EIOPA has just released its statement on dividends distribution and variable remuneration policies in the context of COVID-19 (here).
statement-on-dividend-distribution-april2020.pdf
The secretariat IE has prepared a draft statement as a reaction to EIOPA’s statement on dividend restrictions:
Draft statement on dividends.docx
Update of the position of Insurance Europe 8.4.2020:
Feedback we received indicates that:
- There is limited support for a public statement – as some members believe it is not wise to draw more public attention to the issue, especially in light of political pressure on some markets and the sensitivity of the situation. The secretariat concludes that there is no mandate for a public statement on dividends.
- There are questions raised on whether now is the appropriate time for such a communication.
- There is support for engagement by Insurance Europe from many members and some suggestions in terms of drafting.
Having considered the feedback received, the secretariat considers there is merit in sending a letter to the Commission (Director General Sean Berrigan) in order to:
- Emphasise that it is not acceptable for EIOPA to seek to change the 100% SCR benchmark of Solvency II by urging a general dividend ban that is not tailored to specific company situations.
- Seek an outcome where the EC confirms the flexibility and power of decision that NSAs can exercise, independent of the EIOPA statement (from a legal point of view). Should the EC reply with such a statement, it may be of use either in this case, or in future cases where EIOPA decides to put forward restrictions at EU level that go beyond the Solvency II framework.
The secretariat has therefore uploaded a draft letter (based on previous text and aimed at reflecting comments received from members and input from PEIF).