The European Union’s insurance authority has proposed a blanket rule that would mandate insurance firms to maintain capital equal to the value of their crypto holdings as part of a measure to mitigate risks for policyholders.
The new proposal — made by the European Insurance and Occupational Pensions Authority in a Technical Advice report to the European Commission on March 27 — would set a far stricter standard than other asset classes, such as stocks and real estate, which don’t even need to be half-backed.
“EIOPA considers a 100% haircut in the standard formula prudent and appropriate for these assets in view of their inherent risks and high volatility,” it said in a separate statement.
Such a measure would fill a regulatory gap between the Capital Requirements Regulation and Markets in Crypto-Assets Regulation (MiCA), EIOPA said, noting that