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EIOPA should consider proportionality and flexibility in potential sustainability requirements in Solvency II

Insurance Europe has responded to an EIOPA opinion paper on sustainability in Solvency II, where it said the current framework is not a barrier to the integration of sustainability. It also noted that sustainability risks are already incorporated into the framework.

Insurance Europe warned that the direct incorporation of a uniform quantitative approach into the own risk assessment (ORSA), based on a standardised set of climate change scenarios, would contrast with the very nature of the ORSA, which is company-specific and with a unique time horizon.

With respect to the use of a forward-looking approach, Insurance Europe said that insurers should be given maximum flexibility to use the most suitable tools to deal with sustainability risks in line with their undertakings’ characteristics.

Insurance Europe added that proportionality should be duly considered in any proposed requirements.

Published 30 July 2019