Solvency and financial condition report

(1) Insurance undertakings must publish a solvency and financial condition report at least once a year, no later than 14 weeks after the end of the financial year. For the report at group level, the time limit is extended by six weeks. The report must be approved by the management organ before publication. The report must be sent to the supervisory authority without delay after publication.
(2) The solvency and financial condition report must set out material information on the solvency and financial condition of the insurance undertaking. The particulars in this report must, as regards their level of detail, be geared to the nature, scale, and complexity of the undertaking's business and risks, and must be generally comprehensible. In this connection the following must be described:
1. the undertaking's business activities and business results,
2. the business organisation, together with an assessment of its appropriateness for the undertaking's risk profile,
3. separately for each category of risk, the risk exposure, risk concentrations, risk-mitigation measures, and risk sensitivity,
4. separately for the assets, technical provisions, and other liabilities under the solvency and financial condition report, the bases and methods used for their valuation, together with an explanation of the material differences from the bases and methods used for their valuation in the annual financial statements, and
5. capital management, stating at least the structure and amount of own funds and their quality, and the amounts of the Solvency Capital Requirement and the Minimum Capital Requirement. Where insurance undertakings are required to disclose the information required under section 134c(1) to (3) of the Stock Corporation Act, this may be disclosed in the solvency and financial condition report under the particulars on liquidity risk under point C.4 of Annex XX of Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 12, 17.1.2015, p. 1; L 195, 1.8.2018, p. 27), as last amended by Delegated Regulation (EU) 2019/1865 (OJ L 289, 8.11.2019, p. 3). The information must be preceded by the heading "Information under section 134c(1) to (3) of the Stock Corporation Act".
(3) Where the matching adjustment named in section 80 is applied, the description named in subsection (2), point 4, includes a description of the matching adjustment, of the portfolio of obligations and of the assigned assets to which the matching adjustment is applied, and a quantification of the effect of changing the matching adjustment to zero on the financial position of an undertaking. The description named in subsection (2), point 4, also includes a statement of whether the volatility adjustment named in section 82 is used by the undertaking, and a quantification of the effect of changing the volatility adjustment to zero on the financial position of an undertaking.
(4) The description of own funds includes
1. an analysis of any significant changes compared with the previous reporting period,
2. an explanation of any major differences in respect of the value of own-funds items in the annual financial statements, and
3. a brief presentation of the transferability of capital. Insurance undertakings using an internal or partial internal model for the calculation of the Solvency Capital Requirement must additionally provide sufficient information to explain the main differences between the assumptions underlying the standard formula and their model.
(5) Where non-compliance with the Minimum Capital Requirement, or significant non-compliance with the Solvency Capital Requirement, has occurred during the reporting period,
1. the maximum amount of the shortfall from the respective capital requirement must be stated,
2. the reasons for and consequences of the non-compliance must be explained, and
3. the remedial measures taken and planned must be set out.
(6) Where a capital add-on has been imposed, it must be stated separately. In addition, in that case, the amount determined under the provisions on calculating the Solvency Capital Requirement must also be disclosed. Where the insurance undertaking is required, at the request of the supervisory authority, to use undertaking-specific parameters in calculating the Solvency Capital Requirement, their effects on the calculation must be quantified in detail and likewise disclosed separately. In both cases, the reasons given by the supervisory authority for the measure taken must be addressed.
(7) Where the supervisory authority is still examining the final amount of the Solvency Capital Requirement, this must be indicated in the publication under subsection (1).
(8) With the consent of the supervisory authority, particulars in the report may be replaced by references to information published under other general or supervisory provisions. Consent is given where the information to be referenced is equivalent in nature and scope.