Poland's financial watchdog allows insurers to allocate 100 pct of '24 profit to dividends

KNF has recommended that only insurance and reinsurance companies that meet the following criteria together should pay dividends:

- have received a risk rating of 1 (good) or 2 (satisfactory) in the BION for 2023;

- have not recorded a shortfall of own funds in the respective quarters of 2024 to cover the capital requirement - understood as the maximum of the minimum capital requirement capital requirement (MCR) and the solvency capital requirement (SCR);

- in 2024, were not covered by a realistic recovery plan or short-term realistic financial plan, as referred to in Articles 312 and 313 of the law on insurance and reinsurance businesses;

- the volume of own funds without deducting anticipated dividends as of December 31, 2024, was at a level above 175 percent of the amount of the capital requirements for undertakings operating in Division I and above 150 percent of the amount of capital requirements for establishments operating in Division II.

Poland's financial market regulator said that the determination of the amount of dividends to be paid should take into account that the coverage of capital requirements (after taking into account dividends planned to be paid in 2025) as of December 31, 2024, and for the quarter in which the dividend is planned to be paid, should be at least 175 percent for establishments operating in Division I and at least 150 percent for establishments operating in Division II.

“The insurers meeting the indicated criteria, when deciding on the amount of the dividend, should take into account additional capital needs in the twelve months after the approval of the financial statements for 2024," KNF wrote in the position paper.

seb/ ao/