Sustainable finance

Sustainable finance in the insurance and pensions sector

Sustainability is at the heart of the EU project and is key in ensuring long-term competitiveness of the EU economy and with it, the insurance and pensions sector.

Insurers and pension funds, as managers of large parts of society’s risks and important long-term investors have a particular interest in mitigating the impact of climate change and  facilitating the transition to a more sustainable and resilient economy.

By integrating sustainability considerations from an environmental, social and governance (ESG) perspective into the regulatory and supervisory framework for insurers, reinsurers, insurance distributors and pension providers, EIOPA contributes to the European Commission's Sustainable Finance Action Plan and to the ‘Green Deal’.

EIOPA has been implementing an ambitious strategic plan on sustainability and climate change with the following objectives: 

  • Insurers should manage and mitigate ESG risks through their underwriting activity;
  • Insurers and pension funds should reflect policyholder and pension scheme member preferences for sustainable investments, where relevant; 
  • Insurers and pension funds should adopt a sustainable approach in their investments based on principles of stewardship

EIOPA’s projects in sustainable finance

EIOPA has been carrying out several projects to establish its policy on sustainable finance and to develop tools and methods for ESG risk analysis, with a view to embed ESG risk analysis in regulation as well as in supervision.

EIOPA publically consults and organizes regular Roundtables on Sustainable Finance, to discuss its proposals with participants from EIOPA’s Stakeholder Groups, the European Commission, representatives of the insurance and pensions, asset management and rating industries, and representatives of consumers associations and civil society.

At its latest Roundtable on Sustainable finance, EIOPA stressed the importance for insurers and pension funds to manage sustainability risks as part of their risk management, as well as to contribute to reducing risks to sustainability for society.

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EIOPA is a member of the Network for Greening the Financial System and of the Sustainable Insurance Forum, as well as the European Commission's Sustainable Finance Platform for the taxonomy on sustainable economic activities.

In addition, EIOPA is aiming to improve its own environmental performance as an institution and to lower its impact on the environment. EIOPA has registered to the EMAS (Eco Management and Audit Scheme).

EIOPA’s mandate on sustainable finance, following the review of its founding regulation, is to:

  • take into account sustainable business models and integration of ESG-related factors in the areas of its competence, 
  • develop criteria for identifying systemic risks and an adequate stress-testing regime, including potential environmental-related systemic risk, 
  • put in place a monitoring system, and 
  • develop common methodologies for union-wide assessment of resilience of financial undertakings taking into account risks stemming from adverse environmental developments and of the effect of environmental risks on the financial stability of financial institutions.

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Consumer protection | Risk assessment | Solvency II

Review of specific items in the Solvency II delegated regulation

EIOPA welcomes comments on the review of specific items in the Solvency II Delegated Regulation. Comments are most helpful if they: respond to the question stated, where applicable; contain a clear rationale; and describe any alternatives EIOPA should consider.
Regulation | Risk assessment | Solvency II

Proposal for guidelines on the system of governance

Consumer protection | Risk assessment | Solvency II

Technical advice on the identification and calibration of other infrastructure investment risk categories

Risk assessment | Solvency II

Proposal for guidelines on submission of information to NCA

Consumer protection | Financial stability | Risk assessment | Solvency II

Automation in financial advice

Consumer protection | Risk assessment | Solvency II

Proposal for guidelines on pre-application for internal models

Risk assessment

EIOPA’s Risk Dashboard assesses risks in the European Union insurance sector

Today, the European Insurance and Occupational Pensions Authority (EIOPA) published its updated Risk Dashboard based on the fourth-quarter 2016 data. The results show the risk exposure of the insurance sector in the European Union remained overall stable and some positive market developments were...
Risk assessment | Supervision

EIOPA calls for further improvement in the ORSA implementation

Today, EIOPA published a supervisory statement outlining the first supervisory experiences on how European (re)insurance companies have implemented the ORSA process. This statement is based on the supervisory assessments of the ORSA under the Solvency II framework conducted by the national...
Governance | Risk assessment | Supervision

EIOPA issues principles on supervisory approach to the relocations from the United Kingdom

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Risk assessment

EIOPA highlights financial stability risks

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Risk assessment

EIOPA publishes the first paper of a series on systemic risk and macroprudential policy in the insurance sector

Page Content Today, the European Insurance and Occupational Pensions Authority (EIOPA) published the first in a series of papers with the aim of contributing to the debate on systemic risk and macroprudential policy. Until now, the debate has mainly focused on the banking sector due to its...
Sustainability

Keynote address by Gabriel Bernardino, Chairman of EIOPA, at the 19. Handelsblatt Annual Conference in Berlin

Keynote address by Gabriel Bernardino, Chairman of EIOPA, at the 19. Handelsblatt Annual Conference in Berlin
Risk assessment

EIOPA publishes the first study on the modelling of market and credit risk

Page Content Today, the European Insurance and Occupational Pensions Authority (EIOPA) published its first study on the Modelling of Market and Credit Risk. The results of the study show significant variations in asset model outputs, partially resulting from model specificities, which indicates the...
Sustainability

EIOPA joins the Sustainable Insurance Forum

Page Content The European Insurance and Occupational Pensions Authority (EIOPA) recently became a member of the Sustainable Insurance Forum (SIF) , a network of insurance supervisors and regulators from around the world working together on sustainability challenges facing the insurance sector. The...
Risk assessment

ESAs see return of volatility in new risk report

Page Content The European Union’s (EU) securities, banking and insurance sectors continue to face a range of risks, the latest report on risks and vulnerabilities in the EU financial system by the Joint Committee of the European Supervisory Authorities (ESAs) shows.
Risk assessment

ESAs propose new amendments to technical standards on the mapping of ECAIs

Page Content T he Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) launched today a public consultation to amend the Implementing Regulations on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk to reflect...
Risk assessment | Supervision

ESAs statement on securitisation disclosure and application of rules for credit institutions

Page Content The European Supervisory Authorities (ESAs – European Banking Authority, European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) have published a statement in response to industry concerns relating to severe operational challenges both...
Risk assessment

EIOPA calls for experts to join Network on Catastrophe Risks

Page Content The European Insurance and Occupational Pensions Authority (EIOPA) today issued a call for experts to join a Technical Expert Network on Catastrophe Risks with the aim to strengthen and complement EIOPA's expertise with regard to the modelling and mitigation of (natural) catastrophe...
Risk assessment

ESAs publish joint EMIR STS standards

Page Content The European Supervisory Authorities (ESAs) published today two joint draft Regulatory Technical Standards (RTS) to amend the RTS on the clearing obligation and risk mitigation techniques for non-cleared OTC derivatives . These standards provide a specific treatment for simple,...
Long-term guarantees measures | Risk assessment

EIOPA’s third annual analysis on the use and impact of long-term guarantees measures and measures on equity risk

Page Content Today, the European Insurance and Occupational Pensions Authority (EIOPA) submitted to the European Parliament, the Council of the European Union and the European Commission, its 2018 and third Annual Report on Long-Term Guarantees Measures (LTG) and Measures on Equity Risk. Compared...
Risk assessment | Solvency II

Group solvency calculation in the context of equivalence

Cross-border | IORP | IORP II | Risk assessment

Occupational pensions

One of EIOPA’s main tasks is to contribute to a sound, effective and consistent level of regulation and supervision of institutions for occupational retirement provision (IORPs). *IORPs are financial institutions that manage collective retirement schemes for employers to provide retirement benefits...
Risk assessment | Solvency II

EIOPA Supervisory Assessment of the Own Risk and Solvency Assessment

This report outlines the EIOPA's analysis of the first supervisory experiences regarding the application of the regulation on the Own Risk and Solvency Assessment (ORSA) by (re)insurance undertakings. This assessment is part of the undertakings' risk management and regulated by Article 45 of the...