Notice on the Implementation of New Proportionality Measures

GENERAL SECRETARIAT
NOTICE
Proportionality
(Version of July 10, 2026)

Table of Contents
1. Introduction.................................................................................................................................... 3
1. General Criteria............................................................................................................................ 5
1.1. Definition of an ineffective governance system as a criterion for proportionality.................................................................................................................................. 5
1.2. Prudential supervision process and an entity's ability to overcome any current or future risk 5
1.3. Definition of a complex business model ...................................................................... 6
2. Specific Criteria ........................................................................................................................ 7
2.1. The supervisory authority concludes, at the end of the prudential supervision process, that the entity does not require an evaluation by supervisory authorities more frequent than that requested by the insurance or reinsurance undertaking .............................................................................................. 7
2.2. The entity is not exposed to significant liquidity risk related to the liability or asset side of the balance sheet
7
3. Interactions between group and subsidiary proportionality measures........................................... 8

1. Introduction
1 This document (hereinafter the "Notice") is intended, for the sake of transparency and predictability, to clarify the implementation of the proportionality regime, introduced by the revision of Directive (EU) 2009/138/EC known as "Solvency II", as resulting from Directive (EU) 2025/02, by the Prudential Supervision and Resolution Authority ("the ACPR"). This regulation known as "Solvency II" stems from Directive 2009/138/EC ("the Directive") and Delegated Regulation (EU) 2015/35 ("the Delegated Regulation"), notably amended respectively by Directive (EU) 2025/02 and Delegated Regulation (EU) 2026/269. 2 This Notice does not cover exhaustively the requirements arising from the regulation known as "Solvency II", and cannot prevail over the provisions of the applicable regulation. In particular, it should be read in conjunction with other notices and instructions available on the ACPR website. 3 Commission Delegated Regulation (EU) 2026/269 of 29 October 2025 amending Delegated Regulation (EU) 2015/35 establishes criteria allowing proportionality measures to be granted. 4 The ACPR, by this Notice, wishes to clarify the interpretation it will adopt of these criteria arising from Delegated Regulation (EU) 2026/269. 5 In its application of the criteria arising from Articles 327ter and following of Delegated Regulation (EU) 2026/269 for undertakings, and Article 377ter for groups, the ACPR defines two types of criteria: deterministic criteria which lead to an automatic refusal of all or certain proportionality measures, and expert-judgment criteria which are elements that the ACPR may use to refuse proportionality measures. This list of criteria is not exhaustive but aims to provide predictability regarding the supervisor's decisions on proportionality. 6 For information, the general criteria are, in application of Articles 327ter and following, and Article 377ter of the Delegated Regulation:

• The ACPR concludes, at the end of the prudential supervision process, that the entity is capable of overcoming any current or future risk and is not subject to ongoing supervisory measures aimed at remedying significant breaches of the provisions of the Directive.
• The ACPR concludes that the entity does not present a complex business model, taking into account its strategy, its business plan, the complexity of the insurance products offered, and its investment portfolio.
• The entity meets all of the following conditions:
  i. the technical provisions related to life insurance activities as referred to in Article 76 of Directive 2009/138/EC, net of receivables arising from reinsurance contracts and securitization vehicles, do not exceed 12,000 EUR;
  ii. the annual collection of gross premiums issued related to non-life insurance activities does not exceed 2,000 EUR;
  iii. the entity does not represent more than 5% of the life or non-life insurance market of the Member State of origin of the undertaking, the life market share being based on gross technical provisions, and the non-life market share, on gross premiums issued.
• The ACPR has not noted any major unresolved concern arising from the undertaking's governance system.
  7 This Notice is applicable as from the day of its publication in the ACPR official register.
  8 Unless otherwise stated, the term "the entity" in this Notice refers to insurance or reinsurance undertakings subject to the "Solvency II" regime mentioned in Articles L. 310-3-1 of the Insurance Code (including captive insurance and reinsurance undertakings mentioned in points 1° and 3° of Article L. 350-2), L. 211-10 of the Mutual Code or L. 931-6 of the Social Security Code, groups mentioned in point 5° of Article L. 356-1 of the Insurance Code and subject to group supervision in application of the second and third paragraphs of Article L. 356-2 of the same Code, and French subgroups designated in application of Article L. 356-4 of the Insurance Code.

1. General Criteria
1.1. Definition of an ineffective governance system as a criterion for proportionality
9 The ACPR considers that the two criteria below relating to the definition of an ineffective governance system for proportionality purposes are similar:

• The criterion "the undertaking's governance system is not effective within the meaning of Article L.354-1" provided for in point 2° of Article R. 357-6 of the Insurance Code, pursuant to which the ACPR may ask the undertaking to refrain from applying one or more of the proportionality measures mentioned in Article L. 357-5 of the same Code;
• The criterion "the supervisory authority has not noted any major unresolved concern arising from the undertaking's governance system" provided for in Articles 327ter and following of Delegated Regulation (EU) 2026/269 and applicable to all proportionality measures.
  10 Three deterministic criteria will be applied by the ACPR to assess this notion:
• The existence of ongoing administrative police measures;
• The existence of a disciplinary sanction pronounced in accordance with Articles L. 612-38 and following of the Monetary and Financial Code less than two years ago;
• The implementation of an additional capital requirement due to a governance system significantly deviating from the prescribed standards, as provided for in I. 3° of Article L. 352-3 of the Insurance Code.
  11 Two expert-judgment criteria will also be used:
• Competence and integrity of senior management and key function holders: if during their term of office a breach of integrity and/or competence is noted as provided for by Articles L. 322-2 of the Insurance Code, L. 114-21 of the Mutual Code and L. 931-7-2 of the Social Security Code, the ACPR may consider that this scenario reflects an ineffective governance system for proportionality purposes;
• During an on-site inspection, the ACPR notes major governance shortcomings identified as such in the follow-up letter and which are not resolved.
  1.2. Prudential supervision process and an entity's ability to overcome any current or future risk
  12 The ACPR assesses an entity's ability to overcome any current and future risk with regard to its assessment of the risks borne by the entity and notably its solvency and profitability.
  13 The ACPR does not consider, with regard to the elements of the prudential supervision process, that entities exceeding the thresholds i. and ii. of paragraph 6 of this Notice have a sufficiently low risk profile within the meaning of Articles 327bis and following of the Delegated Regulation.

1.3. Definition of a complex business model
14 The ACPR has defined as a deterministic criterion three activities that will be refused all proportionality measures:

• Construction damage and civil liability insurance (categories 35 and 36) as defined in Article A. 344-2 of the Insurance Code:
  i. Entities holding more than 200M€ of claims provisions arising from these categories;
  ii. Entities for which these categories represent more than 40% of the total of their claims provisions;
  iii. Entities for which these categories represent more than 30% of the total of net premiums.
• Entities holding more than 60M€ of premiums acquired from medical liability as defined in Article L.251-1 of the Insurance Code.
• Credit enhancement: credit enhancement activity consists of providing a financial guarantee to improve the rating of bond issuances or to secure financing.
  15 The ACPR has also defined a non-exhaustive list of expert-judgment criteria that will be taken into consideration during its analysis of business models for proportionality purposes. The list of activities and situations below are complexity factors:
• Reinsurance activity as defined in Article L. 310-1-1 of the Insurance Code
  (i) for undertakings authorized in reinsurance in accordance with Articles L. 321-1-1 of the Insurance Code, L. 211-8-1 of the Mutual Code and L. 931-4-1 of the Social Security Code, or (ii) for undertakings authorized in insurance in accordance with Articles L. 321-1 of the Insurance Code, L. 211-8 of the Mutual Code and L. 931-4 of the Social Security Code.
• The complexity of an entity's international activity will be assessed with regard to the share of international activity in premiums for non-life and in technical provisions for life, and the number of jurisdictions in which the entity carries out its activity. Establishments in extra-European jurisdictions are an additional complexity factor.
• The holding of entities deemed complex (insurance or reinsurance undertakings or non-insurance enterprises).
• The use of an internal model, total or partial, or own parameters on premium or reserve risk.
• The presence of a complex organizational model, notably the significant recourse to outsourcing.
• A professional liability activity involving long-term commitments.

2. Specific Criteria
   2.1. The supervisory authority concludes, at the end of the prudential supervision process, that the entity does not require an evaluation by supervisory authorities more frequent than that requested by the insurance or reinsurance undertaking
   16 This criterion is applicable for three proportionality measures:

• Reduction of the frequency of submission of the regular report to the supervisor (RSR);
• Reduction of the frequency of the internal assessment of risks and solvency (ORSA);
• Reduction of the frequency of review of written policies.
  17 The ACPR assesses this criterion with regard to its assessment of the risks borne by the entity, and notably its solvency and profitability, and the resulting frequency of supervision.
  18 The ACPR considers that the supervision frequency necessary for insurance undertakings listed as eligible providers of protection eligible for the assimilation of guaranteed credit to mortgage credit in application of Article 108(4) of Regulation (EU) 575/2013 of the European Parliament and of the Council of 26 June 2013 amended by Regulation (EU) 2024/1623 of the European Parliament and of the Council of 31 May 2024 is incompatible with obtaining the proportionality measures associated with this criterion.
  2.2. The entity is not exposed to significant liquidity risk related to the liability or asset side of the balance sheet
  19 This criterion is applicable for one proportionality measure:
• Exemption from short-term liquidity risk management plan (LRMP).
  20 The ACPR will assess exposure to liquidity risk for this criterion before and after the implementation of mitigation measures.
  21 In case of significant exposure to liquidity risk, the ACPR may, by individual decision, subject the entity to the long-term horizon of the liquidity risk management plan, in accordance with Instruction No. 2026-YY of XXX.

3. Interactions between group and subsidiary proportionality measures
   22 A non-SNC group cannot benefit from proportionality measures if one or more of its significant subsidiaries do not benefit from a proportionality measure. The following two cases are identified:

• management problems of its significant subsidiaries by the group (profitability, governance, solvency, etc. subjects);
• complexity of the business model of one or more significant subsidiaries.
  23 The above significance would be characterized by a threshold of 40% of the group's premiums or technical provisions belonging to subsidiaries that have been refused proportionality measures.
  24 The refusal of proportionality measures at the group level does not result in the refusal of proportionality measures to its subsidiaries.
  25 Subsidiaries of a group not eligible for proportionality measures may request proportionality measures or notify their status as a small and non-complex enterprise if they meet the conditions.