Česká asociace pojišťoven
ČAP, CAP
Česká asociace pojišťoven je zájmovým sdružením vytvořeným podle § 20f občanského zákoníku na organizaci a podporu vzájemné pomoci, spolupráce a zabezpečení zájmů pojišťoven a zajišťoven.
ID: 031285324217-50
Lobbying Activity
Response to Revision of EU rules on sustainable finance disclosure
30 May 2025
Central and Eastern Europe is starting the transition to a green economy from a significantly different level than other regions in Europe. As a result, it is important for our Czech insurance market to ensure a smooth transition process, specifically to apply a phased approach, ensure recognition of transition efforts and provide objective reporting standards. Overly complex regulation is a source of legal uncertainty for insurers and carries the risk of failing to fully achieve the objectives intended by the EU co-legislator. Insurance companies are hit harder by the SFDR framework than many other financial market participants. For example, investment companies and funds can only publish regular information on green investments, insurance companies must send it (or a link to it) to their clients. Insurance companies generally do not manage client investments themselves, but use asset managers and are therefore dependent on information from them. Finally, the primary objective of insurance is to provide quality protection in the event of a claim. Insurance companies' portfolios are composed of traditional and less risky investments such as government bonds. As a result, green investment opportunities in the region are relatively limited, which explains the low share of EU-taxonomy aligned green products or even sustainable products. Requirements arising from sustainable finance legislation should apply the principle of proportionality and the value of disclosure to consumers. Recent statistical data collected by the Czech insurance association (below as ČAP or the association show that the share of green funds in the insurance products sold is low. Specifically, the share of investments under Article 8 of the SFDR in the premium volume of new life insurance business is 3.84% and 0.02% under Article 9. In terms of new contracts (for the period 2023-2024), we record 129 new underwritten policies under Article 9 and 12,229 under Article 8. These statistics show the limited demand for art. 8 and 9 IBIPs in the Czech insurance market. For the market and demand for ESG IBIPs to grow, it is crucial for the regulatory requirements to be simplified. The cost of SFDR implementation is a significant issue, particularly the cost of IT infrastructure, external data providers, distribution and training. The complexity of information, detailed technical specifications and extensive legal texts can be difficult for the average customer to understand. For this reason, information should be simplified and presented in a clear and concise manner, emphasising the key points that are most important for consumer information. This may include the use of plain and understandable language, providing summaries and key points at the beginning of the document, keeping technical details and legal terms to a minimum unless they are necessary to understand the basic information. The main objective of the SFDR should be transparency at product level. Entity-level disclosure should be limited to those financial market participants not subject to the CSRD and to information not covered by the European Sustainability Reporting Standards (ESRS). Revising the list of Principle Adverse Impact (PAI) indicators: the mandatory list of PAI indicators should be simplified to include only the most important and relevant ones. This would facilitate the publication of this information and reduce the administrative burden. Consumer-friendly information: disclosure formats, such as SFDR templates, should be clear, accessible and support consumers' financial decision-making. Consumers should not be overwhelmed by overly detailed information. Complex regulatory expectations on the ESG preferences during advice and other burdensome pre-contractual information required by SFDR hinder the demand for ESG IBIPs. The templates in the RTS should be understandable for clients and ČAP recommends their radical simplification.
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