Eurovita, banks and insurance companies united for the rescue
The will to save Eurovita and its followers 353 thousand customers exists and is shared by all stakeholders. On the technicalities to get to the safety of the policies there is still a lot to work. The table under the aegis of the Mef served above all to reiterate the interest of banks and insurance companies to arrive at a clear and rapid solution, which can primarily protect the policyholders.
The scheme of the intervention
The scheme outlined is that of a capital increase from 500 million financed by the five insurance companies (Unipol, Intesa Vita, Poste Vita, Allianz and Generali). A further extension of the freeze on redemptions no later than September, even if among the sources consulted no one indicates precise dates. Prior to the unblocking, the five companies would proceed to the steweach taking a slice of Eurovita.
There is also agreement with the banks on the intervention scheme. Which should “cover” insurance, anticipating liquidity to its customers holding Eurovita policies who wish to redeem them. And bringing them the policies expire. The quality of Eurovita’s assets, on initial inspection, was judged to be good or in any case satisfactory. Despite an excessive imbalance on illiquid securities and high risk securitiesincluded in the portfolio in the search for higher yields before rate hikes.
Big banks and small institutions
But the crux of the small banks that sold Eurovita products through their branches remains, the weakest link in the bank complex construction. Ransom charges might indeed cause sealing problems to some of these institutions. On this there was the availability of the largest banks to provide liquidity lines.
However, the interest required on these lines was judged too high. But the large institutions have pointed out that they would have had to carry out these sums anyway provisions. And that to lower them further, a public guarantee scheme would have been necessary, such as to be able to account for this exposure as sovereign risk. And therefore being able to set aside percentages of the exposure lower. Negotiations ran aground on this step in recent days, up until theclarification meeting of yesterday. Then there are a number of accounting topics, it is explained, still to be solved. But as mentioned, even if the will has been reaffirmed, the problems raised remain still on the table.