Order on Proportional Reduction of Regular Supervisory Reporting for Group 1 Insurance Undertakings

Order on Proportional Reduction of Regular Supervisory Reporting for Group 1 Insurance Undertakings and Others¹)

Pursuant to Section 310 of Act No. 718 of 13 June 2023 on Insurance Undertakings, it is hereby prescribed:

Section 1. This Order applies to regulations on regular supervisory reporting adopted by the European Commission pursuant to 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), as amended inter alia by Directive 2014/51/EU of the European Parliament and of the Council of 16 April 2014.

Paragraph 2. In cases covered by Paragraph 1, the Financial Supervisory Authority may make a decision to limit supervisory reporting in accordance with Sections 2-4.

Section 2. Where requirements for supervisory reporting are set at intervals shorter than one year, the Financial Supervisory Authority may, upon application, decide to limit regular supervisory reporting if

1. the reporting of this information would be disproportionately burdensome in relation to the nature, scope, and complexity of the risks associated with the company's business, and
2. the information is reported at least once a year.

Paragraph 2. For Group 1 insurance undertakings that are part of a group, a decision may not be made under Paragraph 1, unless the undertaking can demonstrate that the frequency of regular supervisory reporting is inappropriate in relation to the nature, scope, and complexity of the risks associated with the group's business.

Paragraph 3. A decision under Paragraph 1 may only be made for Group 1 insurance undertakings that, according to the calculation method described in Annex 1, collectively account for no more than 20% of the Danish market. A company whose market share results in exceeding the 20% limit cannot obtain a reduction under Paragraph 1. The 20% limit for companies writing non-life insurance is calculated according to points 1 and 2 of Annex 1, while the 20% limit for companies writing life insurance is calculated according to points 3 and 4 of Annex 1.

Paragraph 4. A decision under Paragraph 1 may be made for reporting requirements at the group level if all Group 1 insurance undertakings in the group have obtained a reduction of reporting requirements in accordance with Paragraph 1.

Section 3. The Financial Supervisory Authority may, upon application, decide to exempt from the requirement for post-by-post reporting if

1. the reporting of this information would be disproportionately burdensome in relation to the nature, scope, and complexity of the risks associated with the company's business,
2. the reporting of the information in question is not necessary for effective supervision of the company,
3. the exemption does not undermine the stability of the financial systems in the Union concerned, and
4. the company can provide the information upon request from the Financial Supervisory Authority.

Paragraph 2. For Group 1 insurance undertakings that are part of a group, a decision may not be made under Paragraph 1, unless the undertaking can demonstrate that post-by-post reporting is inappropriate in relation to the nature, scope, and complexity of the risks associated with the group's business, and taking into account the objective of financial stability.

Paragraph 3. A decision under Paragraph 1 may only be made for Group 1 insurance undertakings that, according to the calculation method described in Annex 1, collectively account for no more than 20% of the Danish market. A company whose market share results in exceeding the 20% limit cannot obtain an exemption under Paragraph 1. The 20% limit for companies writing non-life insurance is calculated according to points 1 and 2 of Annex 1, while the 20% limit for companies writing life insurance is calculated according to points 3 and 4 of Annex 1.

Paragraph 4. A decision under Paragraph 1 regarding exemption from the requirement for post-by-post reporting at the group level may be made if all Group 1 insurance undertakings in the group have obtained an exemption in accordance with Paragraph 1.

Section 4. In assessing whether the reporting of information would be disproportionately burdensome in relation to the nature, scope, and complexity of the company's or group's risks, pursuant to Sections 2 and 3, the following factors must be taken into account at a minimum:

1. The extent of the company's premiums, insurance provisions, and assets.
2. The volatility of the insurance claims and benefits covered by the company.
3. The market risks arising from the company's investments.
4. The degree of risk concentrations.
5. The total number of life and non-life insurance classes for which permission has been granted.
6. The possible effects of the management of the company's assets on financial stability.
7. The company's systems and structures for reporting information for supervisory purposes and the policy for reporting information to the Financial Supervisory Authority, which Group 1 insurance undertakings are required to have pursuant to the Order on Management and Control of Insurance Undertakings, etc.
8. The appropriateness of the company's management system.
9. The level of capital base covering the Solvency Capital Requirement and the Minimum Capital Requirement.
10. Whether the company is a captive insurance or reinsurance undertaking that only covers risks associated with the industrial or commercial group to which the company belongs.

Section 5. This Order enters into force on 1 January 2025.

Paragraph 2. Order No. 791 of 23 June 2016 on Proportional Reduction of Regular Supervisory Reporting for Group 1 Insurance Undertakings and Others is repealed.

Ministry of Business Affairs, 6 December 2024 Morten Bødskov / Julie Sonne

6 December 2024. No. 1533.

¹) The Order contains provisions implementing parts of 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), Official Journal of the European Communities 2009, No. L 335, page 1, and Directive 2014/51/EU of the European Parliament and of the Council of 16 April 2014 amending Directives 2003/71/EC and 2009/138/EC and Regulations (EC) No 1060/2009, (EU) No 1094/2010 and (EU) No 1095/2010 as regards the powers conferred on the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority), Official Journal of the European Union 2014, No. L 153, page 1.

Statutory Gazette A 2024 Published on 14 December 2024 6 December 2024. No. 1533. Ministry of Business Affairs, Financial Supervisory Authority, file no. 24-019104 CQ003035