Department of Finance consults on Insurance Distribution Directive
On 29 March 2017, the Department of Finance launched a consultation on transposition of the Insurance Distribution Directive (IDD). Input is sought from interested parties in relation to the exercise of Member State discretions under the IDD (including in the areas of advice and standards for sales, professional and organisational arrangements, cross-selling and assessment of suitability and appropriateness and reporting to customers). Submissions were invited before 5pm on 2 May 2017.
Central Bank of Ireland publishes motor insurance data in latest Consumer Protection Bulletin
On 20 April 2017, the Central Bank of Ireland (CBI) published a Consumer Protection Bulletin (CPB) focussing on the motor insurance sector. The CPB was compiled from data submitted by 24 motor insurers and provides a high level overview of (a) the number and value of personal motor insurance policies written in 2016, (b) information on the location of the insurers and their regulation and (c) complaints data. Key statistics include that the majority of policies (62%) were provided by Irish authorised insurers, with 28% of polices being provided by insurers operating on a branch basis. Firms operating on a freedom of service basis account for 10% of policies.
Financial Services Ombudsman Annual Review
On 31 March 2017, the Financial Services Ombudsman (FSO) issued its Annual Review 2016. The Review highlights, amongst other matters, the importance of insurance to consumers, noting that insurers need to apply caution when voiding customer's policies and ensure clarity in proposal form questionnaires. According to the Review, 43% of valid complaints to the FSO related to the insurance sector (25% of which were related to motor insurance).
Insurance Ireland publish Annual Report 2016
On 28 March 2017, Insurance Ireland (II) published its 2016 Annual Report. It includes overviews of II's work in each of the life, general, international and health insurance sectors. Points of interest highlighted in the Report include (a) II's merger with Dublin International Insurance Management Association (resulting in membership of 140 companies collectively generating €51,284 million in premium income), (b) details of II's updated strategy, and (c) an overview of II's work in representing the insurance industry with both Government and regulators during 2016.
European Insurance and Occupational Pensions Authority publishes final methodology to derive the Ultimate Forward Rate
On 5 April 2017, the European Insurance and Occupational Pensions Authority (EIOPA) published its report (and a related FAQ) on the methodology to derive the Ultimate Forward Rate (UFR) used to calculate the risk-free interest rate term (RFR)structures under Solvency II. It specifies the method to derive the UFR, details of the calculation of the UFR for 2018 and EIOPA's analysis of the impact of UFR changes. Among other matters, EIOPA confirms that (a) the UFR for 2018 will be 4.05%, and (b) the UFR will be recalculated annually with any update announced by end-March each year and applied to the RFR effective from 1 January the subsequent year. In a press release issued on 5 April 2017, Insurance Europe (IE) commented that the European insurance industry's view was that rushed changes should not be made to the UFR but should instead be made as part of the Solvency II review already planned for completion by 2020.
European Insurance and Occupational Pensions Authority proposes amendments Solvency II rules on reporting and disclosure
On 21 April 2017, EIOPA issued a press release noting that it had identified a number of required amendments to the Implementing Technical Standards (ITS) on (a) templates for reporting to national supervisors, and (b) the procedures, formats and templates specific to the solvency and financial condition report. The proposed amendments will involve changes to the ITS, the Guidelines on Reporting for Financial Stability Purposes, the Guidelines on the Supervision of Branches of Third-Country Insurance Undertakings and the Solvency II XBRL Taxonomy. Comments are invited from all interested parties until 8 May 2017.
European Insurance and Occupational Pensions Authority focuses on treatment of unlisted equity and debt in the standard formula
On 26 April 2017, EIOPA published a call for evidence on the treatment of unlisted equity and debt (without an external credit assessment institution rating) in the standard formula. This follows the European Commission's request for technical advice on the removal of unjustified constraints to financing, including reducing reliance on external credit ratings. Seeking responses by 24 May 2017, EIOPA intends to publicly consult on draft advice to the European Commission in November 2017.
European Insurance and Occupational Pensions Authority publishes results of Thematic Review of consumer protection issues in the unit-linked market
On 26 April 2017, EIOPA published results of its EU-wide thematic review of insurers (focusing on the effects on consumers from financial incentives made by asset managers to insurers in the unit-linked life assurance market). Key findings include that, of the 218 participating insurers, 81% received financial incentives from asset managers. 69% of respondents did not disclose incentives to customers. The report covers (a) the levels and structures of incentives identified in the review (b) unit linked product structures and (c) conflicts of interests/acting in the best interests of consumers.
European Commission proposals on the EU and US bilateral agreement on (re)insurance
On 4 April 2017, the European Commission adopted proposals for Council decisions on the conclusion and signing of the bilateral agreement between the EU and the US on (re)insurance. The bilateral agreement covers prudential measures in relation to (a) group supervision, (b) reinsurance, and (c) the exchange of information between supervisors. The proposed decisions provide for the approval, signature and provisional application of the bilateral agreement.
Insurance Europe Position Paper in relation to the European Services e-card (and related facilities)
Following on from its January 2017 press release, IE has recently published a position paper on the European Commission's proposed legislation for a European Services e-card (and related administrative facilities). Amongst other matters, IE reiterates its concern that certain of the proposed measures (including harmonised certificates of insurance and a standardised pan-European claims history statement) will place additional burdens on insurers, with limited improvements to the provision of cross-border services. The paper also includes IE's commentary on aspects of the Commission's impact assessment which accompanied the proposals.
European Insurance and Occupational Pensions Authority publishes monthly technical information
On 7 April 2017, EIOPA published technical information on (a) the symmetric adjustment of the equity capital charge and (b) relevant risk free interest rate term structures, for Solvency II purposes; with reference to the end of March 2017 in both cases.
Chairman of European Insurance and Occupational Pensions Authority addresses the Public Hearing on the Capital Markets Union in relation to Pan-European Pension Products
On 14 April 2017, the Chairman of EIOPA delivered a speech at the Public Hearing on the Capital Markets Union (CMU) Mid-Term Review. In particular, he spoke about proposals for the Pan-European Personal Pension Product (PEPP). He noted that PEPPs should be simple, cost effective and include characteristics to permit taxation as national pension products.