Group Own funds

When calculating group solvency at the level of insurer B, any own funds eligible for the group SCR arising out of reciprocal financing shall not be taken into account. The holding company A is a participating undertaking and is not consolidated within the scope for the group solvency calculation. However, based on Article 223 of the Solvency II Directive on intra-group creation of capital and Article 331(1)(b) of the Delegated Regulation about free from encumbrances of group own funds, any direct and indirect reciprocal financing between insurers B, C and the participating undertaking A would have to be eliminated when determining the group solvency position. The encumbered own fund items resulting from such direct and indirect reciprocal financing with the holding company A should therefore be deducted from the group reconciliation reserve on the basis of Article 331(1)(b) of the Delegated Regulation , i.e. the amount of the investment of insurer B in the holding company A and the investment of insurer C in the holding company A.