Circular 04/2025 on Solvency Requirements for Small Insurance Undertakings and Pension Institutions

This translation is furnished for information purposes only. The original German text is binding in all respects. Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance under￾takings, funeral expenses funds, Pensionskassen and Pensionsfonds 1 Circular 04/2025 (Insurance and Pension Funds Supervision) Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 11 February 2025

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 2 Contents Preliminary remark..............................................................................................................................................4 Information on solvency...................................................................................................................................5 3.1 General....................................................................................................................................................................5 3.2 List of own funds.................................................................................................................................................7 3.3 Selected aspects relating to subordinations, participations and securities with no specified maturity date (section 214 (1) sentence 1 numbers 4 to 6 and (2) to (5) of the Insurance Supervision Act), including deductions (section 214 (1) sentence 2 no. 3 in conjunction with (7) of the Insurance Supervision Act) and grandfathering clauses (section 214 (8) of the Insurance Supervision Act) ......................................................................................................................9 3.3.1 Grandfathering (section 214 (8) of the Insurance Supervision Act) 9 3.3.2 Deductions in accordance with section 214 (1) sentence 2 no. 3 in conjunction with (7) of the Insurance Supervision Act 10 3.3.3 Reductions in benefits due to a restructuring clause or order in accordance with section 314 (2) of the Insurance Supervision Act 11 3.3.4 Interest rate on subordinated loans and subordinated debt securities 12 3.4 Own funds that can only be counted as such on request and with the consent of the supervisory authority (type B own funds)................................................................................................13 3.4.1 General 13 3.4.2 Approval for recognition of half of the unpaid portion of the share capital or initial fund (section 214 (1) sentence 1 no. 8 a) of the Insurance Supervision Act) 14 3.4.3 Approval for recognition of half the difference between the supplementary contributions permissible under the articles of association in a financial year and the actual supplementary contributions called for (section 214 (1) sentence 1 no. 8 b) of the Insurance Supervision Act) in the case of mutual societies with variable additional payment liabilities and insurance undertakings under public law operating on mutual principles 15 3.4.4 Approval for recognition of half of net hidden reserves, provided that they are not of an exceptional nature (section 214 (1) sentence 1 no. 8 c) of the Insurance Supervision Act) 16 3.4.4.1 Properties 17 3.4.4.2 Affiliated companies and participating interests 18 3.4.4.3 Securities, units in common funds and other investments 18 3.4.4.3.1 Securities admitted to trading on a stock exchange or other market regulated and supervised by state-approved entities as well as units in common funds 18

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 3 3.4.4.3.2 Securities and other investments not admitted to trading on a stock exchange or other market regulated and supervised by state-approved entities 19 Threat of shortfall..............................................................................................................................................20 4.1 Notification requirement due to a deterioration in financial position or threat to solvency (section 132 (2) of the Insurance Supervision Act)...............................................................................20 4.2 Shortfall or threat of shortfall in the solvency capital requirement (sections 134, 136 and 137 of the Insurance Supervision Act) ......................................................................................................20 4.3 Shortfall or threat of shortfall in the minimum capital requirement (sections 135 to 137 of the Insurance Supervision Act) ....................................................................................................................21 Submission deadline........................................................................................................................................22 Submission arrangements and form .........................................................................................................24 Observations on individual items on the reporting templates .......................................................25 7.1 Own funds............................................................................................................................................................25 7.1.1 Type A own funds 25 7.1.2 Type B own funds 31 7.2 Solvency capital requirement.......................................................................................................................34 7.2.1 Small life insurance undertaking reporting template F.701.01 ZE0550 to ZE1300, Pensionskasse reporting template F.702.01 ZE0560 to ZE1300, funeral expenses fund reporting template F.703.01 ZE0550 to ZE0920 34 7.2.1.1 Part I – Endowment and annuity insurance (primary insurance) 34 7.2.1.2 Part II – Supplementary insurance 39 7.2.1.3 Part III – Unit-linked life insurance 41 7.2.1.4 Part IV – Capital redemption operations 43 7.2.1.5 Part V – Tontine schemes 43 7.2.1.6 Part VI – Administration of retirement provision schemes 44 7.2.2 Small health insurance undertakings reporting template F.704.01 ZE0540 to ZE104045 7.2.2.1 First result - premium index ZE0540 to ZE0640 45 7.2.2.2 Second result - Claims index Page ZE0800 to ZE1040 45 7.2.3 Small property/casualty insurance undertaking reporting template F.705.01 ZE0540 to ZE1000 46 7.2.3.1 First result - premium index ZE0540 to ZE0740 46

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 4 7.2.3.2 Second result - Claims index ZE0800 to ZE1000 47 7.2.4 Pensionsfonds reporting template F.706.01 ZE0290 to ZE0670 47 7.2.4.1 Part I – The pension fund bears the investment risk itself 47 7.2.4.2 Part II – The pension fund does not assume any investment risk itself, and the surcharge for administrative expenses included in the premium is fixed for a period of more than five years 48 7.2.4.3 Part III – The pension fund does not assume any investment risk and the surcharge for administrative expenses included in the premium is fixed for a maximum of five years 49 7.2.4.4 Part IV – Risk capital 49 7.3 Summary overview ...........................................................................................................................................50 Preliminary remark 1 This circular provides guidelines on interpreting the solvency provisions in the German In￾surance Supervision Act (Versicherungsaufsichtsgesetz – “VAG”). It interprets these provi￾sions in a binding manner for the German Federal Financial Supervisory Authority (Bun￾desanstalt für Finanzdienstleistungsaufsicht – BaFin) and thereby guarantees consistent ap￾plication in relation to all the undertakings that it covers. 2 This circular covers all of the following undertakings supervised by BaFin:

• domestic primary insurance undertakings that meet the criteria in section 211 of the Insurance Supervision Act (“small insurance undertakings”);
• domestic funeral expenses funds within the meaning of section 218 (1) of the Insur￾ance Supervision Act; and
• Pensionskassen and Pensionsfonds1 as well as separate ring-fenced funds of retire￾ment provision schemes governed by public law that offer retirement provision by way of voluntary insurance and are domiciled in Germany in accordance with section 1 (1) no. 1, section 1 (1) no. 5 and section 2 (1), section 7 no. 33 in conjunction with section 232 and section 236 (1) of the Insurance Supervision Act (institutions for occupational retirement provision (“IORPs”)). The information on Pensionskassen also applies to these separate ring-fenced funds. 3 Small insurance undertakings, funeral expenses funds and IORPs are referred to collec￾tively as “all addressees of the circular”.

1 The circular refers to insurance undertakings in the sections applicable to Pensionsfonds and other addressees of the circular in respect of the terms used. The corresponding terms apply to Pensionsfonds.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 5 4 Small insurance undertakings,

• that are authorised as life insurance undertakings are referred to as “small life insur￾ance undertakings”;
• that are authorised as health insurance undertakings are referred to as “small health insurance undertakings”; and
• that are authorised as property/casualty insurance undertakings are referred to as “small property/casualty insurance undertakings”. 5 This circular is the successor to Circular 5/2021 (Insurance and Pension Funds Supervision). The move to shift national reporting over to XBRL format through, amongst other things, the supplementary provisions in sections 19a to 19e of the German Capital Resources Regulation (Kapitalausstattungs-Verordnung – “KapAusstV”) and sections 42a to 42e of the German Regulation on the Supervision of Pensionsfonds (Pensionsfonds-Aufsichtsver￾ordnung – “PFAV”) resulted in the need for amendments. No other amendments to con￾tent have been made in this circular. In accordance with the transitional provisions in sec￾tion 20 (3) of the Capital Resources Regulation and section 43 (8) of the Regulation on the Supervision of Pensionsfonds, this circular is to be applied to solvency statements submit￾ted for financial years ending on 1 January 2025 or later. Circular 5/2021 (Insurance and Pension Funds Supervision) must be applied for financial years ending before 1 January 2025.2 6 Passages in this circular have been highlighted in order to make it easier to find relevant sections of text. The abbreviation “IORPs” has been used to refer to institutions for occu￾pational retirement provision. The presentation of administrative practice for individual groups of addressees starts with the “small insurance undertakings” as a basic principle because – following the statutory system – the rules for “small insurance undertakings” are often referred back to in respect of the other groups of addressees. In many cases, therefore, the information on “small insurance undertakings” is also relevant for the “fu￾neral expenses funds” and “IORPs” groups of addressees. Information on solvency 3.1 General All addressees of the circular: 7 The provisions of the Insurance Supervision Act on capital requirements and own funds that implement the Solvency II Directive3 do not apply to small insurance undertakings, funeral expenses funds or IORPs. 8 Thus sections 74 to 123 of the Insurance Supervision Act are not to be applied to these undertakings. For small insurance undertakings, this is set out in section 212 (2) no. 5 of the Insurance Supervision Act, as it is for funeral expenses funds (in section 219 (1) of the

2 https://www.bafin.de/ref/19595160. 3 Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of insurance and reinsurance (Solvency II), including subsequent amending Directives.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 6 Insurance Supervision Act). Pensionskassen are covered by section 234f (1) and (2) sen￾tence 1 of the Insurance Supervision Act; and in accordance with section 237 (1) sen￾tence 1 of the Insurance Supervision Act, Pensionsfonds are also covered. 4 Small insurance undertakings: 9 Section 213 sentence 1 of the Insurance Supervision Act requires small insurance under￾takings to dispose of own funds in the amount of their solvency capital requirement as a bare minimum at all times. This is determined in accordance with the Capital Resources Regulation (section 213 sentence 2, section 217 (1) sentence 1 no. 1 of the Insurance Su￾pervision Act in conjunction with sections 2 to 7 and 9 to 16 of the Capital Resources Reg￾ulation). One-third of the solvency capital requirement is deemed to be the minimum cap￾ital requirement (section 213 (3) of the Insurance Supervision Act). The absolute minimum amount of the minimum capital requirement is determined in accordance with section 6 and/or section 15 of the Capital Resources Regulation. In the case of section 7 of the Cap￾ital Resources Regulation, the minimum amount of the minimum capital requirement is waived (but not the minimum capital requirement per se). Funeral expenses funds: 10 Funeral expenses funds must likewise dispose of own funds in the amount of their sol￾vency capital requirement as a bare minimum at all times (section 219 (1) in conjunction with section 213 sentence 1 of the Insurance Supervision Act). Here too, one-third of the solvency capital requirement is deemed to be the minimum capital requirement (section 219 (1) in conjunction with section 213 sentence 3 of the Insurance Supervision Act). Sec￾tions 17 and 18 of the Capital Resources Regulation contain more detailed provisions on the solvency and minimal capital requirements (including the absolute minimum permit￾ted amounts). The absolute minimum amount of the minimum capital requirement does not apply in the case of section 18 (3) of the Capital Resources Regulation. Pensionskassen: 11 Pensionskassen must likewise dispose of own funds in the amount of the solvency capital requirement as a bare minimum (section 234g (1) of the Insurance Supervision Act).This amount is also determined in accordance with the Capital Resources Regulation (sec￾tion 234g (2) sentence 1, section 235 (1) no. 1 of the Insurance Supervision Act in conjunc￾tion with section 17 of the Capital Resources Regulation). Here too, one-third of the sol￾vency capital requirement is deemed to be the minimum capital requirement (section 234g (2) sentence 2 of the Insurance Supervision Act). The absolute minimum amount of the minimum capital requirement is determined in accordance with section 18 (1) and/or (2) of the Capital Resources Regulation. The absolute minimum amount of the minimum

4 The provisions on own funds set out in the Insurance Supervision Act in respect of IORPs serve to implement Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupa￾tional retirement provision (IORPs) (the “IORP II Directive”).

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 7 capital requirement does not apply in the case of section 18 (3) of the Capital Resources Regulation. Pensionsfonds: 12 Pensionsfonds must likewise dispose of own funds amounting to their solvency capital re￾quirement – which is determined on the basis of the entire volume of business – as a bare minimum at all times (section 238 (2) of the Insurance Supervision Act). In accordance with section 238 (3) sentence 1 in conjunction with section 240 sentence 1 no. 9 of the In￾surance Supervision Act, the solvency capital requirement is determined based on section 25 of the Regulation on the Supervision of Pensionsfonds. In the case of Pensionsfonds too, one-third of the solvency capital requirement is deemed to be the minimum capital re￾quirement (section 238 (3) sentence 2 of the Insurance Supervision Act and section 26 sentence 1 of the Regulation on the Supervision of Pensionsfonds). The absolute minimum amount of the minimum capital requirement is determined in accordance with section 26 (2) and/or (3) of the Regulation on the Supervision of Pensionsfonds. All addressees of the circular: 13 The requirement to dispose of sufficient own funds at all times serves to ensure the per￾manent satisfiability of contracts for the protection of policyholders and the recipients of insurance benefits. An undertaking planning to expand its business must make sure to in￾crease its own funds in good time if necessary. 3.2 List of own funds General: 14 An exhaustive list of own funds is provided in section 214 (1) of the Insurance Supervision Act. It applies directly to small insurance undertakings and, in accordance with section 219 (1) of the Insurance Supervision Act, to funeral expenses funds as well. Section 214 of the Insurance Supervision Act applies to Pensionskassen, albeit with a number of minor modi￾fications – see section 234g (3) of the Insurance Supervision Act. Based on section 240 sentence 1 no. 9 of the Insurance Supervision Act, Pensionsfonds are covered by a norm approximating section 214 of the Insurance Supervision Act in section 27 of the Regula￾tion on the Supervision of Pensionsfonds. This provision likewise contains an exhaustive list of the instruments that can count towards own funds. Small insurance undertakings: 15 The list of own funds in section 214 of the Insurance Supervision Act distinguishes be￾tween:

• own funds in accordance with section 214 (1) sentence 1 numbers 1 to 3 of the Insur￾ance Supervision Act, which are to be considered own funds in all circumstances;
• own funds in accordance with section 214 (1) sentence 1 numbers 4 to 7 of the Insur￾ance Supervision Act, which are only to be considered own funds in certain circum￾stances; and

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 8

• own funds in accordance with section 214 (1) sentence 1 no. 8 a) to d) of the Insurance Supervision Act, which are only to be considered own funds on request and with the approval of the supervisory authority (“type B own funds” 5 ). 16 It should also be noted that certain own funds instruments specified in section 214 of the Insurance Supervision Act may be subject to restrictions by virtue of the Capital Resources Regulation (see section 6 (3), section 15 (3) and section 16 (2) of the Capital Resources Regulation,6 which prohibit certain own funds instruments from counting towards the minimum capital requirement). Funeral expenses funds: 17 Funeral expenses funds are governed by section 214 (1) sentence 1 of the Insurance Su￾pervision Act in accordance with section 219 (1) of the Insurance Supervision Act. 18 However, section 214 (1) sentence 1 no. 8 b) does not apply to funeral expenses funds be￾cause this “type B own funds” instrument no longer qualifies if life insurance is offered. 19 In respect of the own funds instrument in accordance with section 219 (1) in conjunction with section 214 (1) sentence 1 no. 1 and no. 8 d) of the Insurance Supervision Act, it must be borne in mind that this cannot be counted towards the minimum capital requirement, even for funeral expenses funds in accordance with section 17 (1) in conjunction with sec￾tion 16 (2) of the Capital Resources Regulation. Based on how it is worded, section 16 (2) of the Capital Resources Regulation only permits this to be counted towards the solvency capital requirement. This is also echoed by reporting template F.703.01 ZE1470, which forms an integral part of the Capital Resources Regulation (see section 19 (3)) and, as such, is also relevant to interpretation. Pensionskassen: 20 Section 214 of the Insurance Supervision Act applies to Pensionskassen as a basic princi￾ple (see section 234g (3) sentence 1 of the Insurance Supervision Act). However, section 214 (1) sentence 1 no. 8 b) of the Insurance Supervision Act does not apply (see section 234g (3) sentence 1 of the Insurance Supervision Act). This “type B own funds” instrument no longer qualifies if life insurance is operated. 21 The own funds instrument in accordance with section 234g (3) sentence 2 in conjunction with section 214 (1) sentence 1 no. 8 d) of the Insurance Supervision Act, specified in greater detail by section 17 (1) in conjunction with section 16 (2) of the Capital Resources Regulation, cannot be counted towards the minimum capital requirement at Pensionskas￾sen either because, according to its wording, section 16 (2) of the Capital Resources Regu￾lation only permits this to be counted towards the solvency capital requirement. This is also echoed by reporting template F.702.01 ZE1470, which forms an integral part of the

5 Own funds that do not require a request to be submitted or approval granted are con￾sidered “type A own funds”. 6 Section 16 of the Capital Resources Regulation specifies the provisions of section 214 (1) sentence 1 no. 8 d) of the Insurance Supervision Act in greater detail.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 9 Capital Resources Regulation (see section 19 (3)) and, as such, is also relevant to interpre￾tation. Pensionsfonds: 22 Pensionsfonds must abide by the exhaustive list of own funds specified in section 27 (1) sentence 1 of the Regulation on the Supervision of Pensionsfonds, which corresponds to section 214 (1) sentence 1 of the Insurance Supervision Act with a number of modifica￾tions. In particular, section 27 (1) sentence 1 of the Regulation on the Supervision of Pen￾sionsfonds only specifies two kinds of own funds for which a request must be submitted, namely the counterparts to section 214 (1) sentence 1 no. 8 a) and c) of the Insurance Su￾pervision Act. 3.3 Selected aspects relating to subordinations, participations and securities with no specified maturity date (section 214 (1) sentence 1 numbers 4 to 6 and (2) to (5) of the Insurance Supervision Act), including deductions (section 214 (1) sentence 2 no. 3 in conjunction with (7) of the Insurance Supervision Act) and grandfathering clauses (section 214 (8) of the Insurance Supervision Act) 3.3.1 Grandfathering (section 214 (8) of the Insurance Supervision Act) All addressees of the circular: 23 Grandfathering applies to receivables from participation rights and receivables from sub￾ordinated liabilities under the provisions of section 214 (8) of the Insurance Supervision Act.7 This provision is considered proper, because section 214 of the Insurance Supervi￾sion Act8 in the version applicable before the German Act Implementing IORP II (EbAV II￾Umsetzungsgesetz) 9 entered into force already reflected the requirements of the own funds provisions in the IORP II Directive, whose content mirrors that of the IORP I Di￾rective10 in this respect.11 24 Contractual amendments to the grandfathered instrument may result in the loss of the grandfathering rights. In the event of changes prompted by BaFin or immaterial changes, BaFin will assume that the grandfathering provision is not being removed. In the event of

7 Also applies to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act. Section 43 (6) of the Regulation on the Supervision of Pensionsfonds sets out a comparable provision for Pensionsfonds. 8 Or, as appropriate, section 27 of the Regulation on the Supervision of Pensionsfonds for Pensionsfonds. 9 German Act of 19 December 2018 Implementing Directive (EU) 2016/2341 of the of the European Parliament and of the Council of 14 December 2016 on the activities and super￾vision of institutions for occupational retirement provision (IORPs) (recast). 10 Directive 2003/41/EC of the European Parliament and the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision, including subsequent amendments (excluding the IORP II Directive). 11 See the German government’s justificatory statement on the Act Implementing IORP II in the Bundestag’s printed paper 19/4673, p. 57 et seq.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 10 doubt, BaFin will advise whether planned contractual amendments will remove the grand￾fathering provision. 3.3.2 Deductions in accordance with section 214 (1) sentence 2 no. 3 in conjunction with (7) of the Insurance Supervision Act Small insurance undertakings, funeral expenses funds and Pensionskassen: 12 25 In accordance with section 214 (1) sentence 2 no. 3 of the Insurance Supervision Act, the participating interests and receivables specified in section 214 (7) of the Insurance Super￾vision Act13 are to be deducted from own funds. 26 The deductions in accordance with section 214 (7) sentence 1 no. 2 of the Insurance Su￾pervision Act also include securities with no specified maturity date, because these – like receivables from participation rights and receivables from subordinated liabilities – are subordinate in nature and likewise count as own funds. Conversely, their recognition as own funds under section 214 (1) of the Insurance Supervision Act also means that they can potentially be recognised as deductions under section 214 (7) of the Insurance Super￾vision Act. 27 For the same reasons, own funds instruments that are deemed equivalent to current re￾quirements for participation rights and subordinated liabilities in accordance with section 214 (8) of the Insurance Supervision Act are still covered by the provision on deductions. 28 Simple industrial holding companies are still exempt from the provision on deductions. The classification of financial undertakings (section 1 (3) of the German Banking Act (Kre￾ditwesengesetz – “KWG”)) in section 214 (7) no. 1 c) of the Insurance Supervision Act is geared towards preventing own funds from being encumbered with additional risks from the financial sector. Because this purpose is irrelevant as far as simple industrial holding companies are concerned, holding companies that meet both of the criteria set out below are exempt from the provision on deductions:

• The undertaking does not hold a qualifying holding (section 1 (9) of the Banking Act) in any of the financial-sector undertakings specified in section 214 (7) no. 1 a) to g) of the Insurance Supervision Act (unless the participating undertaking is itself a simple in￾dustrial holding company); and
• The undertaking does not engage in trading, in particular involving participating inter￾ests (no trading portfolio); it holds acquired portfolios for the long term and does not engage in any other business activities aside from those associated with the manage￾ment of its investment portfolio and from exercising any influence on the participating undertaking that would be associated with its status as a shareholder.

12 Also applies to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act. There is no equivalent provision for Pensionsfonds. 13 Also applies to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act. There is no equivalent provision for Pensionsfonds.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 11 3.3.3 Reductions in benefits due to a restructuring clause or order in accordance with sec￾tion 314 (2) of the Insurance Supervision Act Small life insurance undertakings, funeral expenses funds and IORPs:14 29 In accordance with section 294 (1) of the Insurance Supervision Act, the primary aim of insurance supervision is to safeguard the interests of policyholders and beneficiaries un￾der insurance policies. It is therefore essential for creditors of subordinated liabilities15 to participate in a loss as soon as the supervisory authority, in order to avert insolvency, ap￾proves a reduction in benefits based on a restructuring clause (small life insurance under￾takings, funeral expenses funds and Pensionskassen, with a restructuring clause in each case) or, as appropriate, orders a reduction in benefits in accordance with section 314 (2) of the Insurance Supervision Act (small life insurance undertakings, funeral expenses funds and Pensionskassen with and without a restructuring clause in each case, and Pen￾sionsfonds).16 30 The provisions governing subordinated liabilities must therefore include the following clause or one equivalent to it: For small life insurance undertakings, funeral expenses funds and Pensionskassen, with a restructuring clause in each case: “The creditor for the subordinated loan will be liable even before insolvency occurs if BaFin would otherwise approve a reduction in benefits proposed by the undertaking or order such a reduction in accordance with section 314 (2) of the Insurance Supervision Act. BaFin will notify the creditor for the subordinated loan of the occurrence of the event triggering liabil￾ity. The creditor for the subordinated loan will be liable to the same extent as they would have been had insolvency proceedings been instigated at that point in time. The creditor of the subordinated loan [to the small life insurance undertaking, funeral expenses fund or

14 The information in this subsection draws on the article entitled ”Stricter supervision of subordinated loans in the future” from the July 2019 issue of the BaFin Journal (https://www.bafin.de/SharedDocs/Veroeffen￾tlichungen/EN/Fachartikel/2019/fa_bj_1907_Nachrangdarlehen_en.html). This circular ex￾tends the principles set out therein to cover small life insurance undertakings, funeral expenses funds and Pensionskassen as well. 15 Section 214 (1) sentence 1 no. 5 of the Insurance Supervision Act (small insurance un￾dertakings); also applies to funeral expenses funds by virtue of section 219 (1) of the Insurance Supervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insurance Supervision Act. Section 27 (1) sentence 1 no. 6 of the Regulation on the Supervision of Pensionsfonds sets out a comparable norm for Pensionsfonds. 16 Section 314 (2) of the Insurance Supervision Act applies to small life insurance under￾takings by virtue of section 212 (1) of the Insurance Supervision Act, to funeral expenses funds by virtue of section 219 (1) in conjunction with section 212 (1) of the Insurance Su￾pervision Act, to Pensionskassen by virtue of section 232 (1) of the Insurance Supervision Act and to Pensionsfonds by virtue of section 237 (1) sentence 1 of the Insurance Super￾vision Act.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 12 Pensionskasse] (i.e. the lender) will become unable to recover it at the latest when a reduc￾tion in benefits is ordered.” It is also to be ensured that the articles of association do not contain any provisions that conflict with the restructuring clause. For small life insurance undertakings, funeral expenses funds and Pensionskassen, without a restructuring clause in each case, and for Pensionsfonds: “The creditor for the subordinated loan will be liable even before insolvency occurs if BaFin would otherwise order a reduction in benefits in accordance with section 314 (2) of the In￾surance Supervision Act. BaFin will notify the creditor for the subordinated loan of the occur￾rence of the event triggering liability. The creditor for the subordinated loan will be liable to the same extent as they would have been had insolvency proceedings been instigated at that point in time. The creditor of the subordinated loan [to the small life insurance under￾taking, funeral expenses fund, Pensionskasse or Pensionsfonds] (i.e. the lender) will become unable to recover it at the latest when a reduction in benefits is ordered.” The clause is to be reworded mutatis mutandis for subordinated debt securities. 31 As well as BaFin providing notification regarding the event triggering liability, the contract may also provide the option that, in a specific case, the relevant notification be made by the debtor themselves, rather than by BaFin, after consulting BaFin. 32 Criteria for the acceptance of subordinated liabilities must be submitted in the draft ver￾sion for an examination under supervisory law. A signed copy of the contract must be submitted once it has been signed. Any changes compared to the draft version that relate to the content must be agreed with the supervisory authority prior to signing.17 3.3.4 Interest rate on subordinated loans and subordinated debt securities All addressees of the circular: 33 To protect policyholders and beneficiaries of insurance contracts, the interest rate on sub￾ordinated loans and subordinated debt securities must be comparable to the terms of￾fered as standard on the financial market at the time the contract was concluded. The en￾tity claiming the own funds must therefore set out clearly and comprehensibly how the interest rate was arrived at. An explanation must also be provided as to why the interest rate is considered appropriate in the eyes of the involved parties and would stand up to an arm’s-length comparison.

17 On the treatment of legacy cases (this applies to small life insurance undertakings, funeral expenses funds and Pensionsfonds as well as Pensionskassen by virtue of this circular), see the article entitled “Stricter supervision of subordinated loans in the future” from the July issue of the BaFin Journal (https://www.bafin.de/SharedDocs/Veroeffen￾tlichungen/EN/Fachartikel/2019/fa_bj_1907_Nachrangdarlehen_en.html).

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 13 34 BaFin expects borrowers of subordinated loans and issuers of subordinated bonds to check regularly18 whether it is expedient or even necessary to terminate an own funds in￾strument or replace it with another own funds instrument, particularly one offering a lower interest rate or other advantages. 3.4 Own funds that can only be counted as such on request and with the consent of the supervisory authority (type B own funds) 3.4.1 General All addressees of the circular: 35 A request to approve the recognition of own funds as type B own funds must be submit￾ted together with the requisite solvency statement,19 although it can also be submitted later in exceptional and duly justified cases. The request must meet BaFin’s requirements for the chosen submission method.20 Where BaFin offers a specific electronic submission procedure (particularly via its reporting and publishing platform), this should be used, in￾cluding in cases where there is no legal obligation (yet) to follow this procedure. The re￾quest must be dated and issued by two authorised representatives, including at least one member of the management board. 36 The solvency statement to be submitted must reflect the solvency position, taking account of the request made. The amounts covered by the request must be stated accordingly. 37 The supervisory authority will base its discretionary decisions on requests for approval as type B own funds on the respective purpose of the approval requirement.

18 “Regularly” in this context means (i) generally once a year and (ii) ad hoc in response to significant changes in the underlying conditions and taking account of the contractual provisions applicable to the subordinated instrument. 19 For small insurance undertakings: section 216 (1) and section 217 (1) no. 4 of the In￾surance Supervision Act in conjunction with section 19 of the Capital Resources Regula￾tion; for funeral expenses funds: section 218 (1), section 216 (1) and section 220 of the Insurance Supervision Act in conjunction with section 19 of the Capital Resources Regula￾tion; for Pensionskassen: section 234g (3) and section 235 (1) no. 3 of the Insurance Su￾pervision Act in conjunction with section 19 of the Capital Resources Regulation; for Pen￾sionsfonds: section 240 (1) no. 9 of the Insurance Supervision Act in conjunction with sec￾tion 28 of the Regulation on the Supervision of Pensionsfonds. 20 Up-to-date notes on submitting requests for type B own funds can be found in the in￾formation sheet on the specialised procedure related to insurance supervision (https://www.bafin.de/EN/DieBaFin/Service/MVPportal/VA/mvp_va_node_en.html).

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 14 3.4.2 Approval for recognition of half of the unpaid portion of the share capital or initial fund (section 214 (1) sentence 1 no. 8 a) of the Insurance Supervision Act) All addressees of the circular as a basic principle21 (the unique features applicable to fu￾neral expenses funds and IORPs are indicated in the footnotes in each case for the sake of clarity) 38 Recognition of half of the unpaid portion of the share capital or initial fund can only be approved if the paid portion of the share capital or initial fund or, in the case of public￾sector insurance undertakings, the portion that corresponds to the paid share capital for stock corporations amounts to at least 25 per cent (section 214 (1) sentence 1 no. 8 a) of the Insurance Supervision Act). 39 The quantitative limitation imposed by section 214 (6) of the Insurance Supervision Act must also be taken into account in the case of funds in accordance with section 214 (1) sentence 1 no. 8 a) and b)22 of the Insurance Supervision Act. This stipulates that the funds from a) and b) may only be included in own funds up to an aggregate limit of 50 per cent of own funds or of the solvency capital requirement, whichever is lower.23 40 The own funds in accordance with section 214 (1) sentence 1 no. 8 a) of the Insurance Su￾pervision Act cannot be counted towards the minimum capital requirement at small insur￾ance undertakings on account of section 6 (3) and section 15 (3) of the Capital Resources Regulation. The same applies to funeral expenses funds and IORPs. Firstly, this is set out in the relevant reporting templates – F.702.01 (for Pensionskassen) and F.703.01 (for funeral expenses funds), ZE 1470 in each case, and reporting template F.706.01 ZE0910 for Pen￾sionsfonds. These reporting templates are an integral part of the Capital Resources Regu￾lation or, as appropriate, the Regulation on the Supervision of Pensionsfonds (see section

21 The same provision applies to funeral expenses funds in accordance with section 219 of the Insurance Supervision Act and to Pensionskassen in accordance with section 234g (3) of the Insurance Supervision Act. A comparable provision for Pensionsfonds is set out in section 27 (1) sentence 1 no. 9 a) of the Regulation on the Supervision of Pensionsfonds. 22 Not applicable to funeral expenses funds, because section 214 (1) sentence 1 no. 8 b) does not apply to life insurance undertakings (see section 219 (1) of the Insurance Super￾vision Act); section 214 (1) sentence 1 no. 8 b) of the Insurance Supervision Act does not apply to Pensionskassen either (see section 234g (3) of the Insurance Supervision Act), or indeed to Pensionsfonds, because there is no norm comparable to section 214 (1) sen￾tence 1 no. 8 b) of the Insurance Supervision Act; see section 27 (1) sentence 1 no. 9 of the Regulation on the Supervision of Pensionsfonds. 23 Unique features of funeral expenses funds and IORPs: For funeral expenses funds, section 214 (6) of the Insurance Supervision Act only relates to section 214 (1) sentence 1 no. 8 a) of the Insurance Supervision Act because no. 8 b) does not apply; for Pensionskas￾sen, section 214 (6) of the Insurance Supervision Act likewise only relates to section 214 (1) sentence 1 no. 8 a) of the Insurance Supervision Act because section 214 (1) sen￾tence 1 no. 8 b) does not apply (see section 234g (3) of the Insurance Supervision Act). The legal situation for Pensionsfonds is similar (section 27 (6) of the Regulation on the Su￾pervision of Pensionsfonds).

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 15 19 (3) of the Capital Resources Regulation and section 28 (3) of the Regulation on the Su￾pervision of Pensionsfonds) and, as such, are relevant to their interpretation. Secondly, there is also the risk that the receivables due from the shareholders cannot be recovered when required. Interpreting the relevant provisions from the angle of meaning and pur￾pose, therefore, unpaid share capital and similar items cannot be used to cover the mini￾mum capital requirement in the form of a lower level of cover. 41 A refusal to recognise funds as type B own funds may be considered on account of the default risk described above, especially if there are question marks over the (future) sol￾vency and/or willingness to pay of the shareholders. 42 The request must therefore name the shareholders and specify the shares attributable to them. The management board of the entity submitting the request is also required to confirm that it has no doubts regarding the (future) solvency and willingness to pay of those shareholders not supervised by BaFin. In the case of shareholders supervised by BaFin, this confirmation to be provided by the management board can be replaced by a reference made to this fact. 43 Additional evidence of the shareholders’ (future) solvency and willingness to pay is to be submitted on request in individual cases. If applicable, the upper eligibility limit of 50 per cent of the unpaid portion can be further reduced through a less severe measure than downright refusal. 44 As a basic principle, approval is granted for a limited time and/or with the proviso that it could be revoked, as solvency and willingness to pay can deteriorate significantly over time. 45 Addressees of this circular are thus expected to use suitable methods to monitor the sol￾vency and willingness to pay of their shareholders on an ongoing basis and to notify BaFin accordingly if they identify any material negative changes. 3.4.3 Approval for recognition of half the difference between the supplementary contri￾butions permissible under the articles of association in a financial year and the ac￾tual supplementary contributions called for (section 214 (1) sentence 1 no. 8 b) of the Insurance Supervision Act) in the case of mutual societies with variable addi￾tional payment liabilities and insurance undertakings under public law operating on mutual principles Small insurance undertakings that do not offer either health or life insurance:24

24 Not applicable to funeral expenses funds, because section 214 (1) sentence 1 no. 8 b) does not apply to life insurance undertakings (see section 219 (1) of the Insurance Super￾vision Act), or to Pensionskassen (see section 234g (3) of the Insurance Supervision Act) or Pensionsfonds (due to the lack of a comparable provision in section 27 of the Regula￾tion on the Supervision of Pensionsfonds).

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 16 46 The quantitative limitation imposed by section 214 (6) of the Insurance Supervision Act must be borne in mind. It stipulates that funds in accordance with section 214 (1) sen￾tence 1 no. 8 a) and b) of the Insurance Supervision Act may only be included in own funds up to an aggregate limit of 50 per cent of own funds or of the solvency capital re￾quirement, whichever is lower. Own funds in accordance with section 214 (1) sentence 1 no. 8 b) of the Insurance Supervision Act do not count towards the minimum capital re￾quirement (section 6 (3) of the Capital Resources Regulation). 47 Since there can also be a certain default risk in respect of demands for subsequent contri￾butions, such contributions are deemed own funds for which a request must be submit￾ted. 48 The more an insurance association competes as a private-sector company with corre￾sponding sales and marketing activities, the more likely policyholders are to feel like cus￾tomers rather than members of that association. These communities of policyholders are likely to be largely if not totally unaware of the requirement to make subsequent contri￾butions as members of the association. In this respect, a significant proportion of policy￾holders can be expected to refuse to pay, at least initially. 49 Taking this principle as a basis, requests for half of the subsequent payments to be recog￾nised as own funds will only be accepted as a basic principle if it can be demonstrated that the policyholders were informed of any obligation to make subsequent payments when they took out their policy. 50 As a basic principle, approval is granted for a limited time and/or with the proviso that it could be revoked. 3.4.4 Approval for recognition of half of net hidden reserves, provided that they are not of an exceptional nature (section 214 (1) sentence 1 no. 8 c) of the Insurance Super￾vision Act) All addressees of the circular as a basic principle25 (exceptions are indicated): 51 Hidden reserves are unrealised asset-side gains whose amount is subject to unpredictable fluctuations and that can be eroded significantly or even wiped out entirely within a very short time if the price of the assets falls. Caution is thus always advised when recognising them. Hidden reserves can only be recognised as type B own funds if it can be shown that they are not of an exceptional nature and thus it can be assumed that they will retain their value permanently. Hidden reserves that are not of an exceptional nature will only be ap￾proved if they come under the “Investments” item in the balance sheet.

25 For small insurance undertakings; applies mutatis mutandis to funeral expenses funds in accordance with section 219 (1) of the Insurance Supervision Act, to Pension￾skassen in accordance with section 234g (3) of the Insurance Supervision Act and to Pen￾sionsfonds in accordance with section 27 (1) sentence 1 no. 9 b) of the Regulation on the Supervision of Pensionsfonds.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 17 52 Insofar as hidden reserves are recognised, the taxes and sale costs likely to be incurred on realisation must be deducted from the amount reported. With regard to the tax liability, the worst-case scenario, i.e. an increase in taxable profit caused by releasing the hidden reserves, must be assumed. 53 Where hidden reserves of an addressee of this circular (except for small property/casualty insurance undertakings) are due to the policyholders on realisation as a result of a statu￾tory or contractual obligation and are not subject to any tax liability, they can be recog￾nised without deducting any tax. 54 Only net hidden reserves can be approved; in other words, only the positive balance be￾tween hidden reserves and hidden liabilities can be recognised. First of all, each type of investment is netted separately, then the balances for each investment type are offset against one another. Recognition can only take place if the hidden reserves for all invest￾ments exceed their hidden liabilities. Only those hidden reserves and hidden liabilities that are not of an exceptional nature can be included in the offsetting process. Interest-in￾duced hidden liabilities in investments (fixed-income securities, registered bonds, notes receivable and other loans) reported under fixed assets may be disregarded when deter￾mining net hidden reserves. Below is some information on calculating hidden reserves for individual investment types that are not of an exceptional nature. Hidden reserves other than those explicitly mentioned can also be recognised as a basic principle in individual cases after consulting BaFin. The principles described in sections 3.4.4 to 3.4.4.3.2 must be followed on a regular basis. 3.4.4.1 Properties All addressees of the circular: 55 The provisions of section 55 of the German Regulation on the Accounting of Insurance Undertakings (Verordnung über die Rechnungslegung von Versicherungsunternehmen – “RechVersV”)26 apply mutatis mutandis to calculating the hidden reserves associated with properties. The existence of hidden reserves must be proved by submitting an expert opinion produced by an independent expert within the past five years. The opinion usu￾ally has to be prepared by a publicly appointed and sworn expert. It must expressly ad￾dress the question of the future saleability of the property, taking into account the long￾term, lasting characteristics of the property, the market conditions considered standard for the region and its current and possible alternative uses (the permanent availability of hidden reserves). All assumptions used in this context must be made and justified with care. No speculative elements may be incorporated (principle of section 16 (2) of the Ger￾man Pfandbrief Act (Pfandbriefgesetz – PfandBG)).

26 In conjunction with section 36 of the German Regulation on Accounting for Pen￾sionsfonds (Verordnung über die Rechnungslegung von Pensionsfonds – “RechPensV”) in the case of Pensionsfonds.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 18 56 BaFin reserves the right to request additional evidence (particularly in the event of a sig￾nificant change in the underlying circumstances since the expert report was prepared, re￾quiring the results to be reassessed). 3.4.4.2 Affiliated companies and participating interests All addressees of the circular except Pensionsfonds: 57 The (a) participating interests covered by section 214 (7) of the Insurance Supervision Act27 as well as (b) receivables from (i) subordinated liabilities, (ii) participation rights and (iii) securities with no specified maturity date are to be deducted from own funds. This in￾cludes recognition of any hidden reserves contained therein. All addressees of the circular: 58 Insofar as shares in affiliated companies and participating interests not covered by section 214 (7) of the Insurance Supervision Act are admitted to trading on a stock exchange or other market regulated and supervised by state-approved entities, the information pro￾vided in 3.4.4.3.1 will apply mutatis mutandis (see below). If no such trading takes place, extensive and lengthy investigations will usually be needed – generally requiring the in￾volvement of one or more independent, ideally publicly appointed and sworn, experts – in order to determine the value and permanent availability of the hidden reserves. BaFin re￾serves the right to request additional evidence (particularly if the underlying circum￾stances have changed significantly since the expert investigation was carried out, requir￾ing the results to be reassessed). 3.4.4.3 Securities, units in common funds and other investments 3.4.4.3.1 Securities admitted to trading on a stock exchange or other market regulated and supervised by state-approved entities as well as units in common funds All addressees of the circular: 59 Hidden reserves in securities admitted to trading on a stock exchange are determined by comparing their book value against their market or fair value at the balance sheet date (day-end price) by analogy with section 56 (2) of the Regulation on the Accounting of In￾surance Undertakings.28 60 The market or fair value must exceed the book value on a permanent basis for the hidden reserves to be deemed not of an exceptional nature. 61 The value on the balance sheet date will only be determinative if the price of the security on that date is lower than the average price on this and the three previous balance sheet

27 To be applied mutatis mutandis to funeral expenses funds in accordance with section 219 (1) of the Insurance Supervision Act and to Pensionskassen in accordance with sec￾tion 234g (3) of the Insurance Supervision Act; there is no norm comparable to section 214 (7) for Pensionsfonds. 28 In conjunction with section 36 of the Regulation on Accounting for Pensionsfonds for Pensionsfonds.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 19 dates. If it is higher, the average price will apply. If the price on the day the request for recognition of the hidden reserve is submitted is lower than both the average price and the price on the balance sheet date, then the market or fair value on the day the request is made is to be used instead. 62 If data is not available for four balance sheet dates, the average price should be calculated using the available prices on balance sheet dates. 63 If no price is available on a certain balance sheet date, the last price determined in the 30 days leading up to the balance sheet date is to be used instead. The average price is to be calculated individually for each security. Under no circumstances may securities from a single issuer that encompass different rights be combined together. 64 An additional value is to be determined for fixed-income securities, namely that which the security would have were its remaining term three years shorter. If this value is lower than the others, this lower value is to be used to determine the permanently hidden reserve. 65 The recognition of hidden reserves is not usually possible in the case of fixed-income se￾curities classed as fixed assets. Being classed as fixed assets hinges on securities serving business operations on a permanent basis, which implies that they will be held to ma￾turity. The absence of any intention to dispose of them – and thus the forgoing of the op￾tion to realise temporary hidden reserves – mean that the hidden reserves cannot be deemed permanently available and thus cannot be recognised. 66 These principles apply mutatis mutandis to units in common funds. 3.4.4.3.2 Securities and other investments not admitted to trading on a stock exchange or other market regulated and supervised by state-approved entities All addressees of the circular: 67 The information on hidden reserves in the case of shares in affiliated companies and par￾ticipating interests that are not admitted to trading on a stock exchange or other market that is regulated and supervised by state-approved entities applies mutatis mutandis to securities that are not admitted to trading on a stock exchange or other market that is regulated and supervised by state-approved entities (see 3.4.4.2 above). These hidden re￾serves can only be recognised in exceptional circumstances. 68 Fixed-income investments (fixed-income securities, registered bonds, notes receivable and other loans) classed as fixed assets are not usually eligible for recognition as they tend to be held to maturity. The hidden reserves cannot therefore be deemed permanently availa￾ble and thus cannot be recognised either.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 20 Threat of shortfall 4.1 Notification requirement due to a deterioration in financial position or threat to sol￾vency (section 132 (2) of the Insurance Supervision Act) All addressees of the circular:29) 69 An undertaking must notify the supervisory authority without delay of any deterioration in its financial position that could jeopardise its ability to fulfil its obligations under insur￾ance contracts or represent a risk to its solvency (section 132 (2) of the Insurance Supervi￾sion Act).30 4.2 Shortfall or threat of shortfall in the solvency capital requirement (sections 134, 136 and 137 of the Insurance Supervision Act) All addressees of the circular as a basic principle31 (specific differences are indicated): 70 If the solvency capital requirement is no longer covered, or if this situation is likely to arise within the next three months, the undertaking must inform the supervisory authority ac￾cordingly without delay (section 134 (1) of the Insurance Supervision Act).32 71 Within two months of the undertaking identifying that the solvency capital requirement is no longer covered, it must submit a realistic recovery plan to the supervisory authority for approval (section 134 (2); see section 136 (1) of the Insurance Supervision Act for more information on what this plan must contain as a bare minimum). For IORPs, the deadline under section 134 (2) of the Insurance Supervision Act can be extended by one month to

29 Applicable to small insurance undertakings in accordance with section 212 (1) of the Insurance Supervision Act, to funeral expenses funds in accordance with section 219 (1) in conjunction with section 212 (1) of the Insurance Supervision Act, to Pensionskassen in accordance with section 232 (1) of the Insurance Supervision Act and to Pensionsfonds in accordance with section 237 (1) sentence 1 of the Insurance Supervision Act. 30 For more on section 132 of the Insurance Supervision Act, see the BaFin Journal article of 23 June 2022 on “Section 132 of the Insurance Supervision Act – an important early￾warning system for undertakings and BaFin” (“§ 132 VAG – ein wichtiges Frühwarninstru￾ment für Unternehmen und Aufsicht”): https://www.bafin.de/ref/19617970. 31 Applicable to small insurance undertakings in accordance with section 212 (1) of the Insurance Supervision Act, to funeral expenses funds in accordance with section 219 (1) in conjunction with section 212 (1) of the Insurance Supervision Act and to Pensionskas￾sen in accordance with section 232 (1) of the Insurance Supervision Act, taking into ac￾count the modifications in section 234f (1) to (3) sentence 2 of the Insurance Supervision Act. The same provisions apply to Pensionsfonds as to Pensionskassen as a basic princi￾ple, in accordance with section 237 (1) sentence 1 of the Insurance Supervision Act. In sec￾tion 234f (2) sentence 2 of the Insurance Supervision Act, section 238 (4) of the Insurance Supervision Act replaces section 234g (3) of the Insurance Supervision Act (see section 238 (1) sentence 2 of the Insurance Supervision Act). 32 For more information, see BaFin’s interpretative decision of 27 July 2016 on a shortfall in the solvency or minimal capital requirement: https://www.bafin.de/ref/19607286.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 21 a total of three months on request (section 234f (3) sentence 2 of the Insurance Supervi￾sion Act in the case of Pensionskassen; in conjunction with section 237 (1) sentence 1 of the Insurance Supervision Act in the case of Pensionsfonds). 72 Within six months of the date on which the undertaking has identified that the solvency capital requirement is no longer covered, it must implement appropriate measures and increase its eligible own funds or reduce its risk profile until compliance with the solvency capital requirement is re-established (section 134 (3) sentence 1 of the Insurance Supervi￾sion Act). 73 On request, the supervisory authority can extend the six-month deadline for small insur￾ance undertakings and funeral expenses funds by three months33 to nine months and for IORPs by an appropriate length of time.34 Subject to the criteria in section 134 (4) and (5) of the Insurance Supervision Act, the six-month deadline in section 134 (3) sentence 1 of the Insurance Supervision Act can be extended by up to seven years at most for small in￾surance undertakings and funeral expenses funds. IORPs do not have this option.35 74 If the six-month deadline under section 134 (3) sentence 1 of the Insurance Supervision Act is extended by more than three months, the undertaking must present a progress re￾port to the supervisory authority every three months (section 134 (6) sentence 1 of the In￾surance Supervision Act). Specific details are regulated in section 134 (6) sentence 2 of the Insurance Supervision Act 75 Section 134 of the Insurance Supervision Act gives the supervisory authority additional powers of intervention (section 134 (7) and (8) and section 137 of the Insurance Supervi￾sion Act). 4.3 Shortfall or threat of shortfall in the minimum capital requirement (sections 135 to 137 of the Insurance Supervision Act) All addressees of the circular as a basic principle36 (specific differences are indicated):

33 Section 134 (3) sentence 2 in conjunction with section 212 (1) of the Insurance Supervi￾sion Act for small insurance undertakings; also in conjunction with section 219 (1) for funeral expenses funds. 34 Section 234f (3) sentence 1 of the Insurance Supervision Act for Pensionskassen; in conjunction with section 237 (1) sentence 1 of the Insurance Supervision Act for Pen￾sionsfonds. 35 Section 234f (1) of the Insurance Supervision Act for Pensionskassen; in conjunction with section 237 (1) sentence 1 for Pensionsfonds. 36 Applicable to small insurance undertakings in accordance with section 212 (1) of the Insurance Supervision Act, to funeral expenses funds in accordance with section 219 (1) in conjunction with section 212 (1) of the Insurance Supervision Act and to Pensionskas￾sen in accordance with section 232 (1) of the Insurance Supervision Act, taking into ac￾count the modifications in section 234f (1) to (2) and (3) sentence 3 of the Insurance Su￾pervision Act. The same provisions apply to Pensionsfonds as to Pensionskassen as a basic principle, in accordance with section 237 (1) sentence 1 of the Insurance Supervision

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 22 76 If the minimum capital requirement is no longer covered, or if there is a threat of this oc￾curring within the next three months, the undertaking must inform the supervisory au￾thority of this fact without delay (section 135 (1) of the Insurance Supervision Act).37 77 The undertaking must submit a realistic financing plan in the short term to the supervisory authority for approval within one month of it determining that the minimum capital re￾quirement is no longer covered (section 135 (2) sentence 1 of the Insurance Supervision Act). This plan must show how the own funds that can count towards the minimum capital requirement will be increased at least to the level of the minimum capital requirement amount or how the risk profile will be lowered in such a way that the minimum capital re￾quirement is covered once again (section 135 (2) sentence 2 of the Insurance Supervision Act; see section 136 (1) of the Insurance Supervision Act for more information on the bare minimum that this plan must contain). For IORPs, the one-month deadline under section 135 (2) sentence 1 of the Insurance Supervision Act can be extended by up to two months to a total of three months, and the three-month deadline under section 135 (2) sentence 2 of the Insurance Supervision Act can be extended by up to nine months to a total of twelve months.38 78 Section 135 of the Insurance Supervision Act gives the supervisory authority additional powers of intervention (section 135 (3) and section 137 of the Insurance Supervision Act). 79 The supervisory authority is also required to revoke the authorisation to conduct business of an undertaking that presents a clearly inadequate financing plan. The supervisory au￾thority can or, as the case may be, must likewise revoke this authorisation is the minimum capital requirement is not covered within certain periods of time.39 Submission deadline Small insurance undertakings:

Act. In section 234f (2) sentence 2 of the Insurance Supervision Act, section 238 (4) of the Insurance Supervision Act replaces section 234g (3) of the Insurance Supervision Act (see section 238 (1) sentence 2 of the Insurance Supervision Act). 37 For more information, see BaFin’s interpretative decision of 27 July 2016 on a shortfall in the solvency or minimal capital requirement: https://www.bafin.de/ref/19607286. 38 Section 234f (3) sentence 3 of the Insurance Supervision Act for Pensionskassen; in conjunction with section 237 (1) sentence 1 of the Insurance Supervision Act for Pen￾sionsfonds. 39 For small insurance undertakings: section 304 (1) no. 2 in conjunction with section 212 (3) no. 13 of the Insurance Supervision Act; for funeral expenses funds also in con￾junction with section 219 (1) of the Insurance Supervision Act; for Pensionskassen: sec￾tion 234f (4) of the Insurance Supervision Act; for Pensionsfonds: section 234f (4) in con￾junction with section 237 (1) sentence 1 of the Insurance Supervision Act.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 23 80 Section 216 (1) of the Insurance Supervision Act40 requires a calculation of the solvency capital requirement and a statement of own funds to be submitted annually to the super￾visory authority together with the annual financial statements and management report required by section 341a (1) of the German Commercial Code (Handelsgesetzbuch – “HGB”) (the “solvency statement” in accordance with section 19 (1) of the Capital Re￾sources Regulation). 81 The reporting date for submitting the solvency statement is thus the same as that for the annual financial statements required by section 341a of the Commercial Code (section 217 (1) sentence 1 no. 4 of the Insurance Supervision Act in conjunction with section 19 (2) sentence 1 of the Capital Resources Regulation). The same deadline for submission to the supervisory authority applies as for the prepared annual financial statements (section 217 (1) sentence 1 no. 4 of the Insurance Supervision Act in conjunction with section 19 (2) sentence 2 of the Capital Resources Regulation in conjunction with section 212 (1) in conjunction with section 37 (1) sentence 1 of the Insurance Supervision Act). Funeral expenses funds: 82 The same provisions apply to funeral expenses funds as to small insurance undertakings in accordance with section 219 (1) in conjunction with section 216 (1) of the Insurance Su￾pervision Act and section 19 of the Capital Resources Regulation. Pensionskassen: 83 Pensionskassen must likewise submit a calculation of the solvency capital requirement and evidence of own funds to the supervisory authority each year (section 234g (4) of the In￾surance Supervision Act;41 here too, the term “solvency statement” as per section 19 (1) of the Capital Resources Regulation is used). 84 The reporting date for Pensionskassen to submit their solvency statement is also the same as that for the annual financial statements required by section 341a of the Commercial Code (section 235 (1) sentence 1 no. 12 of the Insurance Supervision Act in conjunction with section 19 (2) sentence 1 of the Capital Resources Regulation). The same deadline for submission to the supervisory authority applies as for the prepared annual financial state￾ments (section 235 (1) sentence 1 no. 12 of the Insurance Supervision Act in conjunction with section 19 (2) sentence 2 of the Capital Resources Regulation in conjunction with sec￾tion 232 (1) in conjunction with section 37 (1) sentence 1 of the Insurance Supervision Act). Pensionsfonds:

40 Plus section 217 (1) sentence 1 no. 4 of the Insurance Supervision Act in conjunction with section 19 (1) of the Capital Resources Regulation. 41 Plus section 235 (1) sentence 1 no. 12 of the Insurance Supervision Act in conjunction with section 19 (1) of the Capital Resources Regulation.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 24 85 Pensionsfonds must likewise submit a calculation of the solvency capital requirement and evidence of own funds to the supervisory authority each year (section 238 (5) of the Insur￾ance Supervision Act;42 the “solvency statement” in accordance with section 28 (1) of the Regulation on the Supervision of Pensionsfonds). 86 The reporting date for Pensionsfonds to submit their solvency statement is thus the same as that for the annual financial statements required by section 341a of the Commercial Code (section 240 (1) sentence 1 no. 9 of the Insurance Supervision Act in conjunction with section 28 (2) sentence 1 of the Regulation on the Supervision of Pensionsfonds). The same deadline for submission to the supervisory authority applies as for the prepared an￾nual financial statements (section 240 (1) sentence 1 no. 9 of the Insurance Supervision Act in conjunction with section 28 (2) sentence 2 of the Regulation on the Supervision of Pensionsfonds in conjunction with section 237 (1) sentence 1 in conjunction with section 37 (1) sentence 1 of the Insurance Supervision Act). All addressees of the circular: 87 If the approved annual financial statements result in changes to the solvency statement, the corrected solvency statement must be submitted without delay to the supervisory au￾thority together with the approved annual financial statements (section 37 (1) sentence 1 of the Insurance Supervision Act,43 section 19d (1) of the Capital Resources Regulation or, as appropriate, section 42d (1) of the Regulation on the Supervision of Pensionsfonds). Submission arrangements and form All addressees of the circular: 88 The latest versions of the relevant reporting templates must be used for the solvency in￾formation to be provided as at the reporting date of the past financial year.44 The report￾ing templates are to be submitted electronically (section 19a (1) of the Capital Resources Regulation for small insurance undertakings, funeral expenses funds and Pensionskassen or section 42a (1) sentence 1 of the Regulation on the Supervision of Pensionsfonds for Pensionsfonds). Explanatory appendices must be enclosed with the reporting templates if necessary. More details on the arrangements and form for submitting the solvency state￾ment and any explanatory appendices are contained in sections 19a to 19e of the Capital Resources Regulation and sections 42a to 42e of the Regulation on the Supervision of Pensionsfonds, which for their part make a number of references to the BaFin website (see

42 Plus section 240 (1) sentence 1 no. 9 of the Insurance Supervision Act in conjunction with section 28 (1) of the Regulation on the Supervision of Pensionsfonds. 43 Applicable (i) to small insurance undertakings in accordance with section 212 (1) of the Insurance Supervision Act, (ii) to funeral expenses funds in accordance with section 219 (1) in conjunction with section 212 (1) of the Insurance Supervision Act, (iii) to Pen￾sionskassen in accordance with section 232 (1) of the Insurance Supervision Act and (iv) to Pensionsfonds in accordance with section 237 (1) sentence 1 of the Insurance Supervi￾sion Act. 44 The reporting templates are an integral part of the Capital Resources Regulation and Regulation on the Supervision of Pensionsfonds.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 25 section 19 (2) sentence 2 and (3) of the Capital Resources Regulation and section 42b (2) sentence 2 and (3) of the Regulation on the Supervision of Pensionsfonds). 45 Observations on individual items on the reporting templates 89 Unless indicated otherwise, the observations on the reporting templates apply to all ad￾dressees of this circular. 90 The structure of the forms concerning own funds is based on reporting templates F.100.01 and F.800.01 (for Pensionsfonds) from the German Regulation on the Reporting by Insur￾ance Undertakings to the Federal Financial Supervisory Authority (Verordnung über die Berichterstattung von Versicherungsunternehmen gegenüber der Bundesanstalt für Fi￾nanzdienstleistungsaufsicht – BerVersV) or, as appropriate, chapter 2 of the Regulation on the Supervision of Pensionsfonds. Items on the reporting templates that also appear on reporting templates F.100.01 and/or F.800.01 are only explained where necessary. 91 Certain explanatory notes make reference to reporting template F.200.01 from the Regu￾lation on the Reporting by Insurance Undertakings to the Federal Financial Supervisory Authority. The references apply mutatis mutandis to undertakings that submit reporting template F.300.01 instead of F.200.01. 7.1 Own funds All addressees of the circular: reporting templates F.701.01, F.702.01, F.703.01, F.704.01 and F.705.01, ZE0010 to ZE0360 in each case, plus reporting template F.706.01, ZE0010 to ZE0240 7.1.1 Type A own funds Item (1.1) – Paid-in share capital or paid-in initial fund – 92 German joint-stock insurance companies are required to deduct the unpaid capital called up (see reporting template F.100.01 ZE0370 SP0030) and the outstanding deposits not called up (see reporting template F.100.01 ZE0540 SP0020) from the “subscribed capital” item on the liabilities side of their balance sheets (see reporting template F.100.01 ZE0530 SP0020). 93 For German mutual societies with variable additional payment liabilities, the paid-in initial fund is determined from the difference between the initial fund reported in the balance sheet (see reporting template F.100.01 ZE0530 SP0020 and the “bills of subscribers to the initial fund” reported in reporting template F.100.01 ZE0370 SP0030) and the outstanding deposits not called up (see reporting template F.100.01 ZE0540 SP0020). 94 Insurance undertakings under public law are required to offset against each other the items that correspond to “subscribed capital” and “capital called up but not yet paid in”

45 [Reference to the exact location on the BaFin website will be added at a later date].

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 26 and “outstanding deposits not called up” at stock corporations and to report the differ￾ence. 95 At Pensionsfonds, the paid-in share capital or, as appropriate, the paid-in initial fund is de￾termined in the same way from the items “subscribed capital” (see reporting template F.800.01 ZE0550 SP0020), “capital called up but not yet paid in” (see reporting template F.800.01 ZE0330 SP0030) and “outstanding deposits not yet called up” (see reporting tem￾plate F.800.01 ZE0560 SP0020). Item (1.2) – Amount of own shares – 96 Not applicable; nothing must be entered here, because own shares will have already been accounted for when determining the liability item “subscribed capital” (see reporting tem￾plate F.100.01 ZE0530 SP0020) or “initial fund reported in the balance sheet” (see report￾ing template F.100.01 ZE0530 SP0020). Item (1.3) – Capital reserves – 97 The capital reserves in accordance with section 272 (2) of the Commercial Code (see re￾porting template F.100.01 ZE0550 SP0030 or reporting template F.800.01 ZE0570 SP0030) are to be entered here. Item (1.4) – Organisational funds in accordance with section 9 (2) no. 5 of the Insurance Supervision Act – 98 Insofar as the capital reserves contain any organisational funds in accordance with section 9 (2) no. 5 of the Insurance Supervision Act (see reporting template F.100.01 ZE0560 SP0030 or reporting template F.800.01 ZE0 580 SP0030), then these funds are to be de￾ducted. 99 This is because the purpose limitation of the organisational funds is restricted to setting up the administration and the network of agents, meaning that they cannot be used to absorb losses and thus cannot be counted towards own funds. Items (1.9) to (1.14) – Profit/loss brought forward, net profit/loss for the year, net re￾tained profits/net accumulated losses – 100 If the balance sheet is prepared in consideration of the partial appropriation of the profit for the year, items (1.13) and (1.14) will replace items (1.9) to (1.12). Items (1.15) – Dividends to be distributed – 101 The portion of the net retained profits that is earmarked for distribution to shareholders according to the appropriation proposal in accordance with section 170 (2) of the German Stock Corporation Act (Aktiengesetz – AktG) and section 341a (4) of the Commercial Code is to be entered here. Item (1.16) for reporting templates F.701.01 to F.705.01 – Profit-sharing capital –

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 27 102 The amount of profit-sharing capital that meets the criteria under section 214 (2) and (5) of the Insurance Supervision Act46 and that can thus be counted towards own funds is to be entered here. The relevant participation rights are to be explained in an appendix (forming an integral component of the qualitative part of the reporting template in ac￾cordance with section 19b (2) sentence 1 of the Capital Resources Regulation). The expla￾nation of the eligible amount must be based on the profit-sharing capital reported in the balance sheet (see reporting template F.100.01 ZE0740 SP0040). Item (1.16) for reporting template F.706.01 – Profit-sharing capital – 103 For Pensionsfonds, the profit-sharing capital is to be entered here insofar as it qualifies in accordance with section 27 (2) and (5) of the Regulation on the Supervision of Pen￾sionsfonds. 104 The relevant participation rights are to be explained in an appendix (forming an integral component of the qualitative part of the reporting template in accordance with section 42b (2) sentence 1 of the Regulation on the Supervision of Pensionsfonds). The explana￾tion of the eligible amount must be based on the profit-sharing capital reported in the balance sheet (see reporting template F.800.01 ZE0720 SP0040). Item (1.17) for reporting templates F.701.01 to F.705.01 – Subordinated liabilities – 105 The amount of subordinated liabilities that meets the criteria under section 214 (3) and (5) of the Insurance Supervision Act47 and that can thus be counted towards own funds is to be entered here. 106 The relevant participation rights are to be explained in an appendix (forming an integral component of the qualitative part of the reporting template in accordance with section 19b (2) sentence 1 of the Capital Resources Regulation). The explanation of the eligible amount must be based on the subordinate liabilities reported in the balance sheet (see reporting template F.100.01 ZE0760 SP0040). Item (1.17) for reporting template F.706.01 – Subordinated liabilities – 107 For Pensionsfonds, the subordinated liabilities are to be entered here insofar as they qual￾ify in accordance with section 27 (3) and (5) of the Regulation on the Supervision of Pen￾sionsfonds. 108 The relevant liabilities are to be explained in an appendix (forming an integral component of the qualitative part of the reporting template in accordance with section 42b (2) sen-

46 Applicable to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act. 47 Applicable to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 28 tence 1 of the Regulation on the Supervision of Pensionsfonds). The explanation of the eli￾gible amount must be based on the subordinate liabilities reported in the balance sheet (see reporting template F.800.01 ZE0740 SP0040). Item (1.18) – Intangible assets reported in the balance sheet – 109 Under section 214 (1) sentence 2 no. 2 of the Insurance Supervision Act,48 recognised goodwill in accordance with section 246 (1) sentence 4 of the Commercial Code is to be considered an intangible asset in particular. 110 In particular, the value from reporting template F.100.01 ZE0050 SP0040 or, as appropri￾ate, reporting template F.800.01 ZE0060 SP0040 (“Total intangible assets”) is to be entered here. 111 The composition of the amount entered for this item is to be explained in an appendix (forming an integral component of the qualitative part of the reporting template in ac￾cordance with section 19b (2) sentence 1 of the Capital Resources Regulation or, as ap￾propriate, section 42b (2) sentence 1 of the Regulation on the Supervision of Pen￾sionsfonds). Item (1.19) – Unallocated provision for premium refunds that can be used to cover losses – 112 Only small life insurance undertakings, small health insurance undertakings, Pensionskas￾sen, funeral expenses funds and Pensionsfonds are able to report an amount for this item. 113 The item relates to the provision for premium refunds insofar as it may be used to cover losses in accordance with section 140 of the Insurance Supervision Act49 and to the extent that it does not represent any surplus shares already allocated (section 214 (1) sentence 1 no. 7 of the Insurance Supervision Act or, as appropriate, section 27 (1) sentence 1 no. 8 of the Regulation on the Supervision of Pensionsfonds). 114 This means that the only amounts eligible as own funds will be that portion of the provi￾sion for premium refunds that has not yet been earmarked for surplus sharing, i.e. that has not yet been ring-fenced for ongoing profit participation or participation in the final surplus by way of a resolution by the competent executive body. In other words, an un￾dertaking can count those portions of their provision for premium refunds for which a sub-provision (final surplus fund) was set aside in accordance with section 28 (6) and (7)

48 Applicable to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act. Pensionsfonds are covered by a comparable provision under section 27 (1) sentence 2 no. 2 of the Regulation on the Supervision of Pensionsfonds. 49 Modifications to section 140 of the Insurance Supervision Act for funeral expenses funds in section 219 (2) sentence 1 of the Insurance Supervision Act, for regulated Pen￾sionskassen in section 233 (3) sentence 1 of the Insurance Supervision Act and for Pen￾sionsfonds in section 237 (4) sentence 1 of the Insurance Supervision Act.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 29 of the Regulation on the Accounting of Insurance Undertakings based on their most re￾cent declaration (see reporting template F.110.01 ZE0250 SP0010). If portions of the final surplus fund are already allocated (e.g. as funds to finance level profits annuities in the case of pension schedules), however, these portions cannot be used to cover losses and thus cannot be counted towards own funds within the meaning of section 214 (1) sen￾tence 1 no. 7 of the Insurance Supervision Act or, as appropriate, section 27 (1) sentence 1 no. 8 of the Regulation on the Supervision of Pensionsfonds. 50 The amounts resulting from reporting template F.110.01 ZE0220 and ZE0240, SP0010 in each case, cannot be recognised either; this also applies to any amounts determined dur￾ing the period lasting beyond the end of the following financial year. 115 Pensionskassen and funeral expenses funds cannot recognise as own funds the amount resulting from reporting template F.121.01 ZE0160–ZE0190, ZE0420-ZE0450 and/or ZE0680–ZE0710, SP0010 in each case; this also applies to any amounts determined during the period lasting beyond the end of the following financial year. 116 Neither can Pensionskassen or funeral expenses funds recognise that portion of their pro￾vision for premium refunds that is still unallocated at the balance sheet date and regard￾ing whose appropriation the highest-level executive body is expected to pass a legally binding resolution for the purposes of the solvency statement by the next reporting date in the following year. Even though the solvency statement is tied to a specific reporting date, these amounts still cannot be recognised, because any resolution passed on their appropriation will automatically turn an unallocated provision for premium refunds into an allocated one. Were the fund to recognise this amount initially as own funds in its sol￾vency statement, it would need to submit an amended solvency statement after passing a legally binding resolution on its appropriation. Item (1.20) for reporting templates F.701.01 to F.705.01 – Participating interests in credit institutions, financial services institutions and financial undertakings – 117 The total of the book values of the individual participating interests in credit institutions, financial services institutions and financial undertakings determined in accordance with section 214 (7) sentence 1 no. 1 of the Insurance Supervision Act51 is to be entered here. Details of this breakdown are not shown in the balance sheet and must be set out in an appendix (forming an integral component of the qualitative part of the reporting template in accordance with section 19b (2) sentence 1 of the Capital Resources Regulation). Item (1.21) for reporting templates F.701.01 to F.705.01 – Receivables from participa￾tion rights due from the undertakings specified in item (1.20) –

50 Applicable to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act. 51 Applicable to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 30 118 The total of the book values of the individual receivables from participation rights due from credit institutions, financial services institutions and financial undertakings specified in accordance with section 214 (7) sentence 1 no. 2 of the Insurance Supervision Act52 is to be entered here. 119 Details of this breakdown are not shown in the balance sheet and must be set out in an appendix (forming an integral component of the qualitative part of the reporting template in accordance with section 19b (2) sentence 1 of the Capital Resources Regulation). Item (1.22) for reporting templates F.701.01 to F.705.01 – Receivables from subordi￾nated liabilities due from the undertakings specified in item (1.20) – 120 The observations made in respect of item (1.21) apply mutatis mutandis with the proviso that the total of the book values of the individual receivables from subordinated liabilities due from credit institutions, financial services institutions and financial undertakings under section 214 (7) sentence 1 no. 2 of the Insurance Supervision Act53 is to be entered here. In particular, the breakdown of the individual items is to be explained in an appendix (forming an integral component of the qualitative part of the reporting template in ac￾cordance with section 19b (2) sentence 1 of the Capital Resources Regulation). Item (1.23) for reporting templates F.701.01 to F.705.01 – Participating interests in pri￾mary insurance undertakings, reinsurance undertakings, primary insurance/reinsurance undertakings based in third countries, insurance holding companies and Pensionsfonds – 121 The total of the book values of the individual participating interests in insurance undertak￾ings based in the EU or EEA, insurance undertakings based in a third country, insurance holding companies and Pensionsfonds determined in accordance with section 214 (7) sen￾tence 1 no. 1 d) to g) of the Insurance Supervision Act54 is to be entered here. Details of this breakdown are not shown in the balance sheet and must be set out in an appendix (forming an integral component of the qualitative part of the reporting template in ac￾cordance with section 19b (2) sentence 1 of the Capital Resources Regulation). Item (1.24) for reporting templates F.701.01 to F.705.01 – Receivables from participa￾tion rights due from the undertakings specified in item (1.23) – 122 The total of the book values of the individual receivables from participation rights due from insurance undertakings based in the EU or EEA, insurance undertakings based in a third country, insurance holding companies and Pensionsfonds determined in accordance

52 Applicable to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act. 53 Applicable to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act. 54 Applicable to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 31 with section 214 (7) sentence 1 no. 2 in conjunction with section 214 (7) sentence 1 no. 1 d) to g) of the Insurance Supervision Act55 is to be entered here. 123 Details of this breakdown are not shown in the balance sheet and must be set out in an appendix (forming an integral component of the qualitative part of the reporting template in accordance with section 19b (2) sentence 1 of the Capital Resources Regulation). Item (1.25) for reporting templates F.701.01 to F.705.01 – Receivables from subordi￾nated liabilities due from the undertakings specified in item (1.23) – 124 The observations made in respect of item (1.24) apply mutatis mutandis with the proviso that the total of the book values of the individual receivables from subordinated liabilities due from insurance undertakings based in the EU or EEA, insurance undertakings based in a third country, insurance holding companies and Pensionsfonds under section 214 (7) sentence 1 no. 2 in conjunction with section 214 (7) sentence 1 no. 1 d) to g) of the Insur￾ance Supervision Act56 is to be entered here. In particular, the breakdown of the individual items is to be explained in an appendix (forming an integral component of the qualitative part of the reporting template in accordance with section 19b (2) sentence 1 of the Capital Resources Regulation). 7.1.2 Type B own funds 125 Type B own funds (in accordance with section 214 (1) sentence 1 no. 8 of the Insurance Supervision Act57) can only be recognised as own funds on request and with the consent of the supervisory authority and up to the maximum limit specified in section 214 (6) of the Insurance Supervision Act. Item (2.1) for reporting templates F.701.01 to F.705.01 126 The maximum limit imposed by section 214 (6) of the Insurance Supervision Act also ap￾plies. It stipulates that funds in accordance with section 214 (1) sentence 1 no. 8 a) and b) of the Insurance Supervision Act may only be included in own funds up to a limit of 50 per cent of own funds (including those for which recognition is being requested) or of the sol￾vency capital requirement, whichever is lower.

55 Applicable to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act. 56 Applicable to funeral expenses funds by virtue of section 219 (1) of the Insurance Su￾pervision Act and to Pensionskassen by virtue of section 234g (3) sentence 1 of the Insur￾ance Supervision Act. 57 Section 3.2 “List of own funds” above provides more details of which provisions of sec￾tion 214 (1) sentence 1 no. 8 of the Insurance Supervision Act also apply mutatis mutandis to funeral expenses funds and Pensionskassen by virtue of a reference norm or also for Pensionsfonds in substantive terms by virtue of a parallel norm.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 32 127 An undertaking requesting that this item be included in the calculation of own funds will be required to disclose the following: 128 Stock corporations are required to state the amount being requested, up to half of their “outstanding deposits on subscribed capital” (the total from the capital called up but not yet paid in as per reporting template F.100.01 ZE0370 SP0030 and the outstanding depos￾its not called up as per reporting template F.100.01 ZE0540 SP0020). 129 Mutual societies with variable additional payment liabilities are required to state the amount being requested, up to half of the total from the “change of subscribers to the in￾itial fund” reported in reporting template F.100.01 ZE0370 SP0030 and the outstanding deposits not called up (see reporting template F.100.01 ZE0540 SP0020). 130 In the case of insurance undertakings under public law, the amount being requested must be a maximum of half of the balance sheet item “outstanding deposits on subscribed cap￾ital” for stock corporations. Item (2.1) for reporting template F.706.01 – Half of the unpaid portion of the share capital or initial fund, if the paid portion amounts to between 25 per cent of the share capital or initial fund and 50 per cent of own funds or the solvency capital requirement, whichever is lower – 131 When determining which of own funds and the solvency capital requirement is lower, “own funds” are deemed to include those for which recognition is being requested. Item (2.2) for reporting template F.705.01 – Half of the difference between the supple￾mentary contributions permissible under the articles of association in a financial year and the actual supplementary contributions required – 132 In accordance with section 214 (1) sentence 1 no. 8 b) of the Insurance Supervision Act, this item is only relevant to mutual societies with variable additional payment liabilities and to insurance undertakings under public law that operate on mutual principles and do not operate life or health insurance.58 133 Insofar as a corresponding request is submitted, the amount stated for this item cannot exceed the maximum limit in accordance with section 214 (6) of the Insurance Supervision Act, with the own funds for which recognition is being requested to be included when cal￾culating the amount of own funds. Item (2.2) for reporting template F.706.01 – Net hidden reserves resulting from the val￾uation of assets, to the extent that these reserves are not of an exceptional nature –

58 In particular, this is not applicable to funeral expenses funds either, because section 214 (1) sentence 1 no. 8 b) does not apply to life insurance undertakings (see section 219 (1) of the Insurance Supervision Act), or to Pensionskassen (see section 234g (3) of the Insurance Supervision Act) or Pensionsfonds (due to the lack of a comparable provision in section 27 of the Regulation on the Supervision of Pensionsfonds).

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 33 Item (2.4) for reporting templates F.701.01 to F.705.01 – Net hidden reserves resulting from the valuation of assets, to the extent that these reserves are not of an exceptional nature – 134 The composition of the amount for which recognition is being requested here must be demonstrated and explained in an appendix.59 Items (2.5) and (2.6) for reporting templates F.701.01 to F.703.01 – Difference be￾tween the premium reserve which has not been fully zillmerised and that which has been / Claims against policyholders that have been capitalised but are not yet due – 135 These items are only relevant for small life insurance undertakings, funeral expenses funds and Pensionskassen (see section 214 (1) sentence 1 no. 8 d), section 219 (1) and section 234g (3) sentence 1 of the Insurance Supervision Act). 136 Item (2.5) relates to the value of those acquisition costs that were included in the amount but that were not zillmerised or were only partially zillmerised when the provision was set aside. 137 In accordance with section 214 (1) sentence 1 no. 8 d) of the Insurance Supervision Act, the own funds in this case include the value of the acquisition costs included in the amount based on the provisions issued on the basis of section 217 sentence 1 of the In￾surance Supervision Act insofar as these costs were not considered when the provision was set aside and insofar as the policyholder has no entitlement to them. 138 Insofar as after this a difference can be taken into consideration, the asset-side claims against policyholders that have been capitalised but are not yet due and that are listed under item (2.6) (“unamortised acquisition costs”) are to be deducted from this difference (reporting template F.100.01 ZE0330 SP0010). 139 If a difference is being claimed, the manner in which it has been calculated must be set out in an appendix.60

59 This demonstrative and explanatory appendix is not considered a qualitative part of a reporting template within the meaning of section 19b (2) sentence 1 of the Capital Re￾sources Regulation or, as appropriate, section 42b (2) sentence 1 of the Regulation on the Supervision of Pensionsfonds as part of the procedure for requesting recognition for type B own funds. Rather, the submission provisions set out in margin number 35 apply (see the information sheet on the specialised procedure related to insurance supervision). 60 If it forms part of regular annual reporting (including any corrections reported in this regard), this appendix will be considered a qualitative part of a reporting template within the meaning of section 19b (2) sentence 1 of the Capital Resources Regulation. If, how￾ever, a request is being submitted to recognise funds as type B own funds, the submission provisions set out in margin number 35 will apply (see the information sheet on the spe￾cialised procedure related to insurance supervision).

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 34 7.2 Solvency capital requirement 7.2.1 Small life insurance undertaking reporting template F.701.01 ZE0550 to ZE1300, Pensionskasse reporting template F.702.01 ZE0560 to ZE1300, funeral expenses fund reporting template F.703.01 ZE0550 to ZE0920 The explanations apply to small life insurance undertakings, Pensionskassen and funeral expenses funds unless stated otherwise: 7.2.1.1 Part I – Endowment and annuity insurance (primary insurance) 140 In addition to insurance for life, death, marriage and birth, independent occupational disa￾bility, invalidity, long-term care and similar insurance policies must also be taken into ac￾count here. Pensionskassen and funeral expenses funds. 141 Pursuant to section 19 (1) of the Capital Resources Regulation, all Pensionskassen and fu￾neral expenses funds are required to submit a proof of solvency to the supervisory au￾thority on an annual basis. This also applies to Pensionskassen and funeral expenses funds which pursuant to section 62 (2) of the Regulation on Insurance Accounting are not re￾quired to perform a new actuarial calculation of the mathematical provisions for each re￾porting date. These Pensionskassen and funeral expenses funds must observe the follow￾ing information when giving proof of solvency in accordance with reporting template F.702.01 and F.703.01 for the interim years (i.e. for the years in which the premium reserve is not recalculated). 142 The amount of the premium reserve at the interim reporting date must be estimated. The estimation must be based on the last premium reserve calculated actuarially. The contri￾butions posted, insurance benefits paid, uses of surplus and actuarial interest accrued af￾ter this reporting date and up to the balance sheet date must then also be taken into ac￾count. Other changes to the premium reserve (e.g. due to portfolio movements or neces￾sary reinforcement of the calculation assumptions) must be taken into account if these are significant; this also applies to special features in the financing procedure (e.g. require￾ment coverage procedure). 143 The estimated premium reserve must be included in the balance sheet and income state￾ment for the interim period for the purpose of producing the proof of solvency as if this were a newly calculated premium reserve. This means that the values in the balance sheet and income statement for the interim period must be adjusted for the purpose of produc￾ing the proof of solvency in such a way that they are consistent with the estimated pre￾mium reserve. In doing so, the adjustment item must be reversed and the resulting posi￾tive gross surplus (taking into account the estimated premium reserve) must be allocated to the provision for premium refunds and the loss reserve in accordance with the articles of association and the Technical Business Plan (or the resulting deficit must be taken from the loss reserve). 144 The information on (2.1.1), (2.1.2), (2.1.3) specified in II. part I item (2) second result of re￾porting templates F.702.01 or F.703.01 may be determined by applying the ratio of these

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 35 values to the estimated current premium reserve as derived from the latest proof of sol￾vency produced on the basis of a recalculated premium reserve. The same applies to the statement under (2.2) provided that the relative share of reinsurance business has not changed. Item (1) first result 145 This is where the premium reserve and the unearned premiums less the cost components (technical provisions calculated actuarially) must be recorded. 146 For the most part, the amounts concerned cannot be taken directly from the balance sheet because the corresponding items are not broken down there by risk and class of in￾surance in accordance with nos. 19 to 24 of the appendix to the Insurance Supervision Act. 147 The calculation of the absolute amounts to be specified under (1.1) and (1.2) must there￾fore be presented in an appendix to this item (as a component of the qualitative part of the reporting template pursuant to section 19b (2) sentence 1 of the Capital Resources Regulation). 148 The amounts listed in the following items of reporting template F.100.01 must be used as a basis in each case: 149 to the extent that this relates to the sum to be reported under (1.1) and in the denomina￾tor of the quotient under (1.3):

• gross premium reserve arising from the direct insurance business (ZE0830 SP0020),
• gross premium reserve arising from the reinsurance business (ZE0930 SP0020),
• gross provision for unearned premiums arising from the direct insurance business writ￾ten less cost components (ZE0810 SP0020),
• gross provision for unearned premiums arising from the reinsurance business less cost components (ZE0920 SP0020), 150 to the extent that this relates to the sum to be reported under (1.2) and in the numerator of the quotient under (1.3):
• net premium reserve arising from the direct insurance business (ZE0830 SP0020 less ZE0120 SP0020),
• net premium reserve arising from the inward reinsurance business (ZE0930 SP0020 less ZE0200 SP0020) as well as
• net provision for unearned premiums arising from the direct insurance business written less cost components (ZE0810 SP0020 less ZE0110 SP0020),
• net provision for unearned premiums arising from the inward reinsurance business less cost components (ZE0920 SP0020 less ZE0190 SP0020). 151 Each individual amount must be broken down into the sub-items “endowment and annu￾ity insurance”, “supplementary insurance”, “insurance pursuant to section 125 (5) nos. 1, 3 and 4 of the Insurance Supervision Act” and “capital redemption operations”. Subse-

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 36 quently, with the exception of “supplementary insurance”, the sums of the premium re￾serves and the premium carryforwards less cost components for the entire insurance busi￾ness, without or following deduction of outward reinsurance, must be formed for these sub-items from these partial amounts. The corresponding amounts for “endowment and annuity insurance” must be transferred from the appendix to the proof of solvency. 152 Finally, the ratio of the remaining net amounts to the remaining gross amounts must be formed under (1.3). The ratio must be stated rounded down to the nearest whole percent￾age point. 153 The amount of the first result must be included in the summary overview. Item (2) second result 154 The risk capital for an insured person in accordance with section 9 (2) of the Capital Re￾sources Regulation and section 17 (1) of the Capital Resources Regulation and subject to section 9 (3) of the Capital Resources Regulation is the difference between

• the sum insured, which, if the insured event were to occur, would become due for pay￾ment under the insurance contract on the reference date relevant for the calculation of the minimum solvency requirement, and
• the sum of the existing premium reserve and the unearned premiums (less the cost components), in each case gross. If different events could trigger liabilities on the part of the insurer in favour of the insured party, a risk capital must be calculated separately for each event; these calculations must be based on the assumption that the event concerned would occur immediately or, if applicable, on the contractually agreed date. The highest of the amounts calculated in this way must be used as the risk capital for the insured party concerned. 155 The risk capital for a contract in accordance with section 9 (4) and section 17 (1) of the Capital Resources Regulation is the sum of the risk capitals for the insured parties covered by this contract. Approximation methods for calculating the risk capital are permissible, provided that they cannot result in amounts lower than those from a precise calculation. Negative risk capital must be recognised as zero. 156 The risk capital for all insurance contracts taken out as at the effective calculation date for the direct insurance business written and inward reinsurance (total insurance business) with no deduction for outward reinsurance (i.e. gross) must be determined in accordance with the term of the insurance contracts for each of the groups to be recognised under (2.1.1), (2.1.2) and (2.1.3), but must only be disclosed there if the amount is positive. A zero must also be stated in all cases instead of any negative amount. For the purposes of map￾ping to the three contract groups, the total contractually agreed period is used as the ba￾sis for one-year insurance payable at death for which an annual renewal is contractually agreed for a specific period. When calculating the risk capital for the individual insurance contract and all contracts in each group, approximation methods may be applied after this has been agreed with BaFin, provided that these methods do not result in amounts lower than the exact calculation. This approach is appropriate in particular if the volume of

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 37 the contract groups covered by (2.1.2) and (2.1.3) is only a small one; in this case, a (posi￾tive) total amount of risk capital may be used instead of the individual amounts under (2.1.1). 157 The sum of the amounts listed under (2.1.1), (2.1.2) and (2.1.3) must also be used in the denominator of the quotient in (2.3). The net risk capital of the entire insurance business, i.e. the sum stated in the denominator less outward reinsurance, must be reported under (2.2) and in the numerator of the quo￾tient in (2.3). 158 As the amounts to be disclosed are not directly apparent from the internal accounting, their calculation must be disclosed in an appendix (as a component of the qualitative part of the reporting template in accordance with section 19b (2) sentence 1 of the Capital Re￾sources Regulation). 159 The risk capital to be disclosed under (2.1) and to be allocated to (2.1.1), (2.1.2) and (2.1.3) before outward reinsurance (gross risk capital) must be determined based on the direct life insurance portfolio - reporting template F.210.01 and reporting template F.211.01 (for Pensionskassen: reporting template F.220.01 and reporting template F.221.01; for funeral expenses funds: reporting template F.221.01) - and inward reinsurance - reporting tem￾plate F.211.01 (not applicable to Pensionskassen and funeral expenses funds). 160 Present values of deferred benefits and premiums must be determined in accordance with section 9 (3) of the Capital Resources Regulation without taking any table of decrements into account. If the insurance contract consists e.g. of a deferred life annuity in return for premiums on an on-going basis until the start of the annuity, the present value of the benefits must be calculated as a deferred temporary annuity until the table end age and the present value of the premiums as a shortened temporary annuity until the annuity start age using the actuarial interest rate for the premium reserve. Life insurance undertakings with the exception of Pensionskassen and funeral expenses funds: 161 In the case of endowment insurance policies with only one insured event or with the same sum insured for all insured events, the gross risk capital is calculated from the amounts included for these insurance policies in reporting template F.210.01 ZE0210 SP0020 and reporting template F.211.01 ZE0220 SP0030, less the sums to be reported for these insur￾ance policies under “Part I (1) first result” in (1.1) and in the denominator of the quotient for (1.3). 162 In the case of other endowment insurance policies with non-deferred benefits, the gross risk capital is calculated mutatis mutandis by replacing the sum insured stated above with the highest benefit amount for an insured event. 163 In the case of other endowment insurance policies with deferred benefits and of annuity insurance policies, the gross risk capital is calculated accordingly by replacing the sum in￾sured (as stated above) with the highest present value of deferred benefits (less the pre￾sent value of any contributions as applicable) of an insured event. For this purpose, the present value of the corresponding benefits must be determined to start with for each

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 38 event that may trigger a liability and, to the extent that a liability to pay premiums exists under the contract until the liability to pay benefits arises, the present value of the premi￾ums must also be determined. The present value of deferred benefits must be calculated with the same actuarial assumptions as the premium reserve, but without taking into ac￾count any table of decrements. 164 In the case of other insurance contracts, e.g. combinations of those specified above, the sum insured stated above must be replaced by the maximum of the highest amount of non-deferred benefits and the highest present value of deferred benefits (less the present value of any contributions as applicable) for an insured event. Pensionskassen: 165 In the case of Pensionskassen, the above statements on small life insurance undertakings apply mutatis mutandis in accordance with section 17 (1) of the Capital Resources Regula￾tion, unless section 17 (2) of the Capital Resources Regulation stipulates otherwise. 166 In the case of funeral expenses insurance, the gross risk capital is calculated from the amount shown on reporting template F.221.01 ZE0420 SP0010 (including bonus amounts) less the gross premium reserves and gross provision for unearned premiums for these in￾surance contracts. Funeral expenses funds: 167 The guidance provided for Pensionskassen on funeral expenses insurance applies. No risk capital is required for additional funeral expenses grants in the event of accidental death. The supplementary casualty insurance must be disclosed under part II. 168 The capital at risk of the reinsurance portion of outward reinsurance (reinsured risk capi￾tal) must be determined on the basis of the reinsured direct life insurance portfolios – re￾porting template F.210.01 ZE0230 (for Pensionskassen: reporting template F.220.01 ZE0030 to ZE0690, for funeral expenses funds: reporting template F.221.01 ZE0190 and ZE0450) in accordance with the above guidance. 169 The capital at risk following deduction of the shares of outward reinsurance (net risk capi￾tal) is then calculated from the gross risk capital less the reinsured risk capital. 170 The ratio of net risk capital (numerator) to gross risk capital (denominator) must be deter￾mined under (2.3). The ratio determined this way must be stated rounded down to the nearest whole percentage point. 171 If a different calculation method has been chosen for calculating risk capital pursuant to section 9 (5) of the Capital Resources Regulation, this must be explained in an appendix to the proof of solvency (as a component of the qualitative reporting template pursuant to section 19b (2) sentence 1 of the Capital Resources Regulation). 172 The amount of the second result must be incorporated into the summary overview.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 39 7.2.1.2 Part II – Supplementary insurance 173 Supplementary casualty insurance, supplementary occupational disability or invalidity in￾surance, supplementary risk and temporary annuity insurance, and supplementary long￾term care insurance are in particular considered to be supplementary risks to life insur￾ance. The solvency capital requirement for these supplementary insurance policies is cal￾culated in accordance with section 11 of the Capital Resources Regulation and section 17 in conjunction with section 3 of the Capital Resources Regulation in accordance with the premiums attributable to the additional risks. Invalidity and survivors’ benefits from annuity insurance of the Pensionskassen are not part of supplementary insurance. Item (1) to (4) 174 The calculation is based on the total premiums attributable to supplementary insurance (less cancellations) for the entire insurance business (i.e. direct and reinsurance business) with no deduction of outward reinsurance (gross) and the additional payments to policy￾holders for supplementary insurance in the direct insurance business written. Gross premi￾ums written and gross premiums earned must be compared in order to determine the amount; the higher amount is the determining factor in each case. 175 The total amount in question cannot be derived directly from the annual financial state￾ments as these do not contain a corresponding breakdown according to the various risks. The amounts to be stated under (1) to (3) must therefore be disclosed in an appendix to this item (as part of the qualitative part of the reporting template in accordance with sec￾tion 19b (2) sentence 1 of the Capital Resources Regulation). 176 For (1), the amount shown in reporting template F.200.01 form 7 ZE0020 SP0030 must be used as a basis; for (2), the amount shown in reporting template F.200.01 form 7 ZE0040 SP0040 must be used. 177 With certain smaller associations pursuant to section 21 of the Insurance Reporting Regu￾lation, in the case of (1) the amount stated in reporting template F.300.01 form 7 ZE0020 SP0030 must be used as a basis, in the case of (2) the amount stated in reporting tem￾plate F.300.01 form 7 ZE0040 SP0040 must be used. A deduction of cancelled premiums or contributions under (4) does not come into consid￾eration because cancelled contributions are already taken into account in the amount to be stated under (1) or (2). Deduction of taxes is not applicable because, pursuant to sec￾tion 4 no. 5 of the Insurance Tax Act, no insurance tax is levied on life insurance contribu￾tions, including contributions for supplementary insurance. 178 No entry is to be made under item (4) (ZE0830 SP0010) because the amounts to be en￾tered under items (1) and (2) already include cancelled contributions and currently neither a tax deduction nor a deduction of fees and charges is possible. 179 Fees and charges only include those amounts paid to utilise a public institution, but not additional payments from policyholders, such as admission fees, enrolment charges, fees

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 40 for official copies and collection or similar benefits. Additional payments from policyhold￾ers must be expressly included in the calculation of gross contributions pursuant to sec￾tion 3 (2) sentence 1 of the Capital Resources Regulation. 180 Deduction of taxes is not applicable because, in accordance with the purpose of section 3 (2) of the Capital Resources Regulation, contributions may only be reduced by taxes that are posted as income under contributions as a risk-free, readily determinable component of contributions but are payable by the company as tax debtor. These prerequisites are currently only met by the fire protection tax, which is not levied on small life insurance un￾dertakings, Pensionskassen or funeral expenses funds. 181 Deduction of fees and charges is also not applicable because the only fees and charges that come into consideration under section 14 of the Act Establishing the Federal Financial Supervisory Authority (Gesetz über die Bundesanstalt für Finanzdienstleistungsaufsicht – FinDAG) are not “attributable to the contributions” but are determined in relation to the total contribution income and the amount of these is independent of the individual insur￾ance contract and the contribution arising from this. Item (5) to (7) for reporting templates F.701.01 and F.703.01 182 Item (6) has not been applicable to reporting template F.701.01 since the introduction of Solvency II on 1 January 2016. 183 Although there is no volume limit above which funeral expenses funds are no longer sub￾ject to the Capital Resources Regulation, with the result that funeral expenses funds could theoretically report contributions above the limit, this is of no practical relevance on the basis of the existing market volumes. 184 Entries must now only be made for items (5) and (7). Items (5) to (7) for reporting template F.702.01 185 The total amount determined up to this point must then be broken down into two euro amounts below and above the threshold of 61.3 million euros, which must also both be stated. 18 per cent of the first instalment and 16 per cent of the second instalment then result in the total (7). Items (8) to (10) 186 A further calculation basis for the solvency capital requirement is the ratio of claims in￾curred net of reinsurance to gross claims incurred for supplementary insurance for the en￾tire insurance business. These amounts, which are to be disclosed under (9) and (8), can￾not be taken directly from the annual financial statements either, meaning that they must also be derived and stated in the appendix (as part of the qualitative part of the reporting template in accordance with section 19b (2) sentence 1 of the Capital Resources Regula￾tion). 187 The starting point for calculation of the amount to be used in the denominator of the quotient is the amount specified in reporting template F.200.01 form 7 ZE0330 SP0040

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 41 plus reporting template F.200.01 form 7 ZE0450 SP0040. The amount to be entered in the numerator of the quotient is derived from reporting template F.200.01 form 7 ZE0030 SP0040 plus ZE0450 SP0040 minus reporting template F.200.01 form 7 ZE0870 SP0030 and ZE0950 SP0030. 188 The ratio to be determined under (10) must be stated rounded down to the nearest whole percentage point. 189 For certain small mutual associations pursuant to section 21 of the Insurance Reporting Regulation, the amount to be used in the denominator of the quotient must be calculated on the basis of the amount specified in reporting template F.300.01 form 7 ZE0190 SP0040 plus ZE0210 SP0040. For these companies, the amount to be entered in (9) is de￾rived from reporting template F.300.01 form 7 ZE0190 SP0040 and ZE0210 SP0040 minus reporting template F.300.01 form 7 ZE0470 SP0030 and ZE0490 SP0030. 190 The amount of the result must be incorporated into the summary overview. 7.2.1.3 Part III – Unit-linked life insurance As this business cannot be operated by funeral expenses funds, only small life insurance undertakings and Pensionskassen can state amounts here. Item (1) first result 191 In the case of insurance undertakings pursuant to section 125 (5) nos. 1, 3 and 4 of the In￾surance Supervision Act, the solvency capital requirement is also determined in accord￾ance with the information provided in part I (1) first result (section 10 in conjunction with section 9 (1) sentence 1 no. 1 of the Capital Resources Regulation). 192 This applies equally to products for which an “additional” underwriting reserve for the guaranteed benefits must be formed in accordance with section 124 (2) no. 3 of the Insur￾ance Supervision Act. For the purpose of forming the reserve, the insurance premium can be broken down into a “reserve, to the extent that the investment risk is borne by the pol￾icyholders” in accordance with form 1, liability item F I of the Regulation on Insurance Ac￾counting, and the additional traditional premium reserve for the guaranteed benefits. If this process is followed, own funds amounting to 1% must be retained for the first reserve stated, while the last one stated must be backed by 4% of own funds. Alternatively, the additional premium reserve required can only be formed if the fund value falls below the guaranteed minimum amount and the difference must be recognised (“offsetting method”). Irrespective of the balance sheet items under which the obligation for the guar￾anteed benefit is stated, 4% of the full premium reserve calculated prospectively must in all cases be retained for this purpose. 193 By way of derogation from this, the solvency capital requirement for insurance undertak￾ings with no investment risk and with administrative expense supplements set at no more than five years is calculated on the basis of net administrative expenses.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 42 194 Since the amounts in question cannot in some cases be taken directly from the balance sheet, the amounts to be stated under (1.1), (1.2) and (1.5) must be calculated in an ap￾pendix to this item (as part of the qualitative part of the reporting template pursuant to section 19b (2) sentence 1 of the Capital Resources Regulation). 195 A distinction must be made between: Item (1.1.1) - insurance contracts where the insurance company bears the investment risk

196 Here, the premium reserves and the unearned premiums less the cost components must be indicated, which are established with regard to mortality, operating expenses, or other risks (such as in the case of guaranteed minimum benefits or surrender values). The amounts to be recognised under (1.1.1) and (1.2) must be calculated in accordance with the information provided in the “first result for life insurance - capital and pension insur￾ance, part I (1)”. Item (1.1.2) - Insurance contracts for which the insurance company does not bear any in￾vestment risk and where the life of the contract exceeds five years and the administrative cost surcharge included in the premium is fixed for more than five years - 197 The partial amount of the premium reserves and of the unearned premiums less the cost components attributable to this contract group of the total insurance business, without deduction of the outward reinsurance, must be entered under (1.1.2). The gross premium reserves reported in reporting template F.100.01 ZE1010 SP0030 in the life insurance seg￾ment, to the extent that the investment risk is borne by the policyholders, must be used as a basis, reduced by the obligations from tontine schemes reported there where applicable (see section 32 (3) of the Regulation on Insurance Accounting). 198 To the extent that this relates to the premium reserves to be reported under (1.2) and the unearned premiums less cost components for the entire insurance business following de￾duction of outward reinsurance, the net premium reserve resulting from reporting tem￾plate F.100.01 ZE1010 SP0030 less ZE0280 SP0030 must be used as a basis, less any obli￾gations arising from tontine schemes where applicable. 199 The ratio to be determined under (1.3) must be stated rounded down to the nearest whole percentage point. Item (1.5) - Insurance contracts for which the insurance company does not bear any in￾vestment risk and where the administrative cost surcharges have been fixed for no more than five years - 200 With these insurance contracts, the net administrative expenses attributable to the con￾tracts in the last financial year must be recorded. 201 The amount of the first result must be included in the summary overview. Item (2) second result

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 43 202 Insofar as small life insurance undertakings bear a mortality risk (death or longevity risk) pursuant to section 125 (5) nos. 1, 3 and 4 of the Insurance Supervision Act, risk capital must be determined in accordance with “Part I (2) second result”. 203 The gross risk capital must be entered under (2.1) and net risk capital under (2.2). The cal￾culation of these amounts, which cannot be taken directly from the balance sheet, must be presented in an appendix to items (2.1) and (2.2) (as part of the qualitative part of the reporting template in accordance with section 19b (2) sentence 1 of the Capital Resources Regulation). In the case of small life insurance undertakings, the amounts for death bene￾fits listed in reporting template F.210.01 ZE0210 SP0020 and reporting template F.211.01 ZE0250 SP0030, as well as the amounts attributable to insurance type 1.4.2 (pursuant to Annex 1, Section C of the Insurance Reporting Regulation) under “Part I (1) first result” in reporting template F.100.01 must be used as a basis. 204 The ratio to be determined under (2.3) must be stated rounded down to the nearest whole percentage point. 205 The amount of the second result must be incorporated into the summary overview. 7.2.1.4 Part IV – Capital redemption operations As this business cannot be operated by Pensionskassen or funeral expenses funds, only small life insurance undertakings can record amounts here. 206 The premium reserves and the unearned premiums less the cost components, which must be calculated in accordance with “Part I (1) first result”, must be stated here. 207 If capital redemption operations are linked with other life insurance policies, the solvency capital requirement for these other life insurance policies must be determined in accord￾ance with parts I to III. 208 Pursuant to section 12 of the Capital Resources Regulation, the solvency capital require￾ment for capital redemption operations pursuant to section 1 (2) sentence 2 of the Insur￾ance Supervision Act amounts to 4 per cent of the mathematical reserves. These must be calculated in accordance with section 9 (1) sentence 1 no. 1 of the Capital Resources Reg￾ulation. 209 The result must be incorporated into the summary overview. 7.2.1.5 Part V – Tontine schemes As this business cannot be operated by Pensionskassen or funeral expenses funds, only small life insurance undertakings can record amounts here. 210 With these transactions, the assets held by the participant groups (tontine schemes) form the basis for calculating the solvency capital requirement. 211 The assets held by the participant groups correspond to the obligation reported in ac￾cordance with section 32 (3) of the Regulation on Insurance Accounting in reporting tem￾plate F.100.01 ZE1010 SP0030.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 44 212 Pursuant to section 13 of the Capital Resources Regulation, the solvency capital require￾ment for tontine schemes is 1 per cent of the assets held by the participant groups. 213 The result must be incorporated into the summary overview. 7.2.1.6 Part VI – Administration of retirement provision schemes As this business cannot be conducted by funeral expenses funds pursuant to section 218 (2) of the Insurance Supervision Act in conjunction with section 1 of the (2) of the Insur￾ance Supervision Act, only small life insurance undertakings and Pensionskassen can re￾port amounts here, unless otherwise specified below. 214 With these transactions, the amount of the solvency capital requirement is based on the scope of the collective investment scheme managed (assets of the pension scheme) or on the net administrative expenses. 215 A distinction must be made here as follows: Item (1.1) - Transactions involving the management of retirement provision schemes where the company assumes the investment risk - 216 For these transactions, the solvency capital requirement is calculated in accordance with the information in “Part I (1) first result for endowment insurance and annuity insurance” (section 14 in conjunction with section 9 (1) sentence 1 no. 1 of the Capital Resources Regulation). As Pensionskassen are not permitted to engage in these transactions, only small life insur￾ance undertakings can report amounts here. Item (1.2) - Transactions involving the management of retirement provision schemes where the company bears no investment risk, the term of the management contract and the determination of administrative expenses exceed five years - 217 Section 14 (2) in conjunction with section 9 (1) sentence 1 no. 1 of the Capital Resources Regulation applies to these transactions, provided that 4 per cent is replaced by 1 per cent; otherwise, the calculation is as described in the explanations for “Part I (1) first result for endowment and pension insurance policies”. Item (5) - Transactions involving the management of retirement provision schemes where the company bears no investment risk and where the administrative expenses are not fixed for more than five years - 218 The solvency capital requirement to be recognised for these transactions is the amount of the net administrative expenses attributable to these transactions in the last financial year. Net administrative expenses are understood to mean solely those expenses actually in￾curred for the administration of the retirement provision scheme. The amount charged to the retirement provision scheme is of no relevance here. 219 If the managing insurance undertaking provides managed assets as a contribution to a life insurance contract (direct insurance or reinsurance contracts), the managed fund that is

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 45 significant for the purposes of calculating the solvency capital requirement is reduced mu￾tatis mutandis. The solvency capital requirement for the life insurance business must be calculated in accordance with parts I to III. 220 The process used to determine the amounts stated under (1), (2) and (5) must be set out in an appendix to this item (as part of the qualitative section of the reporting template pursuant to section 19b (2) sentence 1 of the Capital Resources Regulation). 221 The result must be incorporated into the summary overview. 7.2.2 Small health insurance undertakings reporting template F.704.01 ZE0540 to ZE1040 7.2.2.1 First result - premium index ZE0540 to ZE0640 Item (1.3) - Significant gross contributions - 222 Pursuant to section 3 (1) of the Capital Resources Regulation, the premium index is calcu￾lated on the basis of the gross premiums written or earned. The higher amount is the de￾termining factor. This must be broken down in ZE0560 into SP0010 (according to the technical principles of life insurance) and SP0020 (according to the technical principles of indemnity insurance). Item (1.4) - Amount up to 61.3 million euros * 0.18 - 223 Item (1.4.2) has not been applicable since the introduction of Solvency II on 1 January 2016 224 Entries must now only be made for items (1.4.1) and (1.4.3). Item (1.5) - Ratio of net to gross claims incurred - 225 This ratio must be determined using reporting template F.200.01 (income statement for the entire insurance business). Gross expenses must be reported in ZE0330 SP0040. In or￾der to determine the net expenses, the amount reported in ZE0870 SP0030 must be de￾ducted from this. Pursuant to section 3 (3) sentence 1 of the Capital Resources Regulation, the average value of the last three financial years must be calculated. If this calculation results in a ratio lower than 0.50, then 0.50 must be stated in accordance with section 3 (3) sentence 2 of the Capital Resources Regulation. The ratio must be entered in reporting template F.704.01 ZE0600 SP0010 and SP0020. 7.2.2.2 Second result - Claims index Page ZE0800 to ZE1040 Items (2.1.1), (2.1.2), (2.2.1), (2.2.2), (2.5.1) and (2.5.2) - Gross claims incurred - 226 In accordance with section 4 (1) sentence 2 of the Capital Resources Regulation, the refer￾ence period for these items is the last three financial years, i.e. the total values from the last three financial years must be entered in the corresponding fields from line ZE0800 to line ZE1040 of reporting template F.704.01. Item (2.6) - Annual average 1/3 of (2.5.1) or (2.5.4) -

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 46 227 The fraction corresponding with the reference period must be calculated. Items (2.6.1) and (2.6.2) - Amount up to 42.9 million euros * 0.26 - 228 Item (2.6.2) has not been applicable since the introduction of Solvency II on 1 January 2016. 229 Entries must now only be made for items (2.6.1) and (2.6.3). Item (2.7) - Ratio of net to gross claims incurred - 230 See the information for item (1.5) of reporting template F.704.01 ZE0540 to ZE0640. 231 The ratio must be entered in ZE1000 SP0010 and SP0020. 7.2.3 Small property/casualty insurance undertaking reporting template F.705.01 ZE0540 to ZE1000 7.2.3.1 First result - premium index ZE0540 to ZE0740 Item (1.3) - Significant gross contributions - 232 Pursuant to section 3 (1) of the Capital Resources Regulation, the premium index is calcu￾lated on the basis of the gross premiums written or earned. The higher amount is the de￾termining factor in each case. This must be broken down in ZE0550 into SP0010 (health insurance similar to life insurance) and SP0030 (indemnity insurance). Item (1.4) - Total amount of cancelled premiums and of taxes and fees - 233 Pursuant to section 3 (2) of the Capital Resources Regulation, only taxes and fees attribut￾able to premiums and premiums cancelled in the last financial year may be deducted. Taxes on the income, earnings or assets of insurance undertakings must therefore be dis￾regarded. In accordance with the purpose of this regulation, premiums may only be re￾duced by taxes that are recognised as income as a risk-free component of premiums that can be readily determined, but which are in turn payable by the undertaking as tax liabili￾ties. These prerequisites are currently only met by the fire protection tax (see section 3 (1) of the Fire Protection Tax Act). The amount to be entered is therefore taken from report￾ing template F.200.01 (for the entire insurance business) ZE0610 SP0030. 234 The cancelled contributions cannot be deducted separately because they have already been offset in the amounts shown in item (1.3) (section 36 (2) no. 2 of the Regulation on Insurance Accounting). 235 Nor can any fees be deducted. Membership premiums to associations and community in￾stitutions in the insurance industry (e.g. solidarity and traffic accident victim assistance) are not considered to be fees because they are not paid to utilise a public-sector institu￾tion. The fees and charges payable to BaFin may not be taken into account because the amount of these is independent of the individual insurance contract and the premium re￾sulting from this.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 47 Item (1.5) - Subdivision into amounts up to 61.3 million euros and above 61.3 million eu￾ros - 236 Item (1.5.2) has not been applicable since the introduction of Solvency II on 1 January 2016. 237 Entries must now only be made for items (1.5.1) and (1.5.3). Item (1.6.1) - Net claims incurred - 238 The amounts to be entered in SP0010 to SP0030 arise from reporting template F.200.01 (for the entire insurance business) ZE0330 SP0040 plus ZE0450 SP0040 less reporting tem￾plate F.200.01 ZE0870 SP 0030 and ZE0950 SP0030. Item (1.6.2) - Gross claims incurred - 239 The amounts to be entered in SP0010 to SP0030 are taken from reporting template F.200.01 (for the entire insurance business) ZE0330 SP0040 plus ZE0450 SP0040. 7.2.3.2 Second result - Claims index ZE0800 to ZE1000 Item (2.1) - Gross claims incurred during the reference period - 240 The reference period is generally three financial years. According to section 4 (2) sentence 1 of the Capital Resources Regulation, undertakings whose business mainly comprises storm, hail or frost insurance must use the average claims incurred over the last seven fi￾nancial years as their claims index. 241 The amounts to be entered arise from reporting template F.200.01 ZE0330 SP0040 plus reporting template F.200.01 ZE0450 SP0040. Item (2.2) - Subdivision into amounts up to 42.9 million euros and above 42.9 million eu￾ros - 242 Item (2.2.2) has not been applicable since the introduction of Solvency II on 1 January 2016. 243 Entries must now only be made for items (2.2.1) and (2.2.3). 7.2.4 Pensionsfonds reporting template F.706.01 ZE0290 to ZE0670 7.2.4.1 Part I – The pension fund bears the investment risk itself 244 The premium reserve and the unearned premiums less the cost shares (pension fund technical provisions calculated actuarially) must be recognised here, to the extent that the pension fund bears the investment risk itself pursuant to section 25 (4) of the Regulation on the Supervision of Pensionsfonds. 245 For the most part, the amounts concerned cannot be taken directly from the balance sheet because the corresponding items are not broken down by risk and because partial amounts (T) must be used. The calculation of the absolute amounts to be specified under

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 48 (1) and (2) must therefore be presented in an appendix to this item (as a component of the qualitative part of the reporting template pursuant to section 42b (2) sentence 1 of the Regulation on the Supervision of Pensionsfonds). 246 The amounts listed in the following items of reporting template F.800.01 must be used as a basis in each case: 247 to the extent that this relates to the sum to be reported under (1) and in the denominator of the quotient under (3):

• Gross premium reserve for the pension fund business written (ZE0820 SP0030 and T ZE0910 SP0030).
• Gross provision for unearned premiums arising from the direct pension fund business written less cost components - (T ZE0810 SP0030). 248 to the extent that this relates to the sum to be reported under (2) and in the numerator of the quotient under (3):
• Net premium reserve for the direct pension fund business written (ZE0820 SP0030 less ZE0140 SP0030 and T ZE0910 SP0030 less ZE0140 SP0030 and T ZE0220 SP0030).
• Net unearned premiums from the direct pension fund business written - less cost com￾ponents - (T ZE0810 SP0030 less T ZE0130 SP0030). 249 The ratio of the remaining net amounts to the remaining gross amounts must be calcu￾lated under (2). 250 Finally, the capital exceeding the present value of guarantees must be disclosed under (6), insofar as the pension plan permits use of this, which may be offset against up to 75 per cent of (5) in accordance with section 25 (2) of the Regulation on the Supervision of Pen￾sionsfonds. 251 The amount of the result (7) must be incorporated into the summary overview. 7.2.4.2 Part II – The pension fund does not assume any investment risk itself, and the sur￾charge for administrative expenses included in the premium is fixed for a pe￾riod of more than five years 252 The premium reserve and the unearned premiums less the cost components (pension fund technical provisions calculated actuarially) must be recognised here, to the extent that the pension fund does not assume any investment risk in accordance with section 25 (4) of the Regulation on the Supervision of Pensionsfonds and the surcharge for adminis￾trative expenses included in the premium is fixed for a period of more than five years. 253 For the most part, these amounts cannot be taken directly from the balance sheet be￾cause the corresponding items are not broken down by risk and because partial amounts (T) must be used. The calculation of the absolute amounts to be specified under (1) and (2) must therefore be presented in an appendix to this item (as a component of the quali￾tative part of the reporting template pursuant to section 42b (2) sentence 1 of the Regula￾tion on the Supervision of Pensionsfonds).

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 49 254 The amounts listed in the following items of reporting template F.800.01 must be used as a basis in each case: 255 to the extent that this relates to the sum to be reported under (1) and in the denominator of the quotient under (3):

• gross premium reserve for the pension fund business written (T ZE0910 SP0030).
• gross provision for unearned premiums arising from the direct pension fund business written less cost components - (T ZE0810 SP0030). 256 to the extent that this relates to the sum to be reported under (2) and in the numerator of the quotient under (3):
• net premium reserve for the direct pension fund business written (T ZE0910 SP0030 less T ZE0220 SP0030),
• net unearned premiums from the direct pension fund business written - less cost com￾ponents - (T ZE0810 SP0030 less T ZE0130 SP0030). 257 The ratio of the remaining net amounts to the remaining gross amounts must be calcu￾lated under (3). 258 The amount of the result (5) must be incorporated into the summary overview. 7.2.4.3 Part III – The pension fund does not assume any investment risk and the surcharge for administrative expenses included in the premium is fixed for a maximum of five years 259 The net administrative expenses must be disclosed here that were incurred in the last fi￾nancial year and are attributable to the corresponding contracts for which the pension fund does not assume any investment risk in accordance with section 25 (4) of the Regu￾lation on the Supervision of Pensionsfonds and for which the surcharge for administrative expenses included in the premium is fixed for a maximum of five years. 260 The amounts listed in the following items of reporting template F.810.01 must be used as a basis: 261 administrative expenses (T ZE0550 SP0030 and T ZE0140 SP0010). 262 The amount of the result (2) must be incorporated into the summary overview. 7.2.4.4 Part IV – Risk capital 263 The risk capital pursuant to section 25 (3) of the Regulation on the Supervision of Pen￾sionsfonds must be stated here. 264 As the amounts to be disclosed are not directly apparent from the internal accounting, their calculation must be presented in an appendix (as part of the qualitative part of the reporting template in accordance with section 42b (2) sentence 1 of the Regulation on the Supervision of Pensionsfonds). 265 The amount of the result (5) must be incorporated into the summary overview.

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 50 7.3 Summary overview Small life insurance undertakings (reporting template F.701.01 ZE1310 to ZE1470), Pen￾sionskassen (reporting template F.702.01 ZE1310 to ZE1470), funeral expenses funds (re￾porting template F.703.01 ZE1310 to ZE1470), small health insurance undertakings (re￾porting template F.704.01 ZE1050 bis ZE1260), small property/casualty insurance under￾takings (reporting template F.705.01 ZE1050 to ZE1260) as well as Pensionsfonds (report￾ing template F.706.01 ZE0790 to ZE0910). Item (9) for reporting template F.701.01 - Minimum amount of the minimum capital re￾quirement - 266 In accordance with section 15 (1) and (2) of the Capital Resources Regulation, the mini￾mum capital requirement is at least 3.7 million euros. The minimum amount that the mini￾mum capital requirement can be is reduced by 25 per cent for mutual societies with varia￾ble additional payment liabilities. Item (9) for reporting templates F.702.01 and F.703.01 - Minimum amount of the mini￾mum capital requirement - 267 In accordance with section 18 (1) and (2) of the Capital Resources Regulation, the mini￾mum capital requirement is at least 3 million euros. The lowest amount that the minimum capital requirement can be is reduced by 25 per cent for mutual societies with variable ad￾ditional payment liabilities. 268 Pursuant to section 18 (3) of the Capital Resources Regulation, there is no such minimum amount of the minimum capital requirement for a Pensionskasse or funeral expenses fund that has the legal form of a mutual society and whose annual premiums or contributions have not exceeded an amount of 5 million euros in three consecutive years. Item (5) for reporting templates F.704.01 and F.705.01 - Minimum amount of the mini￾mum capital requirement - 269 Pursuant to section 6 (1) and (2) of the Capital Resources Regulation, the minimum capital requirement is at least 2.5 million euros. The minimum capital requirement for mutual so￾cieties with variable additional payment liabilities is at least 600,000 euros. 270 Pursuant to section 7 of the Capital Resources Regulation, the minimum amount of the minimum capital requirement is not applicable to small mutual associations whose mem￾orandum or articles of association permit supplementary contributions or benefit reduc￾tions and whose annual premiums do not exceed 1.9 million euros. 271 Pursuant to section 6 (3) of the Capital Resources Regulation, own funds pursuant to sec￾tion 214 (1) sentence 1 no. 8 a and b of the Insurance Supervision Act do not count to￾wards the minimum capital requirement. Item (7) for reporting template F.706.01 - Minimum amount of the minimum capital re￾quirement -

Circular 04/2025 (Insurance and Pension Funds Supervision), Solvency of small insurance undertakings, funeral expenses funds, Pensionskassen and Pensionsfonds 51 272 Pursuant to section 26 (2) and (3) of the Regulation on the Supervision of Pensionsfonds, the minimum amount of the minimum capital requirement is 3 million euros. The mini￾mum amount of the minimum capital requirement is reduced by one quarter for mutual pension fund societies. Items (11) to (17) for reporting templates F.704.01 and F.705.01 - Additional calcula￾tion pursuant to section 2 (2) of the Capital Resources Regulation - 273 The corresponding data must in all cases be entered in ZE1180 to ZE1200 of reporting templates F.704.01 and F.705.01 in order to review whether the condition under section 2 (2) of the Capital Resources Regulation is met. If this calculation results in a solvency capi￾tal requirement for the financial year that is lower than that of the previous year (i.e. the amount in ZE1200 SP0010 is greater than zero), the following fields in ZE1220 to ZE1260 must be completed. In ZE1260 SP0020 the overcoverage/shortfall ratio of the newly calcu￾lated required solvency capital requirement from ZE1250 SP0010 must be stated with the total own funds.