(1) An insurance undertaking or reinsurance undertaking shall invest all its assets in accordance with the prudent person principle, as specified in paragraphs (2) to (4).

(2) The undertaking shall comply with the following investment criteria:

(a) with respect to the whole portfolio of assets, it shall only invest in assets and instruments whose risks it can properly identify, measure, monitor, manage, control and report, and appropriately take into account in the assessment of its overall solvency needs in accordance with Regulation 47(2)(a);

(b) it shall invest all its assets, in particular those covering the Minimum Capital Requirement and the Solvency Capital Requirement in such a manner as to ensure the security, quality, liquidity and profitability of the portfolio as a whole and, in addition the localisation of those assets shall be such as to ensure their availability;

(c) it shall invest its assets held to cover the technical provisions in a manner appropriate to the nature and duration of its insurance and reinsurance liabilities and in the best interest of all policy holders and beneficiaries taking into account any disclosed policy objective;

(d) if a conflict of interest arises, the undertaking, or the entity which manages its asset portfolio, shall ensure that the investment is made in the best interest of policy holders and beneficiaries.