This royal decree aims at the adequacy of the Regulation on the management and supervision of private insurance, approved by Royal Decree 2486/1998 of 20 November 1998, to the new accounting framework applicable to institutions (a) insurance pursuant to Royal Decree 1317/2008 of 24 July on the approval of the accounting plan of the insurance institutions and the Law 16/2007 of 4 July on the reform and adaptation of commercial law in the accounting field for its international harmonisation based on the rules of the European Union. In addition, certain technical adjustments are incorporated into the regulatory text necessary for their adaptation to the problem of new insurance products. This rule has a single article, which amends the provisions of the Regulation on the management and supervision of private insurance, and two final provisions, which recognise the basic character of the rule and its entry into force. In particular, the sole article, first of all, extends the content of Article 37 by enabling the Ministry of Economic Affairs and Finance to develop the system of the provision of life insurance in the case of insurance referred to as those in which the taker fully assumes the investment risk. Secondly, it amends Article 59 relating to own assets which are not committed for the purpose of adapting this Article to the new accounting regulation, both in respect of the new terminology used in the Accounting Plan insurance institutions, as in the case of the new accounting treatment of certain items. Thirdly, it adapts the wording of Article 82, which includes the causes of the dissolution of insurance institutions, to the content set out in Article 36.1.c of the Trade Code, in the wording of Law 16/2007 of 4 July. Finally, it adds a further tenth provision to the regulatory text with the aim of adapting its terminology to that of the accounting plan of the insurance institutions. The final provision first specifies the basic character of this rule and the final second provision specifies its entry into force. In its virtue, on the proposal of the Minister for Economic Affairs and Finance, in agreement with the Council of State, and after deliberation by the Council of Ministers at its meeting on 24 July 2008,

D I S P O N G O:

Single item. Amendment of the Regulation on the management and supervision of private insurance, approved by Royal Decree 2486/1998 of 20 November 1998.

The regulation for the management and supervision of private insurance, approved by Royal Decree 2486/1998 of 20 November, is amended as follows:

One. Article 37 is worded as follows:

" Article 37. 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 risk of investment will be borne entirely by the policyholder shall be determined on the basis of the assets specifically affected or the indices or assets which are have set themselves as a reference for determining the economic value of their rights. The provisions laid down in Article 33 of this Regulation 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 the terms established by the Ministry of Economy and Finance. "

Two. Article 59 is worded as follows:

" Article 59. Uncommitted own estate.

1. The non-committed own equity, for the purposes of the individual solvency margin, as referred to in Article 17.2 of the law, includes the items listed below, deducted from the intangible elements indicated in the paragraph 2 of this article: One. As a general rule, the following items shall be considered as non-committal assets: (a) the paid-up share capital excluding the part of the share capital referred to in the following paragraph (e); or the mutual fund. In the event that the insurance institution finances its partners directly or through shares in the capital of companies or natural persons exercising direct or indirect control over that capital, the amount calculated by this subparagraph (a) shall correspond to the net investment position of those partners.

In the case of insurance institutions authorised for the management of pension funds, the amount of the amount calculated in the solvency margin by this subparagraph (a) shall be reduced in the amount of the paid-up share capital affected (a) the activity provided for in the regulatory regulation of pension schemes and funds. (b) the revaluation reserve, the issuance premium and other free stock reserves that do not correspond to the commitments entered into and have not been classified as stabilisation reserves. They shall have such consideration, unless their amount has been committed to meet any specific commitment, the property revaluation reserve arising from the first application of the accounting plan of the insurance institutions adapted to the regulatory framework of the International Financial Reporting Standards adopted by the European Union Regulations and the reserve by trade fund. It shall apply in respect of these items as referred to in the second subparagraph of paragraph (a) above. In any event, the following concepts shall be excluded from this paragraph, in so far as their amount has not already been deducted in other headings:

1. The reserves that are constituted in compliance with the provisions of Articles 79.3 and 80.1, recast of the Law of Companies, approved by the Royal Decree of Law 1564/1989, of December 22.

2. ° The amount of the shares of the parent company or of the parent company acquired or accepted as a pledge or other form of security, directly by the entity or indirectly through a person or company, as well as the amount of the financing of third parties, the object of which is the acquisition of own shares, in so far as the reserves referred to in the preceding paragraph 1 have not been established. 3. The reserves that correspond to the minimum own resources required by the regulatory regulation of pension plans and funds.

(c) The remainder and the part of the credit balance of the profit and loss account which is intended to increase the institution's own funds. For this purpose, the debtor balance of the 'Stabilisation to account reserve' item provided for in the accounting plan of the insurance institutions shall be deducted.

(d) Non-reintegrable contributions from partners or mutualists that are included in the net worth of the balance sheet, where they meet the following requirements:

1. The entity's statutes provide that its return does not cause a decline in its own equity not committed below the minimum amount of the solvency margin and that, in the event of liquidation of the institution, only will be effective after clearing all other debts of the company.

2. No refund is notified to the General Directorate of Insurance and Pension Funds one month in advance of payment, and may be prohibited by means of a reasoned decision within one month after the General Directorate of Insurance and Pension Funds were aware of the company's notification. 3. That the provisions of the statutes, as well as their modifications, concerning this item are approved by the General Directorate of Insurance and Pension Funds.

e) The share of the share capital corresponding to the non-voting shares regulated in Section 5.a of Chapter IV of the consolidated text of the Law of Companies, approved by Royal Decree 1564/1989, of 22 of (a) December, and subordinated financing, up to a ceiling of 50%, either of the non-committed own equity, including those items, or of the minimum amount of the solvency margin if it is less.

Subordinated financing shall be subject to the following conditions, which shall be included in the contracts and prospectuses:

1. No binding agreement by virtue of which, for the purposes of credit ranking, creditors for this concept are placed behind all the common creditors.

2. Only the funds actually disbursed will be taken into consideration. 3. In the case of fixed term loans, the initial period shall be at least five years. If the date of expiry has not been fixed, a notice of at least five years must have been stipulated for its total or partial withdrawal. Both in one case and in another case, from the time of their remaining period of five years, and during those five years, they shall reduce their calculation as their own assets by 20% per year, until their remaining period is less than one year, time when they will no longer be counted as such. 4. No rescue, reimbursement or early repayment terms may be contained, without prejudice to the fact that the debtor may proceed to the early repayment if the solvency of the institution is not affected, subject to the authorisation of the Directorate-General Insurance and Pension Funds. The silent shares shall be computed by their paid-up capital. Subordinated financings of a given duration may not be computed by an amount exceeding 25% of the own uncommitted equity, or of the minimum amount of the solvency margin, if it is less than the amount.

(f) Finances of indeterminate duration, other than those referred to in the preceding subparagraph, where they meet the following requirements: 1. No reimbursable at the initiative of the creditor or without the prior agreement of the General Directorate of Insurance and Pension Funds.

2. The issue contract must give the insurance institution the possibility of deferring the payment of interest. 3. There shall be binding agreement by virtue of which, for the purposes of the ranking of claims, creditors under this concept are placed behind all the common creditors. 4. The issuance contract shall stipulate that the debt and interest payable may be applied to absorb the losses of the institution, without the need for dissolution. 5. Only the funds actually disbursed shall be taken into account.

The indeterminate financing provided for in this paragraph, plus the subordinated financings in the preceding paragraph, shall be subject to the effects of this Article, to a total of 50% of the own non-committed equity, or of the minimum amount of the solvency margin, if it is less. (g) The "Adjustments for Value Changes" that form part of the net worth shall be included, with a positive or negative sign. Two. The following items may be taken into account as own assets: (a) Half of the share of the subscribed capital outstanding, up to a maximum of 50% of the non-committed own equity, or of the the minimum amount of the solvency margin, if it is lower.

(b) In the insurance classes other than life, 50 percent of the passive spill, where the mutualists are required, in the terms of article 9.2.e) of the law, with the limit of 50 percent of net premiums Direct insurance cancellations. This sum may not exceed half of the uncommitted own assets, by counting the items in paragraph 1 and paragraph 2 (a) and (c) of this paragraph, and deducted the items referred to in paragraph 2 of this Article, or from the half of the minimum amount of the solvency margin, if it is lower. (c) the capital gains not recognised by the institution in accounts resulting from the underestimation of assets after deduction of all expenditure which may have an impact on the final amount of the assets, provided that no adjustments have been made; correctors for accounting asymmetries.

In those cases where correction adjustments for accounting asymmetries have been practiced: i. Accumulated net capital gains shall not be computed, whether or not they have been recognised by the institution in the accounts, which come from assets in the following cases: Life insurance operations using the financial immunization techniques provided for in the management and supervision regulations.

Insurance operations that recognize participation in benefits provided that there is a clear identification of the assets to which they are linked, in the amount corresponding to the policyholders. Insurance operations in which the taker assumes the risk of the investment or assimilated.

ii. Accumulated net capital gains shall be computed, whether or not recognised by the institution in accounts, from assets assigned to insurance operations other than those provided for in paragraph i above and which refer to their redemption value. value of the assets assigned to them. The calculation of capital gains resulting from the underestimation of assets of the asset qualified as unfit for the investment of technical provisions shall require an express application to the General Directorate of Insurance and Pension Funds. (d) the discounted commissions which are technically outstanding at the rate of 3.5% of the difference between the insured capital and the mathematical provision, and of which the amount of the sum of the amounts shall be deducted; Discounted commissions activated. 2. For the purposes of this Article, they shall be regarded as immaterial elements to be deducted in the calculation of the solvency margin for items which do not have the value of completion or which, due to their lack of permanence, may be presumed to be presumed to be which do not comply with the purposes of the law and of this regulation.

In any case, the following items shall be deducted from the non-committed own equity computation:

a) The debtor balance of the profit and loss account.

b) The negative results of previous exercises. (c) Impairment not recognised by the institution in accounts resulting from the overvaluation of assets and the underestimation of liabilities, provided that no corrective adjustments to accounting asymmetries have been made.

In those cases where correction adjustments for accounting asymmetries have been practiced: i. The following shall be deducted from the accumulated net impairment, whether or not recognised by the institution in accounts, derived from assets in the following cases: Variable income assets assigned to life insurance operations using the financial immunization provided for in Article 33.2.b) of this Regulation.

Assets to be used as a benchmark to determine the redemption value, linked to transactions other than those provided for in Article 33.2 of this Regulation. Assets assigned to insurance operations that recognise participation in profits provided that there is a clear identification of the assets to which they are linked, in the amount corresponding to the policyholders.

ii. The amount of net assets accumulated, whether or not recognised by the institution in the accounts, shall not be deducted from assets assigned to insurance operations other than those provided for in paragraph i above, in the following cases: of life insurance using the financial immunization techniques provided for in the rules of management and supervision.

Insurance operations in which the taker assumes the risk of the investment or assimilated.

(d) Shares equal to or greater than 20 per cent of the capital or voting rights of the investee that the insurance undertaking has in other insurance or reinsurance entities, in credit institutions, in undertakings of investment services or entities whose principal activity consists in having holdings in insurance institutions.

e) Subordinated financing or other non-committed securities issued by the entities referred to in the preceding paragraph and acquired by the insurance institution.

3. The deductions referred to in paragraph 2 above shall be made on the basis of their value in the holding institution's books.

As an alternative to the deduction of the items referred to in paragraphs (d) and (e) of paragraph 2, which the insurance undertaking holds in credit institutions, investment firms and any entity in the financial sector, the insurers may apply the methods set out in the Annex to Royal Decree 1332/2005 of 11 November 2005 on the development of Law 5/2005 of 22 April on the supervision of financial conglomerates and amending other laws of the sector financial. Method 1 (accounting consolidation) shall only apply where institutions falling within the scope of the consolidation have a level of integrated management and internal control in accordance with the provisions of Article 110. The method chosen should be applied in a consistent manner. In any event, the entities belonging to insurance groups and financial conglomerates subject to supplementary supervision may not deduct the items referred to in paragraph 2 (d) and (e) from credit institutions, undertakings or undertakings. investment, insurance or reinsurance undertakings or holding companies of insurance entities included in the scope of the supplementary supervision. 4. In the case of insurance entities authorized to perform direct insurance operations other than life insurance and life insurance operations, the limits set forth in this article shall be applied separately for each activity. 5. The Directorate-General for Insurance and Pension Funds may adjust the valuation of the items referred to in paragraph 1 where they cease to have, in whole or in part, the condition of uncommitted own assets. 6. The Minister for Economic Affairs and Finance may adapt the items which, in accordance with this Article, are to be considered in the calculation of the uncommitted own assets, to the amendments which are introduced by Community legislation in respect of the relationship of such elements and with respect to the conditions or requirements for their computation. '

Three. Article 82 is worded as follows:

" Article 82. Cause of dissolution.

1. They are causes of dissolution of the insurance companies: 1. The revocation of the administrative authorization that affects all the branches in which the entity operates. However, revocation shall not be a cause of dissolution where the institution itself renounces the administrative authorization and is solely motivated by the amendment of its social object in order to carry out an activity other than that of the listed in Article 3 of this Regulation.

2. The general assignment of the insurance contract portfolio when it affects the entire classes in which the entity operates. However, the transfer of a portfolio shall not be a cause of dissolution where, in the public deed of disposal, the transferor manifests the modification of its social object in order to carry out an activity other than those listed in Article 3 of this Regulation. 3. The number of partners, in mutual and insurance cooperatives and in social security mutual societies, is reduced to a figure below the legally required minimum. 4. Failure to perform passive rights as required by Articles 9 and 10 of the Law and concordant with this Regulation. 5. The causes of dissolution listed in Article 260 of the recast of the Law of Companies. In the case of mutual insurance and social insurance mutual societies, the references to the general meeting and to the social capital must be understood as references to the general assembly and the mutual fund, respectively. However, the causes of dissolution of insurance cooperatives shall be applied in their specific legislation.

2. For the purposes of the preceding paragraph, a) net worth, net worth as defined in Article 36.1 (c) of the Code of Commerce plus the subordinated financing referred to in Article 59 of this Regulation. (b) Social capital, the registered capital. "

Four. An additional tenth provision is included with the following wording:

" Additional Disposition 10th. Adaptation to the terminology of the accounting plan of the insurance institutions.

For the purposes of this rule and its development provisions, references to the market value of assets and liabilities shall be construed as being made to the fair value of the assets and liabilities as defined in the Accounting Plan. insurance institutions. In addition, references to the purchase price of the assets shall be understood as having been made to the initial value for which those assets were accounted for, in accordance with the provisions of the accounting plan of the institutions. insurers. "

Final disposition first. Basic character.

According to the provisions of the final provision of the recast text of the Law on the Management and Supervision of Private Insurance, approved by the Royal Decree of Law 6/2004 of 29 October, the provisions of the Law of the In this royal decree they have the consideration of the bases of the ordination of the insurance dictated under the amparo of article 149.1.11.

Final disposition second. Entry into force.

This royal decree will enter into force on December 31, 2008.

Given in Palma de Mallorca, on July 24, 2008.

JOHN CARLOS R.

The Second Vice President of the Government and Minister of Economy and Finance, PEDRO SOLBES MIRA