This thesis examines the impact of the regulator's statement requesting EU insurers to suspend dividend distributions due to the COVID-19 pandemic on share prices of insurance companies. The purpose of the regulation was to maintain a high level of capitalization of insurance companies thus allowing them to pay compensation for any damage incurred during the crisis. Statistical significance of the potential negative impact of regulation on share prices was explored using event study methodology and statistical tests based on a sample of 33 European insurance companies. The empirical results suggest that the negative impact following, publishing of the regulation is not statistically significant over the chosen event window and has no long-term effect. The robustness of the results is confirmed by several statistical tests - parametric and nonparametric. The statement requesting insurers to suspend all discretionary dividend distributions and share buybacks did not affect the fall in share prices of insurance companies on the stock market, which is in line with economic theory. Therefore, the regulator's statement contributes to ensuring the financial stability of the European insurance sector, supporting the real economy and consequently allowing quicker economic recovery.
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