Natural Disaster Risk Management and Insurance Systems: A Comparative Study of Canadian, Japanese, French, and European Union Frameworks Ali Meskour

Natural Disaster Risk Management and Insurance Systems: A Comparative Study of Canadian, Japanese, French, and European Union Frameworks Ali Meskour Étudiant en 1ère Année en Master en droit des affaires à la Faculté des Sciences Juridiques Economiques et Sociales Mohammedia(FSJESM)

Abstract:

This study examines and compares the legal and insurance frameworks governing natural disasters in Canada, Japan, France, and the European Union. It aims to analyze the organization of their insurance systems, the regulation of natural disaster risks, and the strengths and limitations of each model. Through this comparative approach, the study seeks to identify best practices and assess the capacity of these frameworks to respond to the growing challenges posed by climate change and disaster resilience.

Keywords: Natural Disasters, Insurance Law, Disaster Risk Management, Climate Change, CatNat Scheme, Disaster Resilience, Comparative Law, Natural Disaster Insurance.

The outline of the topic :

Introduction:

Chapter 1: Extra-European Models (Canada and Japan)

Section 1: The Canadian Framework

1. Legal organization of insurance
2. Regulation of natural disasters
3. Limits and challenges

Section 2: The Japanese Framework

1. Organization of the insurance system
2. Regulation of natural disasters
3. Advantages and limitations

Chapter 2: European Systems (France and the European Union)

Section 1: The French Model

1. Legal framework for natural disasters
2. The CatNat insurance scheme
3. Strengths and limitations

Section 2: The European Union Framework

1. General legal framework
2. EU policies on Natural disasters
3. Limitations of the EU Framework (Germany Ex)

Conclusion

INTRODUCTION

Natural disasters represent one of the major challenges facing modern societies, causing significant human, environmental, and economic losses. The increasing frequency and intensity of floods, earthquakes, wildfires, droughts, and other extreme events, largely influenced by climate change, have highlighted the need for effective legal and insurance mechanisms to manage disaster risks and ensure adequate compensation for victims.

Insurance plays a crucial role in mitigating the financial consequences of natural disasters, while public authorities are responsible for establishing legal frameworks that promote prevention, preparedness, response, and recovery. Different countries have developed distinct approaches depending on their legal traditions, institutional structures, and exposure to natural hazards.

Chapter 1: Extra-European Models (Canada and Japan)

Section 1: The Canadian Framework

Insurance Agency Licensing and Structure

1-Legal organization of insurance

Licensing Requirements for Insurance Agencies

• An agency must have at least one licensed insurance agent for each category of insurance it offers, such as life insurance.
• Agencies can expand by applying for a corporate agency license, provided they meet provincial requirements.
• Once licensed, corporate agencies can hire and train additional agents, enhancing their operational capacity.
• Employees involved in selling insurance, such as solicitors and premium collectors, must be licensed, while administrative roles like secretaries do not require licensing.
• The regulatory framework ensures that all distribution channels and their agents are supervised to maintain industry standards.

Role of Actuaries in Insurance

• Actuaries analyze statistics to assess insurance risks and determine appropriate premiums.
• Provincial legislation grants actuaries significant authority, including the responsibility to report on the financial health of insurance companies.
• Membership in the Canadian Institute of Actuaries is mandatory for actuaries, ensuring adherence to professional standards.
• Actuarial work is crucial for maintaining the solvency and reliability of insurance products offered to consumers.

Types of Insurance Agents

• Independent Agents: Work with multiple insurers and often submit business through a Managing General Agent (MGA).
• Career Agents: Typically represent a single insurer or MGA and may be employees or self-employed.
• The distinction between independent and career agents affects their business operations and commission structures.
• Understanding the agency relationship is vital, as agents act on behalf of insurers, who are the principals in these transactions.

Legal Framework Governing Life Insurance

Sources of Insurance Law in Canada

• Insurance law is derived from the Canadian Constitution, common law, and provincial legislation.
• The Constitution allows both provincial and federal governments to legislate on insurance matters, but insurance is primarily a provincial concern.
• Common law, based on judicial precedents, guides the interpretation of insurance contracts, except in Quebec, which follows civil law.
• The Uniform Law Conference has contributed to the standardization of insurance legislation across provinces.

Legal Principles Related to Insurance Contracts

• An insurance contract is a promise to indemnify against specific risks, such as loss from fire.
• The province where the policy was issued governs the interpretation of the contract, including beneficiary designations.
• If a policyholder moves provinces, laws regarding estate planning, like wills, will apply based on the new residence.
• The legal principles governing insurance contracts are largely uniform across provinces, promoting consistency in the industry.

Capacity and Status of Persons in Contracts

• Legal capacity is required to enter into contracts; individuals must understand the terms and implications.
• In Ontario, the legal age for contract capacity is 18, but 16 for personal care consent.
• Individuals under the influence of drugs or alcohol may lack the legal capacity to contract.
• There is no maximum age for contracting; even elderly individuals can have the capacity if they understand the terms.

Agency Relationships and Types of Entities

Understanding Agency Relationships

• Insurance contracts are issued by insurers, which can be business or mutual corporations.
• Agents represent insurers in transactions, acting as intermediaries between the insurer and the client.
• The agency relationship is crucial for the functioning of the insurance market, as agents facilitate the sale of policies.

2-Regulation of natural disasters

The federal, provincial and territorial (FPT) governments have complementary roles in emergency management, and each jurisdiction has emergency management legislation. Since Canada is a federal state, emergency management in Canada is a shared responsibility, which relies on ongoing cooperation and communication between all ordersof government. Within Canada’s constitutional framework, the provincial and territorial governments and local authorities provide the first response to the vast majority of emergencies, particularly natural disasters.

The majority of emergencies and natural disasters in Canada are handled locally or at the provincial/territorial level and do not require direct federal involvement in the response phase. However,if an emergency threatens to overwhelm the resources of any individual province/territory, the federal government may intervene at the specific request of the province/territory or concurrently it may act within its areas of jurisdiction such as aeronautics, nuclear safety or telecommunications.

Public Safety Canada (PS) was created in 2003 to better address and coordinate public safety and emergency management issues for the federal government. In addition to the department itself, the PS portfolio includes five agencies: Royal Canadian Mounted Police; Canadian Security Intelligence Service; Correctional Service of Canada; National Parole Board; and Canada Border Services Agency. The portfolio also includes three independent review bodies

3-Limits and challenges

Canada’s climate has changed and will continue to change. The evidence is now at our doorsteps. Floods, wildfires, droughts, health issues– Canadians across the country are feeling the impacts of climate change and record-breaking weather events. Canada needs to adapt to these changes. We can and must mitigate greenhouse gas emissions that are driving human-induced climate change, and we’re doing that by implementing the 2030 Emissions Reduction Plan. But as the Indigenous peoples and inhabitants of this vast land we now call Canada have been doing since before our foundation as a country, we also must adapt our lives to the environment as it is and will be – not as we wish it were. The Government of Canada Adaptation Action Plan (GOCAAP) is the centerpiece of our country’s plan to adapt to a changing climate – from West to East to North. This first-of-its-kind document is the Government of Canada’s down-payment on the ongoing national project that is our National Adaptation Strategy.

The case for investing in climate adaptation is clear. In a 2020 report, the Canadian Climate Institute highlights that insured losses for catastrophic weather events have tripled, totalling more than $18 billion between 2010 and 2019. If left unchecked, the impact of climate damages will increasingly undercut Canada’s economic growth. As the costs of climate change mount, it pays to be prepared. Every dollar spent on adaptation measures today saves up to $15, including both direct and indirect economy-wide benefits. The dividends from smart adaptation investment include reducing costly repairs or replacement of lost or damaged infrastructure, avoiding disruption of supply chains, and protecting against climate-related health impacts that can cause havoc in our schools, hospitals, businesses and workplaces.

Adaptation is about reducing the impacts of these events and changes on people in Canada and communities, and being better prepared to respond and recover. The choices and adaptation actions we take today will help decide the future of our communities, our livelihoods, our environment, and our economy. But what does that mean?

It means setting targets and making investments for:

• Stronger roads, bridges, sewers and other infrastructure
• Healthier people and communities
• Protecting nature and restoring biodiversity
• A more climate resilient economy and workers
• And better disaster preparedness

It also means advancing climate and environmental justice. As we build systems and solutions that are more climate resilient, we have the opportunity to address systemic inequities that make some people more vulnerable to the impacts of climate change.

The National Adaptation Strategy is a long-term vision for adaptation action, designed to raise awareness, set clear priorities and guide proactive action on adaptation throughout Canada. Implementation of the Strategy will reduce the negative impacts of climate change based on observed or expected changes in climate. It will improve health and well-being outcomes, build and maintain infrastructure, protect nature and biodiversity, support a strong economy and workers, and enhance disaster resilience. As the climate continues to change, our actions to prepare and respond to the impacts of these changes must also keep pace. The Strategy is designed to allow for regular updates as we work and learn together about how to best build resilience to the effects of climate change.

The GOCAAP will complement the adaptation work and strategies of provinces, territories and Indigenous partners. Bilateral Provincial and Territorial action plans will be developed to advance efforts on shared priorities. And everyone has a part – provinces, territories, municipalities, Indigenous peoples, businesses, and all residents of Canada. Through these shared partnerships and initiatives, the federal government is committed to growing momentum on adaptation through tangible actions across Canada.

As climate change impacts and extreme weather become an ever-increasing part of our lives, it is critical that we take urgent action. That is why the Government of Canada has made adaptation and climate resilience a priority. Investments in adaptation shape a future that is more resilient to the impacts of a changing climate. Building climate resilience means that we are not only prepared for climate change, but we can thrive under a changing climate.

The Honourable Steven Guilbeault,
Minister of Environment and Climate Change

Section 2: The Japanese Framework

1-Organization of the insurance system

Insurance business in Japan is regulated under the Insurance Business Act (IBA), whereby the Financial Services Agency (FSA) takes the main role as the insurance regulator.

Under the IBA, the Japanese Prime Minister has the authority to supervise the entities and people conducting insurance business and related business in Japan. However, the PM delegates most of this authority to the Commissioner of the FSA, excluding certain important powers such as granting or cancelling insurance business licences.

In turn, the commissioner delegates part authority to the directors of the Local Finance Bureau (LFB) of the Ministry of Finance.

Non-admitted insurers

Under the IBA, people or entities permitted to act as agents or intermediaries for the conclusion of an insurance contract in Japan are limited to life insurance solicitors, non-life insurance solicitors, small-amount and short-term insurance solicitors and insurance brokers.

Insurance and reinsurance activities are only permitted to be undertaken by insurance companies, Japanese branches of foreign insurers and small-amount and short-term insurance providers that have obtained licences in Japan.

Foreign insurers not licensed in Japan under the IBA, and without branch offices in Japan cannot conclude domestic risk insurance contracts – that is, insurance for people resident or domiciled in Japan or with property located, or vessels and aircraft registered, in Japan. However, certain insurance contracts are excepted: reinsurance; insurance covering international freight; overseas travel insurance; and insurance for which prior permission from the FSA has been received by the policy applicant.

Under the IBA, agents or intermediaries for the conclusion of an insurance contract are limited to life insurance solicitors, non-life insurance solicitors, small-amount and short-term insurance solicitors and insurance brokers.

Authorisation

Japanese companies. A person who conducts insurance business must obtain either a life insurance business licence or a non-life insurance business licence from the PM.

The applicant must submit a licence application to the PM through the FSA. It requires information such as articles of incorporation, statement of business procedures, general policy conditions, statement of calculation procedures for insurance premiums and policy reserves, a business plan, documents explaining the status of recent assets, profits and losses, and documents relating to the applicant’s subsidiaries. To protect the public interest, the PM can impose conditions on licences or revise their conditions.

Foreign insurers. For a foreign insurer to conduct insurance business in Japan, its Japanese branch must obtain from the PM either a life insurance business licence or a non-life insurance business licence.

The procedures for foreign insurers to obtain a licence are similar to those for Japanese insurance companies.

Other regulations

Activities and subsidiaries. The IBA allows insurance companies and licensed branches to carry out only the following types of business:

• Underwriting insurance and management of assets (core business);
• Incidental business, such as: representing the business or performing services on behalf of other insurance companies and other entities carrying out financial business; guarantees of obligations; handling private placements of securities; derivative transactions; and business permissible under the IBA and other laws (e.g. certain securities trading business and trust business concerning secured bonds).

Insurance companies cannot hold subsidiaries or affiliates, other than those set out in the IBA, including:

• Companies that engage in financial business (e.g., insurance companies, banks, securities companies and trust companies);
• Companies that engage in business that is dependent on the business of their parent insurance companies and their subsidiaries;
• Companies that engage in business that is incidental or related to financial business;
• Companies that explore new business fields;
• Companies that carry out new business activities that are recognised as contributing to the improvement of management to a considerable extent;
• Companies that carry out business activities that are recognised as contributing to regional revitalisation; and
• Holding companies whose subsidiaries are limited to companies listed in the above points.

2-Regulation of natural disasters

Emergency Laws and Regulations in Japan: Executive Summery Legislative Framework Japan has established a comprehensive legal framework for disaster management with over fifty legislatives acts to manage all stages of emergencies: prevention, preparedness, response, recovery (including financial measures) and reconstruction. The Disasters Countermeasures Basic Act of 1961 (Hereinafter DCBA) is the major focus of this report but it will also briefly discuss Japan’s nuclear disaster management system as well. The DCBA defines the protection of national land, citizens’ lives and property from natural disasters as a national priority. It creates a comprehensive three layers disaster management system (national, prefectural and municipal) for disaster prevention, preparedness and recovery, by defining responsibilities for multiple agencies and systems that will work in tandem during a state of emergency. The DCBA provides the definition of a state of emergency, whereas the Constitution of Japan does not contain emergency clauses and addresses a state of “national emergency”, without defining it, only in one article1. A draft constitution endorsed by the Liberal Democratic Party in 2012 contains a whole chapter on emergency, but this documents remains for the time being only a draft. Entrance into a State of Emergency Article 2 of the DCBA broadly defines an emergency as an extraordinary disaster whose repercussions on the national economy and public welfare are serious and far-reaching. As such, a multitude of contingencies can fall under a state of emergency. The Prime Minister has the right to declare a state of emergency provided consent is received by the Japan’s bicameral legislature, the Diet, 1 The article concerns the Cabinet’s power to convoke an emergency session of the House of Councillors in “time of national emergency” when the House of Representatives is dissolved. within 20 days. A state of emergency ends when it is revoked by the Prime Minister, or by a resolution passed by the Diet to refuse consent or by repeal of previously issued consent. There is a slight variation in protocol for nuclear emergencies. In this case the Prime Minister can declare a nuclear emergency without the approval of the Diet following a Cabinet Order or a report submitted by the competent minister. Likewise, only the Prime Minister can end a nuclear emergency after hearing the findings of the Nuclear Safety Commission. In addition, Under Article 71 of the Police Law, the Prime Minister can declare a state of “national emergency”, in respect to the country as a whole or any part thereof and assume direct control over Japan’s police. Such declaration can be made only upon recommendation of the National Public Safety Commission. “National emergency” would include such events as a foreign invasion, a large-scale natural disaster, or a major internal disturbance.2 Legal Powers Prior to a disaster, the Central Disaster Prevention Council is responsible for the basic disaster prevention plan. The chief officers of designated administrative organs or public corporations are responsible for an operational disaster prevention plan as well. City, town or village disaster prevention councils are responsible for area planning. During a natural or nuclear disaster the executive branch will establish headquarters for emergency disaster control with jurisdiction over the area covered by the state of emergency. Emergency response, rescue and recovery measures shall be implemented by the heads of the designated administrative organs. In the event of a nuclear emergency, in addition to these measures, a Joint Council for Nuclear Emergency Response and an on-site nuclear emergency manager will also be established. The Cabinet may enact ordinances during an emergency to accept assistance from other countries, ration necessary materials, as well as fix prices in the interest of emergency measures. Responsibility for 2 L.W. Beer, Peace in Theory and Practice under Article 9 of Japan’s Constitution, 81 Marquette Law Review 815, 826 (1998) rehabilitation after a disaster shall be implemented by the chief officer of a designated, national or local, administrative organ, government agency, or public corporation. Upon fixing the amount of rehabilitation, the Minister shall submit reports to the Central Disaster Prevention Council. In addition to the DCBA, the Disaster Relief Act, 1947 aims to provide emergency relief in the event of a disaster with the cooperation of local governments and non-governmental organizations as well as the general public, in order to protect victims and maintain order. No references to emergencies relating to war, terrorism and other security-oriented threats, were found in Japan’s legal system. Rights in State of Emergency According to the Constitution of Japan, human rights granted by the Constitution are inviolate; furthermore, as the Constitution is the supreme law of the land, it cannot be circumvented. Yet, human rights during emergencies are neither directly addressed by the Constitution nor by any other piece of legislation reviewed in the research. Japanese legislation’s relation to human rights under states of emergency might be inferred from: DCBA Article 82 (compensation for requisitioning property for emergency official use); DCBA Article 84 (compensation for persons engaged in the work of emergency measures); DCBA Article 109 (1) (Ordinances regarding rationing of materials in critical shortage, restriction on delivery and fixing a ceiling on prices.); DCBA Article 109 (2) (violation of any provision of said ordinances); and DCBA Article 63 (When deemed necessary to prevent danger to life or limb, the mayor of the city or town may declare areas prohibited).

3-Advantages and Limitations

Quality assurance framework as based on prior regulations In Japan, the quality assurance framework worked as prior regulations, through applying the Standards for Establishing University (SEU) and operating the establishment-approval system (EAS). The intention here is to respect the independence and autonomy of universities, and thus assume that universities which are once approved would be ready to autonomously assure their own quality. Since the SEU and the EAS were introduced, this system has played a very significant role in assuring appropriate levels of quality in all universities. On the other hand, there have been concerns about assuring the quality of every educational activity with only this kind of prior regulations, whose function is only to indicate what is needed to conduct various activities and not to check the outcome afterwards. As higher education became more diversified, reflecting the rise in enrollment rates and the maturity of society, more people posed concerns that dependence on the prior regulations would cause over-regulation and restraint against innovative projects. Thus, the government began considering a new system that would be checking afterwards, while maintaining the independence and autonomy of universities. (2) Introduction of a new system integrating prior regulations with checking afterwards The government amended the regulations such as creating more flexibility in applying the SEU, revising the EAS process, and introducing self-examination and evaluation as compulsory in all universities. Still, as the need for change from prior regulations to checking afterwards through examining current regulations became more widespread throughout the Japanese administrative system, the School Education Law was amended in 2002 to introduce the Quality Assurance and Accreditation System (QAAS), which came into effect from April 2004. Concurrently, the EAS was converted in 2003 so that all universities would be approved as long as they meet the conditions stipulated in the concerned law. At this stage, requirements were reduced and standards were simplified, while a new notification system in which universities could make minor organizational changes without approval was introduced. As this new system of integrating prior regulations with checking afterwards was introduced, the quality assurance framework in Japan has both the advantage of the prior regulations -1- that assure proper quality in advance, and the checking afterwards that constantly assure quality constantly, while respecting the diversity of universities. Thus, it has been assumed that this combination of systems is the most effective and efficient for quality assurance. With regard to the three-fold quality assurance framework comprised of SEU, EAS, and QAAS, new issues have arisen as described below, and the government assumes that it is necessary to examine the role and relationship of these systems, thereby improving their application and enhancing the quality assurance mechanism on the whole.

Chapter 2: European Systems (France and the European Union)

Section 1: The French model

1- legal framework for natural disasters

The French Natural Catastrophe Law requires that all property insurances in France (including motor, physical damage and loss of profits) include cover for damage resulting from natural disasters whether such coverage is specifically mentioned in the policy or not. Underwriters can build up reserves to meet claims by charging additional premium. The Law extends to the four French overseas departments (DOMs) and territorial collectivities, but does not cover the French overseas territories (formerly known as TOMs), nor does it apply to insurance of risks located in Monaco. Please see Appendix 1. A compulsory levy applies to all premiums paid for French property and motor insurance to create a state-controlled fund for the mitigation of losses by natural disaster. This fund was set up by the French government in 1995 following severe flooding in France at the end of 1994 and early 1995. 2. Applicable rates The rate of additional premium which may be charged by insurers for the natural catastrophe coverage is set by French Governmental Decree and currently are 12% for Lloyd’s is regulated by the Financial Services Authority 2 property and loss of profit business, and 6% for motor fire and theft business. These rates are applied to the gross premium paid by the policyholder, inclusive of commission but before tax. If a property policy provides wider coverage than simply for property and loss of profits (for example it may also include third party liability), the 12% additional natural catastrophe premium is payable only on that part of the premium that relates to property damage and loss of profit. In such cases the apportionment of the premium between the risks must be realistic. If a motor policy provides comprehensive coverage, then the additional natural catastrophe premium is 6% of the premium for the fire and theft cover only. An element of the additional premium raised in this way must then be paid to the compulsory government fund for the mitigation of major natural disasters. This amount is currently 2% of the 12% or 6%, depending on class of business involved. This amount is collected and processed via the Lloyd’s Central Taxes System (CTS). 3. Slip and policy notation Natural Catastrophe coverage and the rate charged must be shown as a separate item on the debit note and slip. 4. Reinsurance of compulsory natural catastrophe cover A voluntary scheme is operated by the Caisse Centrale de Réassurance (CCR) to enable insurers of French natural catastrophe to obtain reinsurance cover. Insurers may elect to reinsure their natural catastrophe exposure with the CCR and in simple terms the reinsurance is on a quota share and stop loss basis, and is ultimately backed by the French State. In the Lloyd’s context, the decision to reinsure with CCR is one made at individual syndicate level. A syndicate opting into the CCR scheme must cede its entire natural catastrophe additional premium on a whole portfolio basis to the CCR. It may not select which individual risks to reinsure and which to retain. For a natural catastrophe loss to be recoverable from the CCR, there must first be a formal declaration of a natural catastrophe by the appropriate French authorities. Insurers and syndicates who have opted into the scheme may then seek to recover their losses. Each syndicate must make its own decision about reinsuring their natural catastrophe exposure and will have a separate contractual relationship with the CCR. There is no central administration by Lloyd’s on behalf of syndicates who choose to reinsure with the CCR. Syndicates not reinsuring with the CCR will retain all natural catastrophe exposure for their own account and any natural catastrophe losses they suffer may of course be recoverable from each syndicate’s own reinsurance programme.

2-The CatNat insurance scheme

The “Régime des catastrophes naturelles”, often dubbed CatNat, is designed to compensate for material damage caused by natural disasters. This natural disaster insurance scheme is based on the principles of national solidarity and equality before public burdens, guaranteeing uniform protection for all citizens in the face of natural disasters. The mechanisms of this system are enshrined in the French Insurance Code, principally in articles L.125-1 et seq.

 

The “CatNat” scheme is designed to help victims of exceptional, uninsurable events. In France, damage caused by clay shrinkage and swelling is not covered by conventional insurance and is only compensated under this scheme.

 

This system relies on a complexe administrative procedure to officially recognize the “état de casatrophe naturelle” (state of natural disaster), the occurence of an exceptionnal natural disaster, at municipality level. This recognition allows to activate specific insurance cover, enabling policyholders to be compensated for uninsured material damage. The recognition procedure involves a number of stages, from the initial declaration of the disaster by private individuals, to the examination of each local claims and the publication of inter-ministerial decrees.

The Rousseau law, which passed its first reading on April 6 2023, aims to improve compensation for property damage caused by the shrink-swell phenomenon. Its goal is to simplify the criteria for recognizing a state of natural disaster, and ensures a faster, fairer compensation procedure for affected property owners. The aim is to better protect homes against the growing impact of climate change.

The new provisions for shrink-swell insurance in France

Debated in the Senate on May 30, 2024, the provisions of the proposed law aim to put insurers and owners at the center of concerns, by facilitating declarations, communication and expert appraisals. The main new provisions revolve around several points:

Clearer communication and justification

When the state of natural disaster is not recognized, the decision must now be clearly detailed and justified. This includes information on appeal procedures and access to administrative documents, in particular the expert reports on which the decision was based.

Reinforced expertise procedures

• Obligation for insurers to cover the costs of appraisals and counter-appraisals by qualified experts.
• Introduction of a legal presumption that any damage occurring during a drought is primarily due to swelling, thus facilitating claims by homeowners.

Professional certification

Creation of a label for experts (Expert RGA) and companies (Entreprise de remise en état RGA) specializing in shrink-swell related damage, guaranteeing high standards of competence and reliability.

Broader state recognition of natural disasters

• Use of soil moisture variations as the criteria to recognize a drought as a natural disaster.
• Automatic declaration of a state of natural disaster if the soil moisture indicator breach a one-in-ten-years low.
• Application of the decree over a period of twelve months in swelling risk zones, to take account of delayed effects.

This more generalized recognition of the state of natural disaster is achieved in particular through the use of a new meteorological criterion. To give a clearer idea of what’s going to change, we’ll take a closer look at the new meteorological criterion used from 2024 onwards to characterize the abnormality of the drought leading to recognition as a natural disaster, and thus the compensation provided.

3-Strengths and Adjustments

After a long period of relative calm, life insurance, over the past quarter-century, has confronted a series of shocks (financial crises, negative interest rates, a pandemic, war, and an unexpected surge in inflation), which it has been able to absorb without major disruption and without lasting damage to its solvency. Faced with this riskier universe that seems set to continue, life insurance has undeniable assets that have allowed it to meet its commitments and remain France’s favorite investment. Nevertheless, adjustments are necessary, particularly if we want life insurance to contribute to financing the productive economy at a level commensurate with its share of French savings. Flexibility, dynamic risk management and transparency should be the watchwords of this necessary adjustment to the new risk environment.

Section 2: The European Union Framework

1-General legal framework

EU policy framework on climate adaptation and health  

European Green Deal  

In 2019, the European Green Deal set out the growth strategy to transform the Union into a fair and prosperous society, with a modern, resource-efficient, and competitive economy, where there are no net emissions of greenhouse gases as of 2050 and where economic growth is decoupled from resource use. The European Green Deal also aims to protect, conserve, and enhance the Union’s natural capital, and ‘to protect the health and well-being of citizens from environment-related risks and impacts’.

8th Environment Action Programme  

One of the six interlinked thematic priority objectives of 8th Environment Action Programme to 2030 (‘8th EAP’) is continuous progress in enhancing and mainstreaming adaptive capacity, including on the basis of ecosystem approaches, strengthening resilience and adaptation and reducing the vulnerability of the environment, society and all sectors of the economy to climate change, while improving prevention of, and preparedness for, weather- and climate-related disasters. The document also states that swiftly achieving climate and environmental targets while protecting the health and well-being of people from environmental risks and impacts and ensuring a just and inclusive transition should be the priority. The 8th EAP further recognizes the need for improved coordination between environmental and health policies to strengthen climate resilience, particularly in vulnerable communities.

The Competitiveness Compass  

The Competitiveness Compass of January 2025, provides the strategic framework to steer the European Commission’s work until 2029. It states that the EU and Member States must improve their resilience and step up their preparedness, regularly updating climate risk assessments and improving critical infrastructure resilience. Integrating climate resilience in urban planning, deploying nature-based solutions, developing nature credits and adaptation in agriculture while preserving food security, are also among the options to protect the EU economy and society from the worst of natural calamities such as floods, droughts, wildfires and storms that compromise supply chains and production sites.

2-EU policies on Natural disasters

The Sendai Framework for Disaster Risk Reduction, adopted by the UN in March 2015, is a voluntary and non-binding agreement which aims to reduce disaster mortality and other effects during 2015-2030. The major areas for action are:

• understanding disaster risk with respect to ‘vulnerability, capacity, exposure of persons and assets, hazard characteristics and the environment’.
• strengthening governance at the national, regional and global levels
• investing in the prevention and reduction of disaster effects
• enhancing member states’ preparedness

Some EU member states already have initiated policies for disaster risk reduction however more strategies and methods of implementation need to be developed.

Future challenges

With climate change most natural hazards are predicted to become more frequent and intense. Overall, Europe will experience more frequent events of high precipitation, winters will become wetter and summers will become drier. Areas of Southern Europe will become drier whereas Northern Europe will experience wetter conditions.

Large uncertainties still exist regarding the extent of these changes, how much of an impact they will have on society and how this impact can be reduced. Further research is needed to ascertain more information about these future changes. In addition, the development of early-warning systems for multiple natural disasters is essential for damage reduction. This is being further developed through the establishment of remote sensing. Finally, with the emerging concepts of ‘big data’ and ‘the internet of things’ there is a greater role society can play in the identification and monitoring of natural hazards.

3-Limitations of the EU Framework(Germany Ex)

The German Research Network for Natural Disasters (DFNK) linked 15 partners with scientific expertise in the field of natural hazards. Main objectives were the development and provision of the scientific fundamentals for an advanced risk management of important natural disasters in Germany, i.e., floods, earthquakes, storms and wildland fires. This included risk analyses, the development of information systems for supporting disaster management, and recommendations for risk reduction measures. This paper gives an overview of DFNK and summarises its experiences concerning multidisciplinarity and user-orientation. It illustrates the concept of risk chains, causally linking the different processes from hazard to risk. The step from hazard to risk requires interdisciplinary research teams. The experiences show that integrative concepts allow results not achievable with mono-disciplinary approaches. Integrative approaches pave the way to harmonised safety considerations taking into account the different hazards in a region within a common framework. User-orientation, policy advice and development of operational tools are key issues of disaster research. The experiences of DFNK illustrate the limitations of a research network in bridging the gap between research and application within rather short-term projects. Successful cooperation with users could be established by those activities where, at the beginning of the project, a user was identified who had a strong interest in solving an urgent problem.

Conclusion

Canada, Japan, France, and the European Union have developed different legal and insurance frameworks to address natural disaster risks. Although these systems vary in their organization and mechanisms, they share the common objective of protecting people and limiting economic losses. However, the increasing impact of climate change requires continuous adaptation of legal regulations, prevention strategies, and insurance schemes to strengthen resilience against future disasters.

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