EC Rule Corrects Regulation Supplementing Solvency II Directive
EC published the EU Delegated Regulation 2020/442, which corrects the EU Delegated Regulation 2015/35 that supplements Solvency II Directive (2009/138/EC). Regulation 2020/442 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall apply from July 08, 2019.
The Delegated Regulation 2015/35 has been corrected as follows:
- In Article 84(4), the introductory wording is replaced by the text—"Paragraph 2 shall not apply to investments in related undertakings, other than investments in respect of which all of the following conditions are met:"
- In Annex X, the table in the section "Risk weights for flood risk" is replaced by the table in the Annex to Regulation 2020/442.
An erroneous reference to paragraph 1 of Article 84 of Regulation 2015/35 in paragraph 4 of Article 84 exempts certain collective investment undertakings or investments packaged as funds that are also undertakings related to an insurance or reinsurance undertaking from the look-through approach. However, collective investment undertakings or investments packaged as funds should by default be subject to the look-through approach. In Annex X to the EU Delegated Regulation 2015/35, the section "Risk weights for flood risk" sets out the standard parameters for the calculation of the basic Solvency Capital Requirement for flood risk. To allow the calculation of the Solvency Capital Requirement for flood risk for the region United Kingdom of Great Britain and Northern Ireland, the table should have one row for each of that region’s 124 risk zones. Therefore, Regulation 2015/35 has been corrected accordingly.
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Effective Date: April 15, 2020
Keywords: Europe, EU, Insurance, Reinsurance, Solvency II, Correction to Regulation, SCR, Risk Weights, Regulation 2015/35, Regulation 2020/442, EC
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