1.For the purposes of paragraph 2, ‘restructured assets’ shall mean assets the cash flows of which are dependent on the performance of other underlying financial assets.
2.Without prejudice to Article 77b of Directive 2009/138/EC, insurance and reinsurance undertakings shall only be allowed to include restructured assets in the assigned portfolio of assets referred to in that Article, where they can demonstrate to the satisfaction of the supervisory authority all of the following:
the underlying financial assets of the restructured assets provide a sufficiently fixed level of income such that the cash-flows of the restructured asset are themselves sufficiently fixed;
the cash flows of the restructured asset are supported by features for loss absorbency ensuring that those cash flows remain sufficiently fixed where operating conditions change;
where the underlying financial assets include financial guarantees, those guarantees do not increase the matching adjustment in the calculation pursuant to Article 77c of Directive 2009/138/EC and Article 53 of this Regulation;
the undertaking is able to properly identify, measure, monitor, manage, control and report the risks of the underlying financial assets.