Tuesday, August 4, 2020

BaFin against ban on dividends for insurers

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Federal Financial Supervisory Authority

BaFin opposes the assessment of the EU authority EIOPA.


(Photo: Reuters)

Frankfurt The Bafin rejects a blanket ban on dividends for insurers. The German financial regulator is thus opposed to a different recommendation by the European supervisory authority EIOPA.

A blanket ban on distributions for insurers and pension funds is currently not available, the Bafin said. “When it comes to dividend policy, the individual situation of insurers must of course be taken into account, especially their risk-bearing capacity,” said Executive Director Frank Grund. “We are in close dialogue with the companies in this regard and expect a convincing reason if they want to pay dividends.” Any risks arising from the current crisis situation should be taken into account appropriately.

In view of the corona crisis, EU supervisory authority Eiopa on Thursday evening demanded that insurers and reinsurers should not pay dividends for the time being. In addition, it was advised not to buy back shares in order to conserve own funds. That burdened the shares of many insurers on Friday.

The insurance group Allianz said on Friday night that it wanted to stick to dividends and share buybacks.

The reinsurer Munich Re canceled its 2020 profit target on Tuesday and suspended the share buyback until further notice. At the Annual General Meeting on April 29, a dividend of EUR 9.80 per share will continue to be proposed, it said. The reinsurer did not want to comment on Eiopa’s claims.

In its statement to insurers, however, Bafin reaffirmed its expectation published on March 24 that financial institutions should not distribute dividends and profits.

More: More and more companies cut their dividends

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