GREEN-MINDED SOLVENCY II PROPOSALS MAY LEAVE SOME SHORT-CHANGED

The European Commission’s proposed changes to Solvency II link insurance regulation with the societal zeitgeist like never before, writes our reporter, Antony Ireland. However, many feel the steps to mobilise insurer capital and give proportional treatment to smaller insurers do not go far enough. Under the EC’s proposed “recovery and resolution” regime, insurers would be required to undertake long-term climate scenario analysis and prepare pre-emptive recovery plans for potential future climate-related and macro-prudential issues as part of their management practices and own risk and solvency assessment (Orsa), with the aim of building resilience and protecting policyholders in the wake of a devastating pandemic and escalating natural catastrophes.