- This is a measure adopted at European level in order to maintain the capitalization levels of insurance companies and protect the interests of the insured
- The General Directorate of Insurance and Pension Funds considers it necessary to preserve capitalization and the ability to bear the impact of the consequences of adverse scenarios of the insurance sector
April 7, 2020.- The General Directorate of Insurance and Pension Funds has published a note recommending that insurance companies and their groups subject to supervision not make dividend distributions, assume irrevocable payment commitments or carry out operations that , like share buybacks, may have a materially equivalent effect, as long as the direct consequences of the coronavirus / COVID-19 health crisis persist.
The recommendation extends both to entities subject to the general solvency regime and to smaller entities to which the special solvency regime applies.
This recommendation is aligned with those issued by the European Authority for Insurance and Retirement Pensions (EIOPA) on March 17 and April 2, which indicates that insurance entities should adopt measures to preserve their balanced capital position with the protection of the insured, following prudent dividend policies and other distribution policies, including variable remuneration.
These measures aim to maintain the financial, equity and solvency situation, as well as the capitalization levels of the insurance entities to guarantee the stability of the sector, the protection of the interests of the insured and ensure that they effectively carry out their support function. to the real economy.
Within the framework of these recommendations, the Directorate General of Insurance and Pension Funds points out that stress tests carried out in recent years have shown that the Spanish insurance sector is well capitalized and able to withstand the impact of the consequences of adverse scenarios. . Likewise, it indicates that this level of capitalization must be preserved in the unprecedented economic context generated by the current health crisis, reinforcing the financial and patrimonial defense mechanisms of the insurance sector.
