EIOPA issued a statement that clarifies supervisory expectations on product oversight and governance requirements amid the COVID-19 situation. To ensure the continuing fair treatment of customers in light of COVID-19 crisis, insurance manufacturers are being asked to identify the products affected as a result of COVID-19 crisis, assess possible unfair treatment of customers for these products, and consider proportionate remedial measures. This statement builds on the statement issued, on April 01, 2020, to insurers and intermediaries to take steps to mitigate the impact of COVID-19 crisis on consumers.
EIOPA expects insurance manufacturers to identify insurance products whose main features, risk coverage, or guarantees have been materially impacted by the COVID-19 situation. Where products have been materially affected, insurance manufacturers should assess whether and how they continue to offer value to the target market, taking into account the needs, characteristics, and objectives. The assessment should be on a medium to longer term basis, to take into account product lifecycles and the evolution of the impact of the COVID-19 pandemic. When manufacturers identify products that are no longer sufficiently aligned with the target market, they should assess whether this can result in possible unfair treatment. This should be an assessment for the target market in general, rather than for individual customers.
EIOPA expects measures to be taken where possible unfair treatment emerges, also taking into account the relevant legal requirements in national civil and insurance law. These measures should be proportional to the potential unfair treatment and reflect possible extended changes in product utility. In line with product oversight and governance requirements, remedial measures should aim to mitigate the situation and prevent further occurrences of the detriment. Insurance manufacturers should consider a broad range of possible measures and their impact on products over the medium to long term. EIOPA and national supervisory authorities will continue working collectively to ensure financial stability, market integrity, and consumer protection, including by continuing monitoring the market practices in light of the COVID-19 situation.
Keywords: Europe, EU, Insurance, COVID-19, Governance, Product Oversight and Governance, Proportionality, EIOPA
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