Question ID: 1162
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Article: 164, 169, 261
Status: Final
Date of submission: 20 Mar 2018
Question
We are an Alternative Investment Fund Managers managing a closed-end reserved alternative investment fund (the Fund) which invests exclusively in plants for the production of electricity with photovoltaic technology. The Fund invests only in plants which are already in operation and connected to the electricity distribution network, with an operating history of 3 to 5 years.
The Fund has financed its investments in part with equity and in part with debt, in accordance with the Fund’s bylaws and the relevant legislation.
Assuming that an insurance company, which invests in units of the Fund, after following the procedure provided for in Article 261a of the Delegated Regulation (EU) 2015/35 (the Delegated Regulation), determines that the Fund as “infrastructure project entity” satisfies all the criteria set in Article 164a of the Delegated Regulation, and therefore classifies the investment as a “qualifying infrastructure equity investment”:
We kindly ask confirmation that the capital requirement (equal to 30 % plus 77 % of the symmetric adjustment as indicated at Article 169 paragraph 3 of the Delegated Regulation) is applied directly to the Net Asset Value of the investment in the Fund’s units.
EIOPA answer
The answer is based on the following assumptions:
1. The fund holds solely and directly infrastructure assets as defined in Article 1 (55a) DA (no holdings of debt or equity stakes in other legal entities that hold infrastructure assets).
2. The investment in the fund units does not meet the criteria for strategic equity investments set out in Article 171 DA
3. The NAV equals the value of the units determined in accordance with Article 75 Solvency II.
Provided that the units in the fund are qualifying infrastructure equities as defined in Article 168 (3a) DA, then the "equity shock" set out in Article 169 (3b) DA (i.e. to 30 % plus 77 % of the symmetric adjustment) has to be applied to the NAV.