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19 March 2009 Supervision Supervision label Factsheet

A special purpose reinsurance vehicle must satisfy various requirements imposed by or by virtue of the Financial Supervision Act (Wet op het financieel toezicht, ‘Wft’), both when applying for a licence and during the pursuit of its business. These requirements aim to promote the soundness of special purpose reinsurance vehicles and, hence, to protect stakeholders from the risk of losses resulting from solvency or liquidity deficiencies. De Nederlandsche Bank (‘DNB’) supervises compliance by special purpose reinsurance vehicles with all statutory and regulatory requirements.

The most important requirements which the Wft and its subsidiary legislation make of a special purpose reinsurance vehicle relate to:

  • Integrity and expertise of policymakers (Chapter 2 of the Bpr) The application documents must include the completed propriety assessment forms and accompanying annexes. The forms must be completed and signed by the members of the Management and Supervisory Boards, as well as by the officers responsible for determining or co-determining the day-to-day policies of the special purpose reinsurance vehicle or the group to which the company belongs.

  • Ethical business operations (Chapter 3 of the Bpr)
    The subjects covered by this Chapter include measures to prevent conflicts of interest, breaches of the law and/or other socially undesirable acts. Such acts may undermine public confidence in the special purpose reinsurance vehicle.

  • Sound business operations (Chapter 4 of the Bpr)
    This concerns the adequate management of operational processes and operational risks.

  • Minimum own funds (Chapter 9 of the Bpr)
    The minimum amount of own funds of a special purpose reinsurance vehicle is an amount set by DNB not exceeding €1 million. DNB sets this amount on the basis of the special purpose reinsurance vehicle's risk profile.

  • Solvency (Chapter 10 of the Bpr)
    Pursuant to Section 59(2) of the Bpr the solvency of a special purpose reinsurance vehicle is adequate if the actual solvency is equal to the minimum amount in the guarantee fund.

These requirements are detailed in subsidiary regulations relating to various operational, technical and financial aspects of the firm. These regulations take acount of the several risks the firm is exposed to and with differences in the nature, size and complexity of insurers. The detailed requirements rely in large measure on internationally harmonised supervisory requirements which have been transposed into Dutch legislation through the implementation of EU Directives.


  • Insurers