Regulatory Alerts2016-04-25 | NBB_2016_09Added · Updated
Circular NBB_2016_09 on Auxiliary Own Funds
The National Bank of Belgium establishes guidelines for the approval, classification, and continuous compliance of auxiliary own funds for Belgian insurance and reinsurance undertakings. The circular mandates that elements becoming off-list instruments require prior classification approval and that contracts must be concluded within 15 working days of approval unless extended. It specifies that callable elements must not depend on specific events or third-party consent, and requires undertakings to classify contributions and indemnity contracts as Level 2 auxiliary own funds based on their economic substance. The rules apply from March 23, 2016, and include provisions for ongoing monitoring of loss-absorption capacity.