FEBEA has signed, with other 22 civil society organizations and experts, a letter that urges Commissioner Albuquerque to take immediate action to address the growing financial risks posed by fossil fuel investments under the Solvency II framework. It highlights EIOPA’s November 2024 report, which confirms that current regulations underestimate these risks and recommends increasing solvency capital requirements for insurers.

Despite EIOPA’s warnings, the European Commission has failed to include a targeted review of Solvency II in its 2025 Work Program. The letter argues that without this review, insurers will remain dangerously vulnerable to financial instability as fossil fuel assets lose value in the transition to a carbon-neutral economy.

Prominent financial and environmental experts stress the urgency of the issue:

• Julia Symon (Finance Watch) states that addressing climate risk is essential for a stable and competitive insurance sector.
• Marika Carlucci (ShareAction) warns that ignoring EIOPA’s findings is reckless and leaves the financial system exposed.
• Chiara Pass (WWF EU) emphasizes that fossil fuel investments are high-risk assets and that failing to act undermines the European Commission’s own commitments.

The letter also points to real-world consequences, noting that climate change is already reshaping the insurance market. Recent wildfires in the U.S. and extreme weather events in Europe have led to soaring insurance premiums or the withdrawal of coverage in high-risk areas. Insurers face dual threats: financial losses from fossil fuel investments and the increasing physical risks of climate change.

Civil society organizations are now demanding that the European Commission confirm a targeted review of Solvency II in 2025. They argue that delaying action will expose insurers to worsening financial instability, with the ultimate burden falling on taxpayers and policyholders.

Read here: open-letter-solvency-2-commissioner-albuquerque