On 31 January 2011, ISVAP released the definitive version of the regulation on technical reserves, a previous draft of which was issued for consultation in July 2010. The regulation applies exclusively to Italian insurance companies and Italianbased establishments of extra-EU insurance undertakings.

The major novelties of the regulation concern the governance requirements imposed on supervised undertakings, aimed at ensuring that any undertaking's determination of the types of assets used as technical reserves be adopted by means of a corporate resolution on their investment strategy: such resolution must be notified to the Italian insurance regulator within 15 days of its adoption. The regulation will enter into force on the day subsequent to its publication in the Italian official gazette but insurance undertakings are required to adopt the corporate resolution on investment strategy within three months of the entry into force of the regulation.

Companies which have already invested in structured notes and securitisation notes for technical reserve purposes by 31 December 2010 are not impacted by the regulation, on the condition that such investments do not exceed five percent of their technical reserves.

Click here for the ISVAP website.