Guernsey continues its focus on green finance and sustainable initiatives by considering a green investment discount for life insurer capital requirements.
The Guernsey Financial Services Commission (the "GFSC") has issued a consultation paper in respect of proposed amendments to the Insurance Business (Solvency) Rules, 2016. The amendments would reduce the capital requirements applicable to spread risk for the green assets of commercial life insurers and commercial life reinsurers. It is proposed that the initiative be limited to life insurers, as general insurers typically have a shorter investment time horizon and greater liquidity constraints which is not necessarily optimal for the inclusion of green bonds. It is planned that the criteria for green assets would follow those introduced by the Guernsey Green Fund Rules, 2018.
The consultation follows a 2018 discussion paper on green insurance considering how Guernsey could become a supportive jurisdiction for green insurance through regulatory change, as well as the Guernsey International Insurance Association's ("GIIA") support of the United Nations' Principles for Sustainable Insurance Initiative since June 2020 and recent collaboration between GIIA and Guernsey Green Finance.
The GFSC has invited feedback on the consultation paper to be submitted by 10 November 2020.
Details of the consultation can be found here.
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