Regulatory Alerts2020-07-30
FMA Circular on Securities Lending Transactions in the Deckungsstock of Insurance Undertakings
The Austrian Financial Market Authority issued this circular to guide supervised insurance undertakings on the prudent treatment of securities lending transactions within their cover pools. It mandates that lent assets be removed from the Deckungsstock or valued at zero, while allowing secured claims or collateral to be allocated as substitutes under strict diversification and credit quality conditions. The document further requires that such disposals obtain trustee approval and that collateral be held in segregated accounts with high liquidity and credit ratings to ensure policyholder protection.
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