Exclusion of intra-group creation of capital

(1) In calculating group solvency, eligible own funds arising from reciprocal financing between the participating insurance undertaking and 1. a related undertaking, 2. a participating undertaking, or 3. another related undertaking of one of its participating undertakings, are disregarded.
(2) In addition, in calculating group solvency, the own funds that may be used for the Solvency Capital Requirement of a related insurance undertaking of the participating insurance undertaking are disregarded where these own funds arise from reciprocal financing with another related undertaking of that participating insurance undertaking.
(3) Reciprocal financing exists in particular where an insurance undertaking or one of its related undertakings holds shares in another undertaking, or grants a loan to another undertaking, that in turn directly or indirectly holds own funds that may be counted towards the Solvency Capital Requirement of the insurance undertaking or of one of its related undertakings.