FERMA is currently preparing its response to the consultation exercise now underway on the European Commission Green Paper on the Insurance of Natural and Man-Made Disasters. Stakeholders have until 30 June to express their views on certain proposals by the Commission.
On April 16, the Commission published the Green Paper (click here), which in the EU world, is a consultation type of document used by the European administration to invite relevant stakeholders (individuals and companies) to express their views. It’s a preliminary step that could lead to a more formal document, a White Paper, where the Commission puts forward its final thoughts and conclusions on the topic.
This Green Paper is the logical and necessary step following the release last September by the Joint Research Centre (JRC), the in-house science service of the European Commission, of a full study on Natural Catastrophes: Risk Relevance and Insurance Coverage in the EU (here).
Based on data like the occurrence and the intensity of natural disasters during recent years in Europe, the Commission is now seeking to evaluate whether EU legislative
action is necessary in the field of catastrophe insurance.
To go further in the consultation process, the document contains 21 questions related to the adequacy and the availability of appropriate insurance.
The Green Paper indicates the Commission’s concern about storm surges, river and flash floods, wild forest fires, earthquakes, volcano eruptions, the impact of climate change and man-made disasters. These latter events can be caused by industrial accidents (for example, the 2010 oil spill in the Gulf of Mexico) or trigered by natural catastrophes (“natech”, such as the Fukushima nuclear accident caused by the 2011 earthquake/tsunami in Japan).
Man-made disasters included
That man-made disasters are now included in the Commission review is the major innovation of this consultation. The Commission considers that both natural and man-made catastrophes are on the rise and that the capacity of the insurance sector to insure against them needs to be seriously assessed.
The Commission is making a link with the Environmental Liability Directive (ELD) and the Safety of Offshore Oil & Gas Directive as it targets “human-made disasters”. The questionnaire asked if there are enough data to analyse industrial risks, how to design
an appropriate financial security under the ELD or what innovative insurance mechanisms could be suitable for the offshore oil and gas industry.
FERMA, alongside major industrial stakeholders in Brussels, is very concerned about any mandatory insurance scheme that would not take into account the adaptability and flexibility required by the great diversity of industrial activities across the EU.
These concerns will be shared in the FERMA response to the Green Paper. The variety of business activities calls for innovative insurance solutions that don’t fit with a rigid scheme
applicable to everyone.
In a nutshell :
The Insurance of Natural and Man-Made Disasters : http://ec.europa.eu/internal_market/insurance/consumer/natural-catastrophes/index
Consultation deadline : 30 June 2013