The European Union's insurance authority has proposed a general rule requiring insurance companies to hold capital equivalent to their cryptocurrency holdings to mitigate risks to policyholders.
This proposal, outlined by the European Insurance and Occupational Pensions Authority (EIOPA) in a technical advice report to the European Commission on March 27, is much stricter than rules for other asset classes such as equities and real estate, which do not require full backing.
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EIOPA stated in a separate announcement:
"EIOPA considers a 100% haircut in the standard formula prudent and appropriate for these assets in view of their inherent risks and high volatility."
This measure is intended to bridge the regulatory gap between the Capital Requirements Regulation and the Markets in Crypto-Assets Regulation (MiCA), addressing the current lack of specific provisions on crypto assets in the EU insurance regulatory framework.