Between 1 January and 30 June 2021, Portugal takes over the rotating Presidency of the Council of the European Union. It is the fourth time that Portugal holds the presidency of the Council. But this will certainly be a different Presidency as it will take place in a context of a pandemic and health, social and economic crisis.

Hence, and despite the fact that the Portuguese presidency’s program will focus mainly on the economic recovery and resilience of the EU, social Europe, green Europe, digital Europe and the role of the European Union in the world and defence of multilateralism the whole agenda will be influenced by the extraordinary context of huge uncertainty we live in.

If we look at the priorities of the Portuguese Presidency we can confirm the relevance of the role of “insurance” in many of these dossiers. See, for example:

The European Union economic recovery and resilience:

One of the most relevant dossiers in this area is the Capital Market Union.

As the largest European institutional investor, the insurance industry has granted its support, from the beginning, to the ambitious objectives of the European project of boosting Europe’s growth by strengthening the single market and stimulating sustainable development and integration of capital markets, removing barriers to investment. In this context, it is worth highlighting the need, within the scope of the amendment of the Solvency II rules, to adjust the regulatory framework in order to reduce excessive costs and barriers to long-term investment by insurance companies.

Furthermore and along these lines the Portuguese Presidency identified also as priority the reinforcement of both the risk assessment capacity and of the European Civil protection mechanisms (RescEU). The territory of the European Union has been affected by a number of natural disasters in recent years, causing hundreds of victims and billions of euros in damage. In order to better protect citizens, rescEU aims at strengthening the current EU Civil Protection Mechanism. And if there is an area where the partnership between States and the insurance industry takes on a relevant role, as shown by several European examples, it’s precisely disaster response mechanisms. In Portugal, insurance companies have systematically warned Governments as to the need of establishing an integrated system of partnership between the public and private sector, which is there to ensure a more robust global response in disaster scenarios.

The Social Europe:

In this particular filed, it is worth mentioning both the measures towards implementation of the European Pillar of Social Rights, and the Green Paper on Aging, due to be issued on the first quarter of 2021.

The European Pillar of Social Rights is based on 20 fundamental principles, one of which, the 15th, pertains to old-age Benefits and Pensions, providing for that “retired and self-employed workers are entitled to a pension, proportionate to their contributions that is there to guarantees them adequate income. Women and men should have equal opportunities in terms of acquiring pension rights. Everyone in old age is entitled to resources to provide them a decent life.”

The problems that aging brings with it have been duly factored in particularly as regards the sustainability of public pension systems. To this end the European Commission has acknowledged the role that supplementary private pensions can play in the challenges posed by aging. And the insurance sector plays a clear role in this particular field due to its ability to capture and manage savings related to retirement pensions, as evidenced by the Pan-European Pension Product (PEPP) file, which may undergo important developments during the Portuguese Presidency, considering that is currently going through the final regulation stage before its full adoption, which will take place in the first quarter of 2022.

Green Europe:

The sustainability dossiers, the European climate law, and adaptations to climate change will be on the table during the Portuguese Presidency.

The insurance industry has always supported the objectives of the European agenda to make the European Union’s economy more sustainable, which, among other things, means an economy with zero net greenhouse gas emissions by 2050.

Regulation related to sustainability (ESG) takes on particular relevance in the insurance sector, with emphasis on the investment area: Considering that the overwhelming majority of the insurers’ portfolio – around 70% – is invested in public and private debt securities, the legislative and regulatory developments related to the creation of requirements for “Green Bonds” and/or that help to clearly identify assets or projects deemed sustainable are especially relevant to the sector.

Digital Europe:

Promoting digital services in the domestic market, guaranteeing access to digital education, digital justice, and digital health and promoting digital resilience by reinforcing cybersecurity are on top of the Portuguese Presidency’s agenda. Any of these issues is of the utmost importance to the insurance sector.

Cybersecurity is a fundamental concern for the insurance sector given that insurance companies are important repositories of information about the lives of people and their client companies. Insurers therefore welcome efforts to increase the digital operating resilience of the financial sector. The European Commission submitted in September a proposal for a Digital Operational Resilience Law (DORA) for the financial sector that must now be worked on and which should form the basic framework to be followed by insurance companies to guarantee their cyber resilience.

As for the digitalization of the economy, it plays a fundamental role for a sector, like the insurer, which is still bound to a number of legal requirements in paper format, which are important to put an end to. The dematerialization of car insurance proof, the dematerialization of notifications and communications with the courts, the dematerialization of information on insured wages in case of occupational accidents, online expert surveys, and telemedicine are just some examples of the long road that still needs to be travelled.

Other dossiers

Especially important for the insurance sector is the car insurance directive which should be approved during the Portuguese Presidency and which will reinforce the protection of victims of car accidents.