Regulatory Alerts2025-06-26 | Circular 04/2025 (VA)Circular 04/2025 on Solvency Requirements for Small Insurance Undertakings and Pension Institutions
The German Federal Financial Supervisory Authority (BaFin) issued Circular 04/2025 to establish binding guidelines on solvency capital requirements and own funds for small insurance undertakings, funeral expenses funds, Pensionskassen, and Pensionsfonds. The circular replaces the previous 2021 guidance, aligns national reporting with XBRL standards, and details capital calculation rules including deductions, grandfathering clauses, and type B own funds across specified reporting templates. It mandates that all covered institutions maintain sufficient own funds at all times to ensure contract satisfiability, with the updated rules applying to financial years ending on or after 1 January 2025.
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