Member States shall require undertakings to establish adequate technical reserves to cover the underwriting liabilities assumed in their territories. Member States shall see that the agency or branch covers such technical reserves by means of assets which are equivalent to such reserves and are, to the extent fixed by the State in question, matching assets.
The law of the Member States shall be applicable to the calculation of technical reserves, the determination of categories of investments, and the valuation of assets.
The Member State in question shall require that the assets representing the technical reserves shall be localized in its territory. Article 15(3) shall, however, be applicable.