The Supervisory Authority for Insurance and Pension Funds (ASF) will submit a preliminary report to the government by the end of the year with a view to establishing a seismic fund in Portugal and is currently developing “additional technical work”.
“The AFS continues to work on additional technical work necessary to substantiate the options that will be submitted to the government for consideration and which, once decided, will be reflected in the draft law. Due to the technical complexity inherent in this process, the deadline for submitting a preliminary report will be extended until the end of this year,” the head said in information sent to the Lusa agency on Tuesday.
This is a preliminary report requested by the previous government from the AFS, proposing a model for a seismic risk coverage system.
In an order issued on October 6 last year, the CEO determined that the report would be submitted by the end of the first quarter of this year, which ultimately did not happen.
According to the regulator, the relevant work is still “ongoing.”
“The AFS has carried out a detailed collection of information from the insurance market, paying particular attention to the areas of ‘Fire and Natural Disasters’ and ‘Other Damage to Things’, through Circular No. 5/2023 of April 18, given that these are Non-Life insurance lines that include coverage for seismic risks,” the explanation sent to Lusa reads.
According to the details, “the data collection carried out covered 17 insurance companies, of which 14 are based in Portugal and three have branches in the European Union, representing approximately 98% of the market share (based on gross premiums issued in the European Union as of 2022).”
Based on the information collected through this circular, the ASF states that it has carried out “a structured analysis of the current reality of seismic risk coverage in the Portuguese insurance market, with particular attention to its penetration into the national housing stock, published in April 2024 (first set of results of the information collection launched by the ASF)”.
The watchdog said it was currently continuing to “develop the additional technical work needed to support the options that will be presented to the government for consideration.”
In this regard, the AFS recalls that “this is an issue that it has been pursuing, presenting various solutions and proposals”, citing as an example the draft project for the creation of a system for covering the risk of seismic events and the creation of a Seismic Fund presented in 2010.
An order issued last October and signed by then Civil Protection Minister Patricia Gaspar and Finance Minister João Nuno Mendes acknowledged that “the national territory presents a significant exposure to seismic risk” and that there is “a lack of adequate protection to cover this risk.”
“It is therefore justified to study the appropriate conditions for covering potential losses resulting from seismic events, taking into account the seriousness and scale that the corresponding economic and social consequences may assume,” says the diploma, which obliges the AES to develop, “in cooperation with the relevant organizations, work to establish a system for covering the risk of seismic events.”
In a statement released on Monday following the earthquake that hit Portugal this morning, the Portuguese Insurers Association (APS) warned of the need to create a system of protection against catastrophic risks in Portugal, highlighting that only 19% of homes are currently insured against seismic risks.
The association also found that 47% of homes in the country have no insurance at all, and 34% have fire or multiple-peril insurance but no seismic coverage.
Therefore, he stresses, “there is a huge way to go to ensure that the safe housing stock has minimal protection against these types of events.”
An earthquake measuring 5.3 on the Richter scale, with its epicenter located 58 kilometers west of Sines, in the district of Setubal, was registered at 05:11 on August 26, causing no personal or material damage.
According to the Portuguese Institute of the Sea and Atmosphere IPMA, the earthquake had a maximum intensity of IV/V on the Mercalli scale, classified as moderate or strong, and was accompanied by at least four recurrences.
The shock was felt in several areas of Portugal, with greater force in the Setubal and Lisbon regions.
Author: Lusa
Source: CM Jornal
I’m Sandra Hansen, a news website Author and Reporter for 24 News Reporters. I have over 7 years of experience in the journalism field, with an extensive background in politics and political science. My passion is to tell stories that are important to people around the globe and to engage readers with compelling content.