French Insurance Code
In forceThe report on the solvency and financial situation referred to in Article L. 355-5 is approved by the Board of Directors or the Supervisory Board. It shall contain the following information, either in full or by direct and precise reference to information which is equivalent, both in nature and scope, to that published pursuant to other legislative or regulatory provisions:
a) A description of the company's business and results ;
b) A description of the system of governance and an assessment of its appropriateness to the risk profile of the undertaking;
c) A description, separately for each category of risk, of risk exposure, risk concentrations, risk mitigation and risk sensitivity;
d) A description, separately for assets, prudential technical provisions and other liabilities, of the bases and methods used for their valuation, together with an explanation of any material differences from the bases and methods used for their valuation in the financial statements;
e) a description of how capital is managed, including at least the following elements
i) The structure of own funds ;
ii) The Solvency Capital Requirement and Minimum Capital Requirement;
iii) The option set out in Article R. 352-12 used, where applicable, for the calculation of the Solvency Capital Requirement;
iv) Information allowing a clear understanding of the main differences between the underlying assumptions of the standard formula and those of any internal model used by the undertaking to calculate its Solvency Capital Requirement;
v) In the case of a breach of the Minimum Capital Requirement or a serious breach of the Solvency Capital Requirement which occurred during the period under review, the amount of the difference, even if the problem has subsequently been resolved, together with an explanation of its origin and consequences, and of any remedial action taken.
Where the equalisation adjustment referred to in Article R. 351-4 is applied, the description referred to in d, includes a description of the equalisation adjustment and the bond portfolio, a description of the assets in the assigned portfolio to which the equalisation adjustment applies and a quantification of the effects of a cancellation of the equalisation adjustment on the financial position of the undertaking.
The description referred to in d shall also include a statement indicating whether the volatility adjustment referred to in Article R. 351-6 is used by the undertaking concerned and a quantification of the effects of a cancellation of the volatility adjustment on the financial position of the undertaking.
The description referred to in i of e shall include an analysis of any material change from the previous reporting period and an explanation of any material difference in the value of the items under consideration in the financial statements, together with a brief description of the transferability of capital.
Where insurance or reinsurance undertakings apply a transitional measure to the risk-free interest rate curve relevant to eligible insurance and reinsurance commitments, as referred to in Article L. 351-4, they shall disclose in their solvency and financial condition report referred to in Article L. 355-5, the application of this transitional measure, in accordance with b of III of Article R. 351-16. They shall also quantify the impact on their financial situation of the decision not to apply this transitional measure.
Where insurance or reinsurance undertakings apply a transitional deduction to technical provisions as referred to in Article L. 351-5, they shall indicate in their report on solvency and financial position referred to in Article L. 355-5, the application of this transitional deduction, in accordance with c of IV of Article R. 351-17. They also quantify the impact on their financial situation of the decision not to apply this transitional deduction.
The requirements relating to the content of the report on solvency and financial position, the deadline for transmission and the transmission procedures are defined in Articles 290 to 297, 300, 301 and 303 of Commission Delegated Regulation (EU) No 2015/35 of 10 October 2014.
An order of the Minister in charge of the economy specifies the detailed information that companies must provide as part of the report on solvency and financial position.
