EIOPA issued a statement to insurers and intermediaries, urging them to take steps to mitigate the impact of COVID-19 on consumers. These steps include providing clear and timely information to consumers, keeping consumers informed about contingency measures taken, continuing to apply product oversight and governance requirements, and exercising flexibility in the treatment of consumers where practical. Additionally, in view of COVID-19, the Romanian Supervisory Authority and EIOPA decided to postpone the start of the Balance Sheet Review of the Romanian insurance sector. The exercise was originally expected to be performed in the second semester of the year 2020.
EIOPA welcomes the initiatives already taken by insurers and intermediaries to support and assist consumers, along with the consideration being shown toward consumers affected by COVID-19, including those who are particularly vulnerable. It is critical that insurers and intermediaries continue focusing on ensuring business continuity and the fair treatment of consumers. While highlighting the need for flexibility in the interest of consumers and for their continued fair treatment, EIOPA also highlights that imposing retroactive coverage of claims not envisaged within contracts could create material solvency risks and ultimately threaten policyholder protection. EIOPA expects all market participants to continue to act in the best interests of consumers, throughout the life cycle of their relationship with the consumer. This is in line with the requirements on policyholder protection set out in relevant legislation such as the Insurance Distribution Directive (2016/97) and the Solvency II Directive (2009/138/EC). This call to action follows the publication of a statement on actions to mitigate the impact of COVID-19 on the EU insurance sector and also follows the recommendations on supervisory flexibility regarding deadlines of supervisory reporting and public disclosure by insurers.
Keywords: Europe, EU, Insurance, COVID-19, Business Continuity, Systemic Risk, Solvency II, Insurance Distribution Directive, Balance Sheet Review, Romania, EIOPA
Sam leads the quantitative research team within the CreditEdge™ research group. In this role, he develops novel risk and forecasting solutions for financial institutions while providing thought leadership on related trends in global financial markets.
Previous ArticleBCBS Publishes Basel III Monitoring Updates in April 2020
HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.
BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.
ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.
ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.
EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).
SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.
ECB published results of the March 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets.
FINMA published guidance (06/2020) on extending or discontinuing various exemptions that were granted due to the COVID-19 crisis.
SRB launched a consultation on the minimum data needed for valuation of a bank in resolution.
EIOPA announced a change in the frequency of current extraordinary processes for risk-free interest rate term structures (RFR) and symmetric adjustment to equity risk (EDA) from a weekly basis to every two weeks.