Commission Adopts Changes to the Risk-Weight of Certain Alternative Investments (Solvency II)

Published 8 March 2019

PrintCategory: EuVECA

With trillions (EUR) of assets under management, the insurance sector plays a vital role at the European capital market.

Insurance companies’ investment allocation is closely related to the capital requirements and risk management principles implemented in the Solvency II Directive as well as the delegated regulation (EU) 2015/35 setting out methods, assumptions and standard parameters for calculating the capital requirements.

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; specifically the new legislation introduces a new category of “long-term equity” exposures with a risk-weight of 22% (as opposed to the current risk-weight of 39 % applying to closed-ended and unleveraged alternative investment funds, including venture capital funds that are European Venture Capital Funds (EuVECA), and as opposed to the risk-weight of 49 % applying to unlisted equity in general) provided they meet a series of conditions, including the length of the investment and its geographic location.

See the amended regulation here.  

Tags:  Risk ManagementSolvency IIVenture Capital


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