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21 August 2020

Insurance Supervision Agency recommends suspension of dividends after 1 October 2020

Pursuant to the rules of the Ljubljana Stock Exchange d.d., Ljubljana, and applicable legislation, Sava Re d.d., Ljubljana, announces the following:

Sava Re informs the public that in connection with the recommendation of the Insurance Supervision Agency (Agency) dated 31 March 2020 and the Agency’s call on companies to suspend dividend payments dated 20 May 2020, Sava Re received a further letter on 20 August, in which the Agency recommends to all insurance, reinsurance and pension companies, even after 1 October 2020, the suspension of dividend payments, refraining from making irrevocable commitments to pay dividends and refraining from any purchase of own shares to add shareholder value, until auditors issue opinions on the annual reports for 2020.

This is because the Agency assesses the situations in relation to Covid-19 and its impact on the economy and the insurance sector as still uncertain. Certain risks have increased with the onset of the epidemic, some new risks have arisen, and the current uncertainties regarding how the epidemic is going to develop do not allow for an adequate assessment of these risks.

The Agency is, however, aware that, since its supervised entities operate on different business models, they are affected in different ways. Supervised entities that intend not to comply with the recommendations, must inform the Agency thereof prior to their dividend distribution. In any such notification, the supervised entity must justify its decision and reasons for it, both qualitatively and quantitatively, based on previously performed reliable stress test results with precisely stated stress test assumptions and calculations of impacts on assets, liabilities, available capital and capital adequacy of the supervised entity.

Attachment:

The letter of the Agency