November 08, 2018

EIOPA published four papers resulting from the work of the EU–U.S. Insurance Dialog Project (EU-U.S. Project) in 2018. The EU-U.S. Project began in early 2012, as an initiative by EC, EIOPA, the Federal Insurance Office of the U.S. Department of Treasury (FIO), and NAIC to enhance mutual understanding and cooperation between EU and the United States for the benefit of insurance consumers and effective supervision. In 2018, the EU-U.S. Project focused, and published papers, on cybersecurity risk, cyber insurance market, use of big data, and intra-group transactions (IGTs). These papers will help inform the panel discussions at the EU-U.S. Insurance Project public forum on November 10, 2018 in Luxembourg.

Insurance Industry Cybersecurity Issues Paper. The paper outlines the existing legislative and supervisory frameworks in the EU and the U.S. and describes the selected initiatives and resources for addressing the cybersecurity risk in the insurance industry. The objective is to improve the mutual understanding of EU and U.S. cybersecurity regimes and to enhance supervisory cooperation.

Cyber Insurance Market. The paper describes the cyber insurance market and the types of available cyber insurance coverage. It then outlines challenges in underwriting cyber insurance and highlights the current supervisory practices for assessing cyber insurance underwriting. The paper concludes by offering proposals for future dialog by the Project members.

Big Data Issue Paper. The paper focuses on providing a better understanding on the type, quality, and means of collecting big data and how this data is then used by both insurers and third parties for underwriting, rating, marketing, and claims handling in both the U.S. and the EU. The paper also states how U.S. and EU supervisors are addressing their data needs to appropriately monitor the insurance marketplace and evaluate underwriting, rating, claims, and marketing practices in their respective markets, given the increased use of big data in the marketplace.

Supervision of IGTsIGTs can play an important part in managing risks with strong oversight and financial transactions that help to protect solvency and/or support recovery of undertakings within a group. However, in situations of financial distress, it could be possible for IGTs to increase liquidity risk, operational risk, and/or solvency risk for entities relying on such transactions. In some cases, an inadequate understanding and managing of IGTs could have a more severe impact and can lead to contagion risks between affiliates across the group. The main objectives of the Project’s work on IGTs are to seek mutual understanding about definitions of IGTs and to enhance the understanding of each other’s practices for risk and impact assessment, supervisory review processes, and reporting requirements, in addition to discussing how to further enhance information exchange practices in global supervisory colleges.

 

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Keywords: Americas, Europe, EU, US, Insurance, EU-US Insurance Dialog Project, Cybersecurity Risk, Cyber Insurance Market, Big Data, IGTs, EIOPA