EBA · 2019_4926 Rejected question
Classification of credit insurance undertakings as financial institution
- Regulation
- Regulation (EU) No 575/2013 (CRR)
- Article
- 4, para. 26
- Topic
- Other topics
- Submitted by
- Law firm
- Submitted
- 2019-09-24
Question
Will a credit insurance undertaking whose principal activity is to issue guarantees (as listed in Annex 1 of Directive 2013/36/EC) be deemed to be a "financial institution"?
Background
We note that insurance undertakings are not as such "financial institutions" as defined in CRR article 4 (26), as they will not normally engage in activities listed in Annex 1 of Directive 2013/36/EC (as amended). This approach was confirmed by EBA in question 2013_383. However, credit insurance undertakings will as their principal activity issue guarantees - i.e. they will engage in activities listed in point 6 of Annex 1 to Directive 2013/36/EC. That credit insurance might qualify as guarantees was confirmed by EBA in question 2014_768. If unrated credit insurance undertakings are not deemed to be "financial institutions", credit institutions buying their products will not obtain a reduced capital charge under CRR article 201 (1) letter f) and 119 (5).
No answer published yet.
Original source: European Banking Authority, Q&A ID 2019_4926
This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.
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