LONDON Dec 19 The European Union's insurance
watchdog said on Thursday it will reduce the amount of capital
insurers must hold against top quality securitised debt and
other investments to help generate funds for economic recovery.
The European Insurance and Occupational Pensions Authority
said it proposes to reduce the current 7 percent capital charge
to 4.3 percent, while increasing the charge on risky ones to
The change comes in an EIOPA report following a call from
the EU's executive European Commission to help insurers invest
in economic growth.
EIOPA is fleshing out the detail of new EU capital rules
from insurers known as Solvency II.
"In view of the current economic situation, its purpose was
to examine whether the capital requirements for certain
long-term investments under Solvency II can be reduced without
jeopardising the prudential nature of the regime," EIOPA said in
The report also confirms the currently proposed risk charges
for a number of investments including private equity, loans to
small and medium sized enterprises and socially responsible
investments, EIOPA said.