The insurance companies express their opposition to the regulations of article 23 of the bill “National Climate Law” submitted to the parliament.
According to an announcement of the Association of Insurance Companies, the obligation of insurance only for new buildings located in high vulnerability zones in order to be electrified from January 1, 2025 is contrary to insurance science and technology.
According to the Union, the basic principle of insurance is the insurance of accidental, uncertain and future risk, ie a risk that is not certain to happen but is a possibility.
In the proposed provision, according to insurance companies, once building insurance is requested only in areas of very high vulnerability, the risk becomes almost certain, as damage is extremely likely to occur.
Thus, it is more likely that the specific risks will not be considered insurable and that there will be no insurance company willing to take the risk, the announcement states, which adds: But even if the insurance company – after the necessary valuation and pricing process – the risk, the premium that will be requested, will be high and probably unaffordable.
EAEE made serious objections to this provision at the consultation stage and submitted its views and proposals to the competent Ministry, clearly explaining the objective reasons that require the review of the provision to representatives of the Government.
In addition, today EAEE participated in the joint meeting of the Standing Committee on Production and Trade with the Special Standing Committee on Environmental Protection of the Parliament where it had the opportunity to develop its views. The proposals of the EUSR concern, inter alia:
(a) the areas defined in the relevant article;
(b) extension to existing and newly constructed buildings;
(c) the ongoing review by the State of a valid insurance policy; and
(e) the need to add an empowering provision that will allow individual technical issues to be resolved in the future.
According to the Association of Insurance Companies, the insurance market has repeatedly expressed a willingness to take an active part in dealing with natural disasters, assisting the State and citizens in managing their overweight recovery.
The Government’s choice to introduce an obligation to finance risks in advance through insurance is unquestionably correct, as Insurance plays a key role internationally in dealing with the effects of natural disasters and climate change, the statement concluded.
However, it is necessary to make substantial modifications in order to make the device technically sound and, above all, functional and applicable in order to fulfill its purpose and to take into account the positions of the most competent in the field in terms of technical knowledge and substantial participation in its implementation.
Source: Capital
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