(49)Insurance prudential rules can prove to be very complex, and may generate significant compliance costs, in particular for smaller undertakings. While Directive 2009/138/EC embeds an overarching principle of proportionality, its practical implementation is insufficient to effectively reduce the regulatory burden for smaller undertakings, for whom certain requirements may be disproportionately costly and complex given the nature, scale and complexity of their risks. In addition to the new proportionality framework applicable for undertakings classified as small and non-complex, Directive (EU) 2025/2 introduced Article 29d into Directive 2009/138/EC, allowing insurance and reinsurance undertakings to benefit from the application of proportionality measures, subject to prior supervisory approval and a case-by-case analysis. To ensure a level-playing field and predictability for the sector, the conditions based on which a supervisory authority may refuse to grant that approval should be exhaustively specified.