By Luigi Serenelli2021-04-21T14:13:00+01:00 The German financial supervisory authority, BaFin, has stressed the need to comply with the strict solvency rules for Pensionskassen and Pensionsfonds in the new circular 5/2021(VA). The regulator has thus amended the circular 4/2005 (VA) on solvency rules for insurance companies following the implementation of the EU Directive 2016/2341 on the activities and supervision of institutions for occupational retirement provision (IORP II Directive) into German law. The new circular addresses Pensionskasssen, Pensionsfonds, Sterbekassen and insurance companies. According to BaFin, which offers a binding interpretation of the solvency rules in the Insurance Supervision Act (VAG), creditors of subordinated loans are already liable before the insolvency of a Pensionskasse or a Pensionsfond, if the regulator approves the decision for occupational pension institutions to cut benefits or orders it according to Section 314 paragraph 2 VAG.