EU regulators want 100% coverage of insurers’ crypto holdings
European Insurance and Occupational Pensions Authority (EIOPA) proposed in a technical advice report submitted to the European Commission on March 27 that insurance companies must maintain funds equivalent to the value of their holdings of cryptocurrencies as a measure to reduce policyholder risks. The proposed standard is much stricter than for other asset classes (such as stocks and real estate), with the latter not even requiring half of the funds. EIOPA stated in a separate statement: "Considering the inherent risks and high volatility of these assets, a 100% haircut for crypto assets in the standard formula is prudent and appropriate." In addition, EIOPA noted that this measure would fill the regulatory gap between the Capital Requirements Regulation and the Markets in Crypto Assets Regulation (MiCA), as the current EU insurance regulatory framework lacks specific provisions on crypto assets.
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