Unlisted securities held in life Insurance
Luxembourg insurance regulation allows a large range of underlying investments in internal funds.
These investments may take the form of unquoted/unlisted assets, depending generally on the investment strategy of the life insurance policy.
As investors in these particular and usually more complex assets, insurers face increased risks and challenges.
Risks associated do not only relate to valuation concerns. Legal, compliance, governance and other policy management matters, shall, amongs other, be assessed and monitored on an on-going basis, especially for cross-borders policies.
The need for comprehensive and streamlined processes and controls is enhanced, and an implementation of a clear action plan in order to address these challenges should be seen as a priority.
By the end of this course, participants will be able to:
- Identify the main investment forms/vehicles for unlisted securities
- Explain the main valuation techniques and accounting impacts thereon
- Summarise the main interrelations between the various stakeholders involved within the organisation on the unquoted assets topic
- Identify the key "must have" in terms of internal control environment in relation to such assets (procedures and controls etc.)
1. Rationale for having unlisted securities in policies
- Financial perspective
- Tax perspective
- Asset management perspective.
2. Definitions, concepts & valuation considerations
- The concept of value (definitions and context)
- Valuation methods
- Practical considerations
3. Accounting / financial analysis
- Insurer’s accounting perspective;
- Key disclosure requirements for insurance and commercial companies
- Standalone versus consolidated accounts
4. Procedures and controls
- Structuring a comprehensive procedure and controls within the organisation
- Market benchmarking and pitfalls observed