Will a credit insurance undertaking whose principal activity is to issue guarantees (as listed in Annex 1 of Directive 2013/36/EC) be deemed to be a "financial institution"?
We note that insurance undertakings are not as such "financial institutions" as defined in CRR article 4 (26), as they will not normally engage in activities listed in Annex 1 of Directive 2013/36/EC (as amended). This approach was confirmed by EBA in question 2013_383. However, credit insurance undertakings will as their principal activity issue guarantees - i.e. they will engage in activities listed in point 6 of Annex 1 to Directive 2013/36/EC. That credit insurance might qualify as guarantees was confirmed by EBA in question 2014_768. If unrated credit insurance undertakings are not deemed to be "financial institutions", credit institutions buying their products will not obtain a reduced capital charge under CRR article 201 (1) letter f) and 119 (5).
Please note that as part of adjustments to the Single Rulebook Q&A process, agreed by the EBA and the European Commission, it has been decided to reject outstanding questions submitted before 1 January 2020, when the Q&A process was updated as part of the last ESAs Review. In particular, the question that you have submitted has now regrettably been rejected and will not be addressed.
If you believe your question would still benefit from clarification, you are invited to resubmit your question, adapting it to reflect any legislative, regulatory or other relevant developments that may have occurred since the initial date of submission. The EBA will aim to address resubmitted questions as a matter of priority. When considering to resubmit, you are kindly requested to observe the updated admissibility criteria agreed in the context of the adjustment of the Q&A process, available in the Additional background and guidance for asking questions. We hope for your understanding.