EXPIRED: Communication between insurance undertakings and BaFin and the submission of documents to BaFin – rules on electronic communication adopted into permanent administrative practice.
The rules on electronic communication have now been adopted into administrative practice within BaFin’s Insurance Supervision Sector. This includes the electronic submission of documents. Further information on this can be found here.
EXPIRED: How can insurance undertakings communicate with BaFin?
BaFin is following the federal government’s current recommendations to reduce personal contact as far as possible. Specifically, this means that many of our employees are working from home. We kindly ask that for now you send applications and other correspondence concerning insurance supervisory issues solely by e-mail. Please address your e-mails to the competent division as follows: VAxy@bafin.de (“xy” being a placeholder for the division number) – for example: VA51@bafin.de, VA21@bafin.de, VA44@bafin.de, etc. If you have any questions about electronic correspondence regarding complaints, please send them to your point of contact at BaFin in division VBS 4.
Confidential information must be sent by encrypted e-mail, particularly information regarding insurance-related consumer complaints and other information submitted that are handled centrally by division VBS 4. For information about the SecureMail system, already used by many companies to communicate with BaFin on a regular basis, please refer to the BaFin website.
We ask that you also send us only those documents in paper form for which paper form is compulsory. For data/documents submitted electronically in the past (e.g. via the MVP Portal), no changes will be necessary. Please continue submitting them as before.
EXPIRED:I. How should inside information in the form of forecast changes as a result of current developments involving the novel coronavirus be treated?
It should be noted that any forecast changes are to be publicly disclosed only if they are sufficiently probable. If the impact of the coronavirus crisis cannot be predicted yet, the issuer is entitled to maintain their previous forecast. However, a forecast change is not considered precise only once the exact impact on the financial position and financial performance can be determined in full. Thus, the rules concerning the public disclosure of inside information also apply to possible changes in the future business performance that are triggered by the virus. If the issuer assumes, with a sufficient degree of probability, that the actual results will significantly fall short of the existing forecasts without being able to provide a new detailed forecast, it can be assumed that this constitutes inside information. In this case, it would be permissible for the issuer to withdraw the existing forecast from the market by means of an ad hoc disclosure, without this disclosure containing a new detailed forecast. If the issuer can provide a detailed forecast at a later date, this forecast must also, as a rule, be publicly disclosed in the form of an ad hoc disclosure without undue delay.
EXPIRED:II. Are there specific aspects to be taken into account in light of the recent coronavirus outbreak when assessing whether financial figures constitute inside information?
It may not yet be possible to predict how the current coronavirus crisis will affect quarterly figures. If the coronavirus crisis has a determinable impact on the financial position and financial performance of the issuer in question and this impact results in a considerable difference between the financial figures and their relevant benchmark, this may constitute inside information subject to the ad hoc disclosure requirement for the issuer. Given the current sharp price fluctuations on stock exchanges as a result of information involving the novel coronavirus and the resulting widespread increase in volatility of individual shares, it is more difficult in many cases to determine whether information has the potential to have a significant effect on share prices. In BaFin's view, stricter criteria may need to be applied in individual cases when determining what is to be considered “considerable” in the context outlined above. By contrast, when determining what is to be deemed “considerable”, it is of no significance whether or not the effects of the coronavirus crisis on the financial position and performance are to be considered non-recurring expenses.
BaFin would also like to point out that the mere fact that there is a sharp price fluctuation following the public disclosure of financial figures does not mean that the information is to be automatically categorised as price-sensitive information. Rather, an ex-ante forecast is to be used as a basis when determining whether the information is price sensitive.
EXPIRED: How is BaFin currently dealing with on-site inspections at insurance undertakings?
For now, BaFin will generally not be conducting any on-site inspections at insurance undertakings. On-site supervisory interviews can still be arranged in exceptional cases, however.
EXPIRED:III. How should consensus estimates that only partially take into account the effects of the coronavirus outbreak be assessed given the current impact of the virus? How can market expectations be determined appropriately in such cases?
BaFin determines market expectations based on the mean value (arithmetical mean) of current analyst estimates (“consensus estimates”) at the time the inside information emerges. In BaFin’s view, adjustments for any outliers are, as a rule, not permissible. In this context, BaFin would like to point out that the specific circumstances of the individual case must be taken into account when determining whether information has the potential to have a significant effect on share prices. As it may be difficult in some cases to determine the mean value – e.g. because there are not enough available estimates – determining market expectations in a different manner on the basis of plausible information is permissible.
Given the current impact of the coronavirus crisis, BaFin considers, on an exceptional basis, that, in individual cases, it may be justifiable to adjust an existing consensus estimate in an appropriate and objectively transparent manner, e.g. on the basis of current press reports, if the consensus estimate refers to estimates that are clearly no longer up-to-date and that do not take into account the current situation.
EXPIRED: What measures does BaFin presently consider necessary for assisting insurance undertakings in dealing with the coronavirus crisis?
In the midst of all the economic burdens, the current situation is posing operational challenges particularly for insurance undertakings. BaFin is presently in close dialogue with the European Insurance and Occupational Pensions Authority (EIOPA) and the other national supervisory authorities to determine possibilities for implementing simplified requirements.
EXPIRED: How should undertakings submit documents that several people (e.g. executive directors, management board members, supervisory board members, actuaries etc.) are required to sign by hand?
Many undertakings have decentralised most of their operations. This may lead to the problem that the individuals who are obliged to sign the annual financial statements or other documents in the original are not present in the offices in order to sign them. In the event that such or comparable documents must be personally signed by several people, the two options stated below are possible as a temporary measure:
a) Submission via the electronic reporting and publishing platform MVP (Melde- und Veröffentlichungsplattform):
undertakings that have been submitting their documents via the MVP portal can continue to do so. A covering letter should be attached to the documents to be submitted, containing the information that the report was accepted by the persons duly authorised (for example, consent that was obtained via mail or email, in an audio-visual board meeting etc.). The letter must be signed by the chairperson or their representative. The file naming conventions must be observed when submitting the documents via the MVP portal. This means that the covering letter must be given the same file name as the documents to be submitted. Files that have the same name will not be overwritten.
b) Digital submission without using the MVP portal:
in this case, an electronic signature or a consent issued by e-mail or telefax can be temporarily accepted instead of a personal signature. In all cases, however, it is necessary to confirm at the time the digital submission is made that the physical signature will be provided at the next opportunity. An important point to note in this case is that the obliged signatory makes a declaration of intent to this effect. It is not sufficient for the representative of the undertaking to telephone and announce their intention by way of a telephone note.
EXPIRED:IV. Does the postponement of resolutions on the payment of dividends as a result of the postponement of annual general meetings constitute inside information subject to the ad hoc disclosure requirement?
The sole fact that a resolution on the payment of dividends is postponed to a later date as a result of the postponement of the annual general meeting does not constitute inside information subject to the ad hoc disclosure requirement in the case of shares issued by the issuer in question as this does not constitute information that has the potential to have a significant effect on share prices. This is because the postponement of cash outflows for dividend payments does not in itself, as a rule, have a significant effect on the issuer’s financial position and financial performance and would not be taken into account by a reasonable investor when making an investment decision.
However, the postponement of resolutions on the payment of dividends may have the potential to have a significant effect on prices in the case of derivatives relating to these shares; thus, inside information may emerge in this regard. If this does not concern derivatives issued by the issuer itself, this does not constitute inside information subject to the ad hoc disclosure requirement for the issuer of the shares as this does not relate directly to the issuer.
Irrespective of the postponement of an annual general meeting, a (planned) change in the dividend payment amount originally announced may, however, constitute inside information subject to the ad hoc disclosure requirement. For instance, if it was already very likely when the annual general meeting was postponed that there would be a significant dividend cut, this in itself constitutes, as a rule, inside information subject to the ad hoc disclosure requirement.
EXPIRED: V. How do issuers find out when the BaFin FAQs regarding Article 17 of the MAR published during the coronavirus crisis can no longer be taken into account?
The coronavirus pandemic and the resulting restrictions imposed have a very different impact – both in terms of their duration and scope – on each individual issuer depending on the sector and business activity. For this reason, it is not possible for BaFin to make any generally applicable statements about the date from which the business activities of issuers will return to a level that enables well-founded statements on business performance to be made again and be published in the form of forecasts, where applicable. This question can therefore only be answered by each individual issuer based on the particular circumstances that apply to them.
As regards the expected reaction of investors to new information, it is not possible to state exactly when market conditions will have returned to a normal level comparable with that before the coronavirus pandemic since the process is lengthy and difficult to quantify. As a useful indicator of investors’ response to new information, BaFin recommends using market volatility as a basis for an assessment (e.g. by monitoring the VDAX NEW®).
For this reason, the FAQs published by BaFin during the coronavirus crisis will remain available on the BaFin website until further notice.
