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1. Supervisory authorities shall, within nine months of the submission of each pre-emptive recovery plan, review that plan and assess the extent to which it satisfies the requirements laid down in Article 5 and all of the following:

(a) whether the implementation of the arrangements proposed in the plan is reasonably likely to maintain or restore within an appropriate timeframe the viability and financial position of the insurance or reinsurance undertaking;

(b) whether the plan and specific options within the plan are reasonably likely to be implemented quickly and effectively in situations of financial stress;

(c) whether the plan and specific options within the plan are reasonably likely to avoid to the maximum extent possible any significant adverse effect on the financial system, including in scenarios which would lead other insurance and reinsurance undertakings to implement pre-emptive recovery plans within the same period.

2. Supervisory authorities shall provide resolution authorities with all pre-emptive recovery plans they have received. Resolution authorities may examine the pre-emptive recovery plan to identify any actions in the pre-emptive recovery plan which may adversely impact the resolvability of the insurance or reinsurance undertakings concerned and make recommendations to the supervisory authority with regard to those matters within the period set out in paragraph 1.

3. Where an insurance or reinsurance undertaking carries out significant cross-border activities, the home supervisory authority shall, upon the request of a host supervisory authority, provide the pre-emptive recovery plan to that host supervisory authority. The host supervisory authority may examine the pre-emptive recovery plan to identify any actions in the pre-emptive recovery plan which may adversely impact policy holders, the real economy or the financial stability in its Member State and make recommendations to the home supervisory authority with regard to those matters. The home supervisory authority shall provide a reasoned reply as to its decision to follow or not the recommendations. Where the home supervisory authority fails to properly take into account the recommendations of the host supervisory authority, the host supervisory authority may refer the matter to EIOPA in accordance with Article 31(2), point (c), of Regulation (EU) No 1094/2010.

4. Supervisory authorities that, after having assessed the pre-emptive recovery plan, conclude that there are material deficiencies in that plan or material impediments to its implementation shall notify the insurance or reinsurance undertaking concerned of the content of their assessment and require the undertaking concerned to submit, within two months, a revised plan demonstrating how those deficiencies or impediments are addressed. That period of two months may be extended by one month, upon request of the undertaking concerned, where the supervisory authority so agrees. Before requiring an insurance or reinsurance undertaking to resubmit a pre-emptive recovery plan, the supervisory authority shall give the undertaking the opportunity to state its opinion on that requirement. A supervisory authority that finds that the deficiencies and impediments have not been adequately addressed in the revised plan may instruct the undertaking to make specific changes to the plan.

5. Where the insurance or reinsurance undertaking fails to submit a revised pre-emptive recovery plan, or where the supervisory authority comes to the conclusion that the revised pre-emptive recovery plan does not adequately remedy the deficiencies or impediments identified in its original assessment, and where it is not possible to adequately remedy the deficiencies or impediments through an instruction to make specific changes to the plan, the supervisory authority shall require the undertaking to identify within a reasonable timeframe changes the undertaking can make to its business in order to address the deficiencies in the pre-emptive recovery plan or impediments to the implementation of that plan. Where the insurance or reinsurance undertaking fails to identify such changes within the timeframe set by the supervisory authority, or where the supervisory authority concludes that the actions proposed by the undertaking would not adequately address the deficiencies or impediments, the supervisory authority may take a reasoned decision to instruct the undertaking to take any measures that the supervisory authority considers to be necessary and proportionate, taking into account the seriousness of the deficiencies and impediments and the effect of the measures on the undertaking’s business. This decision shall be notified in writing to the insurance or reinsurance undertaking and shall be subject to a right of appeal.