The European Insurance and Occupational Pensions Authority (EIOPA) has told the European Commission that capital requirements for insurers should not be tweaked to encourage sustainability, nor calculated using a longer time frame to better incorporate the effects of climate change. Instead, it suggests analysis, stress tests and disclosure of risks.
EIOPA has said that assets could suddenly be revalued in the transition to a low carbon economy, potentially affecting insurers’ long-term, illiquid investments. The regulator made the warning in an opinion paper on Monday on sustainability in the Solvency II regime.
But the supervisor said that capital requirements