If the European Commission wishes for the Capital Markets Union (CMU) to succeed, there must be a more flexible definition of ‘infrastructure’ under Solvency II, Insurance Europe has urged. 

The industry group argued that capital requirements and all regulatory definitions for infrastructure needed to be “urgently refined” to ensure there were no barriers to investing in the asset class.

It said there was a need for a tailored approach to regulation of infrastructure under Solvency II.

The association’s response to the CMU green paper added: “This should include a flexible definition of infrastructure, as well as changes to the standard formula for both infrastructure debt and infrastructure equity to better reflect the true risks.‎‎”

The call for greater flexibility comes despite data from Preqin showing investors have committed $101bn (€88.2bn) to infrastructure funds that have yet to be drawn down, pointing towards a lack of suitable projects.

Insurance Europe also argued that any initiatives to come out of the CMU should be complementary to any action taken by member states.

It pointed to the European Long-Term Investment Fund (ELTIF) as an example of potentially successful Commission initiative, as long as the ‎ELTIF were granted the same “look through” status as other European fund vehicles.‎