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
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous ArticleCNB Relaxes Mortgage Limits, Reduces Capital Buffer
FSB finalized the toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities.
HKMA urged authorized institutions to take early action to adhere to the IBOR Fallbacks Protocol, which ISDA is expected to publish soon.
FSB published a global transition roadmap for London Inter-bank Offered Rate (LIBOR).
HM Treasury published a document that summarizes the responses received from a consultation on the approach of UK to transposition of the revised Bank Resolution and Recovery Directive (BRRD2).
HM Treasury published the government response to the feedback received on the consultation for updating the prudential regime of UK before the end of the Brexit transition period.
In a recent statistical notice, BoE announced publication of the reporting schedule for statistical returns for 2021.
EC welcomed the joint declaration by 25 EU member states on building the next generation of cloud in Europe.
MAS published amendments to Notice 648 on the issuance of covered bonds by banks incorporated in Singapore.
FDIC has selected 14 technology companies—including Accenture Federal Services, LLC, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the next phase of the rapid prototyping competition.
GLEIF announced that financial institutions worldwide can realize a variety of cost, efficiency, and customer experience benefits by assuming a new “validation agent” role within the Global Legal Entity Identifier (LEI) System.