Featured Product

    EIOPA on Application of Licensing and Proportionality to Insurtech

    March 27, 2019

    EIOPA published a report on best practices on licensing requirements, peer-to-peer insurance, and the principle of proportionality in the insurtech context. In EU, licensing requirements are regulated through Directives on Solvency II and Insurance Distribution.

    Taking into consideration the Fintech Action Plan of EC and the mandate of the InsurTech Task Force, EIOPA mapped current authorizing and licensing requirements and assessed how the principle of proportionality is being applied in the area of financial innovation. This includes the approach to insurtech start-ups such as peer-to-peer (P2P) insurers. The report includes an analysis of the approach to insurtech start-ups operating as peer-to-peer (P2P) insurers. It highlights the emergent best practices for national competent authorities to support a more systematic approach to insurtech licensing requirements as well as to ensure, through a common application of the proportionality principle, consistent and effective supervisory practices across Europe. The evidence gathered points to an evolving insurtech market in EU that is still in its nascency. Most national competent authorities either have limited experience with insurtech companies or do not differentiate "digital" business models from others.

    One of the conclusions is that, at this stage—also reflecting overall EIOPA stance of technological neutrality and support for establishing a level playing field for all market participants—there seems to be no need for further regulatory steps on licensing. However, national competent authorities should adapt their internal processes and know-how to reflect the impact of digital transformations and avoid diverging supervisory practices, considering the cross-border and cross-sectoral nature of some insurtech developments. Furthermore, close monitoring of developments is required, given rise of new technology driven business models (for example, P2P), the use of new technologies (such as artificial intelligence and distributed ledger technology), and the need to rise to the challenge of sound authorization and ongoing supervision of highly digitalized insurers.

    To prepare for potential associated risks, national competent authorities should further enhance cooperation and the exchange of experience among each other and with EIOPA. To this end, EIOPA will work together with national competent authorities and insurtech firms by:

    • Exploring options to develop a network of innovation facilitators for the benefit of national competent authorities and insurtech firms
    • Assessing what insurtech-related data might need to be collected systematically to support national competent authorities and EIOPA work on insurtech
    • Spearheading further work on understanding new technologies and different business models including the impact of insurtech on traditional business models on insurance companies
    • Monitoring of outsourcing and the developments in licensing insurtech companies
    • Analyzing the potential growth of the P2P insurance market

     

    Related Links

    Keywords: Europe, EU, Insurance, Insurtech, Proportionality, P2P Insurance, License Applications, Solvency II, EIOPA

    Featured Experts
    Related Articles

    PRA Publishes Q&A on Property Valuation Requirements Under CRR

    PRA published a set of questions and answers (Q&A) covering common queries regarding residential and commercial property valuations, for the purpose of the Capital Requirements Regulation (CRR), during the period of disruption caused by COVID-19 pandemic.

    May 29, 2020 WebPage Regulatory News
    News

    IOSCO Consults on Outsourcing Principles for Operational Resilience

    IOSCO proposed updates to its principles for regulated entities that outsource tasks to service providers.

    May 28, 2020 WebPage Regulatory News
    News

    MAS Consortium to Develop AI Fairness Metrics for Credit Scoring

    MAS announced that the first phase of the Veritas initiative will commence with the development of fairness metrics in credit risk scoring and customer marketing.

    May 28, 2020 WebPage Regulatory News

    BoE Updates Definitions for BTL Data Collection

    BoE published the Statistical Notice 2020/4 to update the buy-to-let (BTL) Phase 2 and Phase 3 definitions for the Interest Rate Type data item.

    May 28, 2020 WebPage Regulatory News
    News

    FSI Examines Financial Stability Implications of Payment Deferrals

    FSI published a brief note that examines challenges facing the banking sector as a result of the payment deferral programs put in place to support borrowers affected by the COVID-19 pandemic.

    May 28, 2020 WebPage Regulatory News
    News

    PRA Finalizes Policy on Prudent Person Principle Under Solvency II

    PRA published the policy statement PS14/20, which contains the supervisory statement SS1/20 and the feedback to responses to the consultation paper CP22/19 on expectations for investment by firms in accordance with the Prudent Person Principle, or PPP, as set out in the Investments Part of the PRA Rulebook.

    May 27, 2020 WebPage Regulatory News
    News

    EBA on Extending Large Exposure Limits for French Systemic Banks

    EBA published an opinion following the notification by the French macro-prudential authority, the Haut Conseil de Stabilité Financière (HCSF), of its intention to extend a measure introduced in 2018 on the use of Article 458(9) of the Capital Requirements Regulation (CRR).

    May 27, 2020 WebPage Regulatory News
    News

    ECB Highlights NPL Resolution as Key Policy Issue in Post-COVID Europe

    As part of a Research Bulletin on the recent policy-relevant work, ECB published an article that examines the lessons learned from past crises for nonperforming loan resolution in the post COVID-19 period.

    May 27, 2020 WebPage Regulatory News
    News

    RBNZ Publishes Financial Stability Report for May 2020

    RBNZ published the financial stability report for May 2020. This review of the financial system in the country highlights that the economic disruption associated with COVID-19 will present challenges to the financial system.

    May 27, 2020 WebPage Regulatory News
    News

    ECB Updates Guidance on Reporting of Securities Holdings Statistics

    ECB updated the guidance notes for reporting related to the statistics on holdings of securities by reporting banking groups (SHSG).

    May 26, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5231