Regulatory Alerts2013-08-20
Added · Updated
Adequacy of professional indemnity insurance for AIFMs
Managers of alternative investment funds (AIFMs) must ensure their professional indemnity insurance meets specific coverage thresholds, requiring minimum limits of 0.7% of managed portfolio value for individual claims and 0.9% for aggregate annual claims. If an insurance policy fails to satisfy these criteria or if the maximum coverage limit falls below the required 0.9%, the AIFM must immediately hold additional own funds amounting to 0.01% of the total value of the portfolios managed. AIFMs are responsible for monitoring compliance with these minimum coverage requirements and must notify the Dutch Central Bank (DNB) immediately if the insurance becomes invalid, as failure to maintain sufficient capital constitutes a breach of solvency requirements.