As a Belgian insurance intermediary, FinFactor NV would like to obtain clarity regarding the definition of 'capitalization transactions', as referred to in Article 2, § 3, b), ii), of Solvency II Directive and included in Article 5, 13° of the Insurance Act (hereinafter the WVLA ), which, according to the FSMA, only refers to obligations that are specified in terms of their duration and amount and therefore only relates to products that entail an obligation to repay a certain amount expressed in money.

It follows, according to the FSMA, that an obligation to pay the equivalent of units of an investment fund is not sufficient. According to the FSMA, the value of such units is variable by definition, which means that such obligations cannot relate to the payment of a specific amount (as understood in the ordinary sense, and therefore in money).

The alternative interpretation according to which the phrase “obligations determined as to their duration and amount” could also cover obligations to repay the variable equivalent of investment fund units

(and therefore of a value that is determinable, but not determined, in money), would give the legal terms a meaning that, according to the FSMA, is not customary at all and therefore does not meet the legitimate expectations of policyholders.

FinFactor NV is aware of the fact that the interpretation of the concept of 'capitalization transaction' appears to be different within certain Member States, including Luxembourg and France.

EIOPA's mission is to guarantee coherent and effective application of European regulations. We notice that the different interpretation of "capitalization transactions" leads to legal uncertainty in Belgium and hinders the free movement of services in Europe with regard to "capitalization transactions".

Against this background, do ‘commitments of specified duration and amount’, in the context of the capital redemption operations, as referred to in Article 2(3)(b)(ii) of Solvency II Directive, mean only obligations to repay a certain amount expressed in money/cash, or can obligations be repaid by a fixed equivalent/number of units of an investment?”