Covid-19: ACAPS takes prudential measures for the insurance sector

As part of the monitoring and evaluation of the impact of the situation caused by the Coronavirus (COVID-19), the Supervisory Authority of Insurance and Social Welfare (ACAPS) has decided to make certain prudential rules more flexible on a transitional basis, and to take mitigation measures to enable the insurance industry to cope with the consequences of this pandemic.

These measures are designed to ensure the proper operation of the sector, to strengthen its resilience to shocks that may be induced by the current situation and to protect policyholders and beneficiaries of insurance contracts.

The Authority has decided to adopt a set of flexibility measures covering the provision for the depreciation of investment securities, the provision for liquidity risk and the provisions for receivables and unpaid premiums. 

With regard to liquidity issues, ACAPS will closely monitor the situation of insurance undertakings on a case-by-case basis and act, where necessary, through the various regulatory levers.

With regard to equity, insurance undertakings have been made aware of the need to preserve and strengthen their capital to maintain their capacity to support the real economy and absorb losses in a context of increasing uncertainty linked to the current pandemic situation. In this perspective, a reasonable and responsible policy for the distribution of dividend by insurance undertakings, for the year 2019, is expected.

The Supervisory Authority of Insurance and Social Welfare will continue to assess the current situation on an ongoing basis and will closely monitor the consequences that may affect the insurance industry in order to provide the most appropriate solutions.