(1) When calculating the group solvency of an insurance undertaking or reinsurance undertaking which is a participating undertaking in a credit institution, investment firm or financial institution, the participating insurance undertaking or reinsurance undertaking may apply method 1 or 2 set out in Annex I to Directive 2002/87/EC with any necessary modifications.

(2) However, method 1 set out in that Annex may be applied only with the permission of the group supervisor.

(3) Where the Bank is the group supervisor, it shall permit the application of method 1 where it is satisfied as to the level of integrated management and internal control regarding the entities which would be included in the scope of consolidation.

(4) The method chosen shall be applied in a consistent manner over time.