What changed between the plenary report and the adopted text

Removed:‘1a. The Commission may adopt delegated acts in accordance with Article 301a laying down criteria for assets to be eligible to be included in the portfolio of assets referred to in Article 77b(1), point (a).’;

Removed:(c) the following paragraph 2a is inserted:

Removed:‘2a. In order to ensure uniform conditions of application of Article 77(7), EIOPA shall develop draft implementing technical standards specifying the set of scenarios to be used for the prudent deterministic valuation of the best estimate for life obligations referred to in that paragraph.

Removed:EIOPA shall submit those draft implementing technical standards to the Commission by [OP please insert date = 12 months after entry into force].

Removed:Power is conferred on the Commission to adopt those implementing technical standards in accordance with Article 15 of Regulation (EU) No 1094/2010.’;

Removed:(41) Article 92 is amended as follows:

Removed:(a) paragraph 1a is replaced by the following:

Removed:‘1a. The Commission shall adopt delegated acts in accordance with Article 301a specifying the treatment of participations, within the meaning of Article 212(2), third subparagraph, in financial and credit institutions with respect to the determination of own funds, including approaches to deductions from the basic own funds of an insurance or reinsurance undertaking of material participations in credit and financial institutions.

Removed:Notwithstanding the deductions of participations from the own funds eligible to cover the Solvency Capital Requirement as specified in the delegated act adopted pursuant to the first subparagraph, for the purpose of determining the basic own funds as referred to in Article 88, supervisory authorities may permit an insurance or reinsurance undertaking not to deduct the value of its participation in a credit or financial institution, provided that all of the following conditions are met:

Removed:(a) the insurance or reinsurance undertaking is in one of the circumstances described in point (i) or (ii) of this point:

Removed:(i) the credit or financial institution and the insurance or reinsurance undertaking belong to the same group, as defined in Article 212, to which group supervision applies in accordance with Article 213(2), points (a), (b) and (c), and the related credit or financial institution is not subject to the deduction referred to in Article 228(6);

Removed:(ii) supervisory authorities require or permit insurance or reinsurance undertakings to apply technical calculation methods in accordance with Part II of Annex I to Directive 2002/87/EC, and the credit or financial institution is included in the same supplementary supervision under that Directive as the insurance or reinsurance undertaking;

Removed:(b) supervisory authorities are satisfied as to the level of integrated management, risk management and internal control regarding the undertakings in the scope of group supervision referred to in point (a)(i) of this subparagraph or in the scope of supplementary supervision referred to in point (a)(ii) of this subparagraph;

Removed:(c) the related participation in the credit or financial institution is an equity investment of strategic nature as specified in the delegated act adopted pursuant to Article 111(1), point (m).’;

Removed:(b) paragraph 2 is replaced by the following:

Removed:‘2. Participations in financial and credit institutions as referred to in paragraph 1a shall comprise the following:

Removed:(a) participations which insurance and reinsurance undertakings hold in:

Removed:(i) credit institutions and financial institutions within the meaning of Article 4(1), points (1) and (26), of Regulation (EU) No 575/2013 ,

Removed:(ii) investment firms within the meaning of Article 4(1), point 1, of Directive 2014/65/EU’;

Removed:(b) Additional Tier 1 instruments referred to in Article 52 of Regulation (EU) No 575/2013 and Tier 2 instruments referred to in Article 63 of that Regulation, as well as Additional Tier 1 and Tier 2 instruments within the meaning of Article 9 of Regulation (EU) No 2019/2033, which insurance and reinsurance undertakings hold in respect of the entities referred to in point (a) of this paragraph in which they hold a participation.’;

Removed:(42) in Article 95, the second subparagraph is replaced by the following:

Removed:‘For that purpose, insurance and reinsurance undertakings shall, where applicable, refer to the list of own-funds items referred to in Article 97(1).’;

Removed:(43) in Article 96, the first paragraph is replaced by the following:

Removed:‘Without prejudice to Article 95 and Article 97(1) for the purposes of this Directive the following classifications shall be applied:

Removed:(1) surplus funds falling under Article 91(2) shall be classified in Tier 1;

Removed:(2) letters of credit and guarantees which are held in trust for the benefit of insurance creditors by an independent trustee and provided by credit institutions authorised in accordance with Directive 2013/36/EU shall be classified in Tier 2;

Removed:(3) any future claims which mutual or mutual-type associations of shipowners with variable contributions solely insuring risks listed in classes 6, 12 and 17 in Part A of Annex I may have against their members by way of a call for supplementary contributions, within the following 12 months, shall be classified in Tier 2.’;

Removed:(43a) in Article 105, the following paragraph is added:

Removed:'6a. The Commission is empowered to adopt, in accordance with Article 301a, delegated acts supplementing this Directive, in order to reflect the risk posed by crypto-assets in the market risk sub-module referred to in paragraph 5 and in the counterparty risk sub-module referred to in paragraph 6.'

Removed:(43b) the following Article 105a is inserted:

Removed:‘Article 105a

Removed:Long-term equity investments

Removed:1. A sub-set of equity investments may be treated as long-term equity investments if the insurance or reinsurance undertaking demonstrates, to the satisfaction of the supervisory authority, that all of the following conditions are met:

Removed:(a) the sub-set of equity investments is clearly identified;

Removed:(b) a policy for long-term investment management is set up for each long-term equity portfolio and reflects the undertaking’s commitment to hold the global exposure to equity in the sub-set of equity investment for a period that exceeds five years on average. The administrative, management or supervisory board of the undertaking has signed off on these investment management policies and these policies are frequently reviewed against the actual management of the portfolios, and reported in the own-risk solvency assessment of the undertaking pursuant to Article 45;

Removed:(c) the sub-set of equity investments consists only of equities that are listed in countries that are member of the OECD or of unlisted equities of companies that have their head offices in countries that are member of the OECD;

Removed:(d) the insurance or reinsurance undertaking is able to demonstrate to the satisfaction of the supervisory authority that it is able to maintain the sub-set of equity investments over the holding period referred to in point (b);

Removed:(e) the risk management, asset-liability management and investment policies of the insurance or reinsurance undertaking reflect the undertaking's intention to hold the sub-set of equity investments for a period that is compatible with the requirement of point (b) and its ability to meet the requirement of point (d).

Removed:2. Where equities are held within collective investment undertakings or within alternative investment funds such as European Long Term Investment Funds (ELTIFs), the conditions laid down in paragraph 1 may be assessed at the level of the funds and not of the underlying assets held within those funds.

Removed:3. Insurance or reinsurance undertakings that treat a sub-set of equity investments as long-term equity investments in accordance with paragraph 1 of this Article shall not revert back to an approach that does not include long-term equity investments. Where an insurance or reinsurance undertaking that treats a sub-set of equity investments as long-term equity investments is no longer able to comply with the conditions laid down in paragraph 1 of this Article, it shall immediately inform the supervisory authority and shall cease to apply the instantaneous decrease in the value of equities referred to in paragraph 4.

Removed:4. The capital requirement for long-term equity investments shall be equal to the loss in the basic own funds that would result from an instantaneous decrease equal to 22 % in the value of investments that are treated as long-term equity.

Removed:(44) in Article 106, paragraph 3 is replaced by the following:

Removed:‘3. The symmetric adjustment made to the standard equity capital charge covering the risk arising from changes in the level of equity prices in relation to equities not covering liabilities from unit-linked life insurance policies shall not result in an equity capital charge being applied that is more than 17 percentage points lower or higher than the standard equity capital charge.’;

Removed:(45) Article 109 is replaced by the following:

Removed:‘Article 109 Simplifications in the standard formula

Removed:1. Insurance and reinsurance undertakings may use a simplified calculation for a specific sub-module or risk module where the nature, scale and complexity of the risks they face justifies it and where it would be disproportionate to require all insurance and reinsurance undertakings to apply the standardised calculation.

Removed:Notwithstanding the first subparagraph, low-risk profile undertakings may use a simplified calculation for a specific sub-module or risk module.

Removed:For the purposes of this paragraph, simplified calculations shall be calibrated in accordance with Article 101(3).

Removed:2. Without prejudice to paragraph 1 of this Article and to Article 102(1), where an insurance or reinsurance undertaking calculates the Solvency Capital Requirement and a risk module or sub-module does not represent a share of more than 5 % of the Basic Solvency Capital Requirement referred to in Article 103, point (a), the undertaking may use a simplified calculation for that risk module or sub-module during a period of no more than three years following that calculation of the Solvency Capital Requirement.

Removed:3. For the purposes of paragraph 2, the sum over the shares, relative to the Basic Solvency Capital Requirement, of each risk module or sub-module where the simplified calculations pursuant to paragraph 2 are applied shall not exceed 10 %.

Removed:The share of a risk module or sub-module relative to the Basic Solvency Capital Requirement referred to in the first subparagraph shall be that share as calculated the last time when the risk module or sub-module was calculated without a simplified calculation pursuant to paragraph 2.’;

Removed:(46) Article 111 is amended as follows:

Removed:(a) in paragraph 1, points (l) and (m) are replaced by the following:

Removed:‘(l) the simplified calculations provided for specific risk modules and sub-modules referred to in Article 109(1) and for immaterial risk modules and sub-modules referred to in Article 109(2), as well as the criteria that insurance and reinsurance undertakings, including captive insurance undertakings and captive reinsurance undertakings, shall be required to fulfil in order to be entitled to use simplifications, as set out in Article 109(1);

Removed:(m) the approach to be used with respect to qualifying holdings within the meaning of Article 13(21) in the calculation of the Solvency Capital Requirement, in particular the calculation of the equity risk sub-module referred to in Article 105(5), taking into account the likely reduction in the volatility of the value of those qualifying holdings arising from the strategic nature of those investments and the influence exercised by the insurance or reinsurance undertaking on those investees;’;

Removed:(b) in paragraph 1, the following subparagraphs are added:

Removed:‘For the purpose of the first subparagraph, point (h), the methods and adjustments to be used to reflect the reduced scope for risk diversification of insurance and reinsurance undertakings relating to ring-fenced funds shall not apply to the portfolios of assets that are not ring-fenced funds and that are assigned to cover a corresponding best estimate of insurance or reinsurance obligations as referred to in Article 77b(1), point (a).

Removed:For the purpose of the first subparagraph, point (c), the methods, assumptions and standard parameters for the interest rate risk sub-module referred to in Article 105(5), second subparagraph, point (a), shall reflect the risk that interest rates may further decrease even where they are low or negative and its calculation shall be fully consistent with the extrapolation of interest rates according to Article 77a. Notwithstanding the previous sentence, the calculation of the interest rate risk sub-module shall not be required to take into account the risk of interest rates falling to levels below a negative floor where a negative floor is determined such that the likelihood of interest rates across relevant currencies and across maturities not being at all times above the negative floor is sufficiently small.’;

Removed:(c) the following paragraph 2a is inserted:

Removed:‘2a. Where the Commission, pursuant to paragraph 1, first subparagraph, point (c), adopts delegated acts supplementing this Directive in order to specify the methods, assumptions and standard parameters to be used for calculating the interest rate risk sub-module referred to in Article 105(5), point (a), with the objective to improve the sensitivity of capital requirements in line with developments in interest rates, such adjustments to the interest rate risk sub-module may be phased in over a transitional period of up to five years. Such phasing-in shall be mandatory and apply to all insurance or reinsurance undertakings.’