Insurance EuropeInsurance Europe
Position Paper
Response to European Commission consultation on its sustainable finance initiative for the distribution of insurance-based investment products

On 21 June Insurance Europe responded to a consultation by the European Commission on its sustainable finance initiative for the distribution of insurance-based investment products (IBIPs). The Commission's proposal is a follow-up to the work of the high-level expert group on sustainable finance and aims to amend the Insurance Distribution Directive (IDD) to include the customer preferences with regard to environmental, social and governance (ESG) factors in the criteria and practical details to be taken into account by insurance intermediaries and insurance undertakings when assessing the suitability of insurance-based investment products for their customers.

Insurance Europe agreed with the Commission that the existence of any customer ESG preferences would be a useful consideration to include during the advisory process. However, Insurance Europe pointed out some practical elements that need to be considered to ensure that the ultimate benefit is afforded to the customer.

Insurance Europe underlined that it is crucial to allow insurance undertakings and intermediaries sufficient time to adapt to the new requirements. This is of particular relevance in light of the fact that some member states have already implemented the IDD. Any transitional period should therefore only commence once the overall taxonomy, or ESG classification system, has been finalised. Alternatively, such changes could be introduced within the context of the IDD review, by which time the relevant taxonomy will have been established. Insurance Europe also made some suggestions for clarifications to the proposed text.

Published 21 June 2018
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William Vidonja
William Vidonja
Head of conduct of business
Arthur Hilliard
Arthur Hilliard
Senior policy advisor