Legal environment

COVID-19 legislation

Both European and national legislators enacted many pieces of legislation and regulation to manage or mitigate the effects of the COVID-19 pandemic since its outbreak in Europe at the beginning of 2020. This also had significant effects on VIG Holding and the Group. In Austria, for example, company law was changed to allow board meetings to be held without the physical presence of participants, and the deadlines for holding general meetings and preparing annual financial statements were extended. Reporting deadlines were also extended in Austrian insurance supervisory law and for judicial and administrative proceedings. Legal changes with respect to customer areas, workplaces and events, and the lockdown restrictions also had major effects on VIG Holding and its Group companies.

Sustainable finance

The European Commission aims to make Europe the first climate-neutral continent in the world by 2050 under its “European Green Deal” initiative. This political goal will become legally binding on all Member States and therefore indirectly applicable to VIG Holding and the Group under the first European Climate Law.

A number of directly applicable European regulations were adopted in 2019 and 2020 to achieve this goal, in particular the so-called “Taxonomy Regulation” and “Disclosure Regulation”. The first creates a system for classifying environmentally sustainable activities and represents a minimum standard for classifying VIG Holding and Group investments starting as of 1 January 2022. The second applies to Group companies that offer insurance-based investment products and includes pre-contractual and periodic information duties to make disclosures at both the company and product levels with respect to sustainability risks and the adverse sustainability impacts of investments for all life insurance policies concluded on or after 10 March 2021.

Digital resilience

Regulating the digital security of the financial sector was also a focus of attention at the European level during the reporting period. In September 2020, the European Commission published a legislative proposal for a Digital Operational Resilience Act (DORA) that is aimed at requiring financial market participants to implement all the security measures needed to mitigate cyberattacks and other risks. Based on current information, it is not expected to be applicable before 2023.

BREXIT

31 December 2020 was the last day of the transition period after the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union that took place on 31 January 2020. A Trade and Cooperation Agreement was concluded to govern the future relationship between the United Kingdom of Great Britain and Northern Ireland and the European Union, but there are still questions that need to be clarified, particularly in the area of financial services. With respect to direct insurance, the loss of the freedom to provide services means the possibilities for offering and providing reciprocal services are now very limited. Some countries have therefore adopted transitional legislation. With respect to reinsurance, it remains to be seen whether the European Commission will issue a decision on the equivalence of supervisory regimes and therefore whether reinsurance companies with registered offices in the United Kingdom are to be treated the same as those with registered offices in the European Union.