1. Supervisory authorities shall take all of the following into account for the purposes of the assessment referred to in Article 90(4) of Directive 2009/138/EC:

(a) the legal effectiveness and enforceability of the terms of the commitment in all relevant jurisdictions;

(b) the contractual terms of the arrangement that the insurance or reinsurance undertaking has entered into, or will enter into, with the counterparties to provide funds;

(c) where relevant, the insurance or reinsurance undertaking's memorandum and articles of association or statutes;

(d) whether the insurance or reinsurance undertaking has processes in place to inform the supervisory authorities of any future changes, which may have the effect of reducing the loss-absorbency of the ancillary own-fund item, to any of the following:

(i) the structure or contractual terms of the arrangement;

(ii) the status of the counterparties concerned;

(iii) the recoverability of the ancillary own funds item.

2. Supervisory authorities shall also assess whether Article 90 of Directive 2009/138/EC is complied with taking into account the range of circumstances under which the item can be called up to absorb losses.