After its Consultation last December (please see our newsflash), on 6 June 2016 IVASS enacted Regulation No. 24 ("Regulation 24") - replacing ISVAP Regulation No. 36 of 31 January 2011 ("Regulation 36") - regarding, among other things, investment limits and coverage of technical reserves. Regulation 24 - in line with Ministerial Decree 166/2014 for pension funds - moves toward the prudent person principle, according to the EIOPA Guidelines on Governance and Solvency 2.
Regulation 24, now applicable also to reinsurance companies, abandons the rigid quantitative limits of Regulation 36 but sets out specific rules for the investment in (i) loans to entities different from natural persons and micro-enterprises and (ii) derivatives.
In order to ensure compliance with the prudent person principle in the management of the investments, insurance companies will need to adopt investment policies consistent with the nature and the complexity of the business performed and strengthen their internal control systems.
Regulation 24 also amends ISVAP Regulation No. 27 of 14 October 2008 in order to provide guidelines on how the assets in which technical reserves of insurance and reinsurance companies are invested must be described in a specific register to be kept by the companies.
Regulation 24 enters in force the day after its publication in the Official Gazette. However insurance companies must comply with the new provisions on the investment of the technical reserves and on the register requirements starting from 1 October 2016 and must approve their investment policies by 30 September 2016.