EIOPA Consults on Draft Opinion on Sustainability Within Solvency II
EIOPA is consulting on the draft opinion on sustainability within Solvency II. The draft opinion forms part of strategic activities of EIOPA on sustainable finance and follows a call for opinion from EC. The consultation runs until July 26, 2019. After considering responses received to the consultation, EIOPA will finalize, by September 30, 2019, the draft opinion for submission to EU institutions.
The draft opinion aims to integrate sustainability risks, particularly those related to climate change, in the investment and underwriting practices of (re)insurers. The opinion addresses the valuation of assets and liabilities and assesses current investment and underwriting practices. It also seeks to contribute to the integration of sustainability risks in market risks and natural catastrophe underwriting risks for the solvency capital requirements for standard formula and internal model users. The draft opinion builds on the Technical Advice by EIOPA on the integration of sustainability risks and factors in delegated acts under the Solvency II Directive and the Insurance Distribution Directive (IDD).
Between January and March 2019, EIOPA had conducted a public call for evidence and a confidential request for information. The questions aimed to collect evidence on practices of non-life (re)insurers with regard to climate change. Evidence provided by life insurers confirms that health or life insurers are not considering climate change in their valuation of liabilities and underwriting practices. EIOPA would welcome further insights, during the consultation, from the life and health (re)insurance industry on how sustainability could be considered in their business models, valuation, and solvency assessments. The public call for evidence was answered by 33 stakeholders. The questions of the call for evidence can be found in Annex 3 to the consultation paper on draft opinion. The draft opinion contains the EIOPA analysis of the responses to the call for evidence, along with the key policy conclusions.
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Comment Due Date: July 26, 2019
Keywords: Europe, EU, Insurance, Reinsurance, Solvency II, Opinion, Sustainable Finance, SCR, IDD, Climate Change Risks, EC, EIOPA
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