Legal Entity Identifier (LEI)
The Legal Entity Identifier is a globally unique, 20-character alphanumeric code used to identify legal entities participating in financial transactions and is mandated under numerous regulatory reporting requirements.
Concept
The Legal Entity Identifier (LEI) is a globally unique, 20-character alphanumeric reference code under ISO standard 17442 that uniquely identifies a legal entity participating in a financial transaction. LEI codes are issued and maintained in a decentralized manner by accredited local issuing bodies (Local Operating Units) under the oversight of the Global Legal Entity Identifier Foundation (GLEIF).
Relevance for Insurance Supervision
In the insurance industry, providing the LEI is mandated under numerous regulatory reporting requirements, including quantitative and qualitative reporting under Solvency II and the reporting of derivatives transactions under European market infrastructure regulation (EMIR). The LEI enables supervisory authorities to clearly trace group structures, counterparty risk, and systemic linkages between financial market participants.
Practical Relevance
Because the LEI is a fundamental prerequisite for participating in regulated financial transactions and for numerous regulatory reporting processes, insurance undertakings and other financial market participants must keep their LEI code continuously up to date and renew it annually to ensure the ongoing validity of their regulatory filings.