The European Insurance and Occupational Pensions Authority (EIOPA), which supervises the insurance and Occupational Pensions sectors in the EU, recommends stricter capital requirements to be installed to insurers with crypto companies.
In one racking, The supervisor says that the European Commission has advised to introduce a capital requirement of 100% for digital assets of insurance companies.
The proposed rule applies, regardless of how insurance companies label their crypto companies in the balance sheet or that they have direct or indirect exposure to digital assets
“The Authority of the European Insurance and Occupational Pensions has today published its technical advice to the European Commission and recommends that a one-on-one capital requirement is consistently applied to all Crypto companies of EU (er) insurers.”
The supervisor says that capital requirements must record the risks related to crypto assets, including extreme price movements, market manipulation, lack of price transparency and low liquidity.
“Eiopa considers a 100% hairstyle in the standard formula carefully and suitable for these assets given their inherent risks and high volatility.”
Eiopa says that insurance companies that are active in the region do not yet have significant exposure to crypto. The technical advice of the regulator report Says that in the last quarter of 2023 EU insurers only € 655 million ($ 708.68 million) invested in the emerging asset, which only represents 0.0068% of their € 9.6 trillion ($ 10.39 trillion) in the total assets.
“In general, the investments of companies in crypto-assets are not important.”
According to the Financial Times, EU insurers are currently assign Capital equal to 60% to 80% of the value of their crypto assets.
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