Nanotechnology is finding wider and broader use in modern technology. It is “transforming product design and innovation among manufacturers of electronics goods, textiles, cosmetics and foodstuffs as well as in other fields of materials science,” notes an article on the Lloyd’s web site.
However, for the insurance industry, “uncertainty still surrounds the increasing use of nanotechnology in products and how safe they are.”
Although more and more “nano-materials” are being used in consumer products, “no one really understands their long-term effects on people and the environment,” said Lloyd’s. In addition there is very little specific regulation governing the use of nanotechnology.
Lloyd’s gave the example of CNTs (carbon nano tubes), which are “one of the most commonly used nano-materials and are now produced on an industrial scale. The market is growing fast and primary production alone is projected to be worth $460 million in 2011. By the year 2014 it is estimated that 15 percent (by value) of all products will contain nanotechnology.
“CNTs are microscopic cylinders or needles and in bulk are like fibrous dust. Some fear that they may have similar toxic properties to asbestos if inhaled by workers (or anyone else that comes into contact with them) during production, shipping or use.
“Similar forms of nano-materials are used in films and coatings to produce self-cleaning equipment and appliances, for example. Cosmetics firms use nano-materials in skincare products. Yet, the effect of these products on human DNA – or the environment – is still not clear.”
This “lack of understanding of the risks around nanotechnology has led to a regulatory gap with ‘nanospecific’ regulation still lacking in most countries.”
Lloyd’s noted that there has been some progress in Europe. “The European Commission’s chemicals registration legislation, REACH, was adopted to address the specific risks of carbon nanotubes in 2008. In March 2009, the EU legislation on cosmetics was adopted for nano-materials, requiring labeling, definition and safety assessment. Additionally, the next European Environment and Health Action Plan is expected to address the challenge of nano-materials among its priority areas.
“In 2011, the Commission will also have to respond to the European Parliament Resolution adopted in April 2009, on the regulatory aspects of nano-materials. According to the resolution, various ambitious measures will be taken in order to ensure safety with regard to nano-materials and nanotechnology.
In addition Lloyd’s pointed out that Federal and State authorities in the US “are behind Europe in coordinating their moves to regulate the use of nano-materials.” Although the Environmental Protection Agency (EPA) proposed two new rules in 2009 for “multi-walled and single-walled carbon nanotubes,” The regulations have yet to be enacted.
In Asian countries, existing regulation has not yet been modified specifically for nano-materials.
The insurance industry can initiate steps to “cope with the continuing uncertainty around nanotechnology” said Lloyd’s The CRO Forum, a grouping of chief risk officers in European insurance companies, has suggested the following “pre-emptive risk mitigation strategies:
— Raise clients’ awareness;
— map risk exposure (e.g. improve understanding of how individual clients deal with nanotechnology);
— consider whole life cycle of CNTs and their impacts on traditional lines of business; and
— develop appropriate underwriting measures – on a company by company basis – and adapt them to the facts and circumstances of the individual risks being underwritten.
Source: Lloyd’s of London
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