S.I. No. 664 Of 2006

REGULATIONS

entitled

European Communities (Life Assurance) Framework (Amendment) Regulations 2006

Made by the Minister for Finance

I, Brian Cowen, Minister for Finance, in exercise of the powers conferred on me by the European Communities Act 1972 (No. 27 of 1972, and for the purpose of giving further effect to Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002,¹ and to Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002² , hereby make the following regulations:

Citation and commencement, etc.

1.       (1)       These Regulations may be cited as the European Communities (Life Assurance) Framework (Amendment) Regulations 2006.

(2)(a)     Subject to subparagraph (b), these regulations are deemed to have come into operation on 1 January 2005.

(b)     A failure to comply with the Principal Regulations, as amended by these Regulations, shall only be an offence under Article 73 of the Principle Regulations if such failure occurs on a date after the making of these Regulations.

Interpretation.

2.       In these Regulations, -�Principal Regulations-� means the European Communities (Life Assurance) Framework Regulations 1994 ( S.I. No. 360 of 1994 ).

Amendment of Annex II to the Principal Regulations.

3.       The Principal Regulations are amended in Annex II (inserted by Article 5 of the European Communities (Life Assurance) Framework (Amendment No. 2) Regulations 2004 ( S.I. No. 729 of 2004 )):

(a)       In Article 3

(i)       by substituting the following for paragraph (1):

-�(1)     With the consent of the Bank, securities with no specified maturity date and other instruments (including cumulative preferential shares other than those referred to in subparagraph (6) of paragraph 1 of this Part) may also be included in determining the amount of the available solvency margin for the undertaking, but only up to 50 per cent of the lesser of -

(a)       the available solvency margin, and

(b)       the required solvency margin,

for the total of those securities and the subordinated loan capital referred to in that subparagraph-�,

(ii)       by substituting the following for paragraph (5):

-�(5)       If zillmerizing is not practised, or if, where it is practised, it is less than the loading for acquisition costs include in the premium, an amount equal to the difference between a non-zillmerized or partially zillmerized mathematical reserve and a mathematical reserve zillmerized at a rate equal to the loading for acquisition costs included in the premium may be included in the amount of the available solvency margin for the undertaking, but only with the consent of the Bank. However, the amount of the difference may not exceed 3.5 per cent of the sum of the differences between the relevant capital sums of life insurance activities and the mathematical reserves for all policies for which zillmerizing is possible. In that case the difference must be reduced by the amount of any undepreciated acquisition cost entered as an asset.-�

and

(b)       by substituting the following for Part C:

-�PART C

APPLICATION OF THIS ANNEX

Annex to take effect on the last day of undertaking's financial year ending during 2006

1.       In relation to an insurance undertaking that, on 20 March 2002, provided life assurance in one or more of the classes specified in Annex I to Directive 2002/83/EC, this Annex (as substituted by the European Communities (Life Assurance) Framework (Amendment No. 2) Regulations 2004), with the exception of subparagraphs (2) to (6) of paragraph 4, applies from the last day of the undertaking's financial year that ends during 2006.-�.

¹ OJ No. L 35 11/2/2003, p.1

² OJ No. 345, 19/12/2002, p.1