Regulatory Alerts2015-07-27
Added · Updated
Solvency II: Capital instrument issuance by holding company
Insurance holding companies and mixed financial holding companies must demonstrate that issued capital instruments are unencumbered at the group level and do not impair instrument quality under Article 333(1)(b) of Commission Delegated Regulation (EU) 2015/35. This requirement is satisfied if, upon the winding-up of a group insurance or reinsurance undertaking, claims from these instruments rank after all policyholder and beneficiary claims. Consequently, repayment must be suspended until the interests of policyholders and beneficiaries are fully satisfied. Entities must explicitly reflect this subordination in the terms of the capital instruments.