Less generous dividends and, above all, a cap on bonuses for managers. He asks there'Ivass to Italian insurance companies: they passed the first European exam with good marks a few days ago, but according to the control body, the parameters imposed by Solvency II and the prolongation of the general economic crisis require caution on accounts. So, pay attention, to dividends and variable remuneration of managers. The message was launched by IVASS with a letter (dated 2 December) sent to all insurance groups operating in Italy and published on the website of the control body.
Here is the full text of the communication:
“The persistence of a weak economic situation makes it appropriate for companies to pay particular attention to maintaining adequate capital and prudent risk management.
The results of the Own Risk and Solvency Assessment (ORSA), the indications emerging as a result of the Stress test conducted on the basis of Solvency II requirements and, for non-life companies, the results of the Solvency II - Solvency Capital Requirement survey must be taken into account 2014 that this Institute has requested in recent months precisely for the purpose of adequate preparation for the new regime.
The decisions that will be taken on the subject of destination of profits and payment of variable component of the remuneration of top management will be very relevant in this context.
The profit allocation policies must be such as to guarantee the preservation or achievement, at an individual and consolidated level, of the conditions of capital adequacy current and prospective which, without prejudice to compliance with the minimum mandatory requirement, are consistent with the overall risks assumed by each company.
With reference to the policies of remuneration, companies are invited to address a evaluate carefully and cautiously the existence of the preconditions envisaged by the current regulatory provisions on the matter, with particular regard to the recognition and disbursement of the variable component".
