EIOPA has consulted on the European Commission’s call for further technical advice on the identification and calibration of infrastructure investment risk categories in Solvency II.
Insurance Europe has published a response to the consultation which sets out its position in a series of key messages on the matter. Insurance Europe is concerned that the current definition of the infrastructure asset class is too narrowly constructed and may exclude many investments by focusing on project finance. Consequently, it welcomes the inclusion of infrastructure corporates as a type of investment structure as the assessment of the eligibility of infrastructure investments should be based on the substance of the investment, such as its characteristics and risk profile, rather than its legal form. Insurance Europe also provides responses to 17 specific questions raised by EIOPA on the nature of infrastructure investments, particularly focusing on infrastructure corporates. For example, EIOPA requested information on why a corporate, rather than project, structure would be used for infrastructure investments and whether corporate structures are more prevalent in certain sectors. Insurance Europe put forward a number of reasons why the corporate might be used as the legal form and noted that corporate structures are simply more prevalent in certain sectors e.g. transport, utilities and energy.
EIOPA’s call for evidence closed on 10 December 2015 and, based on feedback received, it will prepare its formal advice to the Commission, which it anticipates publishing in the first half of 2016. This may lead to amendments to the Solvency II legislation.
A link to Insurance Europe’s response is here.