(34)Insurance or reinsurance undertakings should not be disproportionately penalised where a reinsurance counterparty ceases to comply with its Solvency Capital Requirement while still complying with the Minimum Capital Requirement. Insurance and reinsurance undertakings should therefore be allowed, for a period of up to six months, to partially take into account the risk-mitigating effect of reinsurance arrangements entered into with that reinsurance counterparty. Where a reinsurance counterparty ceases to comply with its Minimum Capital Requirement, the insurance or reinsurance undertaking should no longer take into account any risk-mitigating effect from reinsurance arrangements entered into with that reinsurance counterparty.