Commission Delegated Regulation (EU) 2015/35Show full title

Article 288 U.K. Assessment of exceptional adverse situations

For the purposes of declaring the existence of an exceptional adverse situation affecting insurance and reinsurance undertakings representing a significant share of the market or affected lines of business, as referred to in [F1 rule 3.2 of the Undertakings in Difficulties part, and rule 4.4 of the Group Supervision part, of the PRA Rulebook], [F2 the Prudential Regulation Committee of the Bank of England] shall take into account all of the following factors and criteria:

(a)

the impact of possible subsequent decisions by supervisory authorities to extend the recovery period, on financial markets, on the availability of insurance and reinsurance products and on policy holders and beneficiaries;

(b)

the number, size and market share of the insurance and reinsurance undertakings affected by the exceptional adverse situation and whether the size and nature of those undertakings could, when taken together, have a negative effect on the financial markets or on insurance and reinsurance markets;

(c)

possible pro-cyclical effects of re-establishing compliance with the Solvency Capital Requirement, including distressed sales of assets on financial markets;

(d)

the possibility for insurance and reinsurance undertakings to raise additional own funds in financial markets;

(e)

the availability of an active market for assets held by insurance and reinsurance undertakings and the liquidity of that market;

(f)

the capacity of the reinsurance market to provide reinsurance or retrocession cover;

(g)

the availability in financial markets of adequate risk mitigation techniques, including financial instruments;

(h)

the availability in financial markets of other means to reduce the risk-exposure of insurance and reinsurance undertakings.

Textual Amendments

F1 Words in Art. 288 substituted (31.12.2020) by The Solvency 2 and Insurance (Amendment, etc.) (EU Exit) Regulations 2019 (S.I. 2019/407), regs. 1(2), 11(52)(a) (as amended by S.I. 2020/1385, regs. 1(2), 54(2) and with savings in S.I. 2019/680, reg. 11)

F2 Words in Art. 288 substituted (31.12.2020) by The Solvency 2 and Insurance (Amendment, etc.) (EU Exit) Regulations 2019 (S.I. 2019/407), regs. 1(2), 11(52)(b) (as amended by S.I. 2020/1385, regs. 1(2), 54(2) and with savings in S.I. 2019/680, reg. 11)