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24 March 2009
The Istituto per la vigilanza sulle assicurazioni private e di interesse collettivo, the regulatory body with authority over the insurance sector, recently published consultation document 31/2008, containing the regulatory framework "for the implementation of provisions regarding criteria for the assessment of items listed under assets which are not destined to remain as long-term company assets, introduced under Decree Law 185 of November 29 2008". The document implements urgent measures for tackling the recent economic crisis.
Once approved, the regulations will be applied exclusively to Italian insurance and reinsurance companies and to branches of insurance and reinsurance companies with registered offices in a third country which, in compliance with the applicable rules of the Insurance Code, draw up a yearly balance sheet.
The most significant innovative aspect of the new regulations is that they allow insurance companies to refrain from aligning the budget value of short-term financial instruments to the price deducible from market trends at the end of the year.
These instruments may be assessed by referring to the values resulting from the six monthly report as at June 30 2008, without prejudice to long-term losses. Meanwhile, the normal criterion of assessment requires that either the cost or the market value of securities not destined to remain as company assets in the long-term must be entered on the balance sheet, whichever figure is lower.
For further information on this topic please contact David Maria Marino at Giuffrè Scorcelli Rosa & Partners - Studio Legale by telephone (+39 02 7639 0744) or by fax (+39 0276 390 681) or by email (email@example.com).
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