S.L. 403.17 Art. 29Subsidiaries of an insurance or reinsurance undertaking: determination of the Solvency Capital requirement.

(1) Where the subsidiary undertaking is an authorised insurance undertaking or an authorised reinsurance undertaking, without prejudice to regulation 23, the Solvency Capital

Requirement of the subsidiary shall be calculated in accordance with sub-regulations (2) and (4) to (7).

(2) Where the Solvency Capital Requirement of the subsidiary undertaking is calculated on the basis of an internal model approved at group level in accordance with regulation 23 and the competent authority considers that the risk profile of the subsidiary undertaking, deviates significantly from this internal model, and as long as that undertaking does not properly address the concerns of the competent authority, the competent authority may, in the cases referred to in Article 37 of the Solvency II Directive:

(a) propose to set a capital add-on to the Solvency Capital Requirement of that subsidiary undertaking resulting from the application of such model; or

(b) in exceptional circumstances where such capital add-on would not be appropriate, to require that undertaking to calculate its Solvency Capital Requirement on the basis of the standard formula.

(3) Where the Solvency Capital Requirement of the subsidiary undertaking is calculated on the basis of the standard formula and the competent authority considers that the risk profile of the subsidiary undertaking, deviates significantly from the assumptions underlying the standard formula, and as long as that undertaking does not properly address the concerns of the competent authority, the competent authority may, in exceptional circumstances, propose that the undertaking replace a subset of the parameters used in the standard formula calculation by parameters specific to that undertaking when calculating the long-term business of insurance, general business of insurance and health underwriting risk modules, as set out in Article 110 of the Solvency II Directive, or in the cases referred to in Article 37 of the Solvency II Directive, to set a capital add-on to the Solvency Capital Requirement of that subsidiary undertaking.

(4) In the cases referred to in sub-regulations (2) and (3):

(a) the competent authority shall discuss its proposal within the college of supervisors and communicate the grounds for such proposals to both the subsidiary undertaking and the college of supervisors; and

(b) the college of supervisors shall do everything within its power to reach an agreement on the proposal of the competent authority or on other possible measures and the agreement reached shall be recognised as determinative and shall be applied by the competent authority and by the European regulatory authorities concerned.

(5) Where the competent authority and the group supervisor disagree, any one of them may, within one month from the proposal of the competent authority and before an agreement has been reached within the college of supervisors in accordance with sub-regulation (4), refer the matter to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010.

(6) In the circumstances referred to in sub-regulation (5):

(a) the competent authority shall defer its decision and await any decision that EIOPA may take in accordance with Article 19 of that Regulation;

(b) the competent authority shall take its decision in conformity with EIOPA’s decision and shall state the full reasons on which it is based; and

(c) the decision taken by the competent authority shall be submitted to the subsidiary undertaking and to the college of supervisors.

(7) In the cases referred to in Article 238(2) and (3) of the Solvency II Directive, where the competent authority is the group supervisor of a group, and where the competent authority and the European regulatory authority having authorised the subsidiary undertaking disagree, the competent authority may, within one month from the proposal and before an agreement has been reached within the college of supervisors in accordance with Article 238(4) of the Solvency II Directive, refer the matter to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010.