S.L. 403.17 Art. 34Supervision of the system of governance.

(1) The requirements set out in Articles 40 to 49 of the

Solvency II Directive shall apply at the level of mutatis mutandis, the group.

(2) Without prejudice to sub-regulation (1), the risk management and internal control systems and reporting procedures shall be implemented consistently in all the undertakings included in the scope of group supervision pursuant to regulation 3(2)(a) and

(b) so that those systems and reporting procedures can be controlled at the level of the group.

(3) Without prejudice to sub-regulation (1), the group internal control mechanisms shall include at least the following:

(a) adequate mechanisms as regards group solvency to identify and measure all material risks incurred and to appropriately relate eligible own funds to risks;

(b) sound reporting and accounting procedures to monitor and manage the intra-group transactions and the risk concentration.

(4) The systems and reporting procedures referred to in sub-regulations (1) to (3) shall be subject to supervisory review by the group supervisor or in accordance with the rules laid down in regulations 35 to 43.

(5) A participating insurance undertaking or reinsurance undertaking, or the insurance holding company or the mixed financial holding company, shall undertake at the level of the group the assessment required by Article 45 of the Solvency II Directive. The own-risk and solvency assessment conducted at group level shall be subject to supervisory review by the group supervisor in accordance with regulations 35 to 43.

(6) Where the calculation of the solvency at the level of the group is carried out in accordance with method 1, as referred to in regulation 22, the participating insurance or reinsurance undertaking, or the insurance holding company or the mixed financial holding company, shall provide to the group supervisor a proper understanding of the difference between the sum of the Solvency Capital Requirements of all the related insurance or reinsurance undertakings of the group and the group consolidated Solvency Capital Requirement.

(7) The participating insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company, may, subject to the agreement of the group supervisor, undertake any assessments required pursuant to Article 45 of the Solvency II Directive at the level of the group and at the level of any subsidiary undertaking in the group at the same time, and may produce a single document covering all the assessments.

(8) Where the group exercises the option provided in sub-regulation (7), it shall submit the document to all the European regulatory authorities concerned at the same time, and the exercise of that option shall not exempt the subsidiaries concerned from the obligation to ensure that the requirements of Article 45 of the Solvency II Directive are met.

(9) Where the competent authority is the group supervisor of a group, the authority shall:

(a) review the risk management and internal control systems and reporting procedures implemented by the group in accordance with Article 246(1) and (2) of the Solvency II Directive;

(b) review the own-risk and solvency assessment conducted at group level by the group; and

(c) consult the members of the college of supervisors and duly take into account their views and reservations before granting an agreement to a request from a participating insurance or reinsurance undertaking, insurance holding company or mixed financial holding company to undertake its own-risk and solvency assessment in accordance with Article 45 of the Solvency II Directive, at the level of the group and at the level of any subsidiary in the group at the same time, and produce a single document covering all such assessments.