The European regulator has urged re/insurers to temporarily suspect dividend distributions and share buybacks aimed at remunerating shareholders, given the level of uncertainties connected to the impact of the COVID-19 crisis.
The European Insurance and Occupational Pensions Authority (EIOPA) said re/insurers must take all necessary steps to ensure a robust level of funds so they will be able to protect policyholders and absorb potential losses.
The Australian Prudential Regulation Authority (APRA) made a similar move this week, asking insurers and banks to consider deferring dividend payouts or dividend reinvestment plans until the impact of the pandemic is better known.
EIOPA on April 2 urged re/insurers need to take into account of current level of uncertainty about “the depth, magnitude and duration of the impacts of COVID-19 in financial markets and on the economy and the repercussions of that uncertainty in their solvency and financial position.”
This statement builds on EIOPA’s message of March 17, which stressed the importance of insurers preserving their capital position in balance with the protection of the insured.
Source: EIOPA
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Topics Carriers Europe Reinsurance
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