Regulatory Alerts2025-06-09
GFSC Guidance Note on Solvency 2: The quality of capital instruments
The Gibraltar Financial Services Commission issued this guidance to clarify the quality and classification requirements for capital instruments under Solvency 2 regulations. It mandates prior supervisory approval for capital reductions and defines strict operational standards for the principal loss-absorbency mechanisms in restricted Tier 1 instruments. Furthermore, it establishes specific criteria for instruments to count towards group own funds, requiring them to be unencumbered and subordinate to policyholder claims.
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