By derogation from Article 101(3) and as part of the equity risk sub‑module in Article 105(5) (second subparagraph)(b), Member States may permit insurance and reinsurance undertakings that meet specified conditions to treat a clearly identified, separately managed sub‑set of equities as long‑term equity investments. Required conditions include an endorsed long‑term investment policy committing to hold overall exposure on average for more than five years and reporting in the own‑risk and solvency assessment; listing or head office in EEA or OECD countries; ability to avoid forced selling under stress for five years; aligned risk, asset‑liability and investment policies; appropriate diversification; and exclusion of participations. Certain collective investment undertakings may be assessed at fund level.

An undertaking adopting this treatment must not revert to a non‑long‑term approach. If it ceases to comply it must immediately inform the supervisory authority, provide information and remedial actions within one month and seek restoration within six months; failure to restore within six months requires cessation of long‑term classification for two and a half years or until compliance is restored, whichever is longer. The capital requirement for long‑term equity investments equals the loss in basic own funds from an instantaneous 22% fall in value. The Commission shall adopt delegated acts to further specify the conditions, eligible collective undertakings and required disclosures in the solvency and financial condition report and in the regular supervisory report.