Results of Long-Term Guarantees Assessment
On 14 June 2013, EIOPA published its findings on the Long-Term
Guarantee Assessment (LTGA), one of the main stumbling blocks in
implementing Solvency II. The LTGA tested a set of proposed
supervisory measures for long-term guarantee products under
volatile and exceptional market conditions (ie the Long-Term
Guarantee package).
In response to concerns from national supervisors and
participating firms that the LTGA package is overly complex, EIOPA
has made a number of recommendations to reduce and simplify the
package. EIOPA concluded that the final Long-Term Guarantee package
to be included in the Solvency II framework should fulfill a number
of principles in order to ensure a high degree of policy
protection, as well as an effective supervisory process:
- Alignment with the Solvency II framework and the economic balance sheet concept;
- Full consistency and comparability in order to enhance the single market;
- Efficient linking of all the three pillars (quantitative basis, qualitative requirements and enhanced reporting and disclosure);
- Proportionality and simplicity;
- Adequate treatment of transitional issues.
Omnibus II negotiations are now expected to reconvene. Chairman
of EIOPA, Gabriel Bernardino, has said that the findings would
provide EU political bodies with a reliable basis to make an
informed decision on the package and a conclusion on Omnibus II
negotiations.
Please click here to view the findings in full.
EIOPA issues consultation papers on the sale and distribution of insurance products
On 27 June 2013, EIOPA issued the following consultation papers:
(1) Consultation Paper on Draft Report on Good Practices on Comparison Websites
EIOPA is seeking input from interested parties on good
practices in addressing activities by websites that compare
insurance products. The draft report is intended to promote
transparency, simplicity and fairness for internet users in the
market for online comparisons of insurance products.
Comments from interested parties should be submited by 23
September 2013. EIOPA intends to publish a final report on the
consultation before Q2 2014. EIOPA also intends to submit
its Report for adoption by the Board of Supervisors before Q2
2014.
Please click here to view the consultation materials in
full.
(2) Consultation Paper on a Draft Report on Good Supervisory
Practices regarding knowledge and ability requirements for
distributors of insurance products:
EIOPA is seeking input from stakeholders on good supervisory
practices regarding knowledge and ability requirements for
distributors of insurance products. The focus of the Report is on
(i) promoting supervisory convergence amongst competent authorities
in the area of industry training standards and (ii) facilitating
any future policy work EIOPA might carry out on professional
requirements.
Comments are invited from interested parties by 23 September 2013.
EIOPA intends to publish a final report on the consultation before
Q2 2014. EIOPA also intends to submit this Report for adoption by
the Board of Supervisors before Q2 2014.
Please click here to view the consultation materials in
full.
EIOPA opinion on payment protection
insurance
On 28 June 2013, EIOPA issued an opinion on consumer protection
issues in payment protection insurance (PPI). The opinion notes
that the consumer protection issues surrounding PPI have triggered
action from regulatory or supervisory bodies in a number of
jurisdictions. While acknowledging that PPI products, when properly
designed and sold, serve legitimate consumer needs, EIOPA also
acknowledges that in a number of jurisdictions, significant cases
of mis-selling have occurred. This has adversely affected consumers
and has damaged the reputation of the insurance sector
generally.
On the basis of its findings, EIOPA recommends that national
competent authorities analyse whether PPI merits further
investigation and / or regulatory action at national level. It also
requests the national competent authorities to provide feedback on
their previous activities and on any planned actions in this area
based on the opinion within six months from the date of the
opinion. Once EIOPA has received this feedback it will decide if
further action is required at an EU level.
Please click here to view the full text of the opinion.
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