1.The scheme of operations of the agency or branch referred to in Article 10 (1) (c) shall contain the following particulars or proofs concerning: (a) The nature of the risks which the undertaking proposes to cover in the host country ; the general and special policy conditions which it proposes to use; (b) The tariffs which the undertaking proposes to apply for each category of business; (c) The guiding principles as to reinsurance; (d) The state of the solvency margin of the undertaking, referred to in Articles 16 and 17; (e) Estimates relating to the expenses of installing the administrative services and the organization for securing business ; the financial resources intended to cover them; and in addition, for the first three financial years: (f) Estimates relating to expenses of management; (g) Estimates relating to premiums or contributions and to claims in respect of the new business; (h) A forecast balance sheet for the agency or branch. However, the particulars referred to in (a) and (b) above shall not be required with regard to the risks classified under Nos 4, 5, 6, 7 and 12 of point A of the Annex, nor shall those referred to in (b) above be required with regard to the risks classified under Nos 14 and 15 of point A of the Annex. The particulars referred to in (a) and (b) need not be required in the case of risks classified under No 11 of the same point.
2.The scheme of operations shall be accompanied by the balance sheet and profit and loss account of the undertaking for each of the past three financial years. If, however, it has not yet been in business for three financial years it shall be required to furnish them only for the financial years completed. With regard to Lloyd's, the publication of the balance sheet and the profit and loss account shall be replaced by the compulsory presentation of annual trading accounts covering the insurance operations, and accompanied by an affidavit certifying that auditors'certificates have been supplied in respect of each insurer and showing that the responsibilities incurred as a result of these operations are wholly covered by the assets. These documents must allow authorities to form a view of the state of solvency of the Association.
3.The scheme of operations, together with the observations of the authorities competent to issue authorizations, shall be forwarded to the competent authorities of the head office country. The latter authorities shall communicate their Opinion to the former within three months from the receipt of the documents ; if their Opinion has not been communicated upon the expiry of this time, it shall he deemed to he favourable.