Other dossiers: Climate protection gap / Financial education of the consumer / Whistleblower Directive / Environmental Liability / Taxation

Climate protection gap

Public authorities are mainly responsible for climate change adaptation. However, insurance intermediaries play a pivotal role in contributing to climate adaptation, as many have expertise in the modelling of climate risk and the development of resilient and sustainable business models. Intermediaries have also a role in raising awareness of climate risks, in covering new risks (especially for SMEs), preventing a possible "protection gap/insurance gap" by developing adapted and innovative insurance solutions.

Climate Resilience Dialogue 

The Climate Resilience Dialogue is a forum set up by the European Commission (its two Directorates-General FISMA and CLIMA) at the end of 2022. The primary task of the Climate Resilience Dialogue is “to exchange views on how to address the losses incurred from climate-related disasters and to identify how the insurance industry can contribute more to climate adaptation, from actions that increase the penetration of climate risk insurance for industry and all of society, to making the conditions right for more investment in good adaptation solutions”.

The objective of the Climate Resilience Dialogue is to create a forum for discussion that will strengthen the collective understanding of insurers, reinsurers, intermediaries, businesses, consumers and other stakeholders about the climate protection gap.  The climate protection gap is the share of non-insured economic losses caused by climate-related disasters.  The launch of the Climate Resilience Dialogue was announced in the Commission’s 2021 EU Strategy on adaptation to climate change, as well as in its 2021 Strategy for Financing the Transition to a Sustainable Economy.

BIPAR (represented by experts) welcomes the initiative and is a member of the Climate Resilience Dialogue.

Financial education of the consumer

In the framework of the 2020 CMU Action Plan, the European Commission stated it would like to improve citizens’ financial literacy by developing a European financial competence framework and incentives for Member States to promote financial education and responsible investing.

As a result, the Commission and the OECD published a joint financial competence framework for adults in January 2021. This is a framework for voluntary uptake in the EU by public authorities, private bodies and civil society. The framework divides the competences into four content areas: money and transactions; planning and managing finances; risks and reward; and financial landscape. For each competence, three dimensions are considered: awareness/knowledge/ understanding; skills/behaviour; and confidence/motivation/attitudes.  The framework has a special focus on digital and sustainable finance skills.

The Commission and OECD, in cooperation with Member States, are currently working on a financial competence framework for children and youth (individuals under 18). The framework is expected to be finished in 2023.

Whistleblower Directive

Directive (EU) 2019/1937 on the protection of persons who report breaches of Union law (“Whistleblower” Directive) was adopted by the EU legislators in October 2019. Its purpose is to lay down minimum standards providing for a high level of protection of persons reporting breaches of Union law. The deadline for transposition of the Directive was 17 December 2021. However, Member States had until 17 December 2023 to transpose the obligation to set up internal reporting and follow up channels (Article 8(3)), as regards entities with 50 to 249 employees.

The Whistleblower Directive applies to persons reporting breaches on Union law in several areas, including “financial services, products and markets and prevention of money laundering and terrorist financing”.  It specifies that the provisions of the Directive do not apply when there exist specific rules on the reporting of breaches within the sector-specific acts listed in the Annex to the Directive. The Article further states that the provisions of the Whistleblower Directive are applicable to the extent that a matter is not regulated in these sector-specific acts. The sector-specific acts referred to in the Annex (Part II) include, amongst others, the IDD, MiFID II, the IORPs Directive, the PRIIPs Regulation, etc.

Although certain of these sector-specific EU acts (notably the IDD and MiFID II) contain some provisions on the reporting of breaches (ex: Article 35 of the IDD), it appears that none of them includes any requirements on the setting-up of internal channels for reporting and follow-up. Therefore, the Whistleblower Directive requirements on this particular topic (Chapter II, Articles 8 and 9 and parts of Chapter V) apply to the sectors regulated by these acts, such as the insurance distribution sector.

The private legal entities subject to the obligations of the Whistleblower Directive include amongst others, insurance intermediaries as defined in the IDD and investment firms as defined in MiFID II.

Environmental Liability Directive

The Environmental Liability Directive (ELD - adopted in 2004 and first evaluated in 2016) sets out an environmental liability framework to prevent and remedy environmental damage to pre-damage condition when it is caused by economic operators. It contains the “polluter pays” principle. One of the issues that has come up over the years in the discussion at European level is the availability (at reasonable costs) of insurance and other types of financial security, and the need or not for mandatory financial security.

The ELD requires the European Commission to carry out an evaluation before 30 April 2023 and every five years thereafter. The Commission has started this second evaluation process of the ELD, aiming to examine the effectiveness, efficiency, relevance, coherence and EU added value of the ELD.  Two public consultations were launched in the summer of 2022: a general public consultation by the Commission on the evaluation of the ELD and a targeted public consultation from external service providers who are preparing a supporting study on the evaluation of the ELD on behalf of the Commission.


EU taxation policy mostly focuses on establishing a minimum degree of harmonisation of tax rules in order to fight against harmful tax competition and fight tax fraud, while endeavouring to remove tax obstacles for cross-border economic activities. It affects insurance intermediaries in various ways.

With regard to the Value-Added Tax (VAT) policy, although financial services are currently exempted from it, there have been talks, from the Commission, on the possibility of (partly) introducing VAT in the financial sector.

Minimum effective taxation of multinationals

On 22 December 2021, the European Commission presented a proposal for a Directive aimed at ensuring a global minimum level of taxation for multinational groups (2022/2523). This proposal was adopted by the European legislators on 14 December 2022 and published on 22 December 2022.

The Directive is based on the OECD’s Model Rules on Tax Challenges Arising from Digitalisation of the Economy which address Pillar 2 of the OECD’s Two-Pillar Solution. It establishes a minimum level of effective corporate taxation on large multinational enterprises, both domestic and international, (i.e. enterprises with combined financial revenues of over 750 million euros a year and with either a parent company or a subsidiary in a Member State). The Directive contains rules ensuring that large groups pay a 15% minimum rate for every jurisdiction in which they operate.

The deadline for implementing the Directive within national legislations is set on 31 December 2023.

Tax evasion and aggressive planning

In 2022, the Commission held a public consultation on “Tackling the role of enablers involved in facilitating tax evasion and aggressive tax planning”. For the purpose of this consultation, the Commission presented a range of possible options:

- Requirement for all enablers to carry out due diligence procedures;

- Prohibition on facilitation of tax evasion and aggressive planning combined with due diligence procedures and requirements for enablers to register in the EU;

- Code of conduct for all enablers;

- New measures on transparency.

The Commission defined “enablers” as the ones providing tax advisory services and designing complex structures which typically include cross-border arrangements that could result in tax evasion or aggressive tax planning.