Status of the counterparties

1. In the event that the qualitative criteria in Article 211(1) and Article 212(3) and (4) are not met, insurance and reinsurance undertakings shall only take into account the risk-mitigation techniques when calculating the Basic Solvency Capital Requirement where one of the following criteria is met:

(a) the risk-mitigation technique meets the qualitative criteria set out in Articles 209, 210 and Article 212(1) and (2) and collateral arrangements exist that meet the criteria provided in Article 214;

(b) the risk-mitigation technique is accompanied by another risk-mitigation technique, where the other technique when viewed in combination with the first technique meets the qualitative criteria in Articles 209, 210, and Article 212(1) and (2) and where the counterparties to the other technique meet the criteria provided in Articles 211(1) and Article 212(3) and (4).

2. For the purposes of point (a) of paragraph 1 of this Article, where the value, in accordance with Article 75 of Directive 2009/138/EC of the collateral is less than the total risk exposure, the collateral arrangement shall only be taken into account to the extent that the collateral covers the risk exposure.