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Royal Decree 239/2007 Of 16 February, Amending The Regulation Of Management And Supervision Of Private Insurance, Approved By Royal Decree 2486 / 1998, Dated November 20, And The Regulation Of Mutual Social Welfare Organizations, Apro...

Original Language Title: Real Decreto 239/2007, de 16 de febrero, por el que se modifica el Reglamento de ordenación y supervisión de los seguros privados, aprobado por el Real Decreto 2486/1998, de 20 de noviembre, y el Reglamento de mutualidades de previsión social, apro...

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TEXT

The Regulation on the Management and Supervision of Private Insurance, approved by Royal Decree 2486/1998 of 20 November, marked a profound change in the administrative legislation for the management and supervision of private insurance. Until then, the insurance company, which has until then been included in Royal Decree 1348/1985 of 1 August 1985, in adapting the national legal order to the provisions of, inter alia, Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than Council Directive 92 /86/EEC of 10 November 1992 on the coordination of provisions laid down by law, regulation or administrative action relating to life assurance, and to take account of experience, criteria, reflections and circumstances that had been revealed necessary to address the intended purpose.

Since its entry into force on 1 January 1999 to the present day, new provisions of Community law, such as those contained in European Parliament Directive 98 /78/EC, have been incorporated into their articles. by the Council of 27 October 1998 on the supplementary supervision of insurance undertakings which are part of an insurance group, transposed by Royal Decree 996/2000 of 2 June 2000, or those contained in Directives 2002/13/EC Parliament and the Council of 5 March 2002 amending Council Directive 73 /239/EEC on the approximation of the laws of the Member States Council with regard to the requirements of the solvency margin of insurance undertakings other than life insurance, and 2002 /83/EC of the European Parliament and of the Council of 5 November 2002 on life assurance, transposed by the Royal Decree 297/2004 of 20 February. These changes, which seek to improve the necessary Community legislative harmonisation or to revise, adapt and update the technical solvency instruments envisaged for the insurance institutions, cannot be considered as complete, since the dynamic environment of the financial system and European harmonisation legislative trends aimed at adapting the legal framework to achieve the single financial market, require permanent changes.

In this context, this Royal Decree aims, on the one hand, to adapt the legal framework of the Regulation on the Management and Supervision of Private Insurance to the changes that have taken place, in the insurance sector and in the sector In general, with the emergence of new investment alternatives for the coverage of technical provisions, new insurance products or trends in the framework of internal control requirements and, on the other hand, the regulation of technical provisions for ongoing risks and benefits, as well as extending to all the (a) insurance institutions, and therefore also social security funds, the obligation to submit their annual accounts to audit accounts, leaving the exceptions to the Communities for the purposes of the latter institutions; Stand-alone can establish within the scope of its competences.

In particular, regarding the provision of ongoing risks, the possibility of estimating its amount, as an alternative to the calculation by classes, by commercial modality, is incorporated as novelty in the norm; criterion is that, even if it was Being admitted in practice, I had no express reflection in the article. In addition, and in general terms, their calculation is simplified, technical adjustments are made for the items to be considered for estimating the sufficiency of the premiums and details of the methodology to be followed for the quantification of the premiums. reinsurance accepted.

As far as the provision of life insurance is concerned, the systematic amendment is amended to estimate in general the interest rate of the calculation of the life insurance provision, which in the absence of reference to the interest rates of Public issues over five or more years and the elimination of the means of the previous three years, makes it possible to use interest rates that are more in line with the conditions prevailing at each moment in the market. As an alternative to the general interest rate, the calculation of the provision of life insurance at the interest rate prevailing on the date of effect of the policy is permitted as a novelty, provided that certain requirements are met. It also introduces the possibility of using pre-communicated interest rates in insurance for a period not exceeding one year, the interest rate guaranteed in each period, even if it can exceed the general interest rate of calculation, which otherwise it would require compliance with the formal requirements for financial immunization.

With regard to the provision of benefits, a greater detail of the provision of internal claims for settlement expenses is introduced, the calculation of the provision of outstanding claims for claims is adjusted to the to achieve greater approximation of reality and to improve the treatment of disaster management in certain sectors using statistical methods, as the individual assessment of claims is not required.

With regard to the investment regime, the ratio of the various assets and rights considered eligible for the investment of technical provisions, giving input to credit derivatives, to derivatives of investment in general, non-harmonised collective investment institutions or, inter alia, risk capital institutions, which requires a complete regulation of their delimitation, valuation regime and the limits of diversification and dispersion. It is also appropriate to establish a complete regulation of structured financial assets.

The consolidated criteria, although not expressed in the standard, are included in the article on the regime applicable to the capital gains of goods and rights in the non-committed own property and guarantee fund, adjust the negative items to be included in one and the other state and the correction coefficient of the minimum solvency margin is corrected.

The content of the investment book is expanded and detailed, the content of the consolidated group of insurance entities is used to make it compatible with that provided for in the recast of the Law on Management and Supervision of Private Insurance, approved by the Royal Decree of Law 6/2004 of 29 October, extends the deadline for the presentation of the models of the accounting statistical documentation that had a deadline of 31 August and extends the framework of the the obligation to submit the annual accounts to all insurance institutions to audit accounts (a) whatever the class in which they operate and the amount of their business figure, the latter two amendments are also incorporated into the Social Welfare Mutual Insurance Regulation, approved by Royal Decree 1430/2002 of 27 December, extending the obligation to audit their accounts to the social security funds through their specific rules, except for the exceptions which the Autonomous Communities may lay down in the field of their powers. Finally, a whole series of developments in the field of internal control and risk management are carried out in clear harmony, both with national and international regulatory trends in other sectors of the financial system, and with the recommendations emanating from international bodies. In particular, the responsibility of the administrative board of the entity required to present consolidated statistical accounting documentation or that of the obligation to present individual accounting statistical documentation, as well as of the the management of the institution, with respect to the performance of the duties relating to the internal control procedures and control of the investment policy, while detailing the lines of compliance with each obligation, and introducing the the task of drawing up and forwarding an annual report to the Directorate-General for Insurance and Pension Funds self-assessment and improvement of internal control procedures. The internal control requirements shall not be alien in their implementation to the principle of proportionality with respect to the size of each entity and the risks to them assumed.

The second final provision of the recast text of the Law on the Management and Supervision of Private Insurance, approved by the Royal Legislative Decree 6/2004 of 29 October, enables the Government, on a proposal from the Minister of State Economics and Finance, and after hearing of the Advisory Board of Insurance and Pension Funds, to develop the law in matters that are expressly attributed to the regulatory authority, as well as, in general, in all those susceptible to regulatory development in which it is necessary for its proper implementation, through the approval of its (a) Regulation and any subsequent amendments thereto which are necessary. This Royal Decree, which consists of two articles, is issued in accordance with this Enablement; the first contains the amendments to the Regulation on the Management and Supervision of Private Insurance and the second the adaptation of the Rules of Mutual social provision. They complete the contents of the Royal Decree, a transitional provision, a derogation provision and two final provisions.

In its virtue, on the proposal of the Minister of Economy and Finance, in agreement with the State Council, and after deliberation by the Council of Ministers at its meeting on 16 February 2007,

D I S P O N G O:

Article first. Amendment of the Regulation on the Management and Supervision of Private Insurance, approved by Royal Decree 2486/1998 of 20 November.

The Regulation on the Management and Supervision of Private Insurance, approved by Royal Decree 2486/1998 of 20 November, is amended as follows:

One. Article 31 is worded as follows:

" Article 31. Provision of ongoing risks.

1. The ongoing risk provision shall complement the provision of unconsumed premiums to the extent that the amount of the risk is not sufficient to reflect the valuation of all risks and expenses to be covered by the insurance institution that correspond to the the coverage period not after the end of the financial year.

2. The amount of the current risk provision shall be calculated separately for the direct insurance and for the reinsurance accepted, for each class or commercial product, on the basis of the particular guarantee or the pooled set of connected guarantees. whether they may relate to the risks arising from the same class of insured object.

The following rules will be followed in your calculation:

(a) The reference period shall, in general, be two years, the financial year referred to in the calculation and the immediate preceding period.

By exception, in classes 10 to 15 of those set out in Article 6.1.a) of the recast text of the Law on the Management and Supervision of Private Insurance, approved by Royal Decree-Law 6/2004 of 29 October, or in those products which cover a guarantee of these classes, the period considered shall be four years, the financial year referred to in the calculation and the three immediately preceding it.

(b) The difference between the following amounts for direct insurance, net of transferred reinsurance, shall be calculated:

1. A positive sign, premiums written in the reference period, reduced, where appropriate, in their corresponding security surcharges, corrected by the variation in the provision of unconsumed premiums and by the provision of for premiums to be recovered from the end of the last financial year on the basis of premiums written in that reference period. In addition, the revenue from the investments generated by the assets affected by the technical provisions of the class or product concerned and other technical receipts shall be included with a positive sign in accordance with the allocation made in the accounting.

2. A negative sign, and only for claims occurring in the reference period, the amount of claims paid, expenses attributable to benefits and the provision of benefits at the end of the reference period period. The negative sign shall also include the management costs and other technical expenditure, as well as the investment costs incurred by the investments concerned with the technical provisions of the class or product concerned in accordance with the imputation performed in the accounting.

The above measures will collect cumulatively those of all the years that are part of the reference period with the information at the time the calculation is made.

(c) If the difference obtained under (b) above is negative, the percentage representing that difference shall be calculated in respect of the volume, in the reference period, of premiums written by direct insurance net of reinsurance transferred, reduced, where appropriate, in its corresponding security surcharges, corrected by the change in the provision of unconsumed premiums and by the provision for outstanding premiums constituted at the end of the last exercise on the basis of premiums written in that reference period.

d) The amount by which this provision will be provided will be equal to the absolute value resulting from the product of the following factors:

1. º The percentage obtained in accordance with paragraph c) above.

2. The provision for non-consumed premiums of direct insurance, net of the same provision corresponding to the transferred reinsurance corresponding to the calculation exercise.

If the percentage resulting from the above calculations is not appropriate, taking into account recent and significant developments in the claims or pricing or other special circumstances in the the product concerned, the Directorate-General for Insurance and Pension Funds may amend the said percentage at the request of that or ex officio by means of a reasoned decision.

3. The provision of ongoing risks by accepted reinsurance operations shall be provided in accordance with the provisions of the preceding paragraphs. However, where the institutions do not have the information on the year of occurrence of the claim, the calculation may be carried out on the basis of the date reported by the transferor. In the case where the necessary information is not available, the provision shall be quantified in the 3 per 100 of the non-consumption figure of the non-consumed reinsurance of the accepted reinsurance minus that of the reinsurance regressed.

4. When during two consecutive exercises it is necessary to provide the provision regulated in this article, the entity must present in the Directorate General of Insurance and Pension Funds actuarial report on the review necessary of the technical bases to achieve the sufficiency of the premium in which at least the causes which have caused the insufficiency are identified, the measures taken by the entity and the estimated time limit in which they take effect. '

Two. Article 33 is amended as follows:

" Article 33. Interest rate applicable for the calculation of the life insurance provision.

1. The interest rate applicable for the calculation of the life insurance provision may not exceed the following limits:

(a) In the insurance expressed in euro, a choice may be made between:

1. º 60 per 100 of the average interest rates in the last quarter of the financial year preceding the year in which it results from the application of the materialised borrowings in bonds and liabilities of the State. The Directorate-General for Insurance and Pension Funds shall publish annually the interest rate resulting from the application of the above criterion.

2. º The interest rate published by the General Directorate of Insurance and Pension Funds for the calculation of the life insurance provision relating to the financial year corresponding to the date of effect of the policy, provided that the financial duration estimated at the market interest rate of charges specifically assigned to contracts, is greater than or equal to the financial duration of the payments derived from them, taking into account their probabilised and estimated flows to the type of market interest. If this condition is not met, the maximum interest rate applicable to the individual life insurance provision corresponding to the period exceeding the financial duration of the assets shall be that provided for in the preceding paragraph

.

For the determination of the financial duration of the charges referred to in the preceding paragraph, only the flows of the specifically allocated assets that have a certain maturity and fixed amount shall be considered, or a certain maturity and a determinable amount if its amount is referred to as financial variables, as well as, in the case of periodic premium insurance, the recovery flows probabilised by future premiums. The market value of assets not considered in the calculation of the financial duration that have been specifically allocated to commitments the provision of life insurance shall be calculated in accordance with this paragraph shall not exceed in more than 20 percent of the market value of all the assigned assets. The references to the market value of the assets have to be understood as comprehensive of that value as defined in the Accounting Plan of the insurance institutions.

(b) In insurance expressed in currency other than the euro, the following may be chosen:

1. º 60 per 100 of the average interest rates in the last quarter of the financial year preceding the year in which it results from the application of the materialised borrowings in bonds and bonds of the respective State.

2. º The interest rate corresponding to the policy effect date exercise resulting from the application of paragraph 1. above provided that the condition provided for in paragraph a.2. above is met.

(c) In insurance where the guaranteed interest rate has been fixed for a period not exceeding the year, at the rate of interest guaranteed for each period.

If the actual return obtained in an exercise of the investments specifically assigned to the commitments assumed under life insurance operations referred to in paragraphs (a), (b) and (c) above, excluding those specifically assigned to the operations referred to in paragraph 2 of this Article, are less than the average technical interest rate used in operations without the specific allocation referred to in paragraph 2 of this Article; This is calculated by applying an interest rate equal to the profitability actually obtained. The foregoing shall not apply where the institution has previously accredited to the Directorate-General for Insurance and Pension Funds that the performance to be obtained in the current and successive financial year shall be sufficient to guarantee the commitments of payments made.

The calculation of the preceding paragraph shall be made separately for the policies included in paragraphs a.1., a.2. º, b.1., b.2. and c of this paragraph. It shall also be made separately for the policies included in the second transitional provision of this Regulation.

2. Notwithstanding the foregoing, provided that they are collected in the technical basis, the entities which have assigned investments to certain insurance operations, provided that they are appropriate to them, may determine the provision of life insurance by the application of a particular interest rate based on the internal rate of return on these investments, as long as the margins and requirements laid down by the Minister for Economic Affairs and Finance are met and the goodness of the situation is verified the periodicity of the rule of development of this regulation. All of this and, where appropriate, any changes to the initial allocation shall be recorded in the investment register.

In particular, the adequacy of the investments will be the subject of development by the Minister of Economy and Finance, according to the cases, to:

(a) That there is sufficient coincidence, in time and amount, of the collection flows to meet the obligations arising from a policy or a homogeneous group of policies, in accordance with its intended scenario.

(b) the relationship between the current values of investments and the obligations arising from the transactions to which they are assigned, as well as the risks inherent in the financial transaction, including that of rescue and its coverage, be within the margins established to the effect.

3. In insurance with a share in profits and in those where the provision of life insurance has been determined in accordance with the provisions of subparagraph (b) of paragraph 2 above, this provision may not be calculated at a rate of interest greater than that used for the calculation of the premium.

4. If the requirements for the application of paragraph 2 above are not met, the technical interest to be used in the calculation of the life insurance provision shall be that laid down in paragraph 1 of this Article. '

Three. Article 35 is amended as follows:

" Article 35. Administration expenses.

1. The life insurance provision 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, the surcharges for administrative expenditure are insufficient for two consecutive years to meet the actual administrative expenditure defined in accordance with the accounting plan of the insurance institutions, the provision of life insurance shall be calculated taking into account the new circumstance.

3. The above number shall not apply where the excess of expenditure is due to exceptional circumstances and which is likely to continue to occur in the future and thus be credited to the Directorate-General for Insurance and Pension Funds. "

Four. Article 36 is amended as follows:

" Article 36. 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 order for the life assurance provision to be calculated as provided for in Article 33.2, it is necessary that the value of the rescue, if any, does not exceed the market value of the assets allocated. In any event, the rescue value of these operations shall be applicable to the value of the operations referred to in the following paragraph. The Directorate-General for Insurance and Pension Funds may establish other ways of limiting the market risk associated with the evolution of the market value of the assets that determine the value of the rescue in policies for which the insurance provision of life is calculated in accordance with Article 33.2.

3. In those contracts where the value of the rescue has been established on the basis of the life insurance provision corresponding to those contracts, the amount of such life insurance shall be understood as the result of the application of the technical bases. used for the calculation of the premium. "

Five. Article 39 is worded as follows:

" Article 39. Provision of benefits.

1. The provision of benefits 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 cost estimated or certain and all amounts already paid by reason 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. However, where the provision for benefits is calculated using statistical methods in accordance with Article 43, the payments may be counted as net of recoveries.

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.

2. To determine the amount of the provision, 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 irrespective of whether the institution may, in addition, use statistical methods for the calculation of the provision of benefits in accordance with Article 43 of this Regulation. However, in the case of classes 2, 17, 18 or 19 of those set out in Article 6 (1) (a) of the recast of the Law on the Management and Supervision of Private Insurance, where the institution chooses to use statistical methods of overall calculation of the provision for benefits, with the requirements of Article 43 of this Regulation, the individual assessment of each claim will not be necessary. The individual assessment of each claim in the case referred to in paragraph 4 of this Article shall not be required.

4. In the classes referred to in paragraph 3 above, in which the insurance undertaking guarantees the provision of an assistance by the conclusion of a contract of reinsurance for the provision of services for which both the risk and the cost are given of the claims to the reinsurer, a single provision of benefits of a global nature may be calculated for both direct insurance and, where applicable, reinsurance accepted on the one hand, and for reinsurance on the other hand, on the part of which risk and casualty is given.

For these same classes, the calculation of the provision for global direct insurance benefits and, where applicable, reinsurance accepted, in cases where there is insufficient information, may be based on the information supplied by the reinsurer, either in sectoral average costs or in 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 for by the difference. between the risk premiums written in the financial year, in the part attributable to the exercise, and the claims incurred in the financial year.

6. The provision of benefits shall be made up of the provision of outstanding payment or settlement benefits, the provision of outstanding claims and the provision of internal claims for settlement of claims.

For the reinsurance operations accepted, a single provision of global benefits may be calculated. "

Six. Article 40 is worded as follows:

" Article 40. Provision of pending settlement or payment benefits.

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 Iiquidation 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 Regulation for the provision of life assurance.

The provision will include interest in profits and extortions that have been allocated to policyholders, policyholders or beneficiaries and that are pending payment. "

Seven. Article 41 is amended as follows:

" Article 41. Provision of outstanding claims for declaration.

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. Only where the institution does not have statistical methods for the calculation of the provision as provided for in Article 43 or available is adequate, it shall be determined by multiplying the number of claims To be declared by the average cost of the same, estimated both as follows:

(a) The number of outstanding claims to be declared N shall be calculated by means of equality:

Nt = [(Nt-1 + Nt-2 + Nt-3)/(Pt-1 + Pt-2 + Pt-3)] Pt

being t the year that is closed, t-1, t-2 and t-3 the three exercises immediately preceding and P the premiums written.

(b) The average cost C of outstanding claims to be declared shall be determined by means of equality:

Ct = [(Ct-1 + Ct-2 + Ct-3)/(Qt-1 + Qt-2 + Qt-3)] Qt

where t, t-1, t-2, and t-3 have the same meaning as in paragraph (a) above, and where Q is the average cost of the claims already declared.

The calculation of average costs shall be determined by considering that the amount of claims includes all the concepts listed in paragraph 1 of the previous article.

(c) The data relating to the average number and cost of outstanding claims for previous financial years shall be those known to the entity at the date of calculation of the provision.

(d) Where the application of the procedure described in the preceding paragraphs for the determination of the provision of pending declaration benefits results in a failure to compare in the financial year the following, the provision constituted at the beginning with the payments of the claims declared during the same period, corresponding to previous years, plus the amount of the provision of benefits to be settled or paid at the end of the financial year corresponding to those claims, the percentage shall be calculated as such insufficiency represent the provision constituted at the beginning, and the provision to be made in accordance with the procedure referred to above shall be increased by that percentage.

3. Where the institution lacks the necessary experience, it shall provide this provision by applying a percentage of 5 per 100 to the provision of outstanding benefits for the settlement or payment of direct insurance. The percentage shall be raised to 10 per 100 for co-insurance and reinsurance accepted.

4. The determination of this provision by means of statistical methods other than those laid down in paragraph 2 of this Article shall require compliance with the requirements laid down in Article 43, with the exception of paragraph 2. '

Eight. Article 42 is amended as follows:

" Article 42. Provision of internal claims settlement expenses.

This provision should 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 insurance benefits direct as of the accepted reinsurance.

Only if the institution does not have a method of its own for the calculation of this provision, it must be determined on the basis of the relationship between the internal costs attributable to the benefits resulting from the the reclassification of expenditure by destination laid down in the accounting plan of the insurance institutions and the amount of the benefits paid in the financial year which is corrected by the change in the provision for outstanding benefits settlement or payment and claims outstanding. The resulting percentage shall be multiplied, at least, by 50 per 100 of the amount of the provision for outstanding settlement or payment entitlements plus 100 per 100 of the amount of outstanding claims outstanding. "

Nine. Article 43 is amended as follows:

" Article 43. Statistical methods of calculating the provision of benefits.

1. An insurance institution may use statistical methods for the calculation of the provision of benefits which include both outstanding claims for settlement or payment and claims outstanding, in which case it shall not be the breakdown of the provision between the two components is necessary. Statistical methods may also be used only for the calculation of the provision of outstanding claims. The statistical methods to be used and the hypotheses referred to for them, as well as the modifications of the methods or hypotheses used, accompanied by a detailed justification of the contrasts of their goodness and the period of obtaining information, shall be authorised by the Directorate-General for Insurance and Pension Funds, which shall be deemed to have been granted if no express resolution has been given within three months of the request by the institution. Where the institution ceases to use such statistical methods, it shall communicate it to the Directorate-General for Insurance and Pension Funds.

2. The estimation of the final amount of the provision shall be made taking into account the results of at least two methods belonging to different statistical methods. Those methods which are based on the same assumptions or which derive their results from the same or variable values are considered to be belonging to the same group.

3. Determining the provision of benefits using statistical methods will require:

(a) that the institution has a sufficient amount of claims to permit statistical inference and that it has historical information relating to them, at least a sufficient number of exercises to assess the provision according to the average life of the claims and the specific characteristics of each class, and which includes the measures relevant to the calculation.

b) The data to be used is homogeneous and comes from reliable statistics.

The claims or groups of claims that have characteristics, or in which circumstances are present, are excluded from the database used for the statistical calculation that statistically justify their exclusion. These claims will be assessed and provisioned individually.

c) The entity shall perform, at least annually, a contrast of the goodness of the calculations performed.

4. The Minister for Economic Affairs and Finance may provide that, in certain classes or risks, the provision of benefits is calculated by statistical methods as a whole or in one of its parts.

In this case, the General Directorate of Insurance and Pension Funds will give publicity to the statistical methods that will be required in the absence of other proposed by the entity.

The entity may request from the Directorate-General for Insurance and Pension Funds the non-application of statistical methods when it can prove that the method used for the sinister to sinister estimation has led to results. sufficient for the last seven exercises.

5. The Directorate-General for Insurance and Pension Funds may, by means of a reasoned decision, require the amount of the provision to be determined by other statistical methods if it considers that the amount estimated by the institution, using a method of individual assessment or a statistical method is insufficient and can compromise its solvency. "

Ten. Article 44 is amended as follows:

" Article 44. Provision of outstanding claims for the risk of deferred manifestation.

In the risks of civil liability arising from the exercise of a professional or business activity; of the production, marketing and sale of products or services; of the performance of the Public Administrations; of the damage to the environment; the performance of managers, directors and senior officials and decennial of construction, in which the event of claims is held after the end of the reporting period, and in any event; other risks in which, in addition, the reported deferral occurs, the provision of Claims outstanding shall be constituted for an amount equal to the fraction of the risk premium which, in accordance with the experience of the entity or the market general, if it is more reliable, corresponds at any time to the percentage of claims which are deemed to be pending or a declaration, unless the amount estimated as laid down in Article 41 above is higher. '

Once. Article 50 is amended as follows:

" Article 50. Goods and rights eligible for the investment of technical provisions.

They shall have the consideration of goods and rights eligible for coverage of the technical provisions as follows:

1.a) Securities and tradable rights of fixed or variable income of any kind, including those that may entitle them to their subscription or acquisition, when they have been admitted to trading on regulated markets in the field of Organization for Economic Cooperation and Development (OECD), are susceptible to widespread and impersonal trafficking in a financial market.

In any event, it is understood that those securities or rights are susceptible to widespread and impersonal traffic in a financial market, when any of the following requirements are met:

1. In the case of securities and equity rights that are traded electronically or are part of the representative market index in which they are traded.

2. In the case of goods and fixed-income rights in respect of which it is possible to obtain a quote in one of the last three market sessions prior to the date of the preparation of the accounting statements.

3. In the case of goods and fixed income rights in respect of which at least one financial agent acting on its own account publicly offers prices for the purpose of trading and closing transactions that comply with the the conditions prevailing on the market at any time. Financial actors shall meet the requirements of the Ministry of Economy and Finance for such purposes.

In the case of securities and marketable rights temporarily transferred with a non-optional repurchase agreement, the financing received shall be computed as an eligible asset during that period.

marketable securities of fixed income or new issue variable shall be provisionally eligible for the coverage of technical provisions from the time of issue, in the event that the issuing entities have securities of the the same class issued in advance and are eligible for coverage of technical provisions.

Except as otherwise provided by the Directorate-General for Insurance and Pension Funds, the provisional aptitude referred to in the preceding paragraph shall cease if no longer than one year after the date of issue. required requirements.

In the event of a suspension of trading, the trading suspension shall be resumed within one month in order to maintain fitness for the coverage of those assets.

For the purposes of this article, regulated markets are considered to be those established within the scope of the Organisation for Economic Cooperation and Development (OECD), which fulfil the conditions required by the Directive. 2004 /39/EC of the European Parliament and of the Council of 21 April on the markets for financial instruments, and those other than, where appropriate, the Spanish financial control authorities, in understanding that their conditions of They are equivalent to those laid down in the said Community rules.

No securities and rights issued by the insurer itself shall be admitted.

b) Structured financial assets. Structured financial assets consist of the combination of two or more assets, derivative instruments or combination of both that are implemented through a single legal business, in terms and conditions that are set up by the Ministry of Economy and Finance.

Structured financial assets, as defined in this regulation and in their development rules, may not in any case be considered eligible for the investment of technical provisions in application of this Regulation. any other paragraphs of this Article.

2. Securities and negotiable rights other than those provided for in paragraph 1 (a), where they are issued or endorsed by international bodies to which a Member State of the European Economic Area belongs.

3. Fixed income securities other than those listed in paragraphs 1.a) and 2, provided that:

(a) collateral or unconditional collateral has been provided on the securities referred to by a credit or insurance institution by an insurance institution authorised to operate by means of establishment in the a Member State of the European Economic Area or have been issued by one of these entities,

(b) where the shares of the issuing company are traded on a regulated market, or;

(c) where they have a collateral or unconditional guarantee granted by an entity whose shares are traded on a regulated market.

4. Financing granted to the State, autonomous communities, local authorities, State-owned companies or public entities in the European Economic Area, whether or not they are implemented in transferable securities, is already granted by the the insurance or credit institution acquired by the insurer after the grant of the said financing, provided that they offer guarantees for their safety, either for the quality of the borrower or for the guarantees provided.

5. The financial instruments listed below.

a) The following shares and units:

1. º of collective investment institutions established in the European Economic Area and subject to coordination in accordance with Directive 85 /611/EEC on the coordination of laws, regulations and administrative matters relating to undertakings for collective investment in transferable securities (UCITS).

2. of collective investment institutions of a financial character that, not being included in the previous paragraph, are regulated in Law 35/2003, of collective investment institutions, and other provisions of development.

3. º of risk capital entities regulated in the Spanish legislation regulating risk capital institutions and their development provisions.

4. º of risk capital entities other than those referred to in the previous paragraph provided that they meet the following conditions:

1. That they have for the exclusive social purpose the carrying out of activities of risk capital entities, as defined in the Spanish legislation regulating the risk capital institutions and their provisions development.

2. That shares or shares have been issued by entities with registered offices in any member country of the Organization for Economic Cooperation and Development (OECD) in which the character of paradise is not present. fiscal.

3. No limitation to the free transmission of the securities or shares representative of those institutions. Such clauses or express covenants that establish a right of preferential acquisition, without limitation with respect to the price that the parties may agree, shall not have the consideration of limitations to the free transmission in favour of the entity itself. the risk capital or its own shareholders or unit-holders, or which require prior authorisation of the transmission by the management board or the management board of the venture capital institution, provided that in the subscription documents or the relevant procurement or information leaflet is listed as the objective grounds for refusal and such causes are exclusively related to the conditions to be met by the potential acquirers of the risk capital institution.

4. The issuing entity must be subject to annual, external and independent audit of accounts, counting at the time of the investment with favorable opinion regarding the last completed full year. Where the risk capital institution in which it is intended to invest is a new constitution, the managing body of the institution shall be at least another existing risk capital institution that meets the previous annual audit requirement, external and independent with favourable opinion on the last completed full year.

5. º of real estate collective investment institutions established in the European Economic Area, provided that they are subject to the authorisation and supervision of a control authority of any Member State of the Space European Economic.

(b) Derivative instruments, in terms and with the requirements laid down in this Regulation and in its implementing rules.

6. Assets and mortgage market rights, including mortgage securitisations, issued by companies established in the European Economic Area and traded on regulated markets within the scope of the Organisation for Cooperation and Economic Development (OECD). For the case of new emission values, the same transitional aptitude rule as referred to in paragraph 1.a) shall apply.

7. Bills of exchange and promissory notes, where they are free, accepted, endorsed without a non-liability clause or endorsed by credit institutions authorised to operate by means of establishment in a Member State of the European Economic Area. Such assets may also be secured by insurance provided by insurance companies authorised to operate by means of establishment in the territorial area concerned.

8. Shares of credit institutions, investment firms and insurance and reinsurance undertakings to the extent that they are subject to the authorisation and supervision of a supervisory authority of any Member State of the Economic Area European.

9. Nominative shares and shares of companies whose sole activity consists in the management of assets on behalf of insurance institutions and pension funds, where at least 90 per 100 of the capital belongs to one or more entities insurance or pension funds.

10. Real estate and real estate rights. The real estate must meet the following requirements:

(a) It must be a rustic land or soil that according to Spanish urban legislation is defined as urban or urbanizable, finished buildings, or floors or premises that, as part of those, constitute farms Independent registrars.

(b) Being located in the territory of a Member State of the European Economic Area.

c) Be registered in the Property Registry in the name of the insurance institution.

(d) To have been assessed by an approved valuation entity for the valuation of assets in the mortgage market, in accordance with the specific rules for the valuation of buildings eligible for the coverage of technical provisions of the insurance institutions approved by the Minister for Economic Affairs and Finance.

e) In the case of quotas or prodiviviso shares, they must be registrally identified and freely transmissible. In the case of car parking spaces, they must be attached to the main property or, if they are not, they must be registered and be freely transmissible.

f) If the real estate is mortgaged and the lien affects several assets, the liability of each property must be individualised.

g) 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 set in the last valuation that had been carried out. Where the review of a previous assessment, or the valuation of an immovable property that is provisionally eligible, and an underinsured situation occurs, the new value cannot be considered until such a situation is remedied.

By way of derogation from paragraphs (a), (c) and (d) above, buildings under construction or in rehabilitation may be provisionally affected, provided that the insurance undertaking formally assumes the commitment to complete the construction or rehabilitation within five years, as well as the buildings which are in the process of being registered in the Land Registry or pending valuation for a maximum period of one year.

In the case of buildings located outside Spain, the criteria set out above shall apply in a similar way and taking into account the legislation of each State.

The real property rights eligible shall be those that have been constituted on immovable property that meet the requirements referred to in the preceding paragraphs, except the one of ownership, and that are registered in its name in the Property Registry.

In the case of real estate or real estate rights to be registered, there must be a guarantee of a concerted course with an insurance institution other than the owner of the property, or a bank guarantee for a non-inferior amount to the provisional condition value.

11. Mortgage loans, provided that they are first mortgage and are incorporated in buildings which meet the requirements set out in the previous paragraph. In addition, all requirements that would be required by the mortgage regulation must be met.

12. In the case of the guarantee, the guarantee shall be eligible for the coverage of technical provisions.

13. Appropriations or quotas-parts thereof granted to companies domiciled in a Member State of the European Economic Area whose shares are admitted to trading on a regulated market within the scope of the Organisation for Cooperation and Economic Development (OECD).

14.a) Credits guaranteed by, or granted to, credit or insurance institutions provided that in both cases they are authorized to operate by means of establishment in a Member State of the Economic Area European.

(b) The balances maintained by insurance institutions on the basis of certain or predetermined flows of flows with financial institutions and with the requirements of this Regulation and its implementing rules.

15. Claims against the reinsurers for their participation in the provision of benefits, in the part where no deposits were received for them. In the event that the debtor has its registered office outside the territorial scope of the Organisation for Economic Cooperation and Development (OECD), it shall be taken into account when the institution accredit that the institution has been qualified as a solvent. part of a reputable rating agency.

16. Deposits in the transferor by reason of reinsurance transactions accepted.

17. Claims against the public treasury for liquidations of the corporation tax and for withholding tax on the same tax corresponding to returns on investments affecting the coverage of technical provisions and other taxes duly cleared, net of the entity's accrued obligations with the same Public Finance.

18. Interest, income and dividend credits accrued and not due, as well as those that are due and receivable are not affected by probable recovery, provided that in all cases they come from eligible assets. The amount of such claims shall be accumulated to the value of those assets for the purposes of applying the rules on the coverage of technical provisions.

19. Recovery of claims in the fields of credit and caution under the conditions laid down by the Minister for Economic Affairs and Finance.

20. Cash in cash, banknotes or coins to be traded on foreign exchange markets of the Organisation for Economic Cooperation and Development (OECD).

21. Deposits with credit institutions authorised to operate by means of establishment in a Member State of the European Economic Area.

22. Checking accounts not harmed, issued or guaranteed by credit institutions authorised to operate by means of establishment in a Member State of the European Economic Area.

23. Other assets not listed above where they meet the conditions that the Minister of Economy and Finance establishes for their consideration as eligible for the coverage of technical provisions. '

Twelve. Article 52 is amended as follows:

" Article 52. Valuation of investments in technical provisions.

1. For the purposes of the coverage of technical provisions, the goods and rights in which the investment of the technical provisions is materialised shall be valued in accordance with the following criteria and, failing that, the valuation rules of the Plan of accounting of insurance institutions:

(a) Securities and marketable rights: they shall be valued at their market value, as defined in the accounting plan of the insurance institutions, except in the case of securities assigned to transactions carried out in accordance with the provided for in Article 33.2, in which case they shall be valued at the value of the accounts.

In the case of securities or rights acquired with deferred payment, net of such disbursements shall be computed.

(b) Shares and units of companies whose social object is the management of assets on behalf of insurance institutions: they shall be computed by their liquidative value. To determine this value, only assets which, in accordance with this Regulation, have the status of eligible for the coverage of technical provisions, shall be taken into account and shall be computed according to the valuation rules and the limits of dispersion and diversification set out in this regulation.

(c) Mortgage credits or pignoraticios: shall be computed by the amount of their current value, with the limit of the value of the guarantee, using for the update the interest rate of the State of the duration of the State residual credit.

d) Real estate and real estate rights: the real estate will be computed by its value of valuation, and the actual rights of usufruct, use and room by its financial-actuarial value. In the case of real estate or real estate rights mortgaged or acquired with deferred payment, the value eligible for coverage shall be that resulting from the deduction, respectively, of the value referred to above, the amount of the liability Pending mortgage or the current value of the deferred part of the price to be paid and, where appropriate, the value corresponding to the condition that guarantees it, the easements, levies and, in general, real rights the limitation of the domain, taking into account also the impact on the value of the leases weigh on them. The interest rate on the debt of the State of financial duration closest to the residual of the respective obligation shall be used for the update.

In the case of buildings under construction or in rehabilitation, the institution may incorporate into the initial valuation the amount of works certificates to the extent that they are paid and are in accordance with an effective implementation of these measures. Pending registration or valuation shall be assessed, where appropriate, for its purchase price, with the deductions set out in the preceding paragraph.

The General Directorate of Insurance and Pension Funds will be able to check and review the securities attributed to real estate and real estate rights through its technical services.

e) Financial instruments traded or not traded on regulated markets shall be valued at their market value as defined in the Accounting Plan of the insurance institutions.

Derivative instruments traded or not on regulated markets that are affected by transactions referred to in Article 33.2 shall be valued at the value of the accounts.

(f) Structured financial assets shall be valued at their market value, as defined in the Accounting Plan of the insurance institutions, except in the case of securities assigned to transactions carried out in accordance with the the provisions of Article 33.2, in which case they shall be valued at the value of the accounts. The market value thus defined for the non-marketable structured financial assets shall in no case exceed the sum of the market value of the collateral adjusted, where applicable, with the balance of the swap swap default to financial entities.

g) The balances that are generated with the counterparty in the transactions of certain or predetermined flows of flows referred to in Article 50 (2) (b) shall be valued at their market value, as defined in the the accounting plan of the insurance institutions, except in the case of securities assigned to transactions carried out in accordance with Article 33.2, in which case they shall be valued at the value of the accounts.

2. Such valuations shall in any event be deducted from any expenses and indirect taxes, which are likely to arise from the transmission or completion of the transfer or realisation, in accordance with a prudent assessment of their amount.

Also, the assets representative of the technical provisions shall be assessed net of the debts incurred for the acquisition of the same. "

Thirteen. Article 52a is hereby established with the following wording:

" Article 52a. Derivative instruments usable by insurance institutions.

1. An insurance institution may, in accordance with this Regulation, operate on derivative instruments with any of the following purposes:

(a) Ensure adequate coverage of the risks assumed in all or part of the financial instrument portfolio or the derivative instruments held by the institution or the commitments made under the operations of the institution insurance or reinsurance.

b) As an investment, contracted without purpose of coverage.

2. The Minister for Economic Affairs and Finance may lay down the requirements that may be required of any of the categories of derivative instruments contracted by the insurance institutions. '

Fourteen. An article 52 ter is created with the following wording:

" Article 52 ter. Derivative instruments contracted as investment.

1. Derivative instruments contracted as an investment, either directly or as part of a structured product, shall not expose the insurance institution to potential or actual losses that it assumes:

(a) Uncommitted own equity is less than the minimum amount of the solvency margin.

(b) The net accounting assets, as defined in Article 82 and after the loss of such losses, is less than the minimum requirement for compulsory unavailable reserves.

(c) The value of the assets, as defined in Article 52, affected by the coverage of technical provisions and of those other than those that are not affected by such coverage shall meet the requirements laid down in the Articles 50 and 51, is less than the amount of the technical provisions to be covered. For this purpose, the share of the market value of the assets that corresponds to unrealised gains in eligible assets that may in the future correspond to gains in favour of the assets shall not be computed as available.

2. For potential losses, the maximum likely loss according to the internal models shall be understood to estimate the value at risk of the institution. The General Directorate of Insurance and Pension Funds shall establish the requirements, assumptions and conditions to be met by the internal models to estimate the value at risk. '

Fifteen. An article 52c is created with the following wording

" Article 52c. Derivative instruments contracted for hedging purposes.

1. For the purposes of Article 52a, derivative instruments shall be understood to have been contracted to ensure adequate coverage of the risks assumed in all or part of the portfolio of assets or liabilities, provided that they are met. the following conditions:

(a) That existing assets or other operations that contribute to exposing the institution to a risk, those transactions are intended to eliminate or significantly reduce that risk.

(b) That the operations or assets covered and their hedging instruments are explicitly identified from the birth of that coverage.

c) That the underlying of the hedge derivative is the same as that corresponding to the risk of the items being covered.

If not, the existence must be credited, within the generally accepted margins to qualify as effective a coverage operation in the Spanish accounting legislation, of a valid statistical relationship and in the last two years verifiable between the underlying of the hedging derivative and the covered instrument. '

Sixteen. Article 53 is amended as follows:

" Article 53. Limits of diversification and dispersion.

1. The maximum value of the goods and rights to be computed for the coverage of technical provisions shall not exceed the limits laid down for each category. In the event that the entity operates simultaneously in the life class and in classes other than life, the limits in question shall be applied separately with reference to each activity.

2. Real estate, real estate rights and shares and holdings in real estate collective investment institutions.

Investment in a single real estate or real estate right will be counted as maximum up to the limit of 10 per 100 of the technical provisions to be covered. The indicated limit shall 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.

The amount accumulated in this category of assets shall be counted as a maximum of 45 per 100 of the technical provisions to be covered. However, the Directorate-General for Insurance and Pension Funds may authorise the calculation of this type of assets as a percentage higher than that indicated.

3. Cash-in-cash and non-harmed cash-in-cash checks shall be counted as a maximum of 3 per 100 of the technical provisions to be covered.

4. Other eligible assets.-In the case of securities or securities issued by the same undertaking, or of loans granted to the same borrower, or guaranteed or guaranteed by the same guarantor, the total amount to be computed shall not exceed 5%. 100 of the technical provisions to be covered. This limit shall be 10 per 100 if the insurance undertaking does not invest more than 40 per 100 of the technical provisions to be covered by securities or claims relating to issuers and to borrowers or guarantors in which 5 per 100 is exceeded. Shares in exchange-traded funds shall be subject to the above limits.

In the case of investments referred to in the preceding paragraph in companies of the same group, the same shall be accumulated and, subject to the limits of 5 per 100 and 10 per 100 for each of the companies, the said investments shall be calculated investments up to 10 per 100 and 20 per 100, respectively.

They will not be subject to the limits provided for in the previous two paragraphs:

a) The deposits in credit institutions.

(b) Securities or securities, excluding shares of credit institutions or insurers.

(c) Credits granted to credit institutions or insurers.

(d) Credit claims or guaranteed by credit institutions or insurers.

Investment in deposits in credit institutions and in securities or transferable securities, excluding shares, of a single credit institution or insurer, as well as in loans granted to or guaranteed by or secured by the same is subject to a joint limit of 40 per 100 of the technical provisions to be covered. In the case of investments of the above mentioned in companies of the same group, and respecting the previous limit for each entity, the same shall be computed up to 60 per 100 of the technical provisions to be covered.

Investment in shares and units in collective investment institutions of a financial nature not subject to coordination under Directive 85 /611/EEC, for which the legal provisions are coordinated, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), as referred to in Article 50 (2) (2) of this Regulation, other than shares and shares in institutions of collective investment of free investment and of collective investment institutions of collective investment investment institutions, and provided that they do not apply to them any other limit as set out in the preceding paragraphs, shall be subject to the joint limit of 40 per 100 of the technical provisions to cover.

Investment in securities or transferable securities which are not admitted to trading on regulated markets within the scope of the Organisation for Economic Cooperation and Development (OECD), together with the shares and participation in collective investment investment institutions or in institutions for collective investment of collective investment investment institutions as referred to in Article 50 (2). holdings in companies and venture capital funds as referred to in Article 50 (3) (a), may be counted for an amount exceeding 10 per 100 of the total of the technical provisions to be covered.

Not subject to the limit provided for in the preceding paragraph, securities or transferable securities other than shares and units in institutions for collective investment of free investment or investment institutions collective investment investment collective investment institutions, which are admitted to trading on regulated markets within the scope of the Organisation for Economic Cooperation and Development (OECD), even if they are not susceptible to widespread and impersonal traffic in a financial market.

The set of shares and units in a collective investment investment institution or in a collective investment institution of investment collective investment institutions, to which the Paragraph 5.a.2. of Article 50 of this Regulation, or of shares and units in a company or venture capital fund as referred to in Article 50 (3) (3) thereof, may not be counted for an amount exceeding 5 per 100 of the total of the technical provisions to be covered.

The appropriations referred to in Article 50 (13) which are not guaranteed or guaranteed shall be counted for a maximum of 5 per 100 of the technical provisions to be covered, without exceeding the limit of 1 per 100 for a single debtor. Loans granted to credit institutions or insurers, or guaranteed or guaranteed by both, shall not be subject to such limits.

5. Derivative instruments are subject, in accordance with the terms set out in the previous paragraph, to the limits of diversification and dispersion due to the market risk associated with the development of the underlying and the counterparty risk. The limit on securities or transferable securities which are not traded on a regulated market or the limits on the market risk associated with the development of the underlying when it consists of interest rates shall not apply to them. or on reference indexes that meet at least the following conditions:

a) Having a sufficiently diversified composition

b) Having a proper public broadcast.

c) Being of widespread use in financial markets

The derivative instruments whose underlying commodities are commodities shall be subject to the market risk to the limits provided for in the first subparagraph of paragraph 4 above.

For the application of the diversification and dispersion limits associated with market risk, derivative instruments that have the consideration of hedging instruments shall be considered to be based on the net position.

6. The balances of certain or predetermined flows of flows referred to in Article 50 (2) (b) shall be subject to the diversification and dispersion limits provided for in paragraph 4 of this Article for deposits in credit institutions.

7. They shall not be subject to the above limits:

(a) Shares and shares in collective investment institutions established in the European Economic Area and subject to coordination in accordance with Directive 85 /611/EEC on the coordination of provisions laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS).

(b) Deposits in the transferor by reason of reinsurance transactions accepted.

(c) The appropriations corresponding to the participation of the reinsurers in the provision of benefits.

(d) The appropriations against the public finances referred to in Article 50 (17

.

(e) Financial assets issued or endorsed by international organisations to which Member States of the European Economic Area belong, or in this same area those issued by States, Autonomous Communities and Local corporations or public entities of these dependents.

(f) derivative instruments acquired on regulated markets within the scope of the OECD which fulfil the conditions required by Directive 2004/39 of 21 April of the European Parliament and of the Council on the markets of financial instruments, provided that the liquidity of the positions is ensured, by the counterparty risk.

g) Selling positions in non-traded options on regulated derivatives markets shall not be subject to the above limits for counterparty risk.

8. In the case of investment in shares or units in companies dependent on insurance institutions referred to in Article 50 (9), for the purposes of calculating the limits of previous diversification and dispersion, they shall be accumulated at the value of each the asset category of which the entity is directly incumbent, which shall be the result of computing the assets corresponding to the dependent companies according to their share of the holding.

9. For the purposes of this Regulation, collective investment institutions of free investment and collective investment institutions of collective investment investment institutions shall be defined as such that they are qualified as such in Law 35/2003, of November 4, of collective investment institutions, and in its implementing regulation.

10. The Minister for Economic Affairs and Finance shall lay down the means of applying the limits of diversification and dispersion to the structured financial assets referred to in Article 50 (1) (b). "

seventeen. Article 59 is amended 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. In general terms, the following items shall be considered as non-committal assets:

(a) The paid-up share capital excluding the part of the 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 of the account (a) shall correspond to the net investment position of such 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 Planned activity in the regulatory regulation of pension plans and funds.

b) The revaluation reserve, the issuance premium and other heritage reserves. It shall apply in respect of these items as referred to in the second subparagraph of paragraph (a) above.

In any case, 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, 3.1, and 80.1 of the consolidated text of the Law of Companies, approved by the Royal Decree of Law 1564/1989, of 22 December.

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 constituted.

3. Own shares acquired for capital reduction.

4. ° The reserves that correspond to the minimum own resources required by the regulatory regulation of pension plans and funds.

5. ° The amount of negative differences accounted for in the account of Minusvalies from marketable securities of variable income (Article 33.2.b) of the Regulation on the Management and Supervision of Private Insurance) ".

(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.

(d) Non-reintegrable contributions from partners or mutualists that appear on the liabilities side 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 than that.

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 provided for a total or partial withdrawal.

Both in one case and in another case, from the moment that their remaining term is five years, and during those five years, they will reduce their computation as their own property at the rate of 20 percent a year, until their remaining time is less than one year, at which time they will no longer be counted as such.

4. No rescue, redemption or early repayment terms may not 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 institution. the Directorate-General for Insurance and Pension Funds.

The silent actions will be computed by their paid-up capital.

Subordinated financing of a given duration may not be computed by an amount greater than 25% of the non-committed own equity, or of the minimum amount of the solvency margin, if it is less.

(f) Finances of indeterminate duration, other than those referred to in paragraph (e) above, where they meet the following requirements:

1. No shall be reimbursable at the initiative of the creditor or without the prior agreement of the General Directorate of Insurance and Pension Funds.

2. The issuance contract must give the insurance entity the possibility to defer payment of interest.

3. No binding agreement by virtue of which, for the purposes of credit ranking, creditors for 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 will be taken into consideration.

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 non-committed own equity, or the minimum amount of the solvency margin, if it is less than the solvency margin.

Two. The following items may be computed 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 minimum amount of the solvency margin, if it is outside less.

(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 calculating the items in paragraph 1 and paragraphs (a) and (c) of this paragraph, and deducted the items referred to in paragraph 2 of this Article or half of the assets referred to in paragraph 2. of the minimum amount of the solvency margin, if it is smaller.

(c) The capital gains resulting from the underestimation of assets, including the outstanding balance of recognition in the profit and loss account arising from the sale of fixed income assets in the portfolio to maturity, after deduction, in both cases, of all expenses that may have an impact on the final amount of the surplus value.

In no case shall the capital gains and the outstanding balance of recognition in the profit and loss account arising from the sale of fixed income assets of the portfolio to maturity be computed, in both cases, from financial assets linked to life insurance operations in accordance with the provisions of Article 33.2. The accounting gains applied to the compensation of disabled persons shall also not be computable.

The computation of capital gains resulting from the underestimation of assets of the asset qualified as unfit for the investment of technical provisions will require an express request to the General Directorate of Insurance and Funds Pensions.

(d) Discounted commissions that are technically outstanding with the policy limit of 3.5 per cent of the difference between the insured capital and the mathematical provision, and of which, where appropriate, shall be deducted from them. the amount of the 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 are not in accordance with the law and regulation.

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

(a) The expenses of establishment, constitution, capital increase and formalization of debts that appear on the assets of the balance sheet.

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

c) The negative results of previous exercises.

(d) The handicaps resulting from the overvaluation of assets and the underestimation of liabilities, which have not been imputed to results. This item shall include obligations, provisions or debts that may not have been accounted for under any legal or regulatory provision, other than those arising from portfolios of investments due in connection with operations of life assurance as provided for in Article 33.2.

The provisions imputed to results from assets of the ordinary investment portfolio linked to life insurance operations referred to in Article 33.2 shall be computed with a positive sign.

(e) Shares equal to or greater than 20% of the capital or voting rights of the investee that the insurer 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.

(f) Subordinated financings or other non-committed equity securities issued by the entities referred to in the preceding paragraph and acquired by the insurer.

3. The deductions referred to in paragraph 2 above shall be effected by their value in the books of the holding entity.

As an alternative to the deduction of the items referred to in paragraphs (e) and (f) 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 must be applied in a consistent manner.

In any case, entities belonging to insurance groups and financial conglomerates subject to supplementary supervision may not deduct the items referred to in paragraphs (e) and (f) of paragraph 2 which they hold in institutions. credit, investment firms, 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 authorised to perform direct insurance operations other than life insurance and life insurance operations, the limits set out 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. '

Eighteen. Article 61 is amended as follows:

" Article 61. Minimum amount of solvency margin in insurance other than life insurance.

1. The minimum amount of the solvency margin 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 the claims of the last three social years. The minimum amount of the solvency margin shall be equal to that which is higher than those obtained by the above procedures.

2. Where institutions essentially cover one or more of the credit, storm, pawn and frost risks, the last seven social exercises shall be taken into account as the reference period for the average amount of claims. This is understood to be the case where the premiums for those risks are at least 75% of the total of those issued by the institution.

3. The amount of the solvency margin on the basis of premiums shall be determined as follows:

(a) The premium concept shall include the accruals for direct insurance in the financial year that are covered, net of their cancellations and extortions, plus premiums accepted in reinsurance in the same financial year, or, if more high, that of premiums charged for direct insurance in the financial year covered, net of their cancellations and extortionate, plus premiums accepted in reinsurance in the same financial year.

In classes 11, 12 and 13 of those provided for in Article 6 (a) (a) of the recast of the Law on the Management and Supervision of Private Insurance, the amount of premiums or contributions referred to in the preceding paragraph shall be increased by 50 percent. Statistical methods for the allocation of premiums may be used in these classes, provided that the premiums have been submitted to the Directorate-General for Insurance and Pension Funds and accepted by the Directorate-General for Insurance and Pension Funds.

b) Up to 53,100,000 euros of premiums will be applied by 18 percent, and the excess, if any, will be applied by 16 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 receded, and the gross amount of such claims, without this relationship in any case being less than 50%.

4. The amount of the solvency margin on the basis of claims shall be determined as follows:

(a) The amount of claims shall include those paid by direct business in the financial year covered and in the preceding two, except in the case of the risks referred to in paragraph 2 above in which the six previous financial years, no deduction for reinsurance transferred or regressed; claims paid for reinsurance acceptances and outstanding claims for direct insurance and reinsurance accepted shall also be included closure of the financial year.

(b) The sum obtained pursuant to subparagraph (a) shall be deducted from the amount of claims for claims made in the periods referred to in paragraph (a), plus that of the outstanding claims arising at the end of the financial year prior to the period covered by both direct and reinsurance accepted.

In classes 11, 12 and 13 of those provided for in Article 6 (a) (a) of the recast of the Law on the Management and Supervision of Private Insurance, the amount of claims, provisions and recoveries to be considered shall be increased by a 50 percent. In those classes, statistical methods may be used for the allocation of claims, provisions and recoveries provided that such methods have previously been submitted to the Directorate-General for Insurance and Pension Funds, and is accepted by you.

(c) One third of the figure resulting from paragraph (b), with the limit of 37,200,000 euros, will be applied 26 percent, and the excess, if any, will be applied 23 percent, adding both results. In the case of the risks referred to in paragraph 2 above, the seventh shall apply instead of the third.

(d) The amount obtained in accordance with paragraph (c) shall be multiplied by the ratio existing in the last three financial years, between the amount of the net reinsurance claims and the gross amount of such reinsurance. disaster, without this relationship in any case being less than 50 percent.

The claims of outstanding claims and outstanding claims made in this article shall be construed as referring to all concepts to be included in such claims and provisions.

4 bis. Where the minimum amount of the solvency margin, calculated in accordance with the preceding paragraphs, is less than that of the preceding financial year, the minimum amount shall be determined by multiplying that of the previous year by the coefficient as a result of dividing the technical provision for net reinsurance benefits constituted at the end of the financial year and the provision of the commencement of the financial year, without the calculated coefficient being, in any case, higher than 1.

4 ter. Where the nature or quality of the reinsurance contracts has changed significantly from the previous financial year, or in the reinsurance contracts, the risk transfer, the reinsurance reduction or the risk transfer shall not occur. in paragraph 3.c) and in paragraph 4 (d) of this Article, it shall be adjusted to reflect the reinsurance policy of the entity that effectively has an impact on the solvency margin, reducing the amount that is necessary.

Reinsurance is presumed to be of sufficient quality when the reinsurer entity has at least a BB or equivalent rating awarded by a reputable credit rating agency.

In any event, the reinsurance reduction shall not apply if the annual or future solvency of the reinsurer may be adversely affected by its annual accounts.

5. The percentages referred to in paragraphs 3 (b) and 4 (c) above shall be reduced by two thirds in the case of sickness insurance, including health care coverage, carried out in accordance with actuarial bases similar to those applicable to life insurance, and the following circumstances are also given:

(a) The premiums are calculated on the basis of morbidity tables, according to mathematical methods, and consequently a technical provision of sickness insurance is established in accordance with the terms laid down in Article 47.

(b) A security surcharge shall be levied in accordance with the provisions of Article 45.

(c) The insurer cannot object to the extension of the contract after the third annual maturity.

d) That contracts are provided for the possibility of increasing premiums or reducing benefits, even for ongoing contracts.

6. The amounts provided for in paragraphs 3 (b) and 4 (c) above shall be reviewed in order to take account of changes in the European Consumer Price Index published by Eurostat, updating the amounts communicated by the European Commission. To facilitate their knowledge and implementation, such updates shall be made public by resolution of the Directorate-General for Insurance and Pension Funds. "

nineteen. Article 63 is amended as follows:

" Article 63. Guarantee fund.

The guarantee fund must be made up of the items which, as a general rule, have the non-committed own-equity consideration referred to in Article 59 (1) of the guarantee fund, for the capital gains which are available for use in the uncommitted own assets and for the items referred to in Article 59.2. '

Twenty. Article 65 is amended as follows:

" Article 65. Books and accounting records of insurance institutions.

1. Insurance institutions shall carry the books of accounts required by the Trade Code and other provisions which apply to them, including by compulsory means the ledger, which shall collect, for each of the accounts, the and credits which are carried out on them, and must be agreed at all times with the entries made in the daily book, as well as the records listed below:

a) Of accounts. It shall collect the accounts used by the institution to reflect its operations 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 of the insurance companies, approved by Royal Decree 2014/1997 of 26 December.

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 the extortionate of premiums, must be related to the policy from which they come.

When a policy or supplement is cancelled, such a circumstance and its date will be entered 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 criteria for the classification of claims using the entity.

The information that must contain at least this record shall relate to the policy of which each casualty proceeds; dates of occurrence and declaration; initial valuation allocated; subsequent payments or appropriations, with indication separate from the recoveries that have been produced; provision made at the beginning of the financial year; provision at the end of the period; the date of the last valuation of the claim; and the payments and the provision in charge of the reinsurance. It shall also be indicated whether there is a judicial, administrative complaint to the institution's insured person, or any other type.

The obligation to carry this register will be understood even if the information mentioned in this letter is contained in different computer files, provided that it is possible to establish a correlation and integration agile and simple 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, by communicating to the General Directorate of Insurance and Pension Funds its structure and form of management.

The claims for which, in accordance with Article 39.3, an individual valuation is not required are exempted from the above requirements.

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 case and for each of the investments of the institution, including treasury and derivative instruments, this record shall contain the description, status, allocation and valuation for the purposes of accounting and reporting. technical provisions, or preparatory insurance or own funds operations, which are detailed at the reference date. It shall also indicate the deposit of the financial assets and the concept in which the deposit is made.

When the entity has assigned investments to certain insurance operations and based on the profitability of those operations, the life assurance provision of those operations shall indicate the methods of calculation, assumptions formulated and employee control and verification systems.

In the case of entities authorized to operate in both the life class and in classes other than life, this record shall be kept in separate sections.

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. Polices found in the frame of articles 33.1, 33.2 and transitional arrangement second. Within the policies under Article 33.1, the investments specifically assigned to the policies determining the provision of life insurance as provided for in paragraphs a.1., a.2., b.1., b.2. and/or to be identified in the framework of Article 33.1 shall be identified. c. Within the policies under Article 33.2, the investments specifically assigned to the policies constituting a homogeneous group will be identified. In any case, investments specifically assigned to policies that implement pension commitments will need to be identified,

2. Polices that recognize participation in benefits,

3. Polices in which the rescue value is referenced or linked to specific assets.

4. The hedging operations of assets, liabilities and derivative instruments, as defined in paragraphs 1.a) and 1.b) of Article 52a.

The investment register will, in any case, include a summary of the investment situation at the end of each quarter.

(f) States of coverage of technical provisions and solvency margin. The states covered by this register shall be drawn up at least on a quarterly basis and shall contain all the data necessary for the calculation and coverage of the technical provisions and the solvency margin.

g) 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 data identification 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 shall be collected for each contract. economic.

2. The records referred to in the previous paragraph may be kept on computer media.

3. The books and records referred to in this Article shall not be held for more than three months.

4. The Minister for Economic Affairs and Finance may lay down rules on the conduct and technical specifications of the books and records referred to in this Article. "

Twenty-one. Article 66 is amended as follows:

" Article 66. Accounting obligations of insurance institutions and duty of information.

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 a balance sheet, technical and non-profit-making accounts, a state of coverage of technical provisions and a state of solvency margin.

The technical results and coverage statements of technical provisions and solvency margin shall be separately referred 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. The insurance institutions shall send the annual accounts and the management report to the Directorate-General for Insurance and Pension Funds, the statistical-accounting information relating to the financial year and the general and supplementary reports of audit. The annual statistical accounting information shall include data relating to the balance sheet, general profit and loss account and classes, coverage of technical provisions, solvency margin, guarantee fund and those other extremes to be analysed the information contained in the previous statements. The annual accounts shall be forwarded simultaneously to the annual statistical accounting information, which shall be in accordance with the models approved by the Minister for Economic Affairs and Finance and shall be sent before 10 July of the following year. the person to whom they relate, unless the institution carries out an exclusively reinsurer activity in which case the period shall end on 10 October.

The entities required to formulate consolidated accounts shall forward to the General Directorate of Insurance and Pension Funds (Ias) consolidated annual accounts and the management report, consolidated statistical accounting information and the general and supplementary audit reports. The statistical accounting information shall include data relating to the consolidated balance sheet, general consolidated profit and loss account and classes, coverage of technical provisions of the group, consolidated solvency margin and those other extremes to analyse the information contained in the previous statements. The referral of the consolidated annual accounts shall be carried out at the same time as the consolidated annual statistical accounting information, which shall be in accordance with the models approved by the Minister for Economic Affairs and Finance and shall be submitted before 10 July of the year following the year 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.

In addition, you are required to submit quarterly statistical accounting information to any insurance institution located in any 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 above obligation shall only cease when the limit referred to is no longer met for two consecutive years.

(b) Operating in the classes of life insurance, security, credit, or any of those that cover the risk of civil liability.

(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 authorisation, or are in a liquidation period not taken up by the Insurance Compensation Consortium.

In any case, institutions not obliged to forward quarterly statistical accounting information shall report on the balance sheet, profit and loss account and the reporting states of technical provisions at the same frequency. and solvency margin.

Also, the obligable entities of the consolidable groups of insurance entities shall report the statistical-accounting information corresponding to that period semi-annually.

All statistical and accounting information relating to the period under the year shall be sent to the Directorate-General for Insurance and Pension Funds within two months of the end of the period to which it corresponds, except which may be submitted until 31 August, which may be submitted until 15 September following the end of the period to which it corresponds.

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 precept. "

Twenty-two. Article 67 (1) (c) shall be amended as follows:

"(c) The management companies of collective investment institutions and pension fund managers"

Twenty-three. Article 68 is amended as follows:

" Article 68. Audit of the annual accounts of insurance institutions.

1. The individual annual accounts and the consolidated annual accounts of the insurance institutions shall be reviewed by the auditors.

2. Provided that there are irregularities in the accounts which make it difficult to know the true assets of the institution or entities subject to special control measures, the Directorate-General for Insurance and Funds Pensions may require insurance institutions, through individual requirements, to carry out special external audits, with the extent deemed necessary for the proper control of such audits. "

Twenty-four. Article 110 is amended as follows:

" Article 110. Internal control of insurance entities.

1. Insurance institutions shall establish, document and maintain at all times appropriate internal control procedures for their organisation. The administrative board of the entity required to present the consolidated accounting statistical documentation or that of the obligation to present the individual accounting statistical documentation shall be the ultimate responsible for establishing, maintaining and to improve such internal control procedures. The management of the entity shall be responsible for the implementation of the internal control procedures, in line with the guidelines established by the Management Board.

2. An insurance institution must have sufficient information to enable the management board and the management of the institution to have an up-to-date knowledge of the evolution of its business, the functioning of its business departments and distribution networks, and the behavior of the financial economic and basic actuarial measures of your business. In addition, an effective communications system should be established to ensure that relevant information reaches all those responsible.

3. Internal control procedures shall in any event include the development of an appropriate review function and the establishment of risk management systems.

4. The review function shall be carried out by staff with sufficient knowledge and experience to ensure, in the performance of their duties, full independence with regard to the different areas of the institution, corresponding to the management board. of the same guarantee the precise resources for the proper fulfillment of the functions that they have entrusted.

5. Insurance institutions shall establish risk management systems, appropriate to their organisation, which enable them to identify and assess, on a regular basis, the internal and external risks to which they are exposed. To this end, they will establish strategies for the same, appropriate to the nature and incidence of such risks, incorporating processes that allow a measurement of the identified risks, including their probability of occurrence and impact on the risk profile of the institution. Institutions shall also have contingency plans in place to anticipate adverse situations that may jeopardise their viability.

6. Internal control procedures shall be extended, in those entities that outsource any of their functions or actions, to outsourced activities. In no event shall the outsourcing of functions imply that the entity transfers or ceases to assume the responsibilities arising from such functions.

7. Each year the institution shall draw up a report on the effectiveness of its internal control procedures, with an impact on the significant deficiencies identified, its implications and, where appropriate, proposing measures deemed appropriate to their healing. The report shall be subscribed by the Board of Directors of the institution to the Directorate-General for Insurance and Pension Funds together with the annual accounting statistical documentation within the time limits referred to in Article 66.

8. An insurance institution shall establish, in the light of its particular characteristics, a proper segregation of tasks and functions both among its staff and between the activities carried out therein.

9. The requirements set out in this Article, for application to all insurance companies, may be implemented by them in accordance with the principle of proportionality, so that the same principles and elements of control, its implementation may be carried out in the light of the size of the institution and its level of risks. In no case can the application of this paragraph be a minor protection for the insured person.

10. It is for the board of the entity required to present the consolidated statistical accounting documentation to establish the internal control procedures which are necessary in order to ensure compliance with the provisions of the the preceding paragraphs with reference to the consolidable group of insurance entities.

The consolidated group of insurance entities, through the entities that compose it, will establish the internal control procedures necessary to ensure the full availability and adequate presentation of how much data and information in general is required for the preparation and completion of consolidated accounts, including the statements of coverage of consolidated technical provisions and solvency margin. '

Twenty-five. A new Article 110a is hereby established, with the following wording:

" Article 110a. Control of the investment policy.

1. The Board of Directors of the institution shall be responsible for formulating and approving the policy of strategic investment, considering the asset-liability ratio, the overall risk tolerance and the liquidity of the positions in different scenarios. In particular, the identification, monitoring, measurement, reporting and control of risks related to the investment activities, procedures and policies adopted shall be ensured. Management will be responsible for implementing such policies and measures.

2. The use of derivative instruments and structured financial assets by the insurance institutions shall be subject to the requirements laid down for this purpose by the Minister for Economic Affairs and Finance and, in any case, by Following conditions:

(a) Insurance institutions shall have clear and written rules approved by the Management Board on the use of derivative instruments and structured financial assets, including the distribution of functions and their delegation, as well as a description of the responsibilities within the entity. In this respect, the functions of authorisation, execution of orders, control of their use and handling of the information must be carried out by different persons.

(b) Controls on the use of derivative instruments and structured financial assets, which shall be duly documented, shall be carried out on a regular basis, and a person holding a regular report shall be regularly informed. place of responsibility that does not have the responsibility of those who execute the orders, and in any case, to the management of the entity.

The control procedures established should allow the verification of the state of the situation in relation to the risks inherent in the use of the derivative instruments and structured financial assets, and should be verified, external or internal controls, that the procedures implemented are appropriate and are in line with the objectives pursued, as well as that their operation in practice is appropriate.

(c) Insurance entities should have clear and written guidelines on the categories of derivative instruments and structured financial assets that may be used, the maximum permitted positions, the authorised counterparties and in the case of derivative instruments, on whether they have been acquired for the purpose of hedging or investment. In the case of transactions outside regulated markets, the institution should ensure that the financial intermediaries guarantee the liquidity of the positions and offer the possibility of providing purchase and sales quotes, in any time, at the request of the entity.

d) That the institution has internal models to estimate the at-risk value of the derivative instruments acquired for investment purposes referred to in Article 52.b. '

Twenty-six. The third additional provision becomes the following wording:

" Additional provision third. Allocation of technical provisions. Minimum amount.

1. The allocations to be made to technical provisions in accordance with the methods laid down and permitted in this Regulation and the additional ones which, if necessary, are carried out in order to adapt to the provisions of this Regulation, shall have the effect of consideration of minimum amounts for the establishment of such technical provisions.

2. Notwithstanding the foregoing, the technical provision of benefits estimated by statistical methods, as referred to in Article 43 of this Regulation, shall be regarded as a minimum amount in the smaller amount of the following amounts:

The provision resulting from the application of the exercise's statistical method.

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 an "x" exercise estimated by statistical methods, and corresponding to claims occurring prior to the "x" exercise, plus the payments in the "X-2", "X-1" and "x" periods of claims occurring in the "X-3" and previous years, plus payments in "X-1" and "x" of claims occurring in "X-2" plus payments in "x" of claims occurred in "X-1", and in the denominator, the sum of the technical provisions of benefits estimated by statistical methods of the "X-3" exercise, plus the provision of the "X-2" exercise corresponding only to the claims of "X-2", plus provision of the exercise "X-1" for only "X-1" claims.

Imagen: img/disp/2007/043/03433_001.png

Where:

X and X-i: are the current exercise and each of the respective previous X-i exercises.

PTPx: is the PTP of exercise x estimated by statistical methods.

PTPxx-1: is the PTP in exercise x corresponding to claims occurring in 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 the "n" previous exercises estimated by statistical methods.

PTPx-2x-2: is the PTP in the x-2 exercise corresponding to the claims occurred 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.

x-i Paymentsx-3: are the payments for the claims that occurred in the x-3 exercise and previous exercises, but performed in the x-2, x-1, and x exercises.

x-i Paymentsx-2: are the payments for the claims that occurred in the x-2 exercise, but performed in the x-1 and x exercises.

Paymentsxx-1: are the payments corresponding to the claims that occurred in the year x-1, and performed in the exercise x.

3. Without prejudice to the provisions of the preceding paragraph, in the first three financial years in which a statistical method as referred to in Article 43 of this Regulation is applied by the date of closure of the accounting statements, it shall have the consideration of the minimum amount of the technical provision of benefits, the amount which makes the claim for the financial year not exceed the result of applying to the amount of the period of the financial year, the percentage determined by the the proportion of the total number of the five years immediately preceding the tax period, in relation to the period premiums paid in the five financial years concerned. For the calculation referred to above, no account shall be taken of data which has been excluded in the application of the statistical method. '

Twenty-seven. The fifth additional provision happens to have the following wording:

" Additional disposal fifth. Maximum amount of liability coverage as an ancillary risk.

The Minister of Economy and Finance will be able to update, on the basis of the consumer price index, the limit of 60,101,21 euros, which is set as the maximum amount of liability coverage when considering ancillary risk as laid down in Article 6 (1) (c) of the recast of the Law on the Management and Supervision of Private Insurance, provided that such amount does not exceed the insured value in respect of the principal risk. '

Article 2. Amendment of the Social Welfare Mutual Regulation, approved by Royal Decree 1430/2002 of 27 December.

Article 27 of the Social Welfare Mutual Regulation, approved by Royal Decree 1430/2002 of 27 December, has the following wording:

" Article 27. Statistical-accounting and audit information.

The mutual funds shall send to the Directorate-General for Insurance and Pension Funds the annual accounts and the management report, the statistical-accounting information relating to the financial year and the audit reports of the annual and supplementary accounts and the report of the financial control committee, if any. The annual statistical accounting information shall include data relating to the balance sheet, general profit and loss account and, where applicable, risks, coverage of technical provisions, solvency margin, guarantee fund and other liabilities. (b) extreme measures to analyse the information contained in the previous statements. The annual accounts shall be sent simultaneously to the annual statistical accounting information, which shall be in accordance with the models approved by the Minister for Economic Affairs and Finance and shall be sent before 10 July of the following year. the one to which they relate.

The mutual funds required to draw up consolidated accounts shall send the consolidated annual accounts and the management report to the Directorate-General for Insurance and Pension Funds, the statistical-accounting information consolidated and the general and supplementary audit reports. The statistical accounting information shall include data relating to the consolidated balance sheet, general consolidated profit and loss account and classes, coverage of technical provisions of the group, consolidated solvency margin and those other extremes to analyse the information contained in the previous statements. The referral of the consolidated annual accounts shall be carried out at the same time as the consolidated annual statistical accounting information, which shall be in accordance with the models approved by the Minister for Economic Affairs and Finance and shall be submitted before 10 July of the year following the year to which they relate.

In addition, they are required to forward quarterly statistical accounting information to any mutual funds found in any of the following circumstances:

(a) That the shares due in the financial year exceed the figure of 1,200,000 euros. The above obligation shall only cease when the limit referred to is no longer met for two consecutive years.

(b) Operating in the life risks referred to in Article 15.1.a) or in the classes of life, course, credit or any of the types of civil liability.

(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 authorisation, or are in a liquidation period not taken up by the Insurance Compensation Consortium.

In any event, mutual funds not required to forward quarterly statistical accounting information shall report on the balance sheet, the profit and loss account and the provisions of the provisions covering the same periodicity. technical and solvency margin, except where it is to be submitted until 31 August, which may be submitted until 15 September following the end of the period to which it corresponds.

Also, the obligated mutual societies of the consolidated groups of insurance entities shall submit the statistical-accounting information for that period semi-annually.

All statistical-accounting information relating to the lower-than-year period shall be sent to the Directorate-General for Insurance and Pension Funds within two months of the end of the period to which it corresponds.

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 provision.

In any case, they shall forward consolidated statistical accounting information in accordance with the provisions of the previous paragraph, the insurance institutions domiciled in the dominant Spanish territory of a consolidated group of insurance entities which are dominated by other entities domiciled in another State belonging to the European Economic Area.

Individual annual accounts and consolidated annual accounts shall be reviewed by the auditors.

The provisions of this Article shall be without prejudice to any exceptions which may be granted by the Autonomous Communities in the field of their powers. "

Single transient arrangement. Deadlines for adaptation.

1. Insurance institutions shall have the following adaptation periods from the entry into force of this rule:

(a) With regard to the limits of diversification and dispersion referred to in Article 53 of the Regulation on the Management and Supervision of Private Insurance, a period of three months.

(b) In respect of the changes introduced in Article 65.1.e), in respect of the higher requirements required in the investment book, a period of six months.

(c) In respect of the internal control and control requirements of the investment policy referred to in Articles 110 and 110a, a period of six months.

d) With regard to the adaptation of the technical bases of life insurance, a period of six months.

2. The additional requirements for the financial assets as set out in Article 50 (1) (b) of the Regulation on the Management and Supervision of Private Insurance, in the wording given by this royal decree, will only apply to investments made by insurance undertakings after the entry into force of the latter.

Single repeal provision. Regulatory repeal.

The entry into force of this Royal Decree is repealed:

(a) The fifth additional provision of the Regulation implementing Act 19/1988 of 12 July of Audit of Accounts, approved by Royal Decree 1636/1990 of 20 December

; and

(b) The second paragraph of Article 17.2 of the Social Welfare Mutual Insurance Regulation, approved by Royal Decree 1430/2002 of 27 December.

As many rules of equal or lower rank are also repealed, they are opposed to what was established in this royal decree.

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 contained in this royal decree have the consideration of insurance management bases.

Final disposition second. Entry into force.

This Royal Decree shall enter into force on the day following that of its publication in the Official Gazette of the State.

Given in Madrid, on February 16, 2007.

JOHN CARLOS R.

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

PEDRO SOLBES MIR