Regulatory Alerts2023-07-12
Added · Updated
Adequacy of professional indemnity insurance for AIFMs
De Nederlandsche Bank (DNB) requires Alternative Investment Fund Managers (AIFMs) to ensure their professional indemnity insurance (PII) meets specific qualitative and quantitative criteria under the EU Delegated Regulation. PII must cover only professional liability, exclude other entities, and provide minimum coverage of 0.7% of managed portfolio value for individual claims and 0.9% for aggregate annual claims. If PII fails to meet these requirements or if the maximum coverage limit falls below the 0.9% threshold, AIFMs must immediately hold additional own funds amounting to 0.01% of the total value of the portfolios managed. AIFMs are responsible for monitoring compliance and must notify DNB immediately if the insurance policy becomes invalid.