The European insurance industry supports the Commission’s sustainability objectives and generally welcomes the Commission’s amendments to integrate sustainability into insurers’ prudential framework and sales processes.
Insurance Europe appreciates the Commission’s proposals for
amendments on the definition of sustainability risks and factors within
Solvency II, which are consistent with existing legislation and are of
financial materiality. Insurance Europe also highlighted suggestions to
improve the Commission’s proposals in some areas.
Specifically, Insurance Europe called for the removal of the current
definition of environmental, social and governance (ESG) preferences of
policyholders, highlighting that the need to clarify sustainability
preferences should be dealt with in the regulatory technical standards
(RTS) of the Sustainable Finance Disclosure Regulation (SFDR), not in
the context of Solvency II or the IDD. Similarly, the reference to the
ESG preferences of policyholders should be removed in the context of the
prudent person principle.
Regarding sustainability in the prudent person principle, Insurance
Europe suggested that the Commission’s proposal should recognise
existing difficulties in terms of feasibility and proportionality, in
order to take account of the actual impact of investment decisions on
sustainability factors and to avoid potential contradictions with the
principle of freedom of investment.
Regarding the scope of the proposed amendments, Insurance Europe
raised concerns that proposed changes to the IDD appear to apply to all
products, not just those which are designed as sustainable products. It
is important that this is clarified in the final legal text. Insurance
Europe suggests that the Commission reverts to the European Insurance
and Occupational Pensions Authority's original drafting which provided
the necessary legal certainty.
Insurance Europe
© InsuranceEurope
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