S.L. 403.23 Art. 2015

This portion shall decrease linearly at the end of each year from 100% during the year starting from 1 January 2016 to 0% on 1 January 2032.

(4) Where an authorised insurance undertaking and authorised reinsurance undertaking applies the volatility adjustment pursuant to Article 77d of the Solvency II Directive, the relevant risk-free interest rate term structure referred to in sub-regulation (2)(b) shall be the adjusted relevant risk-free interest rate term structure set out in Article 77d of the Solvency II Directive.

(5) An authorised insurance undertaking or an authorised reinsurance undertaking which applies the risk-free interest rate term structure pursuant to sub-regulation (1) shall comprise only of those insurance or reinsurance obligations that meet the following requirements:

(a) the contracts that give rise to the insurance and reinsurance obligations were concluded before the 31 December 2015, excluding contract renewals on or after that date;

(b) until the 31 December 2015, technical provisions for insurance and reinsurance obligations were determined in accordance with Article 20 of Directive 2002/83/EC as at the last date of application of the said Directive;

(c) Article 77b of the Solvency II Directive is not applied to insurance and reinsurance obligations.

(6) An authorised insurance undertaking or an authorised reinsurance undertaking which applies the risk-free interest rate pursuant to sub-regulation (1) shall:

(a) not include the admissible insurance and reinsurance obligations in the calculation of the volatility adjustment pursuant to Article 77d of the Solvency II Directive;

(b) not apply regulation 16;

(c) as part of their report on their solvency and financial condition referred to in Insurance Rules issued pursuant to article 18F of the Act, publicly disclose that they apply the transitional risk-free interest rate term structure, and the quantification of the impact of not applying this transitional measure on their financial position.