On 6 October 2026, the European Insurance and Occupational Pensions Authority (“EIOPA”) published a Supervisory Statement on the authorisation and ongoing supervision of insurance and reinsurance undertakings related to private equity (“PE”). The Supervisory Statement covers acquisitions of qualifying holdings in insurance undertakings, portfolio transfers and mergers, as well as ongoing supervision.
The background to the Supervisory Statement is the growing role of PE firms as buyers and owners of insurance undertakings in the EU. According to EIOPA, 26 PE-related insurance undertakings in 14 Member States managed assets of EUR 260 billion at the end of 2023, corresponding to 2.4 per cent of the European market. EIOPA acknowledges that PE ownership can bring benefits, but also identifies specific risks associated with shorter investment horizons, complex ownership structures, changes in asset allocation, extensive use of reinsurance and high leverage.
The purpose of the Supervisory Statement is to promote high-quality and consistent supervision of PE-related insurance undertakings, taking into account their specific characteristics and risks. It is addressed to national supervisory authorities and is to be applied in accordance with the principles of risk-based and proportionate supervision.
EIOPA sets out the following expectations for supervisory authorities.
As part of the ownership suitability assessment, the supervisory authority should obtain a comprehensive understanding of the future business model and request that the proposed acquirer provides a complete list of all planned changes to that model. In an acquisition of control, the business plan should be subject to close scrutiny and should ensure sufficient and sustained investment in, among other things, IT infrastructure and digital resilience.
Where the information provided is insufficient, the supervisory authority may request additional documentation, such as minutes relating to the acquisition from the PE fund’s investment committee or board. A declaration of no objection may also be made subject to conditions, for example regarding regular reporting or the mitigation of identified risks.
When assessing a proposed acquisition, supervisory authorities should consider how the investment horizon and proposed business plan align with the insurance undertaking’s obligations to policyholders. A significant imbalance between the investment horizon and the obligations to policyholders may lead to the conclusion that the business model is not viable, particularly where there are high initial distributions, incentives for an early exit or an investment strategy that is not in the interests of policyholders.
As part of ongoing supervision, the supervisory authority should closely monitor the financial stability of the undertaking, particularly as the investment horizon approaches its end or where an attempted sale has failed. Exit scenarios may also need to be reflected in the insurance undertaking’s own risk and solvency assessment (“ORSA”).
PE firms should avoid unnecessarily complex ownership structures and limit the number of levels above the insurance undertaking. Where the structure is complex, each level of the ownership chain should be justified, and information should be provided regarding, among other things, the PE firm’s governance structure, entities influencing its decision-making and agreements between entities within the PE group.
EIOPA recommends that an approval of the acquisition from the supervisory authority may be combined with requirements for regular reporting on changes in the group structure and financial information regarding the PE group’s principal holdings.
As part of its on-going supervision, supervisory authorities should ensure that the system of governance continues to provide for sound and effective management following the acquisition and that decisions are made in the best interests of policyholders.
Particular attention should be paid to veto rights and other special shareholder rights, the role of shareholder representatives on committees and leveraged remuneration schemes, although EIOPA notes that performance-related remuneration is not problematic in itself.
Intragroup transactions, such as asset management, reinsurance and outsourcing arrangements, should be conducted on arm’s length terms, and investment management decisions should remain independent of the owner.
EIOPA notes that insurance undertaking assets is in some cases used to finance other companies within the PE group, that the owner may charge advisory and management fees, and that PE owners may shift asset allocation towards private credit and other alternative assets that are more complex, less liquid and more difficult to value.
Supervisory authorities are expected to pay particular attention to material illiquid or alternative investments as part of ongoing supervision. Where extensive use is made of reinsurance, the effective transfer of risk should be assessed, particularly where investments are transferred to a PE-related reinsurer without investment restrictions.
EIOPA also warns for over-optimisation of the balance sheet. Changes in assumptions are acceptable where they are properly substantiated and documented, but where there are significant balance sheet enhancements the undertaking is expected to assess whether the Standard Formula remains appropriate.
The entire financing structure should be scrutinised, including debt held at parent company level where the insurance undertaking is the parent company’s main source of revenue. Where debt is held outside the EEA and may materially affect the insurance undertaking, an additional group solvency assessment may be appropriate.
The baseline scenario should be realistic. EIOPA does not consider it realistic to assume that debt can be repaid using virtually all of the insurance undertaking’s profits. Liens or pledges exceeding the PE fund’s commitments invested in the acquisition are considered high risk, and tailored reporting on financing arrangements may be required.
Given that the statutory processing time for acquisitions of qualifying holdings in insurance undertakings is limited to 60 working days, EIOPA considers that supervisory authorities should encourage PE firms to engage in dialogue before submitting the formal notification, particularly where material changes to the business model are planned.
We believe that the Swedish Financial Supervisory Authority (”SFSA”) may use the Supervisory Statement as a checklist in its assessments of PE firms acquisitions of qualifying holdings in Swedish insurance undertakings. Early engagement with the SFSA should therefore be considered in order to clarify its expectations in a particular transaction.
PE firms should be prepared to explain and justify all planned changes to the business model, submit a business plan that is consistent with the interests of policyholders and remains sustainable under realistic stress scenarios, describe whether the capital commitments are limited to the targeted insurance undertaking or extend to the PE fund as a whole, provide a justification for each level of the ownership chain and present a credible exit strategy
Under current rules, the financing of the acquisition must already be disclosed in the assessment of a proposed acquisition of a qualifying holding and, where the target undertaking and the proposed acquirer will form part of a group under Chapter 19 of the Swedish Insurance Business Act (Sw. försäkringsrörelselagen), a group solvency capital requirement calculation (SCR) must also be submitted. Based on the Supervisory Statement, acquisition debt held further up the ownership chain or outside the EEA may now also be subject to scrutiny. The level of debt, the repayment schedule and the collateral throughout the ownership chain should therefore be structured so that they are sustainable based on a realistic dividend capacity.
PE-owned insurance undertakings should review how governance by the PE owners operates in practice, including the role of shareholder representatives in company committees and how their interactions with the persons who effectively run the undertaking are documented. They should ensure that potential conflicts of interest between the insurance undertaking and its owners are identified and managed, assess whether shareholder-introduced remuneration schemes are consistent with the sound and prudent management of the undertaking, and review intragroup asset management, reinsurance and outsourcing arrangements to ensure that arm’s length terms and independence can be demonstrated.
As the Supervisory Statement specifically addresses remuneration schemes provided by the shareholder, we believe that schemes operated by owner entities outside the group subject to group supervision may also attract scrutiny where they influence the management of the insurance undertaking.
The SFSA may assess whether risks resulting from operational transformation initiatives, cost management measures and outsourcing arrangements are appropriately identified, managed and reflected in the ORSA and, in the case of high leverage, how potential future significant changes in the risk profile may affect the sustainability of the business plan. Where there are signs of deterioration, such as recurrent low or negative revenues or a significant decline in the solvency position, the SFSA may also request that the undertaking include different scenarios considering the potential exit strategy in its ORSA.
EIOPA’s Supervisory Statement points towards a supervisory approach in which the PE owner’s investment model assumes greater importance, both at the acquisition stage and throughout the holding period. For PE firms investing in insurance undertakings, this means that regulatory considerations increasingly need to be integrated into transaction structuring, financing, ownership governance and exit planning.
The Supervisory Statement does not provide for any transitional period. We expect the SFSA to apply it immediately, both in ongoing and future qualifying holdings assessments and in the ongoing supervision of PE-owned insurance undertakings. For PE firms with existing qualifying holdings in insurance undertakings, the Supervisory Statement may also have an indirect impact through enhanced on-going supervisory expectations applicable to the insurance undertaking and in connection with an exit.
