S.L. 403.17 Art. 14Elimination of double use of eligible own funds.

(1) The own funds eligible for the Solvency Capital

Requirement shall not be taken into account more than once among the different insurance or reinsurance undertakings, in a group, in the calculation of the group solvency.

(2) For the purposes of sub-regulation (1), when calculating the group solvency and where method 1 and method 2 do not provide for it, the following amounts shall be excluded:

(a) the value of any asset of the participating insurance or reinsurance undertaking, which represents the financing of own funds eligible for the Solvency Capital Requirement of one of its related insurance or reinsurance undertakings;

(b) the value of any asset of a related insurance or reinsurance undertaking of the participating insurance or reinsurance undertaking which represents the financing of own funds eligible for the Solvency Capital Requirement of that participating insurance or reinsurance undertaking;

(c) the value of any asset of a related insurance or reinsurance undertaking of the participating insurance or reinsurance undertaking, which represents the financing of own funds eligible for the Solvency Capital Requirement of any other related insurance or reinsurance undertaking of that participating insurance or reinsurance undertaking.

(3) Without prejudice to sub-regulation (2), the following may be included in the calculation only in so far as they are eligible for covering the Solvency Capital Requirement of the related undertaking concerned:

(a) surplus funds falling under Article 91(2) of the Solvency II Directive arising in a related insurance or reinsurance undertaking carrying on long term business, of the participating insurance or reinsurance undertaking for which the group solvency is calculated;

(b) any subscribed but not paid-up capital of a related insurance or reinsurance undertaking of the participating insurance or reinsurance undertaking for which the group solvency is calculated.

(4) Notwithstanding sub-regulation (3), the following shall in any event be excluded from the calculation:

(a) subscribed but not paid-up capital which represents a potential obligation on the part of the participating undertaking;

(b) subscribed but not paid-up capital of the participating insurance or reinsurance undertaking, which represents a potential obligation on the part of a related insurance or reinsurance undertaking;

(c) subscribed but not paid-up capital of a related insurance or reinsurance undertaking which represents a potential obligation on the part of another related insurance or reinsurance undertaking of the same participating insurance or reinsurance undertaking.

(5) Where the competent authority considers that certain own funds eligible for the Solvency Capital Requirement of a related insurance or reinsurance undertaking other than those referred to in sub-regulations (3) and (4), cannot effectively be made available to cover the Solvency Capital Requirement of the participating insurance or reinsurance undertaking for which the group solvency is calculated, those own funds may be included in the calculation only in so far as they are eligible for covering the Solvency Capital Requirement of that related undertaking.

(6) The sum of the own funds referred to in sub-regulations (3) to (5), shall not exceed the Solvency Capital Requirement of the related insurance or reinsurance undertaking.

(7) Any eligible own funds of a related insurance or reinsurance undertaking of the participating insurance or reinsurance undertaking for which the group solvency is calculated that are subject to prior authorisation from the competent authority or the relevant European regulatory authority in accordance with Article 90 of the Solvency II Directive, shall be included in the calculation only in so far as they have been duly authorised by the competent authority or the relevant European regulatory authority, responsible for the supervision of that related undertaking.