EIOPA issued a statement to insurers and intermediaries, urging them to take steps to mitigate the impact of COVID-19 on consumers. These steps include providing clear and timely information to consumers, keeping consumers informed about contingency measures taken, continuing to apply product oversight and governance requirements, and exercising flexibility in the treatment of consumers where practical. Additionally, in view of COVID-19, the Romanian Supervisory Authority and EIOPA decided to postpone the start of the Balance Sheet Review of the Romanian insurance sector. The exercise was originally expected to be performed in the second semester of the year 2020.
EIOPA welcomes the initiatives already taken by insurers and intermediaries to support and assist consumers, along with the consideration being shown toward consumers affected by COVID-19, including those who are particularly vulnerable. It is critical that insurers and intermediaries continue focusing on ensuring business continuity and the fair treatment of consumers. While highlighting the need for flexibility in the interest of consumers and for their continued fair treatment, EIOPA also highlights that imposing retroactive coverage of claims not envisaged within contracts could create material solvency risks and ultimately threaten policyholder protection. EIOPA expects all market participants to continue to act in the best interests of consumers, throughout the life cycle of their relationship with the consumer. This is in line with the requirements on policyholder protection set out in relevant legislation such as the Insurance Distribution Directive (2016/97) and the Solvency II Directive (2009/138/EC). This call to action follows the publication of a statement on actions to mitigate the impact of COVID-19 on the EU insurance sector and also follows the recommendations on supervisory flexibility regarding deadlines of supervisory reporting and public disclosure by insurers.
Keywords: Europe, EU, Insurance, COVID-19, Business Continuity, Systemic Risk, Solvency II, Insurance Distribution Directive, Balance Sheet Review, Romania, EIOPA
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous ArticleBCBS Publishes Basel III Monitoring Updates in April 2020
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.