Better bond rating from CSA

Insurance companies will be allowed to invest up to 60% of their technical reserves in bonds issued by the local public authorities instead of the previous 25%. This is what the Insurance Supervision Commission (CSA) decided by modifying the guidelines on the investment conditions for insurance companies’ reserves. Technical reserves are those reserves any insurer is bound to set aside for claim settlement purposes. The municipal bonds, more and more often issued lately, will be possible to take into account when calculating the liquidity quotient of the insurer – a ratio of liquid assets and ironclad obligations to the insured clients. The bonds issued by the local authorities part of the public administration will therefore start being considered liquid assets like the government securities, banking deposits and the cash in current accounts and pay offices. At the same time, CSA’s Board decided to conduct audits of those insurance companies overly exposed to credit and guarantee risk. ZF