EBA Guidelines on Professional Indemnity Insurance Under PSD2
EBA published the final guidelines on professional indemnity insurance under the revised Payment Services Directive (PSD2). These guidelines address the criteria on how to stipulate the minimum monetary amount of the professional indemnity insurance (PII) or other comparable guarantee for payment initiation services (PIS) and account information services (AIS). The guidelines will apply from January 13, 2018.
EBA mapped market practices in the EU with regard to the provision of PIS and AIS and applicable insurance policies. Based on the findings of the mapping exercise, EBA elaborated on the criteria and indicators set out in PSD2, identified additional indicators, developed a calculation method for the indicators, and established a formula for the calculation of the minimum monetary amount of the PII or comparable guarantee. In the final guidelines, EBA considered the feedback received during the public consultation and introduced some changes and clarifications. These include additional specifications on the scope of the PII and comparable guarantee. Furthermore, EBA deleted the indicators ”geographical location” and “number of contracts” under the risk profile criterion in Guideline 5, renamed the “value of claims” indicator to “value of requests for refunds,” and reduced the percentages applied to the top tiers in the calculation of some of the indicators. The resultant final guidelines, therefore, require the minimum monetary amount of PII or comparable guarantee to be calculated by adding up the amounts that are reflective of the risk profile criterion, the type of activity criterion, and the size of activity criterion respectively.
Undertakings intending to carry out these services will need PII cover or a comparable guarantee as a prerequisite to be granted authorization. The guidelines, therefore, contribute to the overall objectives of PSD2, by strengthening the liability regime governing the interactions between the different actors involved in electronic payment transactions.
Related Links
Guidelines on Indemnity Insurance (PDF)
Effective Date: January 13, 2018
Keywords: Europe, EBA, Insurance, Indemnity Insurance, PSD2, Guideline
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