S.I. No. 360/1994 - European Communities (Life Assurance) Framework Regulations, 1994

ARRANGEMENT OF REGULATIONS

PART 1 Citation and Commencement, Interpretation, Scope and Taking up the Business of Life Assurance.

Articles

1. Citation and commencement.

2. Interpretation.

3. Technical adjustments.

4. Scope.

5. Powers of Court.

6. Authorisation/composite insurance undertakings.

7. Conditions when applying for authorisation.

8. Notification of conditions and documents.

9. Identities of shareholders.

PART 2 Financial Supervision, Technical Reserves Provisions, Annual Returns, Accounts and Investigations, Statements, Audit and Auditor's Report, Certificates.

10. Financial supervision of insurance undertaking/transactions with a related company.

11. On the spot verification.

12. Maintenance/determination of technical reserves, including mathematical reserves, solvency margin, determination of liabilities, localisation of assets, currency matching, register of assets.

13. Annual returns, statistical documents.

14. Enforcement of continued compliance with obligations

15. Periodic actuarial investigations.

16. Amount of liabilities and value of assets.

17. Accounts and returns laid before annual general meeting.

18. Modification of Insurance Acts in relation to accounts and other documents.

19. Deposit of documents with Minister.

20. Lodging of documents in Companies Office.

21. Laying of documents before Oireachtas.

22. Accounts and statements.

23. Annual accounts.

24. Contents and form of accounts.

25. Revenue account.

26. Additional information.

27. Profit and loss account.

28. Balance sheet.

29. Periodic actuarial investigation.

30. Signature of documents.

31. Audit and auditor's report.

32. Certificates.

33. Transitional provisions.

34. General: References to Community deposit undertaking.

PART 3 Assignment of Policies, Failure to Comply with Technical Reserves Provisions including Mathematical Reserves, Withdrawal/Lapse of Authorisation

35. Assignment of policies.

36. Failure to comply with technical reserves provisions including mathematical reserves.

37. Withdrawal/lapse of authorisation.

38. Provisions applying in the case of revocation.

39. Reasons for revocation.

PART 4 Qualifying Holdings, Obligation of Professional Secrecy/Exchanges of Confidential Information

40. Qualifying holdings.

41. Obligation of professional secrecy/exchanges of confidential information.

PART 5 Choice of Law, General Good Requirements, Notification of Documents, Policyholder Disclosure, Cancellation Rights

42. Law applicable to insurance contracts.

43. General good requirements.

44. Notification of documents/scales of premiums.

45. Policyholder disclosure rules/cancellation rights.

PART 6 Right of Establishment, Freedom to Provide Services, General Conditions, Prevention of Irregularities

46. Provisions related to right of establishment of a branch outside the State.

47. Amendment to branch information.

48. Conditions for establishing a branch in the State.

49. Amendment to branch information.

50. Conditions for carrying on insurance business by way of services into another Member State.

51. Conditions for carrying on insurance business by way of services into the State.

52. Amendment to services information.

53. General conditions related to services and branch insurance business.

54. Prevention of irregularities.

PART 7 Advertising, Winding-up, Statistical Requirements

55. Advertising.

56. Winding-up.

57. Statistical information.

58. Statistical requirement regarding services and branch insurance business.

59. Statistical information in the general good.

PART 8 Fiscal Arrangements, Acquired Rights, Right of Appeal

60. Fiscal arrangements.

61. Acquired rights.

62. Right of appeal to Court.

PART 9 Provisions Related to Branches of Third Country Insurance Undertakings, Rules Applicable to the Assignment of Third Country Branch Policies, Penalties, Fees

63. Third country branch provisions.

64. Application for authorisation.

65. Conditions of admission.

66. Technical reserves including mathematical reserves.

67. Solvency margin.

68. Guarantee Fund.

69. Annual returns.

70. Advances under Article 30 of the First Directive.

71. Application of Articles 36 and 37.

72. Assignment of third country branch insurance policies.

73. Penalties.

74. Fees.

PART 10 Reciprocity Provisions, Interpretation of Sections 93 and 94 of the Insurance Act, 1936

75. Application of articles 75 to 79 to third country undertakings and acquisitions by such undertakings.

76. Definitions.

77. Notification to the Commission of authorisations and acquisitions of undertakings governed by the laws of a third country.

78. Notification to the Commission of difficulties encountered in establishing or carrying on business in a third country.

79. Reciprocity measures.

80. Interpretation of Sections 93 and 94 of the Insurance Act, 1936.

ANNEXES

Annex I	Defined classes of insurance.
Annex II	Solvency margin and guarantee fund.
Annex III	Policyholder information.
Annex IV	Determination of liabilities.
Annex V	Valuation of assets.
Annex VI	Implicit items.
Annex VII	Reinsurance, currency matching, localisation, documents of title.

SCHEDULES

Schedule 1	Summary of accounts to be completed annually (forms 1 to 24).
Schedule 2	Forms of account and additional information (forms 1 to 21).
Schedule 3	Certificates by auditors, directors and actuary (forms 22 to 24).
Schedule 4	Abstract of life assurance business by the appointed actuary (forms 25 to 30).
Schedule 5	Statement of life assurance business by the appointed actuary (forms 31 to 44).
Schedule 6	Value of dependants.
Schedule 7	Assets to be taken into account only to a specified extent.

S.I. No. 360 of 1994.

EUROPEAN COMMUNITIES (LIFE ASSURANCE) FRAMEWORK REGULATIONS, 1994.

I, CHARLIE McCREEVY, Minister for Enterprise and Employment, in exercise of the powers conferred on me by section 3 of the European Communities Act, 1972 (No. 27 of 1972), as amended by the European Communities (Amendment) Act, 1993 (No. 25 of 1993), and for the purpose of giving effect to Council Directive No. 79/267/EEC of 5 March, 1979, Council Directive No. 90/619/EEC of 8 November, 1990, and Council Directive No. 92/96/EEC of 10 November, 1992, hereby make the following Regulations:

PART 1 Citation and Commencement, Interpretation, Scope and Taking up the Business of Life Assurance.

1 Citation and commencement.

1.

1. (1) These Regulations may be cited as the European Communities (Life Assurance) Framework Regulations, 1994, and shall come into operation on the 8th day of December, 1994. However, the provisions of these Regulations affecting the annual returns to be made to the Minister in accordance with Article 13 of these Regulations shall apply in respect of every financial year beginning on or after the 1st day of January, 1995.

• (2) These Regulations and the Insurance Acts, 1909 to 2990, Regulations relating to insurance business made under those Acts and Regulations made under the European Communities Act, 1972 , may be cited together as the Insurance Acts and Regulations and shall be construed together as one.

2 Interpretation.

2.

2. (1) In these Regulations, except where the context otherwise requires,—

"appointed actuary" means the person appointed to act as actuary to an undertaking to carry out any function relating to the business of that undertaking which is required by the Insurance Acts and Regulations to be undertaken by an actuary, being a Fellow Member of the Society of Actuaries in Ireland;

"authorisation" means—

( a ) authorisation granted by the Minister under these Regulations or under the Regulations of 1984 and still in force, or

( b ) where the context otherwise requires, authorisation granted by the authority charged by law with the duty of supervising the activities of insurance undertakings in a Member State other than the State in accordance with Article 6 of the First Directive as inserted by Article 3 of the Directive;

"branch" means an agency or branch of an insurance undertaking or any permanent presence of an undertaking in the State even if that presence does not take the form of an agency or branch but consists merely of an office managed by the insurance undertaking's own staff or by a person who is independent but has permanent authority to act for the insurance undertaking in the same way as an agency;

"capital at risk" means the amount payable on the happening of the insured event less the mathematical reserve in respect of the relevant contracts;

"carrying on insurance business by way of establishment" means the covering of a commitment by an insurance undertaking in a Member State through a head office or branch situated in that State;

"carrying on insurance business by way of services" means the covering of a commitment by an insurance undertaking in a Member State through a head office or branch situated in another Member State;

"cede" and "cession" in relation to reinsurance, include retrocede and retrocession;

"charges for management" means amounts chargeable in respect of the management of an internal linked fund in accordance with the conditions of those contracts of insurance under which property linked benefits are linked to the value of the fund or units of the fund;

"claim" means a claim against an insurance undertaking under a contract of insurance;

"claims payable" means the amount due to be paid by an undertaking during a financial year in respect of claims whether or not paid during that year;

"commission payable" means, in relation to a financial year of an insurance undertaking, the amount, whether or not paid during that year, recorded during that year as due to intermediaries and cedents in respect of the inception, amendment or renewal of contracts of insurance;

"commitment" means a commitment represented by one of the kinds of insurance or operations referred to in Article 1 of the First Directive;

"Community deposit undertaking" means a life assurance undertaking whose head office is not situated in the territory of another Member State and whose required Community minimum solvency margin is supervised in another Member State in accordance with Article 30 of the First Directive;

"contract of insurance" includes a contract of reinsurance;

" the Court" means the High Court;

"deposit back arrangement" in relation to any contract of reinsurance means an arrangement whereby an amount is deposited by the reinsurer with the cedent;

"designated assets" has the meaning assigned to it in Article 2 (16) of Annex V to these Regulations;

"direction" means a direction issued by the Minister in accordance with Article 3;

"the Directive" means Council Directive 92/96/EEC^(1);

"external branch undertaking" means a life assurance undertaking whose head office is not situated in the territory of a Member State and which is not a Community deposit undertaking or an Irish deposit undertaking;

"financial year" means, in relation to an undertaking, the period in respect of which the accounts of the undertaking are made up, whether the period is a year or not;

"the First Directive" means Council Directive 79/267/EEC^(2);

"general good" shall be construed in accordance with Article 43;

"gross premiums" in relation to a financial year—

( a ) means premiums after deduction of discounts, refunds, and rebates of premium but before deduction of premiums for reinsurance ceded and of commission payable by an undertaking, and

( b ) includes premiums receivable by the undertaking under reinsurance contracts accepted by the undertaking;

"home Member State" means the Member State in which the head office of the insurance undertaking covering the commitment is situated;

"implicit items" has the meaning assigned to it in Annex VI (1) to these Regulations;

"industrial assurance business" has the meaning assigned to it by Section 3 of the Insurance Act, 1936 (No. 45 of 1936), as amended by the Insurance Act, 1989 (No. 3 of 1989);

"insurance" includes "assurance";

"insurance broker", "insurance agent" and

^(1)O.J. L360, 9.12.1992, pages 1-27.

^(2)O.J. L63, 13.3.1979, page 1.

"insurance intermediary" have the meanings assigned to them in Section 2 of the Insurance Act, 1989 ;

"insurance undertaking" or "undertaking" means—

( a ) for the purpose of carrying on insurance business in the State by way of establishment, the holder of an authorisation under these Regulations or, as the case may be, the holder of an authorisation under Article 27 of the First Directive;

( b ) for the purpose of carrying on insurance business by way of services, the holder of an authorisation under these Regulations or, as the case may be, under Article 6 of the First Directive as inserted by Article 3 of the Directive;

"internal linked fund" means an account to which an insurance undertaking appropriates certain linked assets and which may be sub-divided into units the value of which is determined by the undertaking by reference to the value of those linked assets;

"Irish deposit undertaking" means a life assurance undertaking whose head office is not situated in the territory of another Member State and whose required community minimum solvency margin is supervised in the State in accordance with Article 30 of the First Directive;

"Irish head office insurance undertaking" means a life assurance undertaking whose head office is in the State;

"life assurance" means insurance of a class specified at a reference number in Part A of Annex 1 to these Regulations;

"life assurance business assets" and "life assurance business liabilities" mean respectively assets of a life assurance undertaking which are, for the time being, identified as representing the life assurance fund or funds maintained by the undertaking in respect of its life assurance business and liabilities of the insurance undertaking which are attributable to its life assurance business;

"life assurance liabilities" means liabilities of a life assurance undertaking arising under or in connection with contracts for life assurance business including liabilities arising from deposit back arrangements;

"linked assets" means life assurance business assets of an insurance undertaking which are, for the time being, identified in the records of the insurance undertaking as being assets by reference to the value of which property linked benefits are to be determined;

"linked contract" means a contract falling within Class III of life assurance business as specified in Annex I to these Regulations, and "non-linked contract" shall be construed accordingly;

"management expenses" means expenses incurred in the administration of an undertaking or its business which are not commission payable;

"mathematical reserves" means the provision made by a life assurance undertaking to cover liabilities (excluding liabilities which have fallen due and liabilities arising from deposit back arrangements) arising under or in connection with contracts for life assurance business;

"Member State" means a Member State of the European Communities;

"Member State of the branch" means the Member State in which the branch covering the commitment is situated;

"Member State of the commitment" means the Member State where the policyholder has his habitual residence, or, if the policyholder is a legal person, the Member State where the latter's establishment, to which the contract relates, is situated;

"Member State of the provision of services" means the Member State of the commitment, as defined in Article 2 (e) of the Second Directive, where the commitment is covered by an insurance undertaking or a branch situated in another Member State;

"Minister" means the Minister for Enterprise and Employment;

"permanent health contracts" means the business of effecting and carrying out contracts of insurance providing specified benefits against risks of persons becoming incapacitated in consequence of sustaining injury as a result of an accident or of an accident of a specified class or of a sickness or infirmity, being contracts that—

( a ) are expressed to be in effect for a period of not less than five years or until normal retirement age for the persons concerned, or without limit of time, and

( b ) either:

• (i) are not expressed to be terminable by the insurance undertaking under the terms of the contract, or

• (ii) are expressed to be so terminable only in special circumstances mentioned in the contract,

provided that the insurance is carried on by an insurance undertaking in the State which holds an authorisation granted in respect of Class IV in Annex I to these Regulations;

"person," "body," "undertaking" and "insurance undertaking" or "assurance undertaking" include any legal entity specified in Article 5 of the Directive; "premiums" includes the consideration for the granting of an annuity;

"premiums receivable" means—

( a ) in the case of a linked contract the liability under which has been valued on the basis of premiums actually received by the insurance undertaking in a financial year, the amount of premiums received in respect of that contract, and

( b ) in any other case, the premiums recorded in the insurance undertaking's books, in respect of a financial year as due to it in respect of contracts commencing in earlier financial years but not accounted for in the insurance undertaking's revenue account prior to that financial year, whether or not received by the insurance undertaking during that financial year after deducting discounts, refunds and rebates of premiums as recorded in respect of the same period; and for the purpose of determining whether a premium is due no account shall be taken of any credit arrangements made in respect thereof;

"profit and loss account" in relation to an insurance undertaking not trading for profit, means an income and expenditure account;

"property linked benefits" means benefits provided for under any contract the effecting of which constitutes the carrying on of life assurance business, and which are determined by reference to the value of, or the income from, property of any description (whether or not specified in the contract) or by reference to fluctuations in, or an index of, the value of property of any description (whether or not specified in the contract);

"receivable" in relation to income during a financial year, means, unless otherwise specified, such amounts as become due to the undertaking, whether or not received by the insurance undertaking during that year, including (where appropriate) income which has accrued;

"the Regulations of 1984" means the European Communities (Life Assurance) Regulations, 1984 ( S.I. No. 57 of 1984 );

"the Regulations of 1986" means the European Communities (Life Assurance Accounts, Statements and Valuations) Regulations, 1986 ( S.I. No. 437 of 1986 );

"reinsurance" includes reassurance;

"reinsurance" and "reinsurer" include retrocession and retrocessionaire, respectively;

"reinsurance premiums payable" means the premiums recorded in an insurance undertaking's books during a financial year as due by it to reinsurers in respect of reinsurance contracts commencing in the year or reinsurance contracts commencing in earlier financial years but not accounted for in the undertaking's revenue account prior to that financial year, whether or not paid by the insurance undertaking during that financial year, after deducting discounts, refunds and rebates of premiums as recorded in the same period, and for the purpose of determining whether a premium is due no account shall be taken of any credit arrangement made in respect thereof;

"required minimum solvency margin" means the greater of the appropriate required solvency margin and the amount of the appropriate minimum guarantee fund and "required Community minimum solvency margin" and "required Irish minimum solvency margin" shall be construed accordingly;

"the Second Directive" means Council Directive 90/619/EEC^(3);

"supervisory authority" means, in respect of any territory, the authority charged by law with the duty of supervising the activities of undertakings in that territory;

"unit of account" means the ECU used by the European Monetary Co-operation Fund, the conversion value of which, to the currency of the State, shall be, as from 31 December of each year, the rate published in the Official Journal of the Communities for the last day of the preceding October for which conversion values of the ECU were published for the currencies of all States that were then Member States;

"the valuation date" in relation to an actuarial investigation, means the date to which the investigation relates;

"zillmerising" means the method known by the name for modifying the net premium reserve method of valuing a life assurance policy by increasing the part of the future premiums for which credit is taken so as to allow for initial expenses.

• (2) In these Regulations, a reference to a Part, Article, Annex or Schedule is to a Part, Article, Annex or Schedule of these Regulations and a reference to a paragraph is to the paragraph of the Article in which the reference occurs, unless it is indicated that reference to some other provision is intended and a reference to a numbered Form is to the Form as numbered in a Schedule.

^(3) O.J. L330, 29.11.1990, page 50.

• (3) Subject to these Regulations, the provisions of the Insurance Acts and Regulations shall, where applicable and subject to any necessary modifications, apply to all insurance undertakings to which these Regulations relate.

• (4) In these Regulations a reference to any enactment, Council Directive, order or Regulation includes reference thereto as subsequently amended.

• (5) These Regulations shall have effect, any provision to the contrary in any enactment, order or Regulation passed or made before the making of these Regulations notwithstanding.

3 Technical adjustments.

3.

3. (1) The Minister may by direction give effect to any technical adjustment adopted in accordance with Article 47 of the Directive subject to such conditions as may be specified from time to time by the Minister.

• (2) The Minister may issue a direction in writing modifying any requirement of these Regulations or of the Annexes or Schedules in the special circumstances of the case, provided that the direction does not conflict with any provision of the First Directive, the Second Directive or the Directive.

4 Scope.

4.

4. (1) Subject to sub-article (2) of this Article, these Regulations apply to insurance business ("life assurance") of the classes specified in Part A of Annex I and to undertakings carrying on such insurance.

• (2) These Regulations do not apply to—

( a ) the kinds of insurance specified in Articles 2 (1) and 2 (4) of the First Directive;

( b ) the operations specified in Articles 2 (2) and 2 (3) of the First Directive;

( c ) the organisations and mutual associations excluded from the application of the First Directive by Article 3 thereof;

( d ) the bodies referred to in Article 4 of the First Directive.

5 Powers of Court.

5.

5. The Court shall have full jurisdiction to deal with any application, appeal or other proceeding before the Court in accordance with any provision of these Regulations and may for this purpose make any interim, interlocutory, mandatory, prohibitory or injunctive or ancillary order as the Court may consider necessary or appropriate for the purposes of these Regulations.

6 Authorisation/omposite insurance undertakings.

6.

6. (1) An insurance undertaking shall not carry on the business of life assurance unless it is the holder of an authorisation.

• (2) An authorisation shall be valid throughout the Member States and shall allow an undertaking to carry on insurance business there by way of services and by way of establishment.

• (3) For the purposes of the Insurance Acts and Regulations, an insurance undertaking shall be deemed to be or to have been established in the State if—

( a ) it has in the State an office which is open during normal business hours for the transaction of life assurance business for which it is authorised, and

( b ) it employs at such office persons duly qualified to carry on the business transacted and empowered to issue cover for the authorised classes and to settle claims.

• (4) No insurance undertaking, whose head office is situated in the State, may be authorised to carry on both the business of life assurance and the business of non-life insurance of a class referred to in Annex I to the European Communities (Non-Life Insurance) Framework Regulations, 1994.

• (5) An undertaking whose head office is situated in the State, and which has financial, commercial or administrative links with an insurance undertaking carrying on insurance of a class referred to in Annex I to the European Communities (Non-Life Insurance) Framework Regulations, 1994, shall provide the Minister, in such form as the Minister sees fit, with information relating to the arrangements under which any apportionment of expenses of management and income has been made between the insurance undertakings and the basis for such arrangements, and shall provide the Minister on request with copies of any agreement or other documents relevant to any such arrangements.

• (6) The same shall be required of an insurance undertaking whose head office is situated in the State, which is the holder of an authorisation under the European Communities (Non-Life Insurance) Framework Regulations, 1994, and which has financial, commercial or administrative links with an undertaking carrying on insurance of a class referred to in Annex I to these Regulations.

• (7) Where the Minister is satisfied that an undertaking, applying for an authorisation, complies with the appropriate provisions of the Insurance Acts and Regulations, the Minister shall grant that undertaking an authorisation.

• (8) An application for an authorisation may be made to the Minister by—

( a ) any undertaking which has established its head office in the State,

( b ) any insurance undertaking which is the holder of an authorisation related to a particular class or classes of insurance and which proposes to extend its business to another class or classes of insurance.

• (9) An authorisation shall be granted for a class of insurance mentioned at a reference number in Annex I to these Regulations and specified in the authorisation and shall relate to the entire of that class except that, where an applicant for an authorisation desires the authorisation to relate to only part of a class as listed in Annex I to these Regulations, the authorisation shall relate to that part only.

• (10) An authorisation may be restricted to industrial assurance business and a body may not carry on industrial assurance business by virtue of an authorisation granted under these Regulations unless the authorisation expressly extends to such business.

• (11) The forms of authorisation shall be as specified by the Minister from time to time.

7 Conditions when applying for authorisation.

7.

7. (1) Any undertaking applying for an authorisation shall comply with the following provisions:

( a ) It shall be a company limited by shares, a company limited by guarantee or an unlimited company within the meaning (in each case) of the Companies Acts, 1963 to 1990, a society registered under the Industrial and Provident Societies Acts, 1893 to 1978, or a Society registered under the Friendly Societies Acts, 1896 to 1977; it may also adopt the form of a European Company (SE) when that has been established.

( b ) An undertaking set up in any public law form may apply for an authorisation provided such body has as its object insurance operations under conditions equivalent to those under which private law insurance undertakings operate.

• (2) The undertaking shall also comply with the following provisions:

( a ) It shall limit its operations to the business provided for in these Regulations and to operations directly arising therefrom, to the exclusion of all other commercial business.

( b ) It shall submit to the Minister a scheme of operations, in accordance with Article 9 of the First Directive to include particulars or proof concerning—

• (i) the nature of the commitments which the undertaking proposes to cover;

• (ii) the guiding principles as to reassurance;

• (iii) the items constituting the minimum guarantee fund;

• (iv) estimates of the costs of setting up the administrative services and the organisation for securing business and the financial resources intended to meet those costs.

( c ) In addition, for the first three financial years it shall submit to the Minister—

• (i) a plan setting out detailed estimates of income and expenditure in respect of direct business, reassurance acceptances and reassurance cessions;

• (ii) a forecast balance sheet;

• (iii) estimates relating to the financial resources intended to cover its underwriting liabilities and solvency margin.

( d ) It shall possess the minimum guarantee fund referred to in Part B of Annex II to these Regulations.

( e ) It shall be effectively run by persons of good repute with appropriate professional qualifications or experience.

• (3) An insurance undertaking applying for an authorisation to extend its business to other classes of insurance or to extend an authorisation covering only part of a class as listed in Annex I to these Regulations shall—

( a ) submit to the Minister a scheme of operations in accordance with the provisions contained in Article 7 (2) (b) of these Regulations in relation to such other classes of insurance or such extension of authorisation, and

( b ) prove to the satisfaction of the Minister that it possesses the solvency margin in accordance with the provisions of Part A of Annex II to these Regulations and, the minimum guarantee fund referred to in Part B of Annex II to these Regulations.

8 Notification of conditions and documents.

8.

8. (1) Notwithstanding sub-articles (2) and (3) of this Article, the Minister shall not require the prior approval or systematic notification of general and special policy conditions, scales of premiums, technical bases used in particular for calculating scales of premiums and technical reserves, forms and other printed documents which an insurance undertaking intends to use in its dealings with policyholders. The Minister may, however, require notification of such general and special policy conditions, scales of premiums, technical bases, forms and other aforementioned printed documents.

• (2) The Minister may, for the sole purpose of verifying compliance with the rules concerning actuarial principles, require systematic notification of the technical bases used for calculating scales of premiums and technical reserves, provided that requirement does not constitute a prior condition for an insurance undertaking to carry on insurance business in the State.

• (3) Nothing in these Regulations shall prevent the introduction by the Minister of regulations or administrative provisions concerning the approval of the memorandum and articles of association of an insurance undertaking and communication of documents necessary for the normal exercise of supervision.

9 Identities of shareholders.

9.

9. (1) The Minister shall not grant an authorisation to an undertaking before being informed of the identities of the shareholders or persons who have qualifying holdings, whether direct or indirect, in that undertaking and of the amounts of such holdings.

• (2) The Minister shall not grant an authorisation if, after taking into account the requirement to ensure the sound and prudent management of an undertaking, the Minister is not satisfied as to the qualifications of such shareholders or persons.

• (3) The Minister may require information concerning all such shareholders or persons irrespective of the size of their holding and any person concerned shall on request furnish information to the Minister.

• (4) For the purpose of this Article—

a "qualifying holding" means a direct or indirect holding in an undertaking which represents 10 per cent. or more of the capital or of the voting rights or which makes it possible to exercise a significant influence over the management of the undertaking in which a holding subsists.

PART 2 Financial Supervision, Technical Reserves Provisions, Annual Returns, Accounts and Investigations, Statements, Audit and Auditor's Report, Certificates

10 Financial supervision of insurance undertaking.

10.

10. (1) The financial supervision of an insurance undertaking, including the carrying on of insurance business either by way of services or through branches, shall be the sole responsibility of the home Member State.

• (2) Where the head office of the insurance undertaking is situated in the State the Minister shall be responsible for verification with respect to the insurance undertaking's entire business, of its state of solvency, of the establishment and maintenance of technical reserves, including mathematical reserves, in accordance with the Insurance Acts and Regulations.

• (3) Every insurance undertaking shall have administrative and accounting procedures and internal control mechanisms which in the opinion of the Minister are sound and adequate.

Transactions with a related company.

• (4) Prior to entering into any transaction of a material nature with a related company or companies, including, in particular, the provision of loans to and acceptance of loans from a related company or companies, an insurance undertaking shall submit to the Minister a draft copy of any contract or agreement which is to be entered into by the insurance undertaking in relation to the transaction.

• (5) In this Article—

"related company" has the meaning assigned to it by Annex V to these Regulations.

11 On the spot verification.

11.

11. (1) Where an insurance undertaking whose head office is situated in the State carries on insurance business through a branch situated in another Member State, the Minister may, after having informed the supervisory authorities of the Member State of the branch, carry out on-the-spot verification of the information required to ensure the financial supervision of the insurance undertaking.

• (2) The supervisory authorities of the Member State of the branch may participate in such verification where the law of the Member State of the branch so allows.

• (3) Where an insurance undertaking whose head office is situated in another Member State carries on insurance business through a branch situated in the State, the Minister shall, after having been informed by the supervisory authorities of that Member State, allow the supervisory authorities of the head office Member State to carry out on-the-spot verification of the information required to ensure the financial supervision of the insurance undertaking.

• (4) The Minister may, in order to ensure compliance with this Article, provide for participation in such verification by the appointment of authorised officers under the Insurance Acts and Regulations.

• (5) The Minister may, in addition, seek such information as required regarding insurance contracts which are effected through or held by intermediaries and any person concerned shall provide such information to the Minister.

12 Maintenance/etermination of technical reserves, including mathematical reserves, solvency margin, determination of liabilities, localisation of assets, currency matching, register of assets.

12.

12. (1) Each insurance undertaking shall establish and maintain:

( a ) technical reserves, including mathematical reserves, in respect of all underwriting liabilities assumed by it,

( b ) an adequate solvency margin and guarantee fund in respect of its entire business in accordance with Annex II to these Regulations.

• (2) Subject to the provisions of Annex IV to these Regulations relating to the determination of liabilities, the amount of liabilities of an insurance undertaking shall be determined in accordance with generally accepted accounting concepts, bases and policies or other generally accepted methods appropriate for insurance undertakings.

• (3) In determining under sub-articles (1) and (2) of this Article the amount of liabilities of an insurance undertaking, all contingent and prospective liabilities shall be taken into account but not liabilities in respect of share capital.

• (4) Each insurance undertaking shall cover its technical reserves by equivalent assets valued in accordance with the Rules set out in Annex V to these Regulations. The currency matching Rules set out in Annex VII to these Regulations shall apply to such assets, as appropriate.

• (5) Detailed rules related to the localisation of assets and the maintenance of assets in relation to reinsurance arrangements are set out in Annex VII to these Regulations.

• (6) Every insurance undertaking shall keep a register showing the assets representing the technical reserves, including mathematical reserves, required by these Regulations in respect of insurance business carried on in the State in each class by the insurance undertaking and shall furnish to the Minister a certificate of the value of these assets on the closing date for which the accounts and balance sheets of the insurance undertaking are furnished to the Minister, such values being those in such accounts and balance sheets.

• (7) The register shall be maintained at the principal office of the insurance undertaking in the State and shall contain up-to-date details of the assets representing reserves in respect of life assurance business carried on in the State.

• (8) The register shall be open for inspection by an officer or officers of the Minister during normal business hours.

13 Annual returns, statistical documents.

13.

13. (1) An insurance undertaking, whose head office is situated in the State shall furnish to the Minister annually or at such more frequent intervals as the Minister may request such information in such form and manner as the Minister may require, together with statistical documents which are deemed necessary for supervision purposes and in particular in order to verify the state of solvency of the undertaking with respect to its entire business.

• (2) For the purposes of sub-article (1) of this Article, the insurance undertaking shall, in addition, furnish to the Minister annually, or at such more frequent intervals as the Minister may request, such information in such form and manner as the Minister may require in order to enable the Minister to verify that the technical reserves, including mathematical reserves, mentioned in Article 12 of these Regulations are being maintained.

• (3) The Minister shall provide the supervisory authority of another Member State with such information as is necessary for the purposes of supervision.

14 Enforcement of continued compliance with obligations

14.

14. The Minister shall take all appropriate measures in order to be satisfied that an insurance undertaking is complying or has the ability to continue to comply with its obligations under the Insurance Acts and Regulations and applicable administrative provisions and, in particular, with the scheme of operations referred to in Article 7 (2) (b) of these Regulations.

15 Periodic actuarial investigations.

15.

15. (1) Every insurance undertaking which carries on life assurance business—

( a ) shall, once in every period of twelve months, cause an investigation to be made into its financial condition in respect of that business by the person who for the time being is its appointed actuary; and

( b ) when such an investigation has been made, or when at any other time an investigation into the financial condition of the insurance undertaking has been made with a view to the distribution of profits, or the results of which are made public, shall cause an abstract of the actuary's report of the investigation to be made.

• (2) An investigation to which sub-article (1) (b) of this Article relates shall include—

( a ) a valuation of the liabilities of the undertaking attributable to its life assurance business; and

( b ) a determination of any excess over those liabilities of the assets representing the fund or funds maintained by the undertaking in respect of that business and, where any rights of life assurance policyholders to participate in profits relate to particular parts of such a fund, a determination of any excess of assets over liabilities in respect of each of those parts.

• (3) The Minister may require, as and when deemed appropriate, that an undertaking to which sub-article (1) of this Article applies shall prepare a statement of its life assurance business in accordance with the requirements of Schedule 5, at the date to which the accounts of the insurance undertaking are made up for the purposes of an investigation in pursuance of subparagraph (a) of that paragraph.

• (4) For the purposes of any investigation to which this Article applies, the amount of any liabilities and the value of any assets shall be determined in accordance with Annex IV and V, as appropriate.

16 Amount of liabilities and value of assets.

16.

16. Unless otherwise provided in these Regulations, the amount or value given for a liability or an asset of the insurance undertaking shall be the amount or value of that liability or asset as determined in accordance with the provisions of Annex IV and V to these Regulations as appropriate. In the case of an asset of the insurance undertaking to which Annex V to these Regulations does not apply, the value given shall be the value which the asset would have if Annex V to these Regulations were applicable.

17 Accounts and returns laid before annual general meeting.

17.

17. (1) Every insurance undertaking shall forward to the Minister each year two copies of the accounts and returns laid before its annual general meeting.

• (2) The accounts and returns referred to in sub-article (1) shall be forwarded not later than one month after the annual general meeting.

18 Modification of Insurance Acts in relation to accounts and other documents.

18.

18. The accounts, balance sheets, notes, statements, reports and certificates set out in Schedules 1 to 5 are in substitution for the accounts, balance sheets, abstracts or statements specified in the Insurance Acts, 1909 to 1990, and in the Regulations of 1986 insofar as they relate to insurance undertakings authorised or deemed to be authorised under the Regulations of 1984.

19 Deposit of documents with Minister.

19.

19. (1) Every account, balance sheet, note, statement, report and certificate required to be prepared shall be printed and produced in such form or manner as the Minister may require. Five printed copies thereof shall be deposited with the Minister within six months after the close of the period to which the account, balance sheet, note, statement, report or certificate relates: provided that, if in any case it is made to appear to the Minister that the circumstances are such that a period longer than six months should be allowed, the Minister may extend that period by such period not exceeding three months as he thinks fit.

• (2) One of the copies of any document deposited under sub-article (1) of this Article shall be signed by the appropriate person or persons described in Article 30.

• (3) The Minister shall consider the documents deposited under sub-article (1), and if any such document appears to be inaccurate or incomplete in any respect the Minister shall communicate with the undertaking with a view to the correction of any such inaccuracies and the supply of deficiencies.

• (4) There shall be deposited with every revenue account and balance sheet of an insurance undertaking any report on the affairs of the insurance undertaking submitted to the shareholders or policyholders of the undertaking in respect of the financial year to which the revenue account and balance sheet relate.

• (5) In these Regulations, any reference to an account or balance sheet includes a reference to any note, statement, report of certificates annexed thereto giving information authorised or required by virtue of Articles 22 to 33 of these Regulations to be so given.

20 Lodging of documents in Companies Office.

20.

20. Any document submitted to the Minister under these Regulations shall be lodged in the Companies Registration Office and shall there be open to inspection by any person, and copies of such documents may be procured by any person on payment of such fees as the Minister may from time to time fix.

21 Laying of documents before Oireachtas.

21.

21. The Minister shall, as soon as may be, lay before each House of the Oireachtas copies of any documents deemed necessary to be submitted under these Regulations and may append to such documents any explanatory statement or commentary which the Minister thinks fit.

22 Accounts and statements.

22.

22. Articles 22 to 33 of these Regulations apply with respect to the accounts and statements (as hereinafter specified) required to be prepared by every insurance undertaking pursuant to Article 13 of these Regulations.

23 Annual accounts.

23.

23. Every insurance undertaking shall, in respect of each financial year of the insurance undertaking, prepare such of the accounts prescribed in Schedule 1 to these Regulations as are appropriate to the insurance undertaking.

24 Contents and form of account.

24.

24. Every account, balance sheet, note, statement, report and certificate required to be prepared by an undertaking pursuant to Article 22 shall be prepared in the manner hereinafter specified and shall fairly state the information provided on the basis required by these Regulations.

25 Revenue account.

25.

25. The revenue account required to be prepared by every insurance undertaking pursuant to Article 23 shall comply with the requirements of Schedule 2 to these Regulations and shall be in Form 1 completed (as may be appropriate) as specified in the instructions to that Form so, however, that—

• (i) every such insurance undertaking shall prepare a separate account in Form 1 in respect of each life assurance business fund maintained by it, and

• (ii) where there is more than one fund for life assurance business or for industrial assurance business, the insurance undertaking shall also prepare a summary form for life assurance business or for industrial assurance business as the case may require.

26 Additional information.

26.

26. Every insurance undertaking shall, in accordance with Article 23 and Schedule 2 to these Regulations, including the instructions thereto, prepare—

( a ) in respect of life assurance business—

• (i) Forms 2 to 4 and 6, and

• (ii) such of Forms 8 to 14 and 21 as are appropriate; and

( b ) in respect of industrial assurance business—

• (i) Forms 2, 3, 5 and 7 to 9, and

• (ii) uch of Forms 10 to 14 and 21 as are appropriate.

27 Profit and loss account.

27.

27. The profit and loss account required to be prepared by every insurance undertaking under Article 23 shall comply with the requirements of Schedule 2 to these Regulations and shall be prepared in Form 18.

28 Balance sheet.

28.

28. The balance sheet required to be prepared by every insurance undertaking in accordance with Article 23, shall comply with the requirements of Schedule 2 to these Regulations and shall be in Forms 15 to 17, 19 and 20 completed (as may be appropriate) as specified in the instructions to those Forms.

29 Periodic actuarial investigation.

29.

29. Save in relation to subparagraph (a) (ii) of this paragraph, for the purposes of Article 15, life assurance business and industrial assurance business shall be treated separately and—

( a ) the abstract of the report of the actuary on life assurance business—

• (i) shall comply with the requirements of Schedule 4 to these Regulations and shall contain the information (together with such of Forms 25 to 28 as may be appropriate) specified in that Schedule, and

• (ii) except in the case of a Community deposit undertaking, shall also include Form 30 and, where appropriate, Form 29; and

( b ) the statement of life assurance business shall comply with the requirements of Schedule 5 and shall contain the information (together with Forms 31 to 44) specified in that Schedule.

30 Signature of documents.

30.

30. (1) One of the copies of any document required to be prepared in accordance with Articles 22 to 33, except an auditor's report, shall be signed by persons described in sub-articles (2) or (3).

• (2) In respect of any document relating to business carried on through an Irish head office undertaking, the copy shall be signed by—

( a ) in any case—

• (i) where there are more than two directors of the insurance undertaking, at least two of those directors and, where there are not more than two directors, all the directors; and

• (ii) the chief executive, if any, of the insurance undertaking or (if there is no chief executive) the secretary; and

( b ) in the case of an abstract or statement under Article 15, the actuary who made the investigation to which the abstract relates or by reference to which the statement was prepared.

• (3) In respect of any document relating to business carried on through an agency or branch in the State by a Community deposit undertaking or an external branch undertaking or through agencies or branches in any Member State taken together by an Irish deposit undertaking, the copy shall be signed by—

( a ) in any case—

• (i) the authorised agent referred to in Article 46 (2) (d) and sub-paragraph (d) of Article 65 and

• (ii) an officer or employee of the insurance undertaking who, either alone or jointly with others, is responsible for the conduct of the whole of the insurance business carried on by the insurance undertaking in the State, and

( b ) in the case of an abstract or statement under Article 15, the actuary who made the investigation to which the abstract relates or by reference to which the statement was prepared.

• (4) One of the copies of any auditor's report shall be a copy signed by the auditor.

31 Audit and auditor's report.

31.

31. The documents referred to in Articles 25, 26, 27 and 28 and the certificate referred to in Article 32 (a), shall be audited by a person duly qualified under the Companies Acts, 1963 to 1990, who shall make a report in Form 22 in accordance with the requirements of Part I of Schedule 3.

32 Certificates.

32.

32. There shall be annexed to the documents referred to in Articles 25, 26, 27 and 28 of these Regulations:

( a ) a certificate in accordance with the requirements of Part 2 of Schedule 3 and shall be in Form 23 which shall be signed by the persons required by Article 30 to sign the documents to which the certificate relates; and

( b ) a certificate in accordance with the requirements of Part 3 of Schedule 3 and shall be in Form 24 which shall be signed by the appointed actuary.

33 Transitional provisions.

33.

33. Any reference in any provision of these Regulations to a document submitted to the Minister or prepared in respect of a financial year of an insurance undertaking which is a financial year of the insurance undertaking preceding that to which these Regulations first apply shall be construed as a reference to the document so submitted or prepared in accordance with the corresponding provisions of the Insurance Acts and Regulations previously in force.

34 General: References to Community deposit undertaking.

34.

34. (1) In these Regulations, any reference to life assurance business shall, in relation to a Community deposit undertaking, be taken to refer to life assurance business carried on by it through a branch in the State; and accordingly, any reference to, or requirement imposed in respect of the accounts and balance sheets (including any notes, statements, reports and certificates annexed thereto) shall be taken as referring to, or imposing the requirement in respect of business carried on through that branch.

• (2) In these Regulations, any reference to life assurance business shall—

( a ) in relation to an external branch undertaking, be taken to refer to its entire life assurance business and to any life assurance business carried on by it through an agency or branch in the State; and

( b ) in relation to an Irish deposit undertaking, be taken to refer to its entire life assurance business and to any life assurance business carried on by it through an agency or branch in any Member State;

and accordingly, any reference to, or requirement imposed in respect of, the accounts and balance sheets (including any notes, statements, reports and certificates annexed thereto) relevant to life assurance business shall be taken as referring to or, as the case may be, imposing the requirement in respect of—

• (i) accounts prepared in respect of its entire life assurance business, and

• (ii) accounts prepared in respect of the life assurance business carried on, in the case of an external branch undertaking, by the branch in the State and, in the case of an Irish deposit undertaking, by the branches in question in the Member State taken together.

PART 3 Assignment of Policies, Failure to Comply with Technical Reserves Provisions including Mathematical Reserves, Withdrawal/Lapse of Authorisation

35 Assignment of policies.

35.

35. (1) For the purposes of Section 13 of the AssuranceCompanies Act, 1909, and subject to the provisions of Section 36 of the Insurance Act, 1989 , and of these Regulations the following provisions shall have effect:

( a ) An assurance undertaking transacting business in the State, proposing to assign all or part of its portfolio of insurance contracts concluded under the right of establishment or freedom to provide service in the State to an insurance undertaking established in the territory of a Member State may apply to the Court, by petition, for an order sanctioning the scheme of assignment.

( b ) An insurance undertaking whose head office is situated in the State may, after prior consultation with the Minister, assign all or part of its portfolio of insurance policies including insurance business carried on either by way of services or establishment, to an insurance undertaking established in the State or in another Member State. The assignment shall not be effected unless the supervisory authorities of that insurance undertaking or, where appropriate, the supervisory authorities of the Member State referred to in Article 30 of the first Directive, certify that the insurance undertaking possesses the necessary solvency margin after taking the assignment into account.

( c ) Where a branch, established in another Member State, whose head office is situated in the State, proposes to assign all or part of its portfolio of insurance policies covering insurance business carried on either by way of services or establishment, the Minister shall consult the supervisory authority of the Member State of the branch.

( d ) An insurance undertaking whose head office is situated in the State may not assign all or part of its portfolio of insurance policies to an undertaking, established in another Member State, whose head office is not situated in the territory of a Member State.

• (2) ( a ) In the cases referred to in paragraph (b) and (c) of sub-article (1) of this Article, the assignment shall not be effected without obtaining the agreement of the supervisory authorities of the Member States of the branch and the supervisory authorities of the Member States of the commitment.

( b ) Where the supervisory authorities have not given a response indicating consent to or an opinion on the proposed assignment within three months of receiving notification of the assignment, the assignment shall be deemed to be agreed.

• (3) Where the Minister is consulted in accordance with Article 11 (3) or (4) of the Directive, the Minister shall have a period of three months from the date of consultation by the supervisory authorities of the home Member State within which to issue a response to those authorities.

• (4) Where the Minister has not given a response indicating consent to or an opinion on the proposed assignment at the expiry of the period referred to in sub-article (3) of this Article, the assignment shall be deemed to be agreed.

• (5) An assignment effected in accordance with this Article shall be published subject to the provisions of sub-article (1) of this Article by advertisement once in Iris Oifigiúil and once in each of two daily newspapers published in the State and published in the Member State where the risk is situated in accordance with the law of that Member State.

• (6) An assignment effected in accordance with this Article shall be valid against the policyholders, the insured persons and any other person having rights and obligations arising out of the policies assigned.

36 Failure to comply with technical reserves provisions including mathematical reserves.

36.

36. (1) Where an insurance undertaking whose head office is situated in the State fails to comply with Article 12 of these Regulations the Minister may, after notifying the supervisory authorities of the Member States in which the commitments underwritten by the insurance undertaking are situated, apply to the Court for an order, which the Court is empowered to make, prohibiting the free disposal of the insurance undertaking's assets.

• (2) Where the solvency margin of an insurance undertaking whose head office is situated in the State falls below the minimum amount required in accordance with the provisions of sub-article 2 (ii) of Article 7 of these Regulations the Minister shall require that a plan be submitted by the insurance undertaking for the Minister's approval for the restoration of a sound financial position.

• (3) In a case referred to in sub-article (2) of this Article, where it appears to the Minister that the financial situation of the insurance undertaking will deteriorate further, the Minister may apply to the Court for an order, which the Court is empowered to make, restricting or prohibiting the free disposal of the insurance undertaking's assets. In that case, the Minister shall notify the supervisory authorities of the Member States where the insurance undertaking carries on insurance business of this fact and of any order of the Court. The Minister may also request the supervisory authorities of those Member States to take the same measures pursuant to this sub-article.

• (4) Where the solvency margin of an insurance undertaking whose head office is situated in the State falls below the guarantee fund referred to in Part B of Annex II to these Regulations, the Minister shall require the insurance undertaking to submit for approval a short-term finance scheme. The Minister may also apply to the Court for an order, which the Court is empowered to make, restricting or prohibiting the free disposal of the assets of the insurance undertaking. In that case, the Minister shall notify the supervisory authorities of the Member States where the insurance undertaking carries on insurance business of this fact and of any order of the Court. The Minister may also request the supervisory authorities of those Member States to take the same measures pursuant to this sub-article.

• (5) The Minister may apply to the Court for such further orders as may be necessary in order to safeguard the interests of insured persons, in the cases referred to in sub-articles (1) to (4) of this Article.

• (6) Where the head office supervisory authority of an insurance undertaking situated in another Member State requests the Minister to take measures related to the restriction or prohibition of the free disposal of the assets located in the State of the insurance undertaking, the Minister may apply to the Court for an order, which the Court is empowered to make, restricting or prohibiting the free disposal of the assets located in the State of the insurance undertaking.

• (7) The Court may make such order for the purposes of this Article as the Court may think fit.

37 Withdrawal/lapse of authorisation.

37.

37. An authorisation held by an undertaking whose head office is situated in the State may be revoked by the Minister if the Minister is satisfied that the holder—

( a ) has not used the authorisation for the last twelve months, has expressly renounced the authorisation or has ceased to carry on business covered by the authorisation for more than six months,

( b ) no longer fulfils the conditions required by the Insurance Acts and Regulations for the granting of an authorisation,

( c ) has been unable, within the time allowed, to take the measures contained in the restoration plan or finance scheme referred to in Article 36 of these Regulations, or

( d ) fails seriously in its obligations under the Insurance Acts and Regulations.

38 Provisions applying in the case of revocation.

38.

38. Where an authorisation is revoked under Article 37 of these Regulations the following provisions shall apply:—

( a ) the Minister shall notify the revocation to the supervisory authorities of the other Member States in which the undertaking carries on business;

( b ) the Minister shall, in conjunction with the supervisory authorities of the other Member States in which the undertaking carries on business, apply to the Court for an order, which the Court is empowered to make, restricting the free disposal by the undertaking of its assets in accordance with Articles 36 (1), 36 (3) and 36 (4) of these Regulations;

( c ) the Minister may take further necessary measures to safeguard the interests of persons insured by the insurance undertaking and may for this purpose apply to this Court for such order as to the Court may seem fit.

39 Reasons for revocation.

39.

39. Any decision to revoke an authorisation under Article 37 of these Regulations shall be supported by precise reasons and notified to the insurance undertaking in question.

PART 4 Qualifying Holdings, Obligation of Professional Secrecy/Exchanges of Confidential Information

40 Qualifying holdings.

40.