CEIOPS report on the possibility for insurance companies to use hedge funds

15 December 2005

The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) released a Report on the Possibility for Insurance Companies to Use Hedge Funds, gathering information on the different arrangements for insurance companies to use hedge funds.

The survey shows among others that most countries have not expressly disallowed the use of hedge funds as cover for technical provisions, while in 3 countries this is allowed only for investments for the benefit of life-assurance policyholders who bear the investment risk.

Some countries follow the “look through” approach and admit only those hedge funds which invest and take on positions consistent with the limits set by national legislations on assets representing technical provisions. Other countries have set quantitative limits to their use, or have adopted a mixed solution, setting both qualitative and quantitative limits.

Report

© CEIOPS