Countries A, B and C are EEA states. A company in country A has transferred a portfolio of insurance contracts to a company in country B. The insurance contracts include unit link products, individual pension schemes and group annuity.
The insurance contracts were entered into between the country B branch of the country A insurance company and policyholders in country B.
After the insurance contracts were concluded, a few of the policyholders have moved from country B to another country C.

The answer to this question is provided by the European Commission.

As an introduction, it has to be noted that the scope of the authorization (Article 14 of the Solvency II Directive) as defined in Article 15 of the Solvency II Directive shall be valid for the entire Union/EEA. Hence, the authorization permits undertakings to pursue business there and also covers the right of establishment and the right to provide services. From the Commission perspective, the case described under the background section of the question implies that the insurance undertaking in question is already engaged in cross-border business involving Member States A and B.
Article 13(14) of Directive 2009/138/EC (Solvency II Directive) covers the definition of the "Member State of the commitment". It essentially identifies the Member State of the commitment for two specific situations:
(a) the habitual residence of the policy holder;
(b) if the policy holder is a legal person, that policy holder’s establishment, to which the contract relates;
 

Question 1 and 2:
The Definition of “Member State of the Commitment” in Article 13 (14) of the Solvency II Directive has been subject to several interpretations over the years.
 

In general, it has to be noted that the Solvency II Directive does not define the date on which the habitual residence of the policyholder must be determined; nor does it specify whether factual changes to the place of habitual residence of the policyholder during the term of the insurance contract may affect the definition of the Member State of the commitment.
 

However, according to established case law, the ECJ confirms that the habitual residence of the policyholder, is by its very nature, a criterion that may change in particular during long-term insurance contracts (judgement of 21 February 2013, RVS Levensverzekeringen NV v Belgische Staat, C-243/11, paragraph 34).
 

Yet, the case itself in para 39 reads: “As was pointed out at paragraph 30 of this judgment, the definition of the ‘Member State of the commitment’, as set out in Article 1(1)(g) of Directive 2002/83, does not specify the appropriate date on which the habitual residence of the policyholder is to be determined. Consequently, as the Advocate General has observed at point 43 of her Opinion, since the relevant date does not form part of the definition of the term ‘Member State of the commitment’, that term may be defined differently depending on the provision in which it is used. “
 

Therefore, one has to look at the purpose of the notification requirement in Article 147 of the Solvency II Directive.
 

Based on the background provided in the question it becomes clear that the requirement here depends on the business intention of the insurer and not on the life developments of the policyholders.
The insurer did not provide a service into Member State C, the policyholder moved the service it acquired in Member State B into Member State C. It is the individual decision of the policyholder and clearly not the decision of the insurer. If for tax reasons a dynamic interpretation is warranted, that is not the case for the prudential notification procedure in Article 147 of the Solvency II Directive - as the insurer did not move nor intend to provide services in Member State C. It has to be noted again that the authorisation under Solvency II is valid throughout the EEA. Consequently, asking notifications according to Article 147 of the Solvency II Directive whenever policyholders move their habitual residence would be a barrier to free movement of policyholders and bring no real added value prudentially. General good requirements can apply irrespective of notification.

Disclaimer provided by the European Commission:

The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.