Non-compliance with the Solvency Capital Requirement

(1) Where the Solvency Capital Requirement is no longer complied with, or where this is expected to occur within the following three months, the insurance undertaking must inform the supervisory authority of this without delay.
(2) Within two months of the insurance undertaking identifying that the Solvency Capital Requirement is not complied with, it must submit a realistic recovery plan to the supervisory authority for approval.
(3) Within six months of identifying non-compliance with the Solvency Capital Requirement, the insurance undertaking must, through appropriate measures, increase its eligible own funds or reduce its risk profile, until the Solvency Capital Requirement is again complied with. The supervisory authority may extend the period by three months.
(4) Where the European Insurance and Occupational Pensions Authority has determined that exceptional adverse circumstances have occurred within the meaning of Article 138(4) of Directive 2009/138/EC, the supervisory authority may, having regard to all relevant factors, extend the period named in subsection (3), second sentence, for affected undertakings by up to seven years. The possibility of extending the period ends as soon as the European Insurance and Occupational Pensions Authority has determined that exceptional adverse circumstances no longer exist.
(5) The European Insurance and Occupational Pensions Authority makes the determination as to the existence of exceptional adverse circumstances at the request of a supervisory authority. The Federal Institute may make the request where insurance undertakings representing a significant share of the market or of the business areas concerned are, in all likelihood, not going to satisfy one of the conditions named in subsection (3).
(6) Where the supervisory authority has extended the period under subsection (3), first sentence, by more than three months, the affected insurance undertakings must submit a progress report to the supervisory authority every three months. This report must set out the measures taken to increase eligible own funds to comply with the Solvency Capital Requirement or to reduce the risk profile until the Solvency Capital Requirement is again complied with, and the progress made in this respect. The extension of the period must be revoked where the progress report shows that no significant progress has been made in restoring compliance with the Solvency Capital Requirement between the time non-compliance with the Solvency Capital Requirement was identified and the time the progress report was submitted.
(7) Where facts justify the assumption that the financial situation of the insurance undertaking concerned will continue to deteriorate, the supervisory authority may restrict or prohibit that undertaking's free disposal of its assets; section 133(3) applies correspondingly.
(8) Where the supervisory authority has restricted or prohibited free disposal of the assets under subsection (7), it informs the supervisory authorities of the member states or contracting states in which the undertaking maintains a branch or provides services of this. It may request them to take the same measures. In that case, it specifies the assets that are to be the subject of the measure.