Instruction No. 2022-I-24 of 14 December 2022 on Annual Documents to be Submitted by Insurance Undertakings and Additional Professional Pension Schemes

PRUDENTIAL CONTROL AND RESOLUTION AUTHORITY

Instruction No. 2022-I-24 on Annual Documents to be Submitted by Insurance Undertakings and Additional Professional Pension Schemes Subject to Article 29 of Law No. 2019-1147 on Energy and Climate and Article 4 of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on Sustainability Disclosure in the Financial Sector

The Prudential Control and Resolution Authority, Having regard to Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial sector; Having regard to Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment and amending Regulation (EU) 2019/2088; Having regard to Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and presentation of information that undertakings subject to Article 19a or Article 29a of Directive 2013/34/EU must publish regarding their environmentally sustainable economic activities, as well as the methodology to comply with this disclosure obligation; Having regard to Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council with the technical screening criteria determining the conditions under which an economic activity is considered to substantially contribute to climate change mitigation or adaptation and whether that economic activity causes no significant harm to any of the other environmental objectives; Having regard to Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 supplementing Regulation (EU) 2019/2088 of the European Parliament and of the Council by laying down regulatory technical standards detailing the content and presentation of information relating to the "do no significant harm" principle and specifying the content, methods and presentation for information relating to sustainability indicators and adverse sustainability impacts, as well as the content and presentation of information relating to the promotion of environmental or social characteristics and sustainable investment objectives in pre-contractual documents, on websites and in periodic reports; Having regard to Decree No. 2021-663 of 27 May 2021 taken in application of Article L. 533-22-1 of the Monetary and Financial Code; Having regard to the Monetary and Financial Code, in particular Articles L. 533-22-1 and D. 533-16-1 and Articles L. 612-2 and L. 612-24; Having regard to the Insurance Code, in particular Articles L. 310-1-1-3 and L. 385-7-2; Having regard to the Mutual Code, in particular Article L. 114-46-3; Having regard to the Social Security Code, in particular Articles L. 931-3-8 and L. 942-6-1; Having regard to the opinion of the Prudential Affairs Advisory Committee of 29 November 2022,

DECIDES

Article 1
The following entities are subject to this Instruction:
a) Undertakings subject to the Insurance Code that, in direct insurance, enter into commitments the fulfillment of which depends on the duration of human life, commit to paying a capital sum in the event of marriage or the birth of children, or raise savings for capitalization purposes and enter into determined commitments for that purpose; b) Reinsurance undertakings with their registered office in France and authorized under the conditions defined in Article L. 321-1-1 of the Insurance Code that reinsure commitments referred to in point 1 of Article L. 310-1 of the same Code; c) Undertakings subject to the Mutual Code that, in direct insurance, enter into commitments the fulfillment of which depends on the duration of human life, commit to paying a capital sum in the event of marriage or the birth of children, or raise savings for capitalization purposes and enter into determined commitments for that purpose, or that reinsure these same commitments; d) Provident institutions and their unions that, in direct insurance, enter into commitments the fulfillment of which depends on the duration of human life, commit to paying a capital sum in the event of marriage or the birth of children, or raise savings for capitalization purposes and enter into determined commitments for that purpose, or that reinsure these same commitments; e) Additional professional pension schemes, namely the additional professional pension funds referred to in Article L. 381-1 of the Insurance Code, the additional professional pension mutuals or unions referred to in Article L. 214-1 of the Mutual Code, and the additional professional pension institutions referred to in Article L. 942-1 of the Social Security Code.

Article 2
I. - The entities referred to in Article 1 shall submit to the Prudential Control and Resolution Authority, within six months following the closing of the annual financial year, the annual report provided for in point V of Article D. 533-16-1 of the Monetary and Financial Code.
II. - For the presentation of the information provided for by Article D. 533-16-1 of the Monetary and Financial Code within the report, the entities referred to in Article 1 shall apply:
1° the standard template provided for in Annex A of this Instruction if their total balance sheet does not exceed €500 million; 2° the standard template provided for in Annex B of this Instruction if their total balance sheet exceeds €500 million; 3° the standard template provided for in Annex F of this Instruction, if their total balance sheet exceeds €500 million and they are subject to the obligations specified in point I of Article 5.
III. – 1° For the presentation of information within each section of the report, the entities shall indicate, in accordance with point 2° of II of Article D. 533-16-1 of the Monetary and Financial Code, the information applicable to them among the following:
a) The percentage share and euro amount of outstanding amounts or the balance sheet; b) The scope of entities and financial products to which the consideration of environmental, social, and governance criteria applies; c) The share of estimated data and actual data, on the total outstanding amounts managed by the entity and, where applicable, on the total outstanding amounts of the relevant financial product; d) When a timeline is set, the effective date of the commitments; e) When a quantitative analysis is necessary, the methodologies and databases on which the analysis is based, specifying where applicable if the data is freely accessible, the name of the methodology or data provider, the risks of double counting and the measures taken to avoid them, at the entity or financial product level. 2° For the presentation of the improvement plan referred to in point 9° of III of Article D. 533-16-1 cited above, the entities shall provide the expected information within each of the sections provided for in Annex A, B, and Part I of Annex F of this Instruction.

Article 3
I. – In accordance with point a of 5° of III of Article D. 533-16-1 of the Monetary and Financial Code, the entities referred to in Article 1 whose total balance sheet exceeds €500 million shall also submit to the Prudential Control and Resolution Authority information relating to the share of outstanding amounts concerning activities in compliance with the technical screening criteria defined in the delegated acts relating to Articles 10 to 15 of Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment.
II. – The aforementioned entities shall submit the following information, in addition to the narrative reports mentioned in Article 2:
1° Table 1 of Annex C, during the transitional period, until 31 December 2023, in accordance with the provisions of paragraph 3 of Article 10 of Delegated Regulation (EU) 2021/2178 of 6 July 2021; 2° Table 2 of Annex C, from 1 January 2024, for entities also subject to the provisions of Article 8 of Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment; 3° Table 3 of Annex C, or voluntarily Table 2, from 1 January 2024, for entities that are not subject to the provisions of Article 8 of Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment.
III. – On a voluntary basis, the entities referred to in point 1 may also provide Table 4 of Annex C.
In this context, they shall report ratios based on estimates of the alignment of their counterparties with the criteria of Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment.
IV. – For the implementation of the provisions of II and III of this Article, the entities shall comply with the provisions of Delegated Regulations (EU) 2021/2178 and 2021/2139 supplementing Regulation (EU) 2020/852 of 18 June 2020 and take into account the explanations provided by the European Commission in its draft notice of 2 February 2022 (question 18).

Article 4
The entities referred to in Article 1 whose total balance sheet exceeds €500 million shall submit to the Prudential Control and Resolution Authority, separately from the report mentioned in Article 2:

• the quantitative indicators derived from Article D. 533-16-1 of the Monetary and Financial Code in accordance with the model defined in Annex D;
• a mapping table between the content of the reports and the provisions of Article D. 533-16-1 of the Monetary and Financial Code, including a tracking of improvement plans in accordance with the model defined in Annex E.

Article 5
Among the entities referred to in Article 1, those that offer insurance-based investment products, i.e., insurance products with a maturity or surrender value that is wholly or partially exposed, directly or indirectly, to market fluctuations, or that reinsure these same products, are subject, as applicable, to the following obligations:
I - They shall submit to the Prudential Control and Resolution Authority, within six months following the closing of the annual financial year, the declaration on principal adverse impacts of investment decisions on sustainability factors referred to in Article 4 of Delegated Regulation (EU) 2022/1288 of 6 April 2022 when they meet one of the following conditions:
a) They take into account the principal adverse impacts of investment decisions on sustainability factors in application of point a) of 1 of Article 4 of Regulation (EU) 2019/2088 of 27 November 2019; b) They exceed the criterion of an average of five hundred employees during the financial year at the balance sheet closing date; c) They are parent undertakings of a large group as referred to in point 7 of Article 3 of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on annual financial statements, consolidated financial statements and related reports of certain types of undertakings, exceeding, at the balance sheet closing date of the group, on a consolidated basis, the criterion of an average of five hundred employees during the financial year. The entities referred to in the first paragraph that are subject to the provisions of Article 2 shall complete, in a single document, the report provided for in point V of Article D. 553-16-1 of the Monetary and Financial Code with information relating to the principal adverse impacts of investment decisions on sustainability factors. For the presentation of the information to be provided, they shall apply the standard template provided for in Annex F of this Instruction.
II. – The entities that meet one of the conditions listed in I shall submit the indicators concerning the principal adverse impacts of investment decisions provided for in point 1 of Article 6 of Delegated Regulation (EU) 2022/1288 of 6 April 2022 in accordance with the model defined in Annex G of this Instruction.
In accordance with the provisions of paragraph 1 of Article 7 of the aforementioned Delegated Regulation (EU) 2022/1288, they shall explain in the declaration on principal adverse impacts of investment decisions on sustainability factors the methods used to select the indicators from Tables 2 and 3 of Annex G. In particular, they shall explain how these methods take into account the probability of occurrence and the severity of these principal adverse impacts, including their potentially irreversible nature.
III. – The entities that do not take into account the adverse impacts of investment decisions on sustainability factors in application of point b) of 1 of Article 4 of Regulation (EU) 2019/2088 of 27 November 2019 shall submit to the Prudential Control and Resolution Authority, within six months following the closing of the annual financial year, the declaration referred to in Article 12 of Delegated Regulation (EU) 2022/1288 of 6 April 2022 stating that they do not take into consideration the adverse impacts of their investment decisions on sustainability factors, the reasons associated therewith, whether the entity intends to take into consideration these adverse impacts and, if so, by what date.

Article 6
Mutuals and unions governed by Book II of the Mutual Code that have concluded a substitution agreement in accordance with Article L. 211-5 of the Mutual Code are not subject to the obligation to transmit the documents mentioned in the preceding Articles. These documents must, however, be communicated by the mutuals or unions that have substituted for them by electronic transmission in a machine-readable format.

Article 7
I. - The annual report provided for in point V of Article D. 533-16-1 of the Monetary and Financial Code shall be provided in a machine-readable format, and Annexes C, D, E, and G shall be provided in Excel or compatible format.
II. - In the context of their submission to the Prudential Control and Resolution Authority, the information described in Articles 2 to 4 shall be electronically signed in accordance with the conditions set out in the Prudential Control and Resolution Authority Instructions No. 2015-I-18 and No. 2017-I-12.
In the event that the presented information must be transmitted as several separate machine-readable documents, all such documents must be signed.
III. - Other technical and methodological submission requirements are defined by the current ACPR Instructions.

Article 8
This Instruction shall enter into force on the day following its publication.
Paris, 14 December 2022
For the Insurance Sub-Committee
The President
Jean-Paul FAUGÈRE