Commission Delegated Regulation (EU) 2015/35Dangos y teitl llawn

SECTION 3 Eligibility of own funds

Subsection 1 Ring-fenced funds

Article 80 Ring-fenced funds requiring adjustments

1. A reduction of the reconciliation reserve referred to in Article 70(1)(e) shall be required where own-fund items within a ring-fenced fund have a reduced capacity to fully absorb losses on a going-concern basis due to their lack of transferability within the insurance or reinsurance undertaking for any of the following reasons:

(a) the items can only be used to cover losses on a defined portion of the insurance or reinsurance undertaking's insurance or reinsurance contracts;

(b) the items can only be used to cover losses in respect of certain policy holders or beneficiaries;

(c) the items can only be used to cover losses arising from particular risks or liabilities.

2. The own-fund items referred to in paragraph 1, (hereinafter referred to as ‘restricted own-fund items’), shall not include the value of future transfers attributable to shareholders.

Article 81 Adjustment for ring-fenced funds and matching adjustment portfolios

1. For the purposes of calculating the reconciliation reserve, insurance and reinsurance undertakings shall reduce the excess of assets over liabilities referred to in Article 70 by comparing the following amounts:

(a) the restricted own-fund items within the ring-fenced fund or matching adjustment portfolio;

(b) the notional Solvency Capital Requirement for the ring-fenced fund or matching adjustment portfolio.

Where the insurance or reinsurance undertaking calculates the Solvency Capital Requirement using the standard formula, the notional Solvency Capital Requirement shall be calculated in accordance with Article 217.

Where the undertaking calculates the Solvency Capital Requirement using an internal model, the notional Solvency Capital Requirement shall be calculated using that internal model, as if the undertaking pursued only the business included in the ring-fenced fund or matching adjustment portfolio.

2. By way of derogation from paragraph 1, where the assets, the liabilities and the risk within a ring-fenced fund are not material, insurance and reinsurance undertakings may reduce the reconciliation reserve by the total amount of restricted own-fund items.

Subsection 2 Quantitative limits

Article 82 Eligibility and limits applicable to Tiers 1, 2 and 3

1. As far as compliance with the Solvency Capital Requirement is concerned, the eligible amounts of Tier 2 and Tier 3 items shall be subject to all of the following quantitative limits:

(a) the eligible amount of Tier 1 items shall be at least one half of the Solvency Capital Requirement;

(b) the eligible amount of Tier 3 items shall be less than 15 % of the Solvency Capital Requirement;

(c) the sum of the eligible amounts of Tier 2 and Tier 3 items shall not exceed 50 % of the Solvency Capital Requirement.

2. As far as compliance with the Minimum Capital Requirements is concerned, the eligible amounts of Tier 2 items shall be subject to all of the following quantitative limits:

(a) the eligible amount of Tier 1 items shall be at least 80 % of the Minimum Capital Requirement;

(b) the eligible amounts of Tier 2 items shall not exceed 20 % of the Minimum Capital Requirement.

3. Within the limit referred to in point (a) of paragraph 1 and point (a) of paragraph 2, the sum of the following basic own-fund items shall make up less than 20 % of the total amount of Tier 1 items:

(a) items referred to in point (a)(iii) of Article 69;

(b) items referred to in point (a)(v) of Article 69;

(c) items referred to in point (b) of Article 69;

(d) items that are included in Tier 1 basic own funds under the transitional arrangement set out in Article 308b(9) of Directive 2009/138/EC.