(This note is not a legal part of the Instrument and does not purport to be a legal interpretation)

These Regulations give effect to the Reinsurance Directive (2005/68/EC - O. J. No. L 323/1) which institutes a prudential regulatory framework for reinsurance activities in the Community. The Regulations provide the necessary harmonisation to facilitate the mutual recognition of authorisations and prudential control systems, thereby making it possible to grant a single authorisation valid throughout the Community. They apply the principles set out in the Directive to supervision of reinsurance companies by the home Member State.

The Regulations require reinsurance undertakings to establish and maintain technical reserves, solvency margin and guarantee fund and to furnish information and statistical documents necessary for supervision purposes to the Bank. They also provide the Bank with the power to impose, vary and revoke conditions of an authorisation, as well as the power in specified circumstances to cancel an authorisation.

The Regulations set out restrictions on acquiring and disposing of qualifying holdings in reinsurance undertakings, as well as the role of the Bank in this process. They also specify the responsibilities of the Bank under the Regulations, in particular the requirement to collaborate with other competent authorities and the European Commission.

In addition to the regulation of standard reinsurance business, the Regulations are applicable to finite reinsurance activities, and special purpose reinsurance vehicles (SPRVs). A series of mandatory conditions are specified for these types of business.

Appropriate enforcement powers are provided to the Bank under these Regulations.