EIOPA sets EU-wide expectations for the supervision of private equity-backed insurers
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EIOPA publishes a supervisory statement to harmonise across the EU the authorisation and ongoing supervision of insurers controlled by private equity firms. It asks supervisors to monitor mismatched investment horizons, complex ownership structures, investment shifts and heavy reliance on reinsurance.
Key points
- Prevent capital extraction through high distributions or other short-term measures
- Scrutinise the full financing structure and stress-test business plans before authorisation
- Monitor the shift to private credit and illiquid assets and intra-group or third-country reinsurance
- Ensure independent governance in policyholders' interest
Who is affected
(Re)insurers with private equity owners, private equity firms, supervisors
Plain-language version
Some insurers are owned by private equity funds, investors who buy companies to make a profit. EIOPA, the EU watchdog for insurers and pension plans, is asking supervisors across the EU to make sure these owners don't drain capital through large dividends or short-term moves, because that money is there to pay policyholders.
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Summary produced with artificial intelligence from the official publication. It may contain errors: always check the original document.
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