(48)

the following article is inserted: ‘Article 105a Long-term equity investments 1. By way of derogation from Article 101(3), and as part of the equity risk sub-module referred to in Article 105(5), second subparagraph, point (b), Member States shall allow insurance and reinsurance undertakings which comply with the conditions laid down in the second subparagraph of this paragraph, to apply to a specific subset of equity investments held with a long-term perspective a capital requirement in accordance with paragraph 4 of this Article. For the purposes of the first subparagraph, a sub-set of equity investments may be treated as long-term equity investments if the insurance or reinsurance undertaking demonstrates, to the satisfaction of the supervisory authority, that all of the following conditions are met: 2. Where equities are held within European long-term investment funds or within certain types of collective investment undertaking, including alternative investment funds, which are identified in the delegated acts adopted pursuant to this Directive as having a lower risk profile, the conditions laid down in paragraph 1 may be assessed at the level of the funds and not of the underlying assets held within those funds. 3. Insurance or reinsurance undertakings that treat a sub-set of equity investments as long-term equity investments in accordance with paragraph 1 shall not revert back to an approach that does not include long-term equity investments. Where an insurance or reinsurance undertaking that treats a sub-set of equity investments as long-term equity investments no longer complies with the conditions laid down in paragraph 1, it shall immediately inform the supervisory authority and take the necessary measures to restore compliance. Within one month of the date of the first observation of non-compliance with the conditions laid down in paragraph 1, the insurance or reinsurance undertaking shall provide the supervisory authority with the necessary information and the actions to be taken by the undertaking to achieve, within six months of the date of the first observation of non-compliance, the re-establishment of compliance with those conditions. Where the undertaking is not able to restore compliance within six months of the date of the first observation of non-compliance, it shall cease to classify any equity investment as a long-term equity investment in accordance with this Article for a period of two and a half years, or as long as compliance with the conditions laid down in paragraph 1 is not restored, whichever period is longer. 4. The capital requirement for long-term equity investments shall be equal to the loss in the basic own funds that would result from an instantaneous decrease equal to 22 % in the value of investments that are treated as long-term equity. 5. The Commission shall adopt delegated acts in accordance with Article 301a to supplement this Directive by further specifying: ; the sub-set of equity investments is clearly identified and managed separately from the other activities of the undertaking; a policy for long-term investment management is set up for each long-term equity portfolio and reflects the undertaking’s commitment to hold the overall exposure to equity in the sub-set of equity investment for a period that exceeds five years on average. The administrative, management or supervisory body of the undertaking shall explicitly endorse the investment management policies and those policies are frequently reviewed against the actual management of the portfolios, and reported in the own-risk and solvency assessment of the undertaking referred to in Article 45; the sub-set of equity investments consists only of equities that are listed in countries that are member of the EEA or of the Organisation for Economic Co-operation and Development (OECD) or of unlisted equities of companies that have their head offices in countries that are member of the EEA or of the OECD; on an ongoing basis and under stressed conditions, the insurance or reinsurance undertaking is able to avoid forced selling of equity investments within the sub-set for five years; the risk management, asset-liability management and investment policies of the insurance or reinsurance undertaking reflect the undertaking’s intention to hold the sub-set of equity investments for a period that is compatible with the requirement laid down in point (b) and the undertaking’s ability to meet the requirement laid down in point (d); the sub-set of equity investments is appropriately diversified in such a way as to avoid excessive reliance on any particular issuer or group of undertakings and excessive accumulation of risk in the portfolio of long-term equity investments as a whole with the same risk profile; the sub-set of equity investments does not include participations. the conditions set out in paragraph 1, second subparagraph, of this Article; the types of collective investment undertaking referred to in paragraph 2 of this Article; the information to be included in the solvency and financial condition report referred to in Article 51(1) and in the regular supervisory report referred to in Article 35(5a).’

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Source: EUR-Lex (Cellar) · retrieved 2026-10-14 · Text as adopted (Official Journal); later amendments are not incorporated in this text.