Brussels, 01/04/2016 (Agence Europe) - On Friday 1 April, the European Commission announced the entry into force the following day of a modification to a Solvency II delegated act to make it more attractive and less expensive for insurers to invest in infrastructure projects.
“One of the goals of the Capital Markets Union is to promote growth and jobs by knocking down barriers to investment. Insurers told us that some of the Solvency II rules were putting them off investing in infrastructure. We have listened to what they said”, said Commissioner for Financial Services Jonathan Hill.
The delegated act published in the Official Journal of 1 April reduces the risk weightings applicable to investments in own-funds and debt instruments carried out by insurers in these projects in the standard capital requirements calculation formula under Solvency II. The risk weighting applicable to investments in unlisted shares in such projects has been reduced from 49% to 30%. The risk weightings applicable to investments in debt instruments have been reduced by up to 40%, the Commission says.
The insurance sector currently invests less than 1% of its total assets in investments of this kind in infrastructure projects.
When contacted by EUROPE, Olav Jones, Director General of Insurance Europe, said that the publication of the Solvency II delegated acts was a step in the right direction. “However, more still needs to be done through the Solvency II review process, because even after these improvements, Solvency II will still exaggerate the risks involved in long-term investments”, he added. (Original in French by Elodie Lamer)