The Solvency 2 Regulations 2015

Participating undertakings: calculation of group solvency

19.—(1) This regulation applies where—

(a) the PRA is the group supervisor of a group;

(b) the group contains an insurance undertaking or reinsurance undertaking which is a participating undertaking in a third-country insurance undertaking or third-country reinsurance undertaking; and

(c) the third country in which the third-country insurance undertaking or third country reinsurance undertaking has its head office makes it subject to authorisation and imposes on it a solvency regime at least equivalent to that specified in Chapter 6 of Title 1 of the Solvency 2 Directive.

(2) The PRA must permit the group to take into account national laws adopted by the third country in respect of the group’s solvency capital requirement and the own funds eligible to satisfy the solvency capital requirement in the calculation of the group’s solvency unless—

(a) there has been a significant change to those national laws; and

(b) it is not in the interests of the group’s policyholders to do so.

(3) Where no delegated act has been adopted pursuant to paragraph (4) or (5) of article 227 of the Solvency 2 Directive, the PRA may, and on the request of the participating authority must, verify whether a solvency regime in the third country is at least equivalent to Chapter 6 of Title 1 to the Solvency 2 Directive.

(4) The PRA must—

(a) consult the other supervisory authorities concerned in the supervision of the group before taking a decision under paragraph (3);

(b) take the decision in accordance with the criteria set out in any directly applicable regulation made under paragraph (3) of Article 227; and

(c) ensure that its decision does not contradict any previous decision on the equivalence of the third country, except where it is necessary to take into account significant changes to the supervisory regime laid down in Chapter 6 of Title 1 to the Solvency 2 Directive or to the solvency regime of the third country.