S.I. No. 665/2006 - European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2006

STATUTORY INSTRUMENTS

S.I. No. 665 of 2006

REGULATIONS

entitled

European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2006

Made by the Minister for Finance

I, Brian Cowen, Minister for Finance, in exercise of the powers conferred on me by the European Communities Act 1972 (No. 27 of 1972), and for the purpose of giving further effect to Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002¹ , and Directive 2002/13/EC of the European Parliament and of the Council of 5 March 2002² , hereby make the following regulations:

Citation and commencement, etc.

1.       (1)       These Regulations may be cited as the European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2006

(2)(a)     Subject to subparagraph (b), these regulations are deemed to have come into operation on 1 January 2005.

(b)     A failure to comply with the Principal Regulations, as amended by these Regulations, shall only be an offence under Article 59 of the Principle Regulations if such failure occurs on a date after the making of these Regulations.

Interpretation.

2.       In these Regulations, “Principal Regulations” means the European Communities (Non-Life Insurance) Framework Regulations 1994 ( S.I. No. 359 of 1994 ).

Amendment of Annex II of the Principal Regulations.

3.       The Principal Regulations are amended in Annex II (inserted by Article 6 of the European Communities (Non-Life Insurance) Framework (Amendment) Regulations 2004 ( S.I. No. 728 of 2004 )-

(a)      in paragraph 4(2)-

(i)       by substituting the following for clause (a)

“(a) any hidden net reserves arising out of the valuation of assets, in so far as such hidden net reserves are not, in the opinion of the Bank, of an exceptional nature;”,

and

(ii)       by substituting the following for clause (c)

“(c)    in the case of a mutual or mutual-type association to which variable contributions have been made and that has claims against its members for supplementary contribution, and subject to a limit of 50 per cent of the lesser of the available solvency margin, and the required solvency margin, an amount not exceeding one half of the difference between -

(i)       the maximum contributions in respect of which the association has claims against its members by way of calls for supplementary contribution, and

(ii)      the contribution actually called in.”,

(b)       in paragraph 7:

(i)       by substituting the following for subparagraph (1):

“(1)     The premium basis referred to in paragraph 6 of this Part and subparagraph (2) of this paragraph is to be calculated using the higher of -

(a)       the gross written premiums or contributions, and

(b)       the gross earned premiums or contributions received by the undertaking.”,

and

(ii)       by substituting the following for subparagraph (2) other than steps 3 to 6:

“(2)       The solvency margin on a premium basis is to be calculated in accordance with the following steps:

Step 1: Multiply the total amount of premiums or contributions derived from class 11, 12 or 13 insurance business by 0.5;

“Step 2: Add to the total obtained in step 1 the premiums or contributions (inclusive of charges ancillary to premiums or contributions) due in respect of direct business during the undertaking's immediately preceding year;”,

(c)       by substituting the following for Steps 1 and 2 in paragraph 8 (1):

“Step 1 :For class 11, class 12 or class 13 insurance business multiply by 0.5 the amount representing claims, provisions and recoveries:

“Step 2: Add to the total obtained in step 1 the amounts of claims paid in respect of direct business undertaken by the undertaking during the periods referred to in paragraph 6 of this Part (without deducting claims borne by reinsurers and retrocessionaires);”

(d)       by substituting the following for paragraph 1(1)(b)(ii) of Part B of Annex II:

“(ii)      with the approval of the Bank, any hidden net reserves arising out of the valuations of assets, in so far as such hidden net reserves are not, in the opinion of the Bank of an exceptional nature.”,

and

(e)       by substituting the following for Part C of Annex II

¹ OJ No. L 35, 11/2/2003, p.1

² OJ No. L 345, 19/12/2002, p.1