The EC High-Level Expert Group (HLEG) on sustainable finance published on 13 July an interim report.
170713-sustainable-finance-report_en.pdf
The report explicitly focuses on the business model of the insurance sector, which is “particularly suited to supporting sustainability”. The report further notes that:
* If regulation and accounting frameworks were to avoid creating disincentives, insurance companies could hold considerable assets in the real economy and act as stabilisers over the economic and financial cycle.
* Solvency II is based on a ‘market-consistent’ valuation of assets and liabilities, which is equivalent to an assumption that all the assets and liabilities of an insurance company should be available for trading at any time. But many insurance sector practitioners believe that that the implementation of the ‘market consistency’ principle in Solvency II discourages long-term investments due to the associated volatility in the balance sheet because it fails to recognise fully and appropriately the link between an insurer’s assets and its liabilities.
* Sustainability factors could be incorporated into each of the three pillars of the prudential framework for insurance.
Questionnaire by the High Level Expert Group on sustainable finance interim report
https://ec.europa.eu/eusurvey/runner/sustainable-finance-interim-report-2017