July 07, 2017

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)

PSD2 Overview

Effective Date: January 13, 2018

Keywords: Europe, EBA, Insurance, Indemnity Insurance, PSD2, Guideline

Related Articles
News

FSB Chair Reports to G20 on Implementation of Financial Reforms

FSB published the letter to G20 Leaders and the opening statement from an FSB briefing by the FSB Chair Randal K. Quarles.

June 25, 2019 WebPage Regulatory News
News

FSB Summarizes Progress in Implementation of G20 Regulatory Reforms

FSB published a summary progress report on implementation of the G20 financial regulatory reforms.

June 25, 2019 WebPage Regulatory News
News

EBA Issues 2020 Stress Test Methodology and Templates for Discussion

EBA published the 2020 EU-wide stress test draft methodology, templates, and template guidance, for discussion with the industry.

June 25, 2019 WebPage Regulatory News
News

SRB Updates MREL Policy to Reflect Changes in CRR 2

SRB updated its policy on minimum requirement for own funds and eligible liabilities (MREL) as a result of the revisions in the recent Banking Package.

June 25, 2019 WebPage Regulatory News
News

OSFI Updates Manual of Reporting Forms and Instructions for Insurers

OSFI issued its annual update for 2019 to the manual of financial reporting forms and instructions for property and casualty (P&C) insurance companies.

June 25, 2019 WebPage Regulatory News
News

PRA Consults on PRA110 Reporting Frequency Threshold

PRA proposed (CP14/19) to amend the reporting frequency of PRA110 reporting template (PRA110) when a firm is in stress.

June 25, 2019 WebPage Regulatory News
News

APRA Updates Guidance on Managing Information Security Risks

APRA released an updated Prudential Practice Guide CPG 234 on managing information security risks, including cyber-crime.

June 25, 2019 WebPage Regulatory News
News

IMF Releases Report on 2019 Article IV Consultation with United States

IMF published its staff report in the context of the 2019 Article IV consultation with the United States.

June 24, 2019 WebPage Regulatory News
News

FCA and US Agencies on Addressing Issues in Credit Derivatives Market

U.S. SEC Chairman Jay Clayton, U.S. CFTC Chairman J. Christopher Giancarlo, and UK FCA Chief Executive Andrew Bailey issued a joint statement announcing plans to address concerns regarding opportunistic strategies in the credit derivatives markets.

June 24, 2019 WebPage Regulatory News
News

BIS Report Discusses Regulatory Issues Related to Big Techs in Finance

BIS has pre-released a chapter of the BIS Annual Economic Report; this chapter focuses on the risks and opportunities presented by large technology firms in the financial services sector.

June 23, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3315