EBA published a report on the review of the regulatory technical standards specifying the minimum monetary amount of the professional indemnity insurance or comparable guarantee for mortgage credit intermediaries, under the Mortgage Credit Directive, or MCD, in EU. The assessment found no evidence to suggest that the minimum monetary amounts for professional indemnity insurance need to be amended.
In reaching this conclusion it is necessary to stress that the mandate given to EBA by Article 29(2) of the Mortgage Credit Directive refers only to the threshold amounts. The mandate does not extend to EBA assessing, for example, the extent to which the use of the minimum payout amounts prescribed in the regulatory technical standards are potentially impeded by specific clauses in professional indemnity insurance contracts; the nature of the comparable guarantees that may be used in the market; or what should be understood as a "comparable guarantee" at all. EBA, therefore, did not analyze those elements or conduct a thorough assessment of the content of insurance contracts.
EBA assessed the responses to a survey sent by national competent authorities to the ten largest credit intermediaries in their respective jurisdiction, intelligence gathered from national authorities, and desk-based research. The regulatory technical standards on professional indemnity insurance, or PII, were published in the Official Journal of the European Union in October 2014 as Delegated Regulation 1125/2014, set the minimum monetary amount of the professional indemnity insurance or comparable guarantee for mortgage credit intermediaries by specifying an amount for each individual claim (EUR 460,000) and an aggregate amount per calendar year for all claims (EUR 750,000). As part of its mandate, EBA will review the regulatory standards on professional indemnity insurance every two years.
Keywords: Europe, EU, Banking, Professional Indemnity Insurance, Mortgage Credit Directive, Regulatory Technical Standards, Regulation 1125/2014, Credit Risk, MCD, EBA
Previous ArticleDNB Issues Data Checks and Other Reporting Updates for Banks
The Australian Prudential Regulation Authority (APRA) released an update on the timelines for revisions to the market risk prudential standards and the implications for the broader capital framework.
Three global standard-setters launched a joint consultation that reviews the margining practices during the COVID-19 pandemic and identifies potential areas for further policy work.
The Bank of England (BoE) published the Statistical Notice 2021/09 requiring additional information from firms and software vendors to assist in the onboarding and testing phases for migrating statistical reporting to the BEEDS portal.
The European Banking Authority (EBA) published the final draft regulatory technical standards on gross jump-to-default amounts and on residual risk add-on under the Capital Requirements Regulation or CRR.
The Financial Conduct Authority (FCA) published the final rules on the Investment Firms Prudential Regime (IFPR) to streamline and simplify the prudential requirements for solo-regulated UK firms authorized under the Markets in Financial Instruments Directive (MiFID).
The European Supervisory Authorities (ESAs) have delivered to the European Commission (EC) the final report on the draft regulatory technical standards for disclosures under the Sustainable Finance Disclosure Regulation (SFDR).
The European Banking Authority (EBA) published an advice to the European Commission (EC) on funding in resolution and insolvency as part of the review of the crisis management and deposit insurance (CMDI) framework.
The Financial Stability Oversight Council (FSOC) released a report in response to the U.S. President's Executive Order on climate-related financial risk.
The Bank for International Settlements (BIS) published a paper that examines the business models and the associated risks posed by big technology firms foraying into financial services sector.
The Bank for International Settlements (BIS) announced the development of an Asian Green Bond Fund, in collaboration with the development financing community, to channel global central bank reserves to green projects in Asia Pacific.