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ESAs’ stakeholder groups EIOPA’s Consumer Trend Report instance, EIOPA states that “despite bringing peace of mind to consumers and generally being a low cost product, add-
All three authorities have stakeholder groups that represent the industry EIOPA is mandated by its empowering
and consumers in order to facilitate consultation with stakeholders in Regulation to collect, analyse and report
areas relevant to their tasks. BIPAR is represented in EIOPA’s Insurance on consumer trends. For this purpose,
and Reinsurance Stakeholder Group (IRSG). EIOPA publishes, on an annual basis, a
Consumer Trends Report. BIPAR was
BIPAR’s responses to ESAs’ consultations in 2019 and in 2020 consulted by EIOPA on the drafting
of its 2019 Report and in particular
During 2019 and 2020, BIPAR answered many ESAs’ consultations on on issues such as insurance digital
various issues. ecosystems, vulnerable consumers,
price comparison websites and
EIOPA’s thematic review on travel insurance bancassurance.
EIOPA launched in February 2020 an EU-wide thematic review looking into
consumer protection issues with mortgage life and other credit protection In its 2019 Report, EIOPA amongst
insurance (including those sold through banks). EIOPA states that even if others states that:
mortgage life and other credit protection insurance can be beneficial for
consumers, national competent authorities have reported issues and risks - Transparency and disclosure of
related to these types of insurance products that may lead to consumer information to consumers has overall
detriment. improved
- The digitalisation of
As part of this EIOPA workstream, EIOPA organised a roundtable discussion the insurance sector continues
on “Mortgage life and other credit protection insurance sold through showing potential for improving the
banks” on 5 March 2020 in Frankfurt. BIPAR has been invited to give a consumer experience and brings new
presentation at this event. The aim was to consult and collect input from opportunities for insurers
external stakeholders on: - However, areas that could
cause potential consumer detriment
- Issues and risks with the insurance products within the scope of continue to be reported, with possible
EIOPA thematic review; risks for consumers across the product
- Business models used to manufacture and distribute these lifecycle
products and underlying conduct risks, addressing also the different - Particular concerns relate to
corporate arrangements arising between insurers and banks; unit-linked, credit life/credit protection
- Potential benefits for consumers, insurers and banks; and add-on insurance products as
- Market practices that could lead to consumer detriment; well as claims management in motor
- Developments and trends in recent years. insurance. Regarding add-ons for
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on insurance is also a potential source of consumer detriment across several European markets. Concerns relate to the
possible exploitation of behavioural biases in the context of an increase in cross-selling practices and high commissions.”
On the occasion of the publication, Gabriel Bernardino, Chairman of EIOPA, said: “Understanding consumer trends is
an essential part of our work to identify where customers might suffer because of poor practices or lack of information.
Despite evidence of improved disclosures, problems remain with product design and product review processes and
undertakings and distributors must take responsibility for improving consumer outcomes. At the same time, where
EIOPA identifies areas for concern we will take action. This was the case for certain business models in travel insurance,
where EIOPA recently issued a warning. In 2020, we will launch a comprehensive thematic review on mortgage life and
other credit protection insurance sold through banks, to gather evidence on areas of potential consumer detriment.”
ESAs report on cross-border supervision of retail financial services
The Joint Committee of the ESAs published in July 2019 a report on the cross-border supervision of retail financial
services (banking, securities, insurance/pensions).
The ESAs explain that they noted the increase in cross-border provision of retail financial services due to the
development of the single market and digitalisation. They add that this benefits consumers (wider offer) but at the
same time challenges the competent authorities (CA) who have to supervise these institutions and activities. The ESAs
report identifies the main issues that competent authorities face when supervising financial institutions that provide
cross-border retail financial services within the EU and it makes recommendations to both CAs and European legislators
on how to address those issues.
The ESAs report focuses on:
- issues due to institutional and organisational reasons related to the division of responsibilities between home
and host and the exchange of information between both.
- issues related to supervision and enforcement.
-
issues due to regulatory gaps and regulatory arbitrage (lack of clarity of some EU legislation and/or insufficient
harmonisation).
The ESAs note that the rules laid down in existing Directives/Regulations including IDD, MiFID II, PRIIPs, Mortgage Credit
Directive, will already help to tackle some of these issues. Specific attention is given to the passporting rules, cooperation
between authorities etc.
The report reminds that EIOPA has end of 2018 provided additional recommendations for the insurance sector to the
European Commission in its Report on Supervision and Capital Management with a Group of Insurance or Reinsurance
Undertakings, and FOS and FOE under Solvency I. These included recommendations for further enhancing supervisory
reporting requirements regarding information on cross-border business, the establishment of cooperation platforms,
an enhanced role for EIOPA in mediating certain cross-border issues, as well as for the obligations of a CA to share
information with EIOPA at the earliest stage on cross-border developments that can be a source of potential issues.
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