26.—(1) This regulation—
(a)states the rule which applies for the purposes of deciding when—
(i)the PRA is the group supervisor of a group; and
(ii)the PRA must recognise another supervisory authority as the group supervisor of a group; and
(b)applies only when regulation 27 (which specifies exceptions to the rule) does not apply.
(2) Where the PRA is the supervisor of all the insurance undertakings and reinsurance undertakings in a group, the PRA is the group supervisor of the group.
(3) Where paragraph (2) does not apply and the group is headed by an insurance undertaking or reinsurance undertaking which is authorised by the PRA under Part 4A of FSMA, the PRA is the group supervisor of the group.
(4) Where paragraph (2) does not apply and the group is not headed by an insurance undertaking or reinsurance undertaking, the PRA is the group supervisor of the group in any of the following circumstances—
(a)where—
(i)an insurance undertaking or reinsurance undertaking has an insurance holding company or mixed financial holding company as a parent; and
(ii)the PRA has authorised that insurance undertaking or reinsurance undertaking;
(b)where—
(i)the group contains two or more insurance undertakings or reinsurance undertakings with their head offices in an EEA State;
(ii)the undertakings have the same insurance holding company or mixed financial holding company as a parent;
(iii)one of those undertakings has been authorised by the PRA; and
(iv)the insurance holding company or mixed financial holding company has its head office in the United Kingdom;
(c)where—
(i)the group is headed by two or more insurance holding companies or mixed financial holding companies with their head offices in different EEA States;
(ii)there is an insurance undertaking or reinsurance undertaking in the group in each of those EEA States; and
(iii)the PRA has authorised the insurance undertaking or reinsurance undertaking with the largest balance sheet total;
(d)where—
(i)two or more insurance undertakings or reinsurance undertakings with their head offices in an EEA State have the same insurance holding company or mixed financial holding company as a parent;
(ii)none of those undertakings has been authorised in the EEA State in which the insurance holding company or mixed financial holding company has its head office; and
(iii)the PRA has authorised the insurance undertaking or reinsurance undertaking with the largest balance sheet total;
(e)where the group is a group without a parent undertaking, or in any circumstances not referred to in sub-paragraphs (a) to (d), the PRA has authorised the insurance undertaking or reinsurance undertaking with the largest balance sheet total.
(5) Where another supervisory authority has been designated as the group supervisor in accordance with national laws implementing Article 247 of the Solvency 2 Directive, the PRA must recognise that supervisory authority as the group supervisor of the group.
27.—(1) Notwithstanding regulation 26—
(a)the PRA is the group supervisor of a group if all the supervisory authorities concerned take a joint decision that the PRA should be the group supervisor; and
(b)the PRA must recognise a joint decision taken by all the supervisory authorities that a supervisory authority other than the PRA should be the group supervisor of a group.
(2) The PRA may ask the other supervisory authorities concerned to consider whether—
(a)the criteria specified in paragraph 2 of Article 247 of the Solvency 2 Directive are appropriate for determining which supervisory authority should be the group supervisor; and
(b)a supervisory authority other than the supervisory authority satisfying those criteria should be the group supervisor.
(3) The PRA may not make a request referred to in paragraph (2) more than once a year.
(4) Where the supervisory authorities are considering (whether at the request of the PRA or another supervisory authority) whether the criteria are appropriate or whether a particular supervisory authority should be group supervisor—
(a)the PRA must do everything in its power to reach a joint decision on the request within a period of three months commencing on the date of the request;
(b)the PRA must permit the group concerned to give its opinion on the request;
(c)the PRA may refer the matter to EIOPA in accordance with Article 19 of the EIOPA Regulation within a period of three months beginning with the date of the request;
(d)where the matter is referred to EIOPA, the PRA must take a joint decision in accordance with any decision taken by EIOPA;
(e)where the matter is not referred to EIOPA or EIOPA take no decision on such a referral, the PRA may take a joint decision with the other supervisory authorities that—
(i)the criteria referred to in paragraph (2)(a) are inappropriate, taking into account the structure of the group and the relative importance of the activities of insurance undertakings and reinsurance undertakings in the different countries; and
(ii)a supervisory authority other than the supervisory authority satisfying the criteria should be the group supervisor; and
(f)where the joint decision designates the PRA as the group supervisor, the PRA must provide a copy of the decision to the group stating the full reasons for the decision.
28.—(1) Paragraphs (2) to (7) apply where the PRA is the group supervisor of a group, and paragraph (8) applies where the PRA is a member of a college of supervisors for a group but is not the group supervisor.
(2) The PRA must—
(a)coordinate the gathering and dissemination of relevant or essential information for going-concern and emergency situations, including the dissemination of information which is of importance to the supervisory functions of another supervisory authority;
(b)conduct supervisory reviews and assessments of the financial situation of the group;
(c)assess the group’s compliance with the rules on solvency, risk concentration and intra-group transactions set out in Articles 218 to 245 of the Solvency 2 Directive;
(d)assess the group’s system of governance in accordance with regulation 25;
(e)assess whether the members of the administrative, management or supervisory body of the participating undertakings in the group fulfil the requirements set out in rules implementing Articles 42 and 257 of the Solvency 2 Directive;
(f)plan and coordinate, through regular meetings held at least annually or other appropriate means, supervisory activities in going-concern and emergency situations, in cooperation with the other supervisory authorities concerned and taking into account the nature, scale and complexity of the risks inherent in the business of all the undertakings in the group;
(g)lead the process for validating an internal model at group level as set out in regulation 49;
(h)lead the process for permitting the application of the regime referred to in Articles 237 to 240 of the Solvency 2 Directive; and
(i)carry out the other tasks, measures and decisions assigned to the group supervisor by the Solvency 2 Directive.
(3) In order to facilitate the exercise of the tasks referred to in paragraph (2), the PRA must establish and chair a college of supervisors comprising—
(a)the PRA;
(b)the supervisory authorities of the EEA States in which the head office of every subsidiary undertaking in the group is situated; and
(c)EIOPA.
(4) The PRA—
(a)must permit the supervisory authorities of significant branches and related undertakings to participate in the college of supervisors, provided that their participation is limited to achieving an efficient exchange of information;
(b)must ensure that the processes for cooperation, exchange of information and consultation between the PRA and the other supervisory authorities concerned are effectively applied in accordance with Title 3 of the Solvency 2 Directive, with a view to promoting the convergence of their respective decisions and activities;
(c)may agree with the other supervisory authorities concerned that some activities of the college be carried out by a reduced number of supervisory authorities where the effective functioning of the college of supervisors requires it;
(d)must conclude co-ordination arrangements with the other supervisory authorities concerned for the establishment and functioning of the college of supervisors.
(5) The arrangements referred to in paragraph (4)(d) must specify procedures for—
(a)the decision-making process among the supervisory authorities in accordance with Articles 231, 232 and 247 of the Solvency 2 Directive; and
(b)consultation under Articles 218(5) and 248(4) and of the Solvency 2 Directive.
(6) Where the PRA has received advice from EIOPA in relation to the establishment and functioning of the college of supervisors, it must, after consulting the other supervisory authorities concerned, duly consider such advice before the end of the period of two months beginning with the date the advice was received before taking its final decision.
(7) Where the PRA makes a decision regarding the establishment and functioning of the college of supervisors, the PRA must—
(a)ensure the decision contains a statement setting out in full the reasons for the decision and explaining any significant deviation from any advice given by EIOPA; and
(b)send a copy of the decision to the other supervisory authorities concerned.
(8) The PRA must send EIOPA any information on the functioning of the college of supervisors and any difficulties encountered that are relevant for EIOPA’s reviews of the operational functioning of colleges of supervisors.
29.—(1) Where the PRA is the group supervisor of a group, the PRA must provide the other supervisory authorities concerned and EIOPA with the following information regarding the group—
(a)information received by the PRA under rules implementing the last sub-paragraph of Article 19, Article 51(1) and Article 254(2) of the Solvency 2 Directive;
(b)information regarding the legal, governance and organisational structure of the group.
(2) Where the PRA is a member of the college of supervisors for a group, the PRA must—
(a)cooperate closely with the other supervisory authorities concerned, in particular in cases where an insurance undertaking or reinsurance undertaking in the group encounters financial difficulties;
(b)provide the other supervisory authorities concerned with relevant information so as to allow and facilitate the exercise of their supervisory tasks under the Solvency 2 Directive;
(c)communicate all relevant information to the other supervisory authorities concerned without delay as soon as such information becomes available or exchange such relevant information on request; and
(d)call immediately for a meeting of all supervisory authorities concerned where—
(i)the PRA becomes aware that an individual insurance undertaking or reinsurance undertaking in the group has breached the solvency capital requirement in a significant way;
(ii)the PRA becomes aware that an individual insurance undertaking or reinsurance undertaking in the group has breached the minimum capital requirement;
(iii)the PRA becomes aware that the group has breached the solvency capital requirement at group level in a significant way; or
(iv)other exceptional circumstances occur.
30.—(1) Except where paragraph (3) applies, the PRA must consult the other members of the college of supervisors before taking a decision which is of importance to the supervisory tasks of another supervisory authority with regard to—
(a)changes in the shareholder, organisational or management structure of insurance undertakings or reinsurance undertakings in the group, which require the approval or authorisation of the other supervisory authority;
(b)a decision on the extension of the recovery period under rules implementing Articles 138 (3) and (4) of the Solvency 2 Directive; or
(c)the imposition of a capital add-on, a limitation on the use of an internal model for calculating the solvency capital requirement, or any other major sanctions or exceptional measures taken by the other supervisory authority.
(2) Where the PRA consults another supervisory authority on a matter referred to in paragraph (1)(b) or (1)(c) and the PRA is not the group supervisor, the PRA must also consult the group supervisor on that matter.
(3) Paragraph (1) does not apply in cases of urgency or where consultation may jeopardise the effectiveness of the PRA’s decision, provided the PRA informs the other supervisory authorities concerned without delay.
(4) The PRA must also consult a supervisory authority before taking a decision based on information received from that supervisory authority.
31.—(1) Before requesting information from an insurance undertaking or reinsurance undertaking in a group, the PRA must satisfy—
(a)condition 1; and
(b)if the PRA is the group supervisor of the group to which the undertaking belongs and the information is referred to in rules implementing Article 254(2) of the Solvency 2 Directive, condition 2.
(2) In this regulation—
(a)condition 1 is that the information has been requested from the insurance undertaking or reinsurance undertaking subject to group supervision and has not been supplied by that undertaking within a reasonable period of time; and
(b)condition 2 is that the PRA has, if possible, requested the information from all the other supervisory authorities to which the information has been provided and none of those supervisory authorities has provided the information to the PRA.
32.—(1) Where the PRA receives a request for verification from another supervisory authority in accordance with Article 255(2) of the Solvency 2 Directive, the PRA must carry out the verification directly, allow an auditor or expert to carry out the verification, or allow the other supervisory authority to carry out verification itself.
(2) Where the PRA is not the group supervisor, the PRA must inform the group supervisor of the action it takes.
33. Where the PRA is the group supervisor of a group and the PRA has received a request from—
(a)an insurance undertaking which is a participating undertaking;
(b)a reinsurance undertaking which is a participating undertaking;
(c)an insurance holding company;
(d)a mixed financial holding company,
to provide a single solvency and financial condition report in accordance with rules implementing Article 256 of the Solvency 2 Directive, the PRA must consult and duly take into account any views and reservations of the other members of the college of supervisors before agreeing to the request.
34.—(1) In this regulation, a “relevant event” means—
(a)an insurance undertaking or reinsurance undertaking in a group does not comply with a requirement referred to in—
(i)Articles 218 to 246, or 265, of the Solvency 2 Directive; or
(ii)a third country supervisory regime which is equivalent to Title 3 of the Solvency 2 Directive;
(b)the solvency of an insurance undertaking or reinsurance undertaking in a group is jeopardised; or
(c)an intra-group transaction or risk concentration is a threat to the financial position of an insurance undertaking or reinsurance undertaking in a group.
(2) Where—
(a)the PRA is the group supervisor of a group;
(b)the group contains an insurance holding company, a mixed financial holding company or a mixed-activity insurance holding company with its head office in an EEA State other than the United Kingdom; and
(c)a relevant event occurs in relation to such a company,
the PRA must inform the supervisory authority of that EEA State with a view to enabling the supervisory authority to take any necessary measures in accordance with Article 258(1) of the Solvency 2 Directive.
(3) Where—
(a)the PRA is the group supervisor of a group;
(b)a relevant event occurs in relation to an insurance undertaking or reinsurance undertaking in the group; and
(c)that undertaking has its head office in an EEA State other than the United Kingdom,
the PRA must inform the supervisory authority of the EEA State with a view to enabling the supervisory authority to take the necessary measures in accordance with Article 258(1) of the Solvency 2 Directive.
(4) The PRA must, where appropriate, coordinate any measures it may take with the other supervisory authorities concerned.