Regulatory Alerts2011-04-15 | Circular 4/2011 (VA) - Guidance Notes on the Investment of Restricted Assets of Insurance UndertakingsGuidance Notes on the Investment of Restricted Assets of Insurance Undertakings
The Federal Financial Supervisory Authority (BaFin) requires German and European Economic Area insurance undertakings to invest their restricted assets in a manner that guarantees maximum security, profitability, and liquidity. The guidance notes mandate comprehensive internal investment rules and robust risk management frameworks that actively monitor market, credit, concentration, liquidity, and legal exposures through stress testing and asset/liability alignment. Undertakings must establish clearly separated front- and back-office functions, enforce strict internal limits, and submit regular risk reports to ensure their portfolios consistently support sustainable contract obligations.
Share