.
Given in Madrid, on November 20, 2015.
FELIPE R.
The Minister of Economy and Competitiveness,
LUIS DE GUINDOS JURADO
ANNEX
Standard Formula of the Solvency Capital Requirement (SCR)
1. Calculation of the basic Solvency Capital Requirement
The basic Solvency Capital Requirement, set out in Article 69.1, will be equal to the result of applying the following formula, in which SCRi represents the risk module i, SCRj represents the risk module j, e "i" and "j" means that the sum of the different terms must cover all possible combinations of i and j:
For this calculation SCRi and SCRj are replaced by:
-SCR non-life, which represents the non-life insurance subscription risk module.
-SCR of life, which represents the life insurance subscription risk module.
-SCR disease, representing the disease insurance subscription risk module.
-SCR market, which represents the market risk module.
-SCR default, which represents the counterparty default risk module.
The Corr factori, j represents the concept in row i and column j of the following correlation matrix:
j | ||||||
---|---|---|---|---|---|---|
| Incompliance | Life | Disease | Life | ||
| 1 |
0.25 | 0.25 | |||
|
1 | 0.25 | 0.25 | 0.5 | ||
| Life | 0.25 | 0.25 | 0.25 |
0 | |
0.25 | 0.25 | 0.25 | 1 | 0 | ||
Life Distinct | 0.25 | 0.5 | 0 | 0 | 1 |
2. Calculation of the insurance subscription risk module other than life insurance
The insurance subscription risk module other than life insurance, as set out in Article 71, will be equal to the result of applying the following formula, in which SCRi represents the submodule i, SCRj represents the submodule j, e "i" and "j" means that the sum of the different terms must cover all possible combinations of i and j:
For this calculation SCRi and SCRj are replaced by:
-SCR premiums and reserves nv, which represents the insurance premiums and premiums submodule other than life insurance.
-SCR catastrophe nv, which represents the insurance catastrophe risk sub-module other than life insurance.
3. Calculation of the life insurance subscription risk module
The life insurance subscription risk module, which is set by Article 72, will be equal to the result of applying the following formula, in which SCRi represents the submodule i, SCRj represents the submodule j, e "i" and "j" means that the sum of the different terms must cover all possible combinations of i and j:
For this calculation SCRi and SCRj are replaced by:
-SCR mortality, which represents the mortality risk sub-module.
-SCR longevity, which represents the longevity risk submodule.
-SCR disability, which represents the disability risk submodule.
-SCR living expenses, which represents the life insurance expense risk submodule.
-SCR review, which represents the revision risk submodule.
-SCR expiration, which represents the expiration risk submodule.
-SCR life catastrophe, which represents the life insurance catastrophe risk sub-module.
4. Calculation of the market risk module
The market risk module, which is set by Article 74, will be equal to the result of applying the following formula, in which SCRi represents the submodule i, SCRj represents the submodule j, e "i" and "j" means that the sum of the different terms must cover all possible combinations of i and j:
For this calculation SCRi and SCRj are replaced by:
-SCR interest rate, which represents the interest rate submodule;
-SCR variable income, which represents the variable income risk submodule;
-SCR real estate, which represents the real estate risk submodule;
-SCR differential, which represents the differential risk submodule;
-SCR concentration, which represents the market risk concentration submodule;
-SCR currency, which represents the currency risk sub-module B.