Own funds

(1) Insurance undertakings must at all times hold eligible own funds at least equal to the Solvency Capital Requirement. They must at all times hold eligible basic own funds equal to the Minimum Capital Requirement. Own funds are eligible where they meet the requirements of sections 94 and 95.
(2) The own funds of an insurance undertaking comprise basic own funds and ancillary own funds.
(3) Basic own funds are: 1. the excess of assets over liabilities, less the amount of own shares, in the solvency balance sheet, and 2. subordinated liabilities.
(4) Ancillary own funds are those that do not count as basic own funds and that can be called up to absorb losses. They may comprise the following items: 1. the part of unpaid share capital, initial fund, or, for public-law insurance undertakings, the item corresponding to the share capital of a stock corporation, that has not been called up, 2. for mutual insurance associations with variable supplementary call obligations, the future claims that the association has against its members if it calls up supplementary contributions within the following twelve months, 3. letters of credit and guarantees, and 4. all other legally binding payment obligations of third parties towards the insurance undertaking.
(5) As soon as an item of ancillary own funds has been paid in or called up, it is treated as an asset for the purposes of the solvency balance sheet and counts as basic own funds.