Brussels, 23/10/2015 (Agence Europe) - On Friday 23 October, the European Commission announced that it has decided to give the go-ahead to the planned changes to the restructuring plan of Belgian insurance company Ethias and its issuance of additional subordinated debt.
Ethias has already successfully implemented a large part of its restructuring plan (previously approved by the Commission in May 2010 and amended in June 2014) and its non-life insurance activities generate significant profits. However, Ethias has to strengthen its solvency position in view of stricter regulatory requirements which will enter into force in January 2016 (under the Solvency II directive).
The restructuring plan requires Ethias to pay dividends to its public shareholders, provided its capital position permits, as part of the measures aimed at reducing competition distortions created by the state aid granted to the company. The Commission has found that the amount of new subordinated debt to be issued will be limited and will therefore not unduly affect the remuneration level paid by Ethias to its public shareholders in return for aid previously granted. The Commission's assessment showed that Ethias will in the first place significantly strengthen its capital base by management measures (investment, reinsurance, cost cuttings, etc) before drawing on subordinated debt for a limited part of the company's capital position. (Original version in French by Élodie Lamer)