Approval of ancillary own funds

(1) Ancillary own funds may be recognised only with the prior approval of the supervisory authority.
(2) The supervisory authority approves either an amount for each item of ancillary own funds, or a method of determining the amount of each item of own funds. In the latter case, approval is granted only for a specified period and also covers the amount determined under that method.
(3) The amount attributed to each item of ancillary own funds reflects the loss-absorbing capacity of the item and is based on prudent and realistic assumptions. Where an item of own funds has a fixed nominal value, the amount of that item corresponds to its nominal value where that amount appropriately reflects its loss-absorbing capacity.
(4) In deciding on the application to recognise ancillary own funds, the supervisory authority takes into account: 1. the ability and willingness of the counterparties to pay, 2. the recoverability of the funds, taking into account the legal form of the item and any other circumstances that may prevent successful payment-in or calling-up of that item, and 3. any information on the outcome of the insurance undertaking's past calling-up of such ancillary own funds, insofar as that information can be reliably used to assess the expected outcome of future calls.