Reinsurance undertakings in run-off

(1) The following subsections, and the provisions applicable to small insurance undertakings with the exception of section 215, apply to reinsurance undertakings that ceased concluding new reinsurance contracts by 10 December 2007 and manage only their portfolio with the aim of discontinuing their activity.
(2) The asset holdings serving the continuous ability to meet the obligations arising from the reinsurance relationships comprise assets equal to the amount of the technical provisions within the meaning of sections 341e to 341h of the Commercial Code, and the liabilities and accruals and deferrals arising from reinsurance relationships (qualifying assets). Having regard to the kind of insurance business conducted and the structure of the undertaking, these holdings must be invested so as to achieve the greatest possible security and profitability, with the reinsurance undertaking's liquidity assured at all times, while maintaining an appropriate mix and spread. This applies with the proviso that adequate currency matching is ensured, and that the appropriateness of the mix and spread must be assessed having regard to the particular features of the reinsurance undertaking concerned. In doing so, regard must also be had to the undertaking's capital resources and overall financial situation, and to its group structure. Investments in derivative financial instruments are permissible insofar as they contribute to reducing investment risks or to facilitating portfolio management.
(3) In determining the obligations to be secured, liabilities for which security is provided by cash deposits placed with the ceding insurer are not taken into account. The shares attributable to retrocessionaires and to special purpose vehicles authorised to conduct business within the meaning of Article 13, point 26, of Directive 2009/138/EC are disregarded. Shares attributable to special purpose vehicles with their registered office in a third country are disregarded only where the insurance special purpose vehicle is authorised by the state and supervised to conduct business in its country of establishment in accordance with the requirements of the delegated acts issued under Article 211(2) of Directive 2009/138/EC, and has a comparable level of capital investments.
(4) Where reinsurance relationships belong to a separate portfolio of a reinsurance undertaking in a third country, subsection (2) and section 125(1) apply correspondingly also to the asset holdings arising from those reinsurance relationships, insofar as foreign law does not prescribe otherwise.