The European Commission on Friday approved new rules to reduce the capital insurers have to set aside to back exposures in corporate bonds and equities to try to boost investments by the 1-trillion-euro ($1.1 trillion) industry.
The move aims to support growth in the European Union, where economic expansion is slowing. But the insurance industry said the Commission`s plans did not go far enough.
Valdis Dombrovskis, the Commission`s vice-president, said the overhaul would make it easier to invest in small and medium-sized companies and provide long-term funding to the EU economy.
"As a result of today`s rules, insurers will have to hold less capital for such investments and will therefore find it more attractive to invest in the economy," the EU executive said in a statement.
Olav Jones from Insurance Europe, the industry`s trade association, said that even after the reform, the industry would still have to hold excessive capital against risks, limiting its ability to invest.
"Overall, this is a missed opportunity," Jones said.
The provisional rules will become operational in three months if EU governments and lawmakers endorse the reform.
The Commission has already taken steps to encourage insurers to invest in infrastructure projects by approving preferential treatment for these investments in 2015 and 2017.
EU insurers collected 1.2 trillion euros of premiums in 2017 and invested 10.2 trillions, figures from Insurance Europe show.($1 = 0.8909 euros)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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