Section II: Technical and accounting rules.

I. - When, pursuant to the last paragraph of Article R. 441-21, the commitments of the insurance undertaking under an agreement are no longer represented in at least an equivalent manner by the assets relating to that agreement and a reduction in the value of the annuity unit is not authorised by the agreement under the conditions set out in Article L. 441-2, the insurance undertaking shall make up this shortfall in the theoretical mathematical provision by the sum of the special technical provision, the unrealised gains and losses on the assets allocated to the special technical provision and the special technical provision for reversal by allocating to the commitments relating to this agreement assets representing reserves or provisions of the insurance undertaking other than those representing its regulated commitments. These assets are chosen in accordance with the "prudent person" principle referred to in Article L. 353-1 and are allocated to the special supplementary technical provision for this agreement.

II. - When, pursuant to the last paragraph of Article R. 441-21, the commitments of the insurance undertaking under an agreement are no longer represented in at least an equivalent manner by the assets relating to that agreement and a reduction in the service value of the annuity unit is authorised by the agreement under the conditions set out in Article L. 441-2, the insurance undertaking shall perfect this representation by allocating assets, under the conditions provided for in I, up to the amount of the representation deficit which remains after taking into account the change in the theoretical mathematical provision resulting from the reduction in the value of the annuity unit which the insurance undertaking will have decided for the coming year and the allocation to the special technical reversal provision under the conditions provided for in III.

If the insurance undertaking does not decide to reduce the value of the annuity unit for the coming year, it will perfect the representation of all the commitments under the agreement, in accordance with the conditions set out in I.

III. - When it decides, for a given agreement, to reduce the value of the annuity unit, the insurance undertaking evaluates the amount of the change in the theoretical mathematical provision resulting from this reduction.

The insurance undertaking reallocates to the special technical reversal provision referred to in 3° of Article R. 441-7, set up in respect of this agreement, part of the assets contributed to represent the commitments of the agreement in application of I, and where applicable the assets acquired to replace them following the sale of the latter, for an amount equivalent to that assessed in the first paragraph of this III, within the limit of the total assets allocated to the additional special technical provision of the agreement.

When the amount of the change referred to in the first paragraph of this III is greater than the net book value of the total assets allocated to the special supplementary technical provision of the agreement before the reallocation provided for in the previous paragraph, the insurance undertaking makes up this difference within the limit of the difference between the product of 0.05 multiplied by the amount of the theoretical mathematical provision, before the reduction concerned in the service value of the annuity unit, and the sum of the assets allocated to the special supplementary technical provision before the reallocation provided for in the previous paragraph. To this end, the insurance undertaking directly allocates to the special technical reversal provision assets representing its reserves or provisions other than those representing its regulated commitments.

IV. - The assets allocated to the special technical provision for reversal pursuant to III and, where applicable, the assets acquired to replace them following the sale of the latter are reallocated to the representation of reserves or provisions other than those relating to the policy concerned when the insurance undertaking decides to increase the value in service of the unit of annuity of the policy concerned, for an amount of assets equivalent to the amount of the change in the theoretical mathematical provision resulting from this increase, within the limit of the total assets contributed to the special technical provision for reversal.

V. - The changes in the allocation of assets provided for in I, the last paragraph of III and IV do not entail the allocation to the agreement of the income from the rights attached to these assets, including the income corresponding to any tax credits attached to the holding of these same assets. The financial income and expenses generated by the assets thus allocated to the special supplementary technical provision or to the special technical reversal provision are recorded, as and when they are recognised for accounting purposes, in the income statement of the insurance undertaking.

The assets thus allocated to the special supplementary technical provision or to the special technical reversal provision are recorded in the balance sheet referred to in Article R. 441-12 at their realisable value, determined in accordance with Articles R. 343-11 and R. 343-12. The difference between this value and the previous book value is recorded in the insurance undertaking's profit and loss account.

VI. - When, for a given policy, the sum of the amount of the special technical provision, the supplementary special technical provision, the special technical provision for reversal and the net unrealised gains and losses on the assets allocated to the special technical provision exceeds the amount of the theoretical mathematical provision, the insurance undertaking reallocates the special technical provision to the new policy, the insurance undertaking reallocates to represent reserves or provisions other than those relating to this agreement assets which, pursuant to I, had been allocated to the special supplementary technical provision and, where applicable, assets acquired with the proceeds of the sale of the latter, up to the limit of the positive difference between the aforementioned sum and the theoretical mathematical provision.

VII. - Assets reallocated to represent reserves or provisions other than those relating to the agreement concerned pursuant to IV and VI are recorded in the balance sheet of the insurance undertaking at their net book value, determined in accordance with articles R. 343-9 and R. 343-10.