In light of the massive challenges arising from the economic effects of the global COVID-19 crisis, the European Insurance and Occupational Pensions Authority (EIOPA) and the Austrian Financial Market Authority (FMA) today made an urgent recommendation to insurance undertakings to refrain from distributing dividends for the previous and current financial year as well as from share buy-backs. The supervisory institutions remark in unison that the current difficult situation is also to be taken into account regarding variable remuneration. Initially this recommendation applies for at least six months, although in any case until such a time as is possible to more accurately gauge the economic and financial impacts of the current crisis.
“In light of the large degree of uncertainty surrounding both the duration and the effects of the crisis, insurance undertakings must contribute however possible in order to be able to continue to fulfil its important risk transfer function for the economy and society. In such a situation it would be complete incomprehensible it insurers were to drain their financial resources by having an irresponsible distribution policy,” remark the FMA’s Executive Directors, Helmut Ettl and Eduard “At the current time, there is a need for solidarity and doing everything possible to cushion the economic shock caused by the COVID-19 crisis as far as is possible, as well as creating optimal conditions, to allow us to hit the ground running again once the crisis is over.”
EIOPA and the FMA have already displayed the utmost flexibility, in order to support the financial economy, including the insurance sector, in its important function for the real economy. This is essential for ensuring the continuity of insurance services, and to ensure the coverage of risks for private households as well as companies also during the current crisis, and to create the financial basis for an upturn as soon as possible.
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)676/882 49 516