EIOPA Submits Technical Advice on Sustainable Finance to EC

A key aspect of the advice is the integration of sustainability in the prudent person principle for investments under Solvency II. Insurers should reflect the impact of their investments on sustainability, promoting a stewardship approach by insurers and reinsurers. EIOPA emphasized the relevance of integrating sustainability risks in the investment decisions and underwriting practices. In respect of product design and distribution, EIOPA calls for the introduction of a clear reference to environmental, social, and governance (ESG) considerations in the implementing rules of the Insurance Distribution Directive on product oversight and governance as well as on conflicts of interest. Furthermore, EIOPA proposes an explicit link between the prudent person principle and the target market assessment in the product oversight and governance arrangements to ensure the delivery of ESG characteristics of a product, if promoted as such. To ensure consistency, EIOPA developed its final report in cooperation with ESMA.

Related Links

• Press Release
• Final Report on Technical Advice (PDF) 

Keywords: Europe, EU, Insurance, Sustainable Finance, Solvency II, Insurance Distribution Directive, ESG, EC, EIOPA