NBB_2016_12 / Guidelines on the communication of information and on information for the public

NBB_2016_12 – 25 April 2016 Circular – Page 1/16 boulevard de Berlaimont 14 – BE-1000 Brussels tel. +32 2 221 38 12 – fax + 32 2 221 31 04 company number: 0203.201.340 RPM Brussels www.bnb.be Circular Brussels, 25 April 2016 Reference: NBB_2016_12 your contact:
Patricia Kaiser tel. +32 2 221 34 31 – fax +32 2 221 31 04 patricia.kaiser@nbb.be Guidelines on the communication of information and on information for the public Scope Belgian insurance or reinsurance undertakings.
Insurance or reinsurance undertakings that are part of a Belgian group within the meaning of Article 339, 2° of the Law of 13 March 2016 on the status and supervision of insurance or reinsurance undertakings.
Belgian entities that are part of a Belgian financial conglomerate within the meaning of Article 340, 1° of the aforementioned Law of 13 March 2016.
Branches of third-country entities carrying on insurance [or reinsurance] activities in Belgium.
This circular applies to mutual insurance companies defined in Article 15, 79° of the aforementioned Law of 13 March 2016. For these entities, 'the Bank' should be replaced by 'the Office for the Supervision of Mutual Funds and National Unions of Mutual Funds' as defined in Article 15, 84° of the same Law. This circular does not apply to insurance undertakings referred to in Articles 275, 276 or 294 of the aforementioned Law of 13 March 2016. Summary/Objectives This circular aims to explain the Bank's guidelines regarding the communication of information and information for the public. Legal References The Law: The Law of 13 March 2016 on the status and supervision of insurance or reinsurance undertakings. Regulation 2015/35: Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II).

Circular – Page 2/16 NBB_2016_12 – 25 April 2016 Structure
I. Objectives
II. Definitions
III. Supplementary Information
IV. Entry into Force
V. Guidelines on the communication of information and on information for the public
Madam,
Sir,
I. Objectives
These guidelines relate to Articles 95 to 100, 312 to 316, 399 to 406, 422 to 426 as well as Article 77 § 8 and Articles 290 to 298, 305 to 311, 359 and 365 as well as Annex XX of Regulation 2015/35 specifying the information that should be provided to supervisory authorities in the Regular Supervisory Report (RSR), in the communication of quantitative information for supervisory purposes, the predefined events and the information that should be made public in the Solvency and Financial Condition Report (SFCR). The guidelines provide additional details on the information that supervisory authorities should expect from insurance and reinsurance undertakings, participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies regarding:
a) the content of the SFCR as specified in Title I, Chapter XII, Section 1 of Regulation 2015/35; b) the content of the RSR as specified in Title I, Chapter XII, Section 1 of Regulation 2015/35; c) the validations to be applied to annual and quarterly quantitative models, complementing the information presented in the RSR, as defined in the implementing technical standards on models to be used for the communication of information to supervisory authorities; d) the communication of information in the event of predefined events, as defined in the Law; e) the company's processes regarding information for the public and the communication of information for supervisory purposes in accordance with the requirements of the Law. The objective of the guidelines on the content of the SFCR and RSR is to harmonize information for the public and the communication of information for supervisory purposes, insofar as it is necessary to further clarify Regulation 2015/35, by specifying the minimum content expected from certain sections of the reports. Unless otherwise stated, the guidelines for undertakings apply to insurance and reinsurance undertakings, branches of third-country insurance undertakings and participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies.

NBB_2016_12 – 25 April 2016 Circular – Page 3/16 Where applicable, the sections of the guidelines dealing with both the SFCR and the RSR apply to branches established in the Union and belonging to insurance or reinsurance undertakings whose registered office is located outside the Union (third-country branches) when they establish their RSR (given that third-country branches are not required to establish an SFCR and that the RSR for insurance and reinsurance undertakings is complementary to the SFCR). Furthermore, the guidelines concerning groups apply to participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies when they establish the group SFCR or the company SFCR and the group RSR. Unless otherwise stated, these guidelines apply to all undertakings regardless of whether they use the standard formula, an internal model or a partial internal model to calculate the Solvency Capital Requirement (SCR). The guidelines on predefined events, applying to both individual undertakings and groups, aim to further clarify the requirements set out in Article 312, § 2, 1° and 422, § 2, al. 1st and Article 390 § 2 of the Law. The application of these guidelines should take into account the principle of materiality, as defined in Articles 291 and 305 of Regulation 2015/35.
II. Definitions
In the absence of a definition in this circular, the terms have the meaning defined in the legislative and regulatory acts referred to therein.
III. Supplementary Information
This circular falls within the framework of the harmonized implementation of the principles 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), as determined by the guidelines of the European Insurance and Occupational Pensions Authority. Undertakings may, for information purposes, consult these guidelines at the following address: https://eiopa.europa.eu/publications/eiopa-guidelines.
IV. Entry into Force
The guidelines apply from 23 March 2016.
Field Code Changed

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V. Guidelines on the communication of information and on information for the public
SECTION I – SOLVENCY AND FINANCIAL CONDITION REPORT (SFCR)
A. Activity and results
Guideline 1 - Activity
In the 'A.1 Activity' section of the SFCR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should indicate at least the following information concerning their activity:
a) the name and location of the legal or natural persons holding directly or indirectly qualifying holdings in the undertaking (including the parent entity or the immediate or superior natural person), the share of the holding held and, if different, the share of voting rights held; b) the list of significant related undertakings, including the name, legal form, country, share of the holding held and, if different, the share of voting rights held; c) the simplified structure of the group. Guideline 2 - Results of other activities In the 'A.4. Results of other activities' section of the SFCR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should generally describe the lease agreements for each significant lease contract, indicating separately finance leases and operating leases. B. Governance system Guideline 3 - Governance structure In the 'B.1. General information on the governance system' section of the SFCR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should explain the provisions enabling key functions to have the authority, resources and operational independence necessary to carry out their tasks and to report to the administrative, management or supervisory body of the insurance or reinsurance undertaking and to advise it. Guideline 4 - Risk management system for users of internal models In the 'B.3 Risk management system, including internal assessment of risk and solvency' section of the SFCR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings using a partial or full internal model to calculate the SCR, should describe at least the following information concerning the governance of the internal model:
a) the responsible functions and specific committees, if any, their main tasks, positions and responsibilities; b) the manner in which existing committees interact with the administrative, management or supervisory body to comply with the requirements set out in Article 170 of the Law ; c) any significant change to the internal governance model occurring during the reporting period;

NBB_2016_12 – 25 April 2016 Circular – Page 5/16 d) the description of the validation process (used to ensure monitoring of the results and the permanent adequacy of the internal model).
C. Risk profile
Guideline 5 - Underwriting risk
In the 'C.1 Underwriting risk' section of the SFCR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should, regarding the use of securitization vehicles, indicate whether they are approved under Article 242 of the Law, identify the risks transferred to them and explain how the principle of full coverage is assessed consistently. D. Valuation for solvency purposes Guideline 6 – Assets – Information on aggregation by category In the 'D.1 Assets' section of the SFCR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should, when they aggregate assets into significant categories to describe the valuation basis applied to them, take into account the nature, function, risk and materiality of these assets. Categories other than those used in the Solvency II balance sheet model, as defined in the implementing technical standard on procedures, formats and models for the solvency and financial condition report, should only be used if the undertaking is able to demonstrate to the supervisory authority that another presentation is clearer and more relevant. Guideline 7 – Content by significant categories of assets In the 'D.1 Assets' section of the SFCR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should, for each significant category of assets, indicate at least the following quantitative and qualitative information:
a) the accounting and valuation basis applied, including the methods and input data used, as well as other assessments other than estimates likely to have a significant impact on the amounts recognized, and in particular:
i. for significant intangible assets: nature of the assets and information on the evidence and criteria used to conclude that there is an active market for these assets;
ii. for significant financial assets: information on the criteria used to assess whether markets are active and, if they are not, description of the valuation model used;
iii. for finance leases and operating leases: general description of the lease agreements for each significant category of assets subject to a lease contract, indicating separately finance leases and operating leases;
iv. for significant deferred tax assets: information on the origin of the recognition of deferred tax assets and the amount and maturity date, if applicable, of deductible temporary differences, unused tax losses and unused tax credits for which no deferred tax asset is recognized in the balance sheet;
v. for related undertakings: if related undertakings have not been valued using quoted prices in an active market or the corrected equity method, explain why the use of these methods was not possible;
b) any changes to the accounting and valuation bases used or estimates during the reporting period; c) assumptions and assessments, including those concerning the future, and other major sources of uncertainty of estimates.
Guideline 8 – Valuation of technical provisions In the 'D.2 Technical provisions' section, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should describe the significant simplified methods used to calculate technical provisions, including those used to calculate the risk margin. Guideline 9 – Other liabilities than technical provisions – Information on aggregation by category In the 'D.3 Other liabilities' section of the SFCR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should, when they aggregate other liabilities than technical provisions into significant categories to describe the valuation basis applied to them, take into account the nature, function, risk and materiality of these liabilities. Categories other than those used in the Solvency II balance sheet model, as defined in the technical standard on models to be used for the communication of information to supervisory authorities, should only be used if the undertaking is able to demonstrate to the supervisory authority that another presentation is clearer and more relevant. Guideline 10 - Content by significant categories of other liabilities than technical provisions In the 'D.3 Other liabilities' section of the SFCR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should, for each significant category of other liabilities than technical provisions, indicate at least the following quantitative and qualitative information:
a) the accounting and valuation basis applied, including the methods and input data used, and in particular:
i. general description of significant liabilities arising from lease agreements, indicating separately information on finance leases and operating leases;
ii. the origin of the recognition of deferred tax liabilities and the amount and maturity date, if applicable, of deductible temporary differences, unused tax losses and unused tax credits for which no deferred tax liability is recognized in the balance sheet;
iii. the nature of the commitment and, if known, the expected timing of the potential outflow of economic benefits and an indication of the uncertainties concerning the amount or timing of the outflow of economic benefits and how the risk of deviation was taken into account in the valuation;
iv. the nature of liabilities concerning employee benefits and the breakdown of amounts by nature of the liability as well as the nature of the assets of the defined benefit scheme, the amount of each category of assets, the share of each category of assets in the total assets of the defined benefit scheme, including reimbursement rights;

NBB_2016_12 – 25 April 2016 Circular – Page 7/16 b) any changes to the accounting and valuation bases used or estimates during the reporting period; c) assumptions and assessments, including those concerning the future, and other major sources of uncertainty of estimates. E. Capital management Guideline 11 - Own funds – Additional solvency ratios In the 'E.1 Own funds' section of the SFCR, as indicated in Annex XX of Regulation 2015/35, when undertakings communicate solvency ratios in addition to those included in template S.23.01, the SFCR should also contain an explanation of the calculation and significance of the additional ratios. Guideline 12 - Own funds – Information on the structure, amount, quality and eligibility of own funds In the 'E.1 Own funds' section of the SFCR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should, regarding their own funds, indicate at least the following information:
a) for each significant own fund item referred to in Articles 69, 72, 74, 76 and 78, as well as for items approved by the supervisory authority in accordance with Article 79 of Regulation 2015/35, the information required in Article 297, paragraph 1, of Regulation 2015/35, differentiating between basic own funds items and ancillary own funds items; b) for each significant own fund item, the extent to which it is available, subordinated, as well as its duration and any other relevant characteristic allowing its quality to be assessed; c) the analysis of any significant evolution of own funds during the reporting period, including the value of own fund items issued during the year, the value of instruments repurchased during the year and the extent to which the issuance was used to finance the repurchase; d) regarding subordinated liabilities, the explanation of the evolution of their value; e) when the information provided for in Article 297, paragraph 1, point c), of Regulation 2015/35 is communicated, the explanation of any restrictions on available own funds and the impact of the limits on level 2 eligible own funds, level 3 eligible own funds and restricted level 1 own funds; f) the details of the loss-absorption mechanism on capital used to comply with Article 71, paragraph 1, point e), of Regulation 2015/35, including the trigger event, and its effects; g) the explanation of the main elements of the reconciliation reserve; h) for each basic own fund item subject to transitional provisions:
i. the ranking level of each basic own fund item and the justification for this ranking;
ii. the date of the next call and the regularity of any subsequent call dates or the fact that no call date occurs before the end of the transitional period;
i) when the information provided for in Article 297, paragraph 1, point g), of Regulation 2015/35 is communicated, information on the type of agreement and the nature of the basic own fund item that each ancillary own fund item called or paid would become, including the level, as well as the approval date of the item by the supervisory authority and, when a method has been approved, the duration of the approval; j) when a method has been used to determine the amount of a significant ancillary own fund item, undertakings should describe:
i. the evolution of the valuation provided by the method over time;
ii. the input data of the methodology to which this evolution is mainly due;
iii. the extent to which the calculated amount is affected by past experience, including the result of previous calls;
k) regarding items deducted from own funds:
i. the total excess of assets over liabilities within the segregated funds and portfolios to which the equalisation adjustment is applied, defining the amount for which an adjustment is made when determining available own funds;
ii. the extent and reasons for significant restrictions, deductions and charges on own funds.
Guideline 13 - Differences between the standard formula and any internal model used In the 'E.4 Differences between the standard formula and any internal model used' section, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should, when they communicate the main differences in the methodologies and underlying assumptions used in the standard formula and in the internal model, describe at least the following:
a) the structure of the internal model; b) the aggregation methodologies and the effects of diversification; c) the risks not covered by the standard formula but covered by the internal model.
Group SFCR
A. Activity and results
Guideline 14: Information on the group scope
In the 'A.1 Activity' section of the group SFCR, as indicated in Annex XX of Regulation 2015/35, participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies should explain the significant differences between the group scope used for consolidated financial statements and the scope for consolidated data determined in accordance with Article 335 of Regulation 2015/35. E. Capital management Guideline 15 – Information on own funds - groups In the 'E.1 Own funds' section of the group SFCR, as indicated in Annex XX of Regulation 2015/35, participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies should, regarding the group's own funds, indicate at least the following information:
a) the own fund items issued by a group entity other than the participating insurance or reinsurance undertaking, the insurance holding company or the mixed financial holding company;

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b) when significant own funds are issued by a third-country insurance or reinsurance undertaking equivalent included using the deduction and aggregation method, if the Member State allows the use of local rules, the local tiering classification of these own fund elements, including information on the structure, criteria, and limits of the tiering classification;

c) when significant own fund elements are issued by an entity that is not an insurance or reinsurance undertaking and which is subject to tiering requirements other than those of the Solvency II Directive, the source and nature of these tiering requirements, as well as the amount of own funds in each tier;

d) how group own funds were calculated, net of intragroup transactions, including intragroup transactions with entities from other financial sectors;

e) the nature of restrictions on the transferability and fungibility of own fund elements in affiliated undertakings, where applicable.

SECTION II – REGULAR REPORTING OF INFORMATION FOR SUPERVISORY PURPOSES (RSR)

Activity and Results

Orientation 16 - Activity
In section "A.1 Activity" of the RSR, as indicated in Annex XX of Regulation 2015/35, when providing information concerning their activity, insurance and reinsurance undertakings should indicate at least the following information:
a) the number of employees in full-time equivalents; b) the list of all affiliated undertakings and branches.

Orientation 17 - Underwriting Results
In section "A.2 Underwriting results" of the RSR, as indicated in Annex XX of Regulation 2015/35, when providing information on risk mitigation techniques relating to underwriting activities, insurance and reinsurance undertakings should include the description of:
a) the impact of risk mitigation techniques on underwriting results; b) the effectiveness of risk mitigation techniques.

B. Governance System

Orientation 18 - Governance Structure
In section "B.1 General information on the governance system" of the RSR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should indicate:
a) the internal organizational structure, including the detailed organizational chart and positions of persons holding key functions; b) how the company's remuneration policy and practices are consistent and promote sound and effective risk management and do not encourage excessive risk-taking.

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Orientation 19 - Risk Management System
In section "B.3 Risk management system, including internal assessment of risk and solvency" of the RSR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should:
a) explain how the strategies, objectives, processes, and procedures for risk management information reporting for each category of risk are documented, monitored, and enforced; b) when it has a subcontracting agreement that led to the exemption from reporting external ratings and the designated OEEC in the quantitative reporting templates, explain the procedures implemented by the company to monitor and ensure compliance with the requirements in the relevant area and the arrangements ensuring that all relevant information underlying the investment portfolio is taken into account in risk management; c) describe the nature and adequacy of the main data used in internal models and describe at least the process established to verify data quality.

C. Risk Profile

Orientation 20 – Other Significant Risks
In section "C.6 Other significant risks" of the RSR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should:
a) explain how they ensure that the use of derivatives contributes to reducing risks or facilitates effective portfolio management; b) include details of any significant consideration of reinsurance and financial mitigation techniques and future management decisions used in the calculation of the SCR and how they meet the recognition criteria; c) when the company selected "Other" at point "C0140 - Type of underwriting model" of template S.30.03, as defined in the regulatory technical standards on templates to be used for reporting to supervisory authorities, provide justification for the applied underwriting model; d) when they belong to a group, provide qualitative and quantitative information regarding significant intragroup transactions including the following information:
i. the amount of transactions;
ii. the amount of outstanding payments, where applicable;
iii. the terms and conditions relevant to the transactions.

D. Valuation for Solvency Purposes

Orientation 21 – Valuation of Other Assets
In section "D.1 Assets" of the RSR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should explain in particular:
a) when significant deferred tax assets are recognized, how they assess the probability of future taxable profits, where applicable, and how they define the amount and expected time horizons of reversed temporary differences;

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b) cases where they have been unable to provide the maximum value of potential unlimited guarantees (on-balance sheet or off-balance sheet) appearing in quantitative reporting templates S.03.03 as defined in the implementing regulatory technical standards on templates to be used for reporting to supervisory authorities.

Orientation 22 – Technical Provisions

In section "D.2 Technical provisions" of the RSR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings, except for participating insurance and reinsurance undertakings, insurance holding companies, and mixed financial holding companies, should provide information on technical provisions comprising:
a) details of the methodologies and relevant actuarial assumptions used to calculate technical provisions, including details of any simplification used (including for calculating future premiums and the risk margin and its allocation to each line of business), as well as an explanation justifying that the selected method is proportionate to the nature, scale, and complexity of the risks faced by the company, including reasons for any significant changes in the use of these methods; b) the explanation of contract boundaries applied to each different activity when valuing technical provisions and details of contracts with significant renewals within existing activities; c) details of the main options and guarantees taken into account in the calculation of technical provisions as well as their significance and how they evolve; d) an overview of any significant evolution in the level of technical provisions since the last reference period, including reasons for any significant evolution, including the reasoning behind any significant evolution of assumptions; e) any significant evolution in the lapse rate; f) details of the homogeneous risk groups used to calculate technical provisions; g) any recommendations regarding the implementation of improvements to internal procedures concerning data considered relevant; h) information on any deficiencies and significant adjustments; i) the description of technical provisions calculated as a whole; j) the description of cases where significant contracts have been disaggregated; k) details of the economic scenario generator, including an explanation of how the risk-free interest rate was obtained and the volatility assumptions selected; l) the description of the assessments referred to in Article 85(2) of the Act. If the reduction to zero of the equalizer adjustment or the volatility correction would result in non-compliance with the SCR, the analysis of measures it might apply in such a situation to restore the level of eligible own funds covering the SCR or to reduce its risk profile to restore compliance with the SCR; m) details of the approach used to calculate significant receivables arising from reinsurance.

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Orientation 23 – Off-Balance Sheet Items
In section "D.1. Assets" or "D.3 Other liabilities" of the RSR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should include a description of any other significant off-balance sheet asset or liability not reported in template S.03.01 as defined in the implementing regulatory technical standard on templates to be used for reporting to supervisory authorities.

E. Capital Management

Orientation 24 – Distributions to Shareholders In section "E.1 Own Funds" of the RSR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should provide details on the amount of distributions made to shareholders.

Orientation 25 – Simplified Calculation in the Standard Formula In section "E.2 Solvency Capital Requirement and Minimum Capital Requirement" of the RSR, as indicated in Annex XX of Regulation 2015/35, insurance and reinsurance undertakings should explain, if material, why the use of a simplified calculation in the standard formula for calculating the SCR is justified by the nature, scale, and complexity of the risks faced by the company.

Group RSR

B. Governance System

Orientation 26 – Preparation of Consolidated Information In section "B.1 General information on the governance system" of the Group RSR, as indicated in Annex XX of Regulation 2015/35, participating insurance and reinsurance undertakings, insurance holding companies, and mixed financial holding companies should provide at least the following information:
a) how consolidated, aggregated, or combined data (depending on the method used) were prepared as well as the processes put in place to prepare them; b) information on the bases, methods, and assumptions used at the group level for the solvency valuation of group assets and liabilities other than technical provisions, particularly regarding the valuation of contributions from third-country undertakings and unregulated undertakings to group data.

C. Risk Profile

Orientation 27 – Other Important Information Concerning Activity In section "C.6 Other significant risks" of the Group RSR, as indicated in Annex XX of Regulation 2015/35, participating insurance and reinsurance undertakings, insurance holding companies, and mixed financial holding companies should provide information on the terms and conditions of significant intragroup transactions, including the following information:
a) the commercial justification for the operation or transaction;

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b) the risks borne by each party to the operation or transaction as well as the benefits available to each party to the operation or transaction; c) any particular aspects of the operation or transaction that are (or may become) disadvantageous to any party; d) any conflicts of interest arising during the negotiation and execution of the operation or transaction and any conflicts of interest that may arise in the future; e) if the transaction is related to other operations or transactions in terms of timing, function, and planning, the individual effect of each operation or transaction and the overall net impact of linked operations and transactions on each stakeholder of the operation or transaction and on the group; f) the extent to which the operation or transaction depends on liquidation and circumstances in which the operation or transaction can be executed.

Orientation 28 - Risk Profile
In section "C.6 Other significant risks" of the Group RSR, as indicated in Annex XX of Regulation 2015/35, participating insurance and reinsurance undertakings, insurance holding companies, and mixed financial holding companies should provide qualitative and quantitative information on any significant risk concentration at the group level, including:
a) the description of the risk(s); b) the probability of risk realization; c) mitigation actions including the worst-case scenario evaluation in case of exposure default; d) the analysis and quantification of risk concentrations by legal entity; e) consistency with the group's business model, risk appetite, and risk strategy, including compliance with limits established by the group's internal control system and risk management processes; f) the extent to which losses resulting from risk concentrations harm the group's overall profitability or short-term liquidity; g) the relationship, correlation, and interaction between risk factors in the group and any spillover effects of risk concentrations in a particular area; h) quantitative information on risk concentration and its impact on the company and the group and the impact of reinsurance contracts; i) indication of whether the element concerned is an asset, liability, or off-balance sheet item.

D. Valuation for Solvency Purposes

Orientation 29 – Technical Provisions
In section "D.2 Technical provisions" of the RSR, as indicated in Annex XX of Regulation 2015/35, participating insurance and reinsurance undertakings, insurance holding companies, and mixed financial holding companies, should provide information on the group's technical provisions, including:
a) information on any significant adjustment concerning each technical provision, for example, elimination of intragroup transactions, to calculate the group's technical provisions;

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b) when the group applies long-term guarantee measures or transitional measures, information on the impact of adjustments at the group level on the measures used at each company level; c) information on the bases, methods, and assumptions used to calculate the contribution of third-country insurance and reinsurance undertakings to technical provisions, whether Solvency II rules are used or other rules of an equivalent regime are authorized.

SECTION III - REPORTING OF INFORMATION FOR SUPERVISORY PURPOSES FOLLOWING PREDEFINED EVENTS

Orientation 30 - Identification and Triggering of the Obligation to Report Predefined Events Insurance and reinsurance undertakings should immediately notify in writing to the supervisory authority the occurrence of any event that could reasonably produce or would have already produced significant changes in the activity and results, the governance system, the risk profile, and solvency as well as the financial situation of a company or a group (hereinafter, the "predefined event"). In case of doubt, insurance and reinsurance undertakings should ask supervisory authorities whether a given event should be classified as a predefined event.

SECTION IV – PROCESS FOR REPORTING INFORMATION TO THE PUBLIC AND REPORTING INFORMATION FOR SUPERVISORY PURPOSES

Orientation 31 - Policy on Public Information Reporting Insurance and reinsurance undertakings should have a policy on public information reporting compliant with Orientation 7 of the guidelines on the governance system, further comprising the following elements:
a) the definition of persons/functions responsible for preparing and reviewing public information; b) processes to meet reporting requirements; c) review and approval processes of the SFCR by the administrative, management, or supervisory body; d) the definition of information already accessible to the public that, according to the insurance or reinsurance undertaking, is of a nature and scope equivalent to the RSSR information requirements; e) the specific information that the insurance or reinsurance undertaking does not intend to publish in the cases provided for in Art. 100, para. 1, of the Act; f) additional information that the company has decided to publish voluntarily under Article 98 of the Act.

Orientation 32 - SFCR - Non-disclosure of Information Insurance and reinsurance undertakings should not enter into contractual commitments obliging them to keep secret or confidential the information they are required to communicate as part of the SFCR.

Orientation 33 – Format of Quantitative Reporting Templates

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Insurance and reinsurance undertakings should take into account the data point model published by EIOPA 1 when communicating information contained in quantitative reporting templates.

Orientation 34 - Validations
Insurance and reinsurance undertakings should ensure that the information contained in quantitative reporting templates complies with the validation rules published by EIOPA.

Orientation 35 - RSR – References to Other Documents When insurance and reinsurance undertakings refer in the RSR to other documents subject to reporting to supervisory authorities, these references should be made directly to the information and not to a general document. Insurance and reinsurance undertakings should not use references in the RSR to other documents not subject to reporting to supervisory authorities.

Orientation 36 – Policy on Reporting Information for Supervisory Purposes Insurance and reinsurance undertakings should ensure that the policy on reporting information for supervisory purposes is compliant with Orientation 7 of the guidelines on the governance system, further comprising the following elements:
a) the definition of persons/functions responsible for drafting and revising any information communicated to supervisory authorities; b) the definition of processes and deadlines to meet different reporting, review, and approval requirements; c) an explanation of processes and controls to ensure the reliability, completeness, and consistency of the information provided.

Orientation 37 – Approval of Information Communicated to Supervisory Authorities Insurance and reinsurance undertakings should ensure that interim information, the RSR, and annual quantitative reporting templates have been approved by the administrative, management, or supervisory body before their submission to the relevant supervisory authority.

Insurance and reinsurance undertakings should ensure that quarterly quantitative templates have been approved either by the administrative, management, or supervisory body or by the persons who effectively direct the insurance or reinsurance undertaking before their submission to the relevant supervisory authority.

Orientation 38– First Submission of the RSR
Insurance and reinsurance undertakings should submit the regular report to the controller for the first time for the fiscal year ending June 30, 2016 or later, but before January 1, 2017.

1 https://eiopa.europa.eu/regulation-supervision/insurance/reporting-format

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Orientation 39 – Interim Information
Insurance and reinsurance undertakings should present a qualitative explanation of the main differences between the figures reported in the opening valuation using the valuation provided by the Solvency II Directive and those calculated in accordance with the previously applicable solvency regime as provided for in Article 314 of Regulation 2015/35, in an electronically readable format. These explanatory information should adopt the structure of the main categories of assets and liabilities as defined for the Solvency II balance sheet as specified in the regulatory technical standard on templates to be used for reporting to supervisory authorities. A copy of this circular is transmitted to the authorized commissioner(s) of your institution.

Sincere greetings,
Jan Smets
Governor