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Solvency II tweaked to encourage infrastructure investment

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Changes to Solvency II, the risk-based capital regime for insurers in Europe, will make it easier for insurers to invest in infrastructure projects, according to the European Commission.

An amendment that came into force Saturday has reduced the risk charges imposed on insurers’ equity and debt investments in infrastructure.

The European Commission said that the risk calibration for investment in unlisted equity shares of infrastructure projects had been changed to 30% from 49%, while the risk charges for investment in infrastructure debt had been reduced by up to 40%.

“Insurers told us that some of the Solvency II rules were putting them off investing in infrastructure,” said Jonathan Hill, commissioner for financial services, financial stability and markets union, in a statement.

“We have listened to what they said — as from today they will find it easier and more attractive to invest in European infrastructure projects. I hope they will take advantage of this change,” he said.