Order 2934 was issued by Italy's insurance regulator, ISVAP, on September 27 2011. It approved amendments to:

  • Regulation 28/2009 in relation to the "implementation of provisions regarding criteria for the assessment of items listed under assets which are, however, not destined to remain as long-term company assets, introduced under Legislative Decree 185/2008"; and
  • Regulation 37/2011 in relation to "provisions regarding the proper assessment of solvency margins".

The order and the ISVAP regulations apply exclusively to Italian insurance and reinsurance companies and to branches of insurance and reinsurance companies with registered offices in a third country which prepare a yearly balance sheet in compliance with the applicable rules of the Insurance Code.

The purpose of the order is to enable insurance companies to support themselves against capital losses suffered as a result of highly volatile markets, particularly in the context of bonds issued by governments. Given the present European markets conditions, the order continues to be highly relevant to insurance and reinsurance companies.

The order introduced a new provision regarding the permitted difference between the book value and the current value of items listed under assets that are not destined to remain long-term company assets. This permitted difference has been increased from 20% to 30% of the required margin, provided that capital losses related to government bonds are not less than 75% of the total losses.

For further information on this topic please contact David Maria Marino at DLA Piper Italy by telephone (+39 02 80 61 81), fax (+39 02 80 61 82 01) or email ([email protected]).