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Italy: IVASS consultation on Regulation 36/2011 extending permitted investments for technical purposes

On 10 June 2014, IVASS launched a public consultation (the “Consultation“) concerning amendments to ISVAP Regulation 36/2011 setting out the guidelines on investments and assets eligible for technical reserves. Regulation 36/2011 was recently amended by IVASS Resolution No. 17 of 15 April 2014 which was adopted for the purpose of implementing the EIOPA Guidelines (please refer to our newsflash of 30 April 2014). On that occasion, market players had proposed certain amendments to the investments allowed for technical reserves, but IVASS decided not to implement these requests and to focus attention instead on the preparation for Solvency II. The Consultation takes these requests into consideration in proposing much broader permitted investments.

In particular, the new set of rules aims at widening the range of investments permitted to life and non-life insurance companies thus allowing them to benefit from greater investment diversification. In this regard, the category of allowed equity securities not traded on a regulated market would now also include units in limited liability companies. Moreover, the Consultation eliminates the limit of 5% for investments in (i) close ended funds not traded on regulated markets, (ii) reserved funds and (iii) hedge funds.

In addition, IVASS would now have the power to authorise insurance companies to carry out investments exceeding the limits set out in the Regulation itself, provided that certain conditions (in terms of risk management, compliance with the investment policy, safekeeping of the assets, etc.) are met.

IVASS stated that such amendments are expected to improve insurance companies’ investments selection without affecting the companies’ stability or undermining consumers’ protection.

In light of the above, insurance companies, if the amendments are enacted, would be able to rely upon a wider range of risk-return combinations. The amendments would also open up a new market for asset managers.

The Consultation will end on 10 July 2014.

Please click here to download the Consultation (available in Italian only).