LONDON, Dec. 3, 2012 /PRNewswire/ -- New research by BNY Mellon, the global leader in investment management and investment services, in association with Insurance Risk magazine and with support from Ernst & Young, has found that nearly half (46%) of those surveyed have either not yet initiated or concluded their impact assessment of the changes mandated by the European Market Infrastructure Regulation (EMIR) and the Dodd-Frank Act – while 22% do not believe they will be impacted at all.
Only 32% of insurers surveyed said they understood the impacts of the new regulations and were already working towards operational readiness.
Other key findings of the survey include:
- 78% of respondents believe that they will be impacted by upcoming regulatory changes;
- only 12% of respondents believe they hold enough assets of the requisite quality within their investment portfolios to meet future collateral margining requirements and other pledges;
- 27% believe that they may be obliged to engage in some sort of "asset transformation" activity before being able to post the appropriate collateral, despite one-third of their bond portfolio investments being rated AA or above;
- 53% of insurers expect to participate in the new cleared environment;
- 50% of those surveyed believe their organisation will increase its use of derivatives in the coming years.
The survey polled 59 insurers across the life, non-life and re-insurance sectors; the respondents collectively represent assets in excess of $4.5 trillion, approximately 20% of total insurer owned assets worldwide.Under the existing regime, 64% of respondents said they hold enough assets of the requisite quality within their investment portfolios to meet their collateral margining requirements and other pledges. Currently 54% do not post initial margin and 25% don't post variation margin.