EIOPA Responds to EC Consultation on Digital Finance Strategy
EIOPA responded to the EC consultation on a new digital finance strategy for Europe. In its response, EIOPA highlighted that a sound approach to financial innovation should strike a balance between enhancing financial innovation and ensuring well-functioning consumer protection and financial stability frameworks. EIOPA espouses further improvements in the areas of fit-for-purpose insurance regulations, ethical and transparent use of data, a common cyber incident reporting framework, and data standardization.
In its response, EIOPA emphasizes that insurance regulation must be fit for purpose. For this reason, it is crucial to understand how new technologies and business models drive new risks and opportunities. Improvements and clarifications can be introduced, for example, on paper requirements by default, on the definition of insurance, and on outsourcing requirements. Additionally, there must be a fair, ethical and transparent use of data. Data is a key driver of financial innovations such as those enabled by artificial intelligence. Data analytics governance frameworks are crucial to engender trust and ground the use of data in common ethical principles. This is an area where stakeholders have called for more guidance, so EIOPA is working with an Expert Group on Digital Ethics in insurance to bring further clarity on fairness, explainability, and governance aspects of artificial intelligence and similar use cases. EIOPA also states that access to relevant datasets is critical for insurance. In this area:
- EIOPA has recently started a broader discussion with stakeholders on possible balanced, forward-looking, and secure approaches to Open Insurance and its risks and benefits to the insurance industry, consumers, and supervisors. This work is ongoing and EIOPA sees some potential for the sector if handled sensitively. Different Open Insurance solutions could further facilitate the uptake of suptech.
- EIOPA encourages EC to promote the interoperability of applications and portability of data between different platforms (that is, reduce lock-in effects) and to improve the power of consumers to switch between providers.
- EIOPA explains that a common cyber incident reporting framework is critical for sharing knowledge about incidents and to encourage the development and growth of sound underwriting practices.
- EIOPA believes it is critical that future standardization is built on what has already been achieved. EIOPA has extensive experience in this regard and is ready to be closely involved in future discussions on data standardization. Innovation and digitalization could also benefit from a wider adoption of existing standards (for example, the Legal Entity Identifier). The elements EIOPA considers as useful in terms of standardization are metadata management including schema and variables, data formats and common data models, and data exchange protocols and APIs.
- EIOPA has not yet done detailed work on regtech; however, it has developed a suptech strategy. One of the areas commonly referred to when addressing regtech is supervisory reporting. In this case, the lack of harmonization of EU rules, namely consistency across definitions, formats, and processes within the financial services reporting legislation, needs to be achieved to contribute to further development of such tools. EIOPA considers that translating financial services legislation into machine-readable and executable reporting requirements could benefit both, the reporting entity and the supervisor. It is likely that the long-term future compliance with regulatory and reporting requirements will be largely algorithm/code based.
Related Links
Keywords: Europe, EU, Insurance, Fintech, Regtech, Suptech, Cyber Risk, Reporting, Solvency II, Machine-Readable Regulations, Digital Finance Strategy, EC, EIOPA
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Adam Koursaris
Asset and liability management expert; capable modeler; risk and capital specialist
Related Articles
EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.
EC Mandates ESAs to Propose Amendments to SFDR Technical Standards
The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.
EBA Examines Supervisory Practices, Issues Deposits Reporting Template
The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),
US Agency Publications Address Basel, Reporting, and CECL Developments
The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances
SEC Extends Comment Period on Climate Risk Disclosures
The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.
APRA Reduces Committed Liquidity Facility, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.
CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks
The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.
PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down
The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.
EBA Updates Standards for 2023 Benchmarking of Internal Approaches
The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.
EIOPA Responds to Stakeholder Views on Blockchain in Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.