ARTICLE 18

EACH MEMBER STATE SHALL REQUIRE OF EVERY UNDERTAKING WHOSE HEAD OFFICE IS SITUATED IN ITS TERRITORY AN ADEQUATE SOLVENCY MARGIN IN RESPECT OF ITS ENTIRE BUSINESS . THE SOLVENCY MARGIN SHALL CONSIST OF : 1 . THE ASSETS OF THE UNDERTAKING , FREE OF ALL FORESEEABLE LIABILITIES , LESS ANY INTANGIBLE ITEMS ; IN PARTICULAR THE FOLLOWING SHALL BE INCLUDED : 3 . UPON APPLICATION , WITH SUPPORTING EVIDENCE , BY THE UNDERTAKING TO THE SUPERVISORY AUTHORITY OF THE MEMBER STATE IN THE TERRITORY OF WHICH ITS HEAD OFFICE IS SITUATED AND WITH THE AGREEMENT OF THAT AUTHORITY : ( A ) AN AMOUNT EQUAL TO 50 % OF THE UNDERTAKING'S FUTURE PROFITS ; THE AMOUNT OF THE FUTURE PROFITS SHALL BE OBTAINED BY MULTIPLYING THE ESTIMATED ANNUAL PROFIT BY A FACTOR WHICH REPRESENTS THE AVERAGE PERIOD LEFT TO RUN ON POLICIES ; THE FACTOR USED MAY NOT EXCEED 10 ; THE ESTIMATED ANNUAL PROFIT SHALL BE THE ARITHMETICAL AVERAGE OF THE PROFITS MADE OVER THE LAST FIVE YEARS IN THE ACTIVITIES LISTED IN ARTICLE 1 . THE BASES FOR CALCULATING THE FACTOR BY WHICH THE ESTIMATED ANNUAL PROFIT IS TO BE MULTIPLIED AND THE ITEMS COMPRISING THE PROFITS MADE SHALL BE DEFINED BY COMMON AGREEMENT BY THE COMPETENT AUTHORITIES OF THE MEMBER STATES IN COLLABORATION WITH THE COMMISSION . PENDING SUCH AGREEMENT , THOSE ITEMS SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE MEMBER STATE IN THE TERRITORY OF WHICH THE UNDERTAKING ( HEAD OFFICE , AGENCY OR BRANCH ) CARRIES ON ITS ACTIVITIES . WHEN THE COMPETENT AUTHORITIES HAVE DEFINED THE CONCEPT OF PROFITS MADE , THE COMMISSION SHALL SUBMIT PROPOSALS FOR THE HARMONIZATION OF THIS CONCEPT BY MEANS OF A DIRECTIVE ON THE HARMONIZATION OF THE ANNUAL ACCOUNTS OF INSURANCE UNDERTAKINGS AND PROVIDING FOR THE COORDINATION SET OUT IN ARTICLE 1 ( 2 ) OF DIRECTIVE 78/660/EEC ( 7 ) ; ( B ) WHERE ZILLMERIZING IS NOT PRACTISED OR WHERE , IF PRACTISED , IT IS LESS THAN THE LOADING FOR ACQUISITION COSTS INCLUDED IN THE PREMIUM , THE DIFFERENCE BETWEEN A NON-ZILLMERIZED OR PARTIALLY ZILLMERIZED MATHEMATICAL RESERVE AND A MATHEMATICAL RESERVE ZILLMERIZED AT A RATE EQUAL TO THE LOADING FOR ACQUISITION COSTS INCLUDED IN THE PREMIUM ; THIS FIGURE MAY NOT , HOWEVER , EXCEED 3,5 % OF THE SUM OF THE DIFFERENCES BETWEEN THE RELEVANT CAPITAL SUMS OF LIFE ASSURANCE ACTIVITIES AND THE MATHEMATICAL RESERVES FOR ALL POLICIES FOR WHICH ZILLMERIZING IS POSSIBLE ; THE DIFFERENCE SHALL BE REDUCED BY THE AMOUNT OF ANY UNDEPRECIATED ACQUISITION COSTS ENTERED AS AN ASSET ; ( C ) WHERE APPROVAL IS GIVEN BY THE SUPERVISORY AUTHORITIES OF THE MEMBER STATES CONCERNED IN WHICH THE UNDERTAKING IS CARRYING ON ITS ACTIVITIES ANY HIDDEN RESERVES RESULTING FROM THE UNDER-ESTIMATION OF ASSETS AND OVER-ESTIMATION OF LIABILITIES OTHER THAN MATHEMATICAL RESERVES IN SO FAR AS SUCH HIDDEN RESERVES ARE NOT OF AN EXCEPTIONAL NATURE . THE PAID-UP SHARE CAPITAL OR , IN THE CASE OF A MUTUAL CONCERN , THE PAID-UP AMOUNT OF ITS FUND , ONE HALF OF THE UNPAID-UP SHARE CAPITAL OR FUND ONCE 25 % OF SUCH CAPITAL OR FUND ARE PAID UP , STATUTORY RESERVES AND FREE RESERVES NOT CORRESPONDING TO UNDERWRITING LIABILITIES , ANY CARRY-FORWARD OF PROFITS ; 2 . IN SO FAR AS AUTHORIZED UNDER NATIONAL LAW , PROFIT RESERVES APPEARING IN THE BALANCE SHEET WHERE THEY MAY BE USED TO COVER ANY LOSSES WHICH MAY ARISE AND WHERE THEY HAVE NOT BEEN MADE AVAILABLE FOR DISTRIBUTION TO POLICY-HOLDERS ;

← art_17__para · All articles · art_18__para →

Source: EUR-Lex (Cellar) · retrieved 2026-10-29 · Text as adopted (Official Journal); later amendments are not incorporated in this text.