OTC Derivatives

GDV’s position on the joint discussion paper of the European Supervision Authorities (ESA)

GDV contributed to the ESA (European Insurance and Occupational Pension Authority, European Banking Authority and European Securities and Markets Authority) consultations on OTC derivatives not cleared by a CCP.

From the GDV’s point of view the following aspects should be highlighted:

  • Collaterals for OTC derivatives do not qualify as restricted assets (“Sicherungsvermögen” and “sonstiges gebundenes Vermögen”) for the purpose of German insurance regulatory law. German insurers would need to finance such collateral out of other funds. This would cause remarkable additional costs as well as additional operational efforts.
  • German insurers are allowed to enter into derivative contracts only for purposes of protection or hedging. Corresponding capital requirements are fully defined by Solvency II.
  • For reasons of funding the re-use of collateral should not be restricted.
  • The collateralization of intra-group OTC derivative contracts is not customary as the overall risk profile of a group is not affected.

The GDV’s complete position paper is available in the download section


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on the Joint Discussion Paper of the ESAs as of 6 March 2012 on risk mitigation techniques for OTC derivatives not cleared by a CCP under the Regulation on OTC derivatives, CCPs and Trade Repositories