The European Insurance and Occupational Pensions Authority (Eiopa) has invited insurers and asset managers to participate in a public hearing on the treatment of infrastructure investments under the Solvency II standard formula.
The hearing will take place on 4 September in Frankfurt. It is the last opportunity for the industry to lobby for changes in the regulations before Eiopa submits its technical advice to the European Commission.
As the Solvency II rules currently stand, infrastructure attracts the same capital charge as corporate bonds or equities, depending on whether insurers invest through debt or participate directly in a project.
Early this month, Eiopa published for consultation a proposal to apply a lower risk charge to some infrastructure investments deemed safe, but it remains unclear how the charges should be calibrated (IAR, 3 July 2015).
One possible approach is to derive a spread risk charge based on initial spreads for infrastructure project finance loans. The other approach is to use the existing spread risk charges for bonds and loans as a starting point and to adjust for differences in credit risk or the risk of forced sales.
The consultation closes on 9 August.
The Commission said it would issue a delegated act amending Solvency II before the end of the year.
