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Firstly, insurance activities that have the potential to generate or transmit systemic risk should be identified. Secondly, it should be assessed whether the risks posed by such activities are adequately dealt with by the existing risk management processes and supervisory regimes.
Other measures such as the proposed separation of activities or the application of targeted higher loss absorbency (HLA) requirements should only be considered as a subsequent step and should be carefully targeted at systemically risky activities.
Insurance Europe emphasised that a group-wide HLA requirement would not be an appropriate measure in insurance.