What is Decree No. 306 / 2016 Coll.?

Decree No. 306 / 2016 Coll., implementing certain provisions of the Insurance Act — Decree implementing certain provisions of the Insurance Act.

When it became Decree No. 306 / 2016 Coll. effectiveness?

Decree No. 306 / 2016 Coll. became effective 23.09.2016.

Is Decree No. 306 / 2016 Coll. still valid?

Yes, Decree No. 306 / 2016 Coll. is still valid and effective.

How many times was it Decree No. 306 / 2016 Coll. amended?

Decree No. 306 / 2016 Coll. has 3 time versions of the text.

Decree No. 306 / 2016 Coll. - Decree implementing certain provisions o...

306

DECLARATION

of 8 September 2016

implementing certain provisions of the Insurance Act

Pursuant to Article 136 (1) of Act No. 277 / 2009 Coll., on Insurance, as amended by Act No. 304 / 2016 Coll., for the implementation of § 7b (7), § 54b (1) and (4), § 78 (2), § 81 (5), § 82 (2), § 89c (6), § 100 (3) and § 123 (3) and pursuant to § 136 (2) of this Act:

ČÁST PRVNÍ

INTRODUCTORY PROVISIONS

§ 1

Subject matter

This decree incorporates the relevant European Union1), following the directly applicable European Union2) and provides for

(a) the method for calculating the Solvency Capital Requirement;

(b) the conditions for applying a full or partial internal model for the calculation of the Solvency Capital Requirement;

(c) calculation of group solvency;

(d) conditions of use and method of calculating the risk-free yield adjustment;

(e) assessing the sensitivity of technical provisions and eligible own funds;

(f) the details and structure of the report on the verification of the information disclosed in the solvency and financial situation report;

(g) the arrangements for the payment and payment of remuneration and reimbursement of final expenses by the compulsory manager of a domestic insurance undertaking or a domestic reinsurance undertaking, its agent and liquidator of a domestic insurance undertaking, a domestic reinsurance undertaking, a branch of a third State insurance undertaking or a branch of a third State reinsurance undertaking.

§ 2

Definition of terms

For the purposes of this decree:

(a) the diversification effects of the reduction of the exposure of insurance undertakings, reinsurance undertakings and insurance or reinsurance groups to risks related to the diversification of their business, which result from the fact that the adverse impact of one risk may be offset by a more favourable impact of another risk, unless those risks are fully correlated;

(b) the liquidation property shall have the balance remaining after all the operations necessary to carry out the liquidation prior to the settlement of the liquidator's remuneration;

(c) a test of the use of the assessment of the use of the internal model in the management and control system, in particular the integration of the internal model into the risk management system and relevant decision-making processes;

(d) calibration standards for calibration requirements set out in Sections 74 (2) and (3) of the Insurance Act and calibration standards for internal model purposes pursuant to Section 12.

ČÁST DRUHÁ

SOLVENCY OF INSURANCE AND INSURANCE

HLAVA I

CALCULATION OF THE SOLVENCY CAPITAL REQUIREMENTS BY STANDARD SAMPLING

§ 3

Basic Solvency Capital Requirement

(1) The basic Solvency Capital Requirement includes own funds requirements at least for risk modules

(a) non-life underwriting risk;

(b) life underwriting risk;

(c) health underwriting risk;

(d) market risks;

(e) counterparty default risks; and

(f) other risk modules laid down by the directly applicable European Union law governing the calculation of the Solvency Capital Requirement.

(2) The risk modules referred to in points (a) to (e) of paragraph 1 consist at least of the risk sub-modules listed in Annex 1 to this Regulation and of the risk sub-modules according to the directly applicable European Union law governing the calculation of the Solvency Capital Requirement.

(3) For the purposes of calculating the basic Solvency Capital Requirement, the own funds requirements for risk modules referred to in points (a) to (e) of paragraph 1 shall be aggregated using the correlation factors set out in Annex 2 to this Regulation.

(4) For the purposes of points (a) to (c) of paragraph 1, insurance and reinsurance operations shall be included in the underwriting risk module which best takes into account the technical nature of the underlying risks of the operation.

§ 4

Capital requirement for operational risk

The operational risk capital requirement takes into account operational risks to the extent that they are not taken into account in the risk modules referred to in Section 3.

§ 5

Adjustments to technical provisions and deferred tax liabilities to absorb losses

(1) The adjustment for technical provisions and deferred tax liabilities to absorb losses (3) reflects any partial compensation for unexpected losses through the simultaneous reduction of technical provisions or deferred tax liability or a combination of both.

(2) The adjustment for the technical provisions and deferred tax liability to absorb losses reflects the effect of the risk reduction through future unguaranteed interests in the profit of insurance contracts to the extent that the domestic insurance or reinsurance undertaking is able to demonstrate that the reduction in those transactions can be used to cover any unexpected losses.

§ 6

Simplified calculation

A local insurance undertaking or a domestic reinsurance undertaking may use a simplified calculation provided for in the directly applicable European Union law on the calculation of the Solvency Capital Requirement for the risk modules or sub-modules referred to in Article 3 (2) where this is proportionate to the nature, scale and complexity of the risks associated with the activities of the domestic insurance undertaking or the domestic reinsurance undertaking. The simplified calculation of the domestic insurance or reinsurance undertaking shall be carried out in accordance with the provisions of Section 74 (2) and (3) of the Insurance Act.

§ 7

Measures implementing the Solvency Capital Requirement

The calculation of the Solvency Capital Requirement, the own funds requirements for individual risk modules and sub-modules under Section 3, the capital requirement for operational risk under Section 4, the adjustments under Section 5 and the application of the conditions and rules for the application of the simplified calculation under Section 6 shall be governed by the directly applicable European Union provisions governing the calculation of the Solvency Capital Requirement.

§ 8

Solvency Capital Requirement of a third State insurance undertaking or a third State reinsurance undertaking

Paragraph 3 to 7 shall apply mutatis mutandis to an insurance undertaking from a third State or a reinsurance undertaking from a third State in relation to obligations arising from an insurance or reinsurance activity carried on within the territory of the Czech Republic.

HLAVA II

CALCULATION OF SOLVENCY CAPITAL REQUIREMENTS BY COMPLETE OR PARTIAL INTERNAL MODELS

§ 9

Use test

As part of the use test, the local insurance undertaking or domestic reinsurance undertaking demonstrates that the internal model is widely and consistently used in its management and control system, at least to the extent of § 78 (4) (a) and (b) of the Insurance Act.

Statistical quality standards

§ 10

(1) An insurance undertaking or a domestic reinsurance undertaking shall ensure that the internal model, including the determination of the probability distribution forecast on which the internal model is based, complies with the requirements set out in paragraphs 2 to 6 and § 11.

(2) The methods used to determine the probability distribution forecast must be based on appropriate actuarial and statistical methods and be consistent with the methods used for calculating the technical provisions under the directly applicable European Union Regulation. The methods used to determine the probability distribution forecast shall be based on current and reliable information and realistic assumptions. The local insurance or domestic reinsurance company will justify to the Czech National Bank the assumptions underlying its internal model.

(3) The data used for the internal model must be accurate, complete, appropriate and reliable. The national insurance or reinsurance undertaking shall, at least once a year, update the data sets it uses to determine the probability distribution forecast.

(4) The internal model must include the risks referred to in Section 74 (4) of the Insurance Act and any other significant risks to which the domestic insurance undertaking or the domestic reinsurance undertaking is or could be exposed.

(5) In its internal model, the local insurance undertaking or domestic reinsurance undertaking will accurately assess the individual risks related to financial guarantees and all contractual options, if relevant. It shall also assess the risks associated with the options of policyholders, insured persons and beneficiaries and the contractual options of the domestic insurance or reinsurance undertaking, including the impact that future changes in financial and non-financial conditions might have on the application of those options.

(6) The local insurance undertaking or domestic reinsurance undertaking will take into account, in its internal model, all payments to policy holders, insured persons and beneficiaries which it expects to be made, whether or not those payments are contractually guaranteed.

§ 11

(1) A local insurance undertaking or a domestic reinsurance undertaking may, in its internal model, take into account the dependencies within and between the different risk categories in terms of diversification effects and at the same time justify to the Czech National Bank that the system used to measure diversification effects is appropriate.

(2) An insurance undertaking or a domestic reinsurance undertaking may fully take into account the effects of risk mitigation techniques in its internal model if the credit risk and other risks arising from the application of those techniques are duly taken into account in the internal model.

(3) An insurance undertaking or a domestic reinsurance undertaking may, in its internal model, take into account future management measures that can be expected to be implemented, taking into account the time necessary to implement them.

§ 12

Calibration standards

(1) A local insurance undertaking or a domestic reinsurance undertaking may, for the purposes of the construction of an internal model, use a time period or level of risk other than those provided for in Sections 74 (2) and (3) of the Insurance Act where the internal model output can be used for the calculation of the Solvency Capital Requirement in a way that provides policy holders, insured persons and beneficiaries with a level of protection under Section 74 of the Insurance Act.

(2) A local insurance undertaking or a domestic reinsurance undertaking shall derive the Solvency Capital Requirement directly from the forecast probability distribution created by the internal model using the risk value method under Section 74 (3) of the Insurance Act.

(3) If a domestic insurance undertaking or a domestic reinsurance undertaking cannot derive the Solvency Capital Requirement directly from the probability distribution forecast created by the internal model, it may use approximation when calculating the Solvency Capital Requirement if it is able to demonstrate to the Czech National Bank that the policy holders are provided with a level of protection under Section 74 of the Insurance Act.

§ 13

Standards for validating the internal model

(1) A local insurance undertaking or a domestic reinsurance undertaking regularly verifies the validity of the internal model under Section 78 of the Insurance Act and the directly applicable European Union law governing the calculation of the Solvency Capital Requirement. The verification of the validity of the internal model shall at least include monitoring of its behaviour, reviewing the continued suitability of its specification and comparing its results with the experience observed.

(2) The process of verifying the validity of the internal model shall include an effective statistical process for verifying the validity of the internal model by which the national insurance or reinsurance undertaking demonstrates to the Czech National Bank that the internal model set out in the resulting capital requirements is adequate in accordance with § 74 (2) and (3) of the Insurance Act.

(3) By verifying in accordance with paragraph 2, a domestic insurance undertaking or a domestic reinsurance undertaking shall, by statistical methods, test the appropriateness of the forecast of the distribution of probability against:

(a) harmful experience; and

(b) any other relevant related new data and information.

(4) The process of validating the internal model shall include an analysis of its stability, in particular testing the sensitivity of the internal model results to changes in key assumptions. It shall also include an assessment of the accuracy, completeness, suitability and reliability of the data used in the internal model.

§ 14

Documentation standards of the internal model

(1) The local insurance or reinsurance undertaking shall document in detail the design of its internal model and its functioning.

(2) The documentation must demonstrate compliance with the requirements set out in Sections 73 (3) and 78 (3) of the Insurance Act and in Sections 9 to 13.

(3) The documentation shall contain a description of the theory, assumptions and mathematical and empirical basis of the internal model.

(4) The documentation shall specify the circumstances in which the internal model is not functioning correctly.

(5) An insurance undertaking or a domestic reinsurance undertaking documents any significant changes to its internal model.

§ 15

Implementing measures for the internal model

The method of meeting the requirements set out in paragraphs 9 to 14, the requirements for external models and dates, the crediting of profits and losses and the integration of a partial internal model into the standard formula for calculating the Solvency Capital Requirement shall be governed by the directly applicable European Union provisions governing the calculation of the Solvency Capital Requirement through an internal model or a partial internal model.

§ 16

Internal models for a third-State insurance undertaking or a third-State reinsurance undertaking

Paragraph 9 to 15 shall apply mutatis mutandis to an insurance undertaking from a third State or a reinsurance undertaking from a third State in relation to obligations arising from an insurance or reinsurance activity carried out in the Czech Republic.

ČÁST TŘETÍ

RULES FOR CALCULATION OF GROUP SOLVENCY

§ 17

General provisions

(1) When calculating group solvency, the participating person under Section 89c (1) of the Insurance Act (hereinafter referred to as "the responsible person ') shall take into account the proportional share held in the associated entities. The proportion shall be determined as:

(a) the percentage used for the compilation of consolidated accounts in accordance with the directly applicable European Union provisions governing the calculation of group solvency where the responsible person uses the accounting consolidation method for the calculation of group solvency; or

(b) the sum of the direct and indirect interest of the person responsible in the capital of the associate where the responsible person uses the method of deduction of aggregated data for the calculation of group solvency.

(2) Where any of the controlled insurance or reinsurance undertakings has eligible own funds below the Solvency Capital Requirement, the total solvency deficit of that insurance or reinsurance undertaking shall be used in the calculation of the group solvency and not just a proportional share.

(3) Where the liability or liability of the responsible person for the liabilities of the controlled insurance or reinsurance undertaking is precisely and unambiguously limited by the amount of its share in the capital of the controlled person, after approval by the Czech National Bank, if it is the group supervisor and after consultation with the other competent supervisory authorities in the college, it is possible to take into account the discrepancy between the amount of the eligible capital and the Solvency Capital Requirement of that controlled insurance or reinsurance undertaking in proportion when calculating group solvency.

§ 18

Prohibition of multiple uses of capital

(1) In calculating group solvency, multiple uses of own funds items to meet the Solvency Capital Requirements for different persons in the same group are excluded.

(2) For the purposes of paragraph 1, when calculating group solvency, the value of assets shall be excluded:

(a) participating insurance or reinsurance undertakings which are used to finance own funds items eligible to cover the Solvency Capital Requirement by the related insurance or reinsurance undertaking; and

(b) related insurance or reinsurance undertakings which are used to finance the items of own funds applicable to cover the Solvency Capital Requirement of the participating insurance or reinsurance undertaking or other insurance or reinsurance undertaking associated to that participating undertaking.

(3) To cover the group Solvency Capital Requirement may be used

(a) the available bonus fund pursuant to Section 65 of the Insurance Act of an insurance undertaking operating under the life insurance sector referred to in Part A of Annex 1 to the Insurance or Reinsurance Act of an insurance or reinsurance undertaking operating in a life reinsurance business associated to the responsible person; and

(b) the subscribed but not paid-up capital of the insurance or reinsurance undertaking associated to the responsible person;

and to the extent that those items are applicable to cover the Solvency Capital Requirement of the related insurance or reinsurance undertaking. This shall be without prejudice to the provisions of paragraphs 1, 2 and 4.

(4) The group Solvency Capital Requirement cannot be used to cover:

(a) subscribed but unpaid capital constituting an undertaking by the participating insurance or reinsurance undertaking;

(b) the subscribed but not paid-up capital of the participating insurance or reinsurance undertaking which constitutes an obligation of the related insurance or reinsurance undertaking; or

(c) the subscribed but not paid-up capital of the related insurance or reinsurance undertaking which constitutes an undertaking of another insurance or reinsurance undertaking associated with that insurance or participating reinsurance undertaking.

(5) Where the competent supervisory authority decides that any of the other items of own funds of an ancillary insurance or reinsurance undertaking are not applicable to cover the Solvency Capital Requirement of an insurance or reinsurance undertaking holding a participation in that related insurance or reinsurance undertaking, the value of those items may be included in the own funds applicable to cover the group Solvency Capital Requirement only up to the amount to which those items are applicable to cover the Solvency Capital Requirement of that related insurance or reinsurance undertaking.

(6) The total value of the applicable own funds items referred to in paragraphs 3 and 5 may not exceed the amount of the Solvency Capital Requirement of the related insurance or reinsurance undertaking.

(7) Capital items used to cover the Solvency Capital Requirement of the related insurance or reinsurance undertaking subject to the prior approval of the supervisory authority of the home Member State may be used to cover the group Solvency Capital Requirement only if approved by that supervisory authority.

§ 19

Exclusion of mutual funding

In calculating group solvency, no amount of eligible own funds arising from mutual funding between persons belonging to the same group may be taken into account. Mutual financing means a situation where an insurance or reinsurance undertaking or its associated person holds, directly or indirectly, a share in a person who holds, directly or indirectly, the items of own funds applicable to the Solvency Capital Requirement of that insurance or reinsurance undertaking or provides loans to that person.

§ 20

Accounting consolidation method

(1) The calculation of group solvency using the accounting consolidation method is based on consolidated accounts. The group solvency shall be determined as the difference between:

(a) own funds usable to cover group Solvency Capital Requirement determined from consolidated accounts; and

(b) the group solvency capital requirement calculated from consolidated accounts.

(2) The group solvency capital requirement calculated from consolidated accounts must not be less than the sum of:

(a) the minimum capital requirement of the responsible person; and

(b) the proportional amount of the Minimum Capital Requirement of the related insurance or reinsurance undertakings included in the calculation.

(3) At the level of the group, primary capital must be available in accordance with § 71 (4) of the Insurance Act at least at the level of the sum referred to in paragraph 2. The provisions of § 89c (4) and (5) and § 89d to 89g of the Insurance Act and § 17 to 19 shall apply mutatis mutandis for the purposes of determining the eligible capital according to the first sentence.

§ 21

Method of deduction of aggregated data

(1) The group solvency calculated by the method of deduction of aggregated data shall be determined as the difference between:

(a) the sum of the eligible own funds referred to in paragraph 2; and

(b) the sum of the carrying amount of the share and items of own funds of the responsible person in the related insurance undertaking, reinsurance undertaking or insurance holding company on the date on which the accounts and the aggregated Solvency Capital Requirement referred to in paragraph 3 are drawn up.

(2) The sum of eligible own funds is equal to the sum of:

(a) the own funds usable to cover the Solvency Capital Requirement of the responsible person; and

(b) the relative share of the responsible person in the capital of the related insurance or reinsurance undertaking which is applicable to cover the Solvency Capital Requirement of that related insurance or reinsurance undertaking.

(3) The aggregated Solvency Capital Requirement is equal to the sum of:

(a) the Solvency Capital Requirement of the responsible person; and

(b) the proportional share of the Solvency Capital Requirement of the related insurance or reinsurance undertaking.

(4) The amount to be reported in column 060 of this row: (b) the value of such indirect holdings shall be included in respect of the relevant successive holdings and the relevant proportional share of the eligible own funds of the related insurance or reinsurance undertakings and of the Solvency Capital Requirement of the related insurance or reinsurance undertakings shall be included in the items referred to in paragraphs 2 (b) and 3 (b).

§ 22

Group solvency measures

The principles and methods for calculating group solvency, group Solvency Capital Requirement and eligible own funds to cover own funds referred to in paragraphs 17 to 21 shall be governed by the directly applicable European Union provisions governing the calculation of group solvency.

ČÁST PÁTÁ

PROVISION OF INFORMATION BY THE CZECH NATIONAL BANKNOTE INSURANCE FROM A THIRD STATE OR INSURANCE FROM A THIRD STATE

§ 27

An insurance undertaking from a third State or a reinsurance undertaking from a third State shall submit information to the Czech National Bank mutatis mutandis in accordance with the directly applicable regulation of the European Union, which provides for the submission of periodic reports to supervisory authorities and a report to supervisory authorities on its own risk and solvency assessment in relation to the insurance or reinsurance activities carried out in the Czech Republic.

ČÁST ŠESTÁ

COUNTERVAILING ADJUSTMENT OF THE RISK EXCHANGE SHEET

§ 28

Conditions for applying the risk-free yield adjustment

(1) A compensatory adjustment to the risk-free yield curve under Section 54b (1) of the Insurance Act may be applied if:

(a) the domestic insurance undertaking or the domestic reinsurance undertaking has set aside a portfolio of assets consisting of bonds or other financial instruments with similar cash flow characteristics (hereinafter referred to as "the pool of assigned assets") intended to cover the value of the best estimate of the portfolio of liabilities for which a risk-free yield adjustment (hereinafter referred to as "the portfolio of assigned liabilities") will be used in the calculation of the best estimate,

(b) the domestic insurance undertaking or domestic reinsurance undertaking shall maintain the composition of the portfolio of assigned assets throughout the life of the relevant liabilities, except where the adjustment to the composition of that portfolio is necessary to maintain the replication of the expected cash flows resulting from the assets and liabilities referred to in point (d) in the event of a significant change in those cash flows;

(c) the identification, arrangement and management of the portfolio of assigned assets and portfolio of assigned liabilities shall be carried out separately from other activities of the domestic insurance or reinsurance undertaking and the portfolio of assigned assets shall not be used to cover losses arising from other activities of the domestic insurance or reinsurance undertaking;

(d) the expected cash flows resulting from the portfolio of assigned assets replicate all the individual cash flows resulting from the portfolio of assigned liabilities in the same currency and the risks arising from any non-compliance with those cash flows are insignificant in view of the risks associated with the activities of the domestic insurance undertaking or the domestic reinsurance undertaking to which the adjustment relates;

(e) insurance and reinsurance contracts of the portfolio of assigned liabilities do not give rise to any future payments of premiums and premiums;

(f) in the context of the subscription risk, the portfolio of dedicated liabilities is exposed only to the risk of longevity, cost risk, revision risk and mortality risk;

(g) where the subscription risk arising from the portfolio of assigned liabilities also includes the risk of mortality, the value of the best estimate of that portfolio shall not be increased by more than 5% of its original value as a result of the application of a morbidity shock under the directly applicable European Union law governing the calculation of the Solvency Capital Requirement in the life underwriting risk module calibrated in accordance with Section 74 of the Insurance Act;

(h) insurance contracts of the portfolio of assigned liabilities do not contain any options for policyholders; the right to redemption may be part of an insurance contract only if the amount of such redemption value of the assets valued under Section 51 of the Insurance Act intended to cover this obligation at the time of the exercise of the right to redemption,

(i) the cash flows resulting from the portfolio of assigned assets are fixed and neither the issuer nor any third party has the right to amend or otherwise modify them; and

(j) the liabilities arising from a single insurance or reinsurance contract are not separated from each other when the portfolio of the assigned liabilities is drawn up.

(2) The condition that the cash flows referred to in paragraph 1 (i) remain constant is deemed to be met where the domestic insurance undertaking or the domestic reinsurance undertaking makes use of assets for the portfolio of assigned assets from which the resulting cash flows are fixed, with the exception of inflation dependency, while replicating the cash flows resulting from the portfolio of assigned liabilities for inflation, in accordance with paragraph 1 (d).

(3) The right of the issuer or third party to change the cash flows resulting from an asset contained in the portfolio of assigned assets shall not infringe the condition for the application of the compensatory adjustment referred to in paragraph 1 (i) where that right includes compensation enabling the domestic insurance or reinsurance undertaking to obtain the same cash flows by reinvesting in assets of the same or higher credit quality.

§ 29

Determination of risk-free yield adjustment

(1) For each currency, the offsetting of the risk-free yield curve is equal to the difference

(a) the annual effective interest rates expressed as a single discount rate, the use of which on cash flows resulting from the portfolio of assigned liabilities results in a value equal to the value of the portfolio of assigned assets valued under Section 51 of the Insurance Act; and

(b) the annual effective interest rates expressed as a single discount rate, the use of which leads to a value of the cash flows resulting from the portfolio of assigned liabilities which is equal to the value of the best estimate of the portfolio of assigned liabilities calculated in accordance with Section 53 of the Insurance Act.

(2) The adjustment does not include a basic margin taking into account the risks retained by the domestic insurance or reinsurance undertaking (hereinafter referred to as the "basic margin").

(3) A local insurance undertaking or a domestic reinsurance undertaking will increase the basic margin in such a way that the compensatory adjustment resulting from the holding of an asset with a certain maturity and type of credit assessment below the investment grade does not exceed the adjustment resulting from the holding of assets with the same maturity, the same type and the investment grade of the credit assessment.

(4) An insurance undertaking or a domestic reinsurance undertaking uses external credit assessments for the purposes of determining the level of the adjustment in a manner that complies with the directly applicable European Union regulation governing the use of external credit assessments.

(5) The basic margin referred to in paragraph 2 shall be determined as the sum of:

(a) the credit spread corresponding to the probability of asset default, the calculation of which is based on long-term credit default statistics relevant to the assets concerned, taking into account the maturity, credit quality and type of those assets; and

(b) the credit spread corresponding to the expected loss resulting from a reduction in the credit assessment of assets.

(6) Where it is not possible to determine the credit spread referred to in paragraph 5, the procedure referred to in paragraph 7 or paragraph 8 shall apply for the calculation of the base margin, depending on the type of exposure.

(7) In the case of exposures to the central government and central bank of a Member State, the base spread referred to in paragraph 2 shall be at least 30% of the value of the long-term average of the range observed on financial markets derived from assets of the same maturity, credit quality and type in relation to the risk-free yield curve.

(8) In the case of exposures to entities other than those referred to in paragraph 7, the basic margin referred to in paragraph 2 shall be at least 35% of the value of the long-term average of the range observed on financial markets derived from assets of the same maturity, credit quality and type in relation to the risk-free yield curve.

§ 30

Compensation for a third-State insurance undertaking or a third-State reinsurance undertaking

Paragraphs 28 and 29 shall apply mutatis mutandis to a third-State insurance undertaking or a third-State reinsurance undertaking in respect of obligations arising from an insurance or reinsurance activity carried out in the Czech Republic.

ČÁST SEDMÁ

EXPOSURE AMOUNT

§ 31

(1) An assessment of the sensitivity of technical provisions and eligible own funds is carried out at least on a quarterly basis by the local insurance or domestic reinsurance undertaking.

(2) A local insurance undertaking or a domestic reinsurance undertaking shall assess the sensitivity of the technical provisions and the eligible own funds, in particular the change in the amount of technical provisions and the eligible own funds due to changes in the data or parameters used, on the basis of realistic and appropriate assumptions and appropriate methods. The evaluation shall also include an assessment of the suitability and adequacy of these assumptions and methods.

§ 32

An insurance undertaking from a third State or a reinsurance undertaking from a third State is treated mutatis mutandis in relation to obligations arising from an insurance or reinsurance activity carried on within the territory of the Czech Republic under Section 31.

Citation	Decree No. 306 / 2016 Coll., implementing certain provisions of the Insurance Act
Regulation Type	Order
Author	-
Collection	Code of Laws

Date of Promulgation	23.09.2016
Effective from	23.09.2016
Effective until	-
Status	Valid

Decree No. 306 / 2016 Coll.

Decree implementing certain provisions of the Insurance Act

Contents