Law should not go beyond ELD; CEA

BRUSSELS—In order to facilitate the development of insurance under the European Union's Environmental Liability Directive (2004/35/EC), an expert working group of the Paris-based Comité Européen des Assurances is discouraging some member states from adopting legislation that goes "far beyond the scope" of the directive.

"This situation poses not only significant challenges to the insurance industry, but also to industry within the EU territory through exposure to different regimes, which may have significant consequences on final costs for operators and their financial risk takers respectively," according to the CEA group's white paper on the insurability of environmental liability released today.

"Member states that have gone beyond the ELD will most likely make insurability of the whole ELD more difficult, not just the additional liabilities," the paper stated. It cited Poland and Spain as examples of countries considering more stringent legislation.

EU member countries are required to transpose the Environmental Liability Directive, adopted in 2004, into national law by April 30.

The directive aims to create incentives to avoid environmental damage based on the "polluter pays" principle. It ensures that environmental damage is repaired at the expense of the polluter, rather than society.