Insurance Europe has responded to a call for evidence on infrastructure corporates by the European Insurance and Occupational Pensions Authority (EIOPA), which was launched after the European Commission sent a call for advice on these types of investments in October. In its response, Insurance Europe noted that it has been very supportive of a more risk-based treatment of infrastructure.
It welcomed the recognition by EIOPA and the Commission that infrastructure investments can be less risky than traditional corporates. However, the current Solvency II definition for the infrastructure asset class excludes many viable investments by focusing on project finance.
Insurance Europe believes that there are many investments that are structured as infrastructure corporates that can exhibit the same desirable characteristics as infrastructure project finance. Therefore, Insurance Europe called on EIOPA and the Commission to allow an assessment of eligible infrastructure investments that is based on substance over form: for example, the protection of investors instead of the legal form.
Insurance Europe also said that infrastructure corporates should receive the same capital treatment as infrastructure project finance. In terms of next steps, the Commission has asked EIOPA to deliver its advice by the end of January. Depending on the advice from EIOPA, the Commission may adopt further changes to the Solvency II delegated act in 2016.