Insurance Companies Encouraged to Invest in Long-Term Equity by way of Capital Relief
Published 8 October 2021
Category: Investors Regulation
The EU Commission has published a proposal to amend the EU insurance directive (known as “Solvency II”) so that insurance companies can scale up long-term investments – see more here.
As part of the proposal, the EU Commission will introduce in 2022 technical changes to the criteria attached to the long-term equity category in the Solvency II Delegated Act by lowering the risk charges that are attached to insurance companies’ investment in long-term equity, including investment into alternative investment funds.
According to a press release issued by the EU Commission, it is expected the reduction in capital requirements would reach approximately EUR 10.5 billion under a cautious scenario assuming that only 15% of additional equities would qualify as long-term. This would be a decrease of more than 6% compared to current levels for insurance companies which can be further invested in long-term equity.
Next Step: The amendments to the long-term equity category is expected to be adopted during 2022.
Tags: Solvency II
Also tagged ‘Solvency II’
Commission Adopts Changes to the Risk-Weight of Certain Alternative Investments (Solvency II)
An amendment to the delegated regulation (EU) 2015/35 was adopted by the European Commission 8 March 2019. The legislation includes changes to the risk-weight of certain alternative investments.
Risk ManagementSolvency IIVenture CapitalOther updates
Registration of “sustainability auditors” is now possible
On 1 June 2024, the new rules on requirements to companies’ sustainability reporting (entailed by CSRD) entered into force.
CSRDSustainabilityMeasures to support corporate sustainability reporting
In July, the European Securities and Markets Authority (“ESMA”) published measures to support corporate sustainability reporting.
CSRDESMAESRSSustainabilityESMA opinion on sustainable investments: Facilitating the investor journey
On 24 July 2024, the European Securities and Markets Authority (“ESMA”) published an opinion: “Sustainable investments: Facilitating the investor journey – a holistic vision for the long term” setting out ESMA’s long-term vision on the functioning of the Sustainable Finance Framework.
ESMASustainabilityThematic review of pension funds subject to SFDR article 8
The Danish Financial Supervisory Authority initiated an inspection of three pension funds’ disclosing pursuant to SFDR article 8 in November 2023.
ComplianceDisclosure RequirementsSustainabilityEU’s new Anti-Money Laundering package announced
On 19 June 2024 EU’s new Anti-Money Laundering package was announced. The new AML package has been long in the making, and the Commission presented its package of legislative proposals as early as July 2021.
KYC / AMLFinal reports from ESMA, EBA and EIOPA on greenwashing in the financial sector
The European Supervisory Authorities (EBA, EIOPA and ESMA) has published their final reports on greenwashing in the financial sector.
Sustainability