The new Capital Investment Circular

On 12 December 2017, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht - “BaFin”) published the new Capital Investment Circular 11/2017 (Capital Investment Circular).

The Capital Investment Circular provides an interpretation of the legal basis for the supervision of insurance companies in connection with the capital investment of primary insurers to which the provisions of sec. 212 to 217 of the Insurance Supervision Law (Versicherungsaufsichtsgesetz - “VAG”) apply (so-called “Small Insurance Companies”) as well as of pension schemes and pension funds. Futhermore, the Capital Investment Circular has practical relevance to occupational pension schemes and other asset managers that are guided by the regulations for the supervision of insurance companies in their investment activities.

Concerning the background: On 03 March 2015, the ordinance on the investment of the guarantee assets (Sicherungsvermögen) of pension schemes, burial funds and small insurance companies was amended. Thus, the ordinance was adapted to the Capital Investment Code (Kapitalanlagegesetzbuch - “KAGB”) and extended by further investment opportunities in the field of infrastructure. The contents of the current version of the Investment Ordinance dated 18 April 2016 (Anlageverordnung - “AnlV”) are essentially identical to those of the investment ordinance as amended on 03 March 2015.

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