EIOPA has published a Discussion Paper (DP) on assessing the prudential treatment of insurers’ sustainable assets and activities. Given that insurance underwriting and investment activities can be profoundly affected by sustainability risks, EIOPA is assessing how assets and activities associated with environmental or social objectives are treated under Solvency II. The DP aims to address the protection gap between the amount at risk from climate change and the proportion insured.
The DP outlines the various kinds of analysis considered by EIOPA and focuses on three key areas:
- assets and transition risk exposures;
- underwriting risks and climate change adaptation; and
- social risks and objectives.
Comments on the DP can be submitted until 5 March 2023.