Solvency II
Undertakings in difficulty – Solvency II

Solvency II Art.138: Arts 138, 142 On SCR breach: inform immediately, file a recovery plan within two months, restore within six

What does Art.138 require?

Undertakings must inform the supervisor immediately when the SCR is no longer met or there is a risk of breach within three months, submit a realistic recovery plan within two months (with management expense and income estimates, forecast balance sheet, resources for provisions and capital requirements, and reinsurance policy), and restore own funds or reduce risk within six months (extendable by three months, or up to seven years in an EIOPA-declared exceptional adverse situation with quarterly progress reports). The supervisor may restrict free disposal of assets.

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