Investment by private equity and other collective investment entities in the insurance sector

Investment by private equity and other collective investment entities in the insurance sector

Abstract:

In recent years, there has been a growing interest from private equity entities and other collective investment entities in investing in insurance undertakings, with multiple examples of such investments in the United States and, to a lesser extent, in Europe. This increasing interest has also led to a growing attention from supervisory authorities about these types of investments.

The purpose of this paper is to analyze the way in which various regulations, as well as certain actions by the European Insurance and Occupational Pensions Authority (EIOPA) and the Spanish Directorate General for Insurance and Pension Funds (DGSFP), may impact, in practice, the investment operations of different types of collective investment institutions in the insurance sector.

Although it is not the central focus of this paper, we also refer to the regime of investments by insurance undertakings and Spanish pension funds, exclusively with regard to their investment in private equity entities and other closed-ended collective investment institutions (a regime that, in the case of insurance companies, is delimited by EU law; while in the case of Spanish pension funds, it is established in national laws regulations).

Keywords: EIOPA; DGSFP; NAIC; venture capital entities; collective investment entities; Solvency II; LOSSEAR; ROSSEAR; TRLPFP; RPFP