Regulation objective
New requirements
Next steps
EU Regulation and IVASS Regulation 38/2018 on governance of insurance companies
On 21 April 2021, the EU Commission Delegated Regulation EU 2021/1257 (the Regulation) was approved. The Regulation amends Delegated Regulations EU 2017/2358 and EU 2017/2359 in the matter integration of sustainability factors, risks and preferences into the product oversight and governance requirements for insurance undertakings and insurance distributors, and into the rules on conduct of business and investment advice for insurance-based investment products.
In line with the sustainable development goals agreed within the Paris Agreement, adopted under the United Nations Framework Convention on Climate Change, the European Green Deal and the Commission's Financing Sustainable Growth's action plan, insurance undertakings and insurance intermediaries manufacturing insurance products will be required to consider sustainability factors in the distribution of insurance products.
In particular, the design and marketing of insurance products as well as the relevant approval process and testing shall also take into account sustainability factors and any sustainability-related objectives of customers belonging to the identified target market. With reference to insurance-based investment products, "sustainability preferences" in the investment strategy shall be appropriately assessed.
Internal product oversight and governance policies of undertakings and distributors shall be reviewed so as to ensure that sustainability-related objectives and, in case of insurance-based investment products, sustainability preferences, are duly pondered in the context of design and distribution.
The Regulation will enter into force on 2 August 2022.
EU Regulation and IVASS Regulation 38/2018 on governance of insurance companies
The Regulation appears to be in line with the rules as regards environmental, social and governance (ESG) criteria in Italy, including IVASS (Institute for the Supervision of Insurance is the Italia) Regulation 38/2018 on the matter of corporate governance of insurance undertakings. In particular, article 4 of the IVASS regulation requires the board of insurance undertakings to take into account ESG factors in the structure of corporate governance structure and the assessment of risks.
For further information on this topic please contact David Maria Marino at DLA Piper Studio Legale Tributario by telephone (+39 02 80 61 81) or email ([email protected]). The DLA Piper Studio Legale Tributario website can be accessed at www.dlapiper.com.