Supervision of insurance and reinsurance undertakings shall be prospective and risk‑based, including continuous verification of the proper operation of the business and of compliance with supervisory provisions. Supervision shall comprise an appropriate combination of off‑site activities and on‑site inspections. Member States shall ensure that the Directive’s requirements are applied proportionately to the nature, scale and complexity of the risks inherent in an undertaking’s business, in particular for undertakings classified as small and non‑complex undertakings.

Delegated acts and the Commission’s regulatory and implementing technical standards shall take into account the principle of proportionality; draft RTS (Articles 10–14), draft ITS (Article 15) and guidelines/recommendations (Article 16) submitted by EIOPA shall ensure proportionate application. The Commission shall adopt delegated acts specifying: the criteria in Article 29a(1), including the method to calculate the sums in points (a)(iv), (b)(v) and (c)(vii); the methodology for classifying small and non‑complex undertakings; and the conditions for granting or withdrawing supervisory approval for proportionality measures for undertakings not so classified (Article 29d).